S-1

As filed with the Securities and Exchange Commission on October 1, 2013

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

BARRACUDA NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3577	83-0380411
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

3175 S. Winchester Blvd

Campbell, California 95008

(408) 342-5400

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

William D. “BJ” Jenkins, Jr.

Chief Executive Officer

Barracuda Networks, Inc.

3175 S. Winchester Blvd.

Campbell, California 95008

(408) 342-5400

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

Copies to:

Jeffrey D. Saper Allison B. Spinner Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300 Diane C. Honda Vice President and General Counsel Barracuda Networks, Inc. 3175 S. Winchester Blvd. Campbell, California 95008 (408) 342-5400 Gordon K. Davidson Jeffrey R. Vetter William L. Hughes Fenwick & West LLP 801 California Street Mountain View, California 94041 (650) 988-8500

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

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:  ¨

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

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

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

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

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Common Stock, $0.001 par value per share	$100,000,000	$12,880.00

(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2) Includes the aggregate offering price of additional shares that the underwriters have the option to purchase to cover over-allotments, if any.

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

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

PROSPECTUS (Subject to Completion)

Issued October 1, 2013

                Shares

COMMON STOCK

Barracuda Networks, Inc. is offering                 shares of its common stock and the selling stockholders are offering                 shares. We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering, and no public market currently exists for our shares. We anticipate that the initial public offering price will be between $         and $         per share.

We intend to apply to list our common stock on the                 under the symbol “CUDA”.

We are an “emerging growth company” under the federal securities laws and are subject to reduced public company reporting requirements. Investing in our common stock involves risks. See the section titled “Risk Factors” beginning on page 13.

PRICE $             A SHARE

	Price to Public	Underwriting Discounts and Commissions(1)	Proceeds to Barracuda Networks	Proceeds to Selling Stockholders
Per Share	$	$	$	$
Total	$	$	$	$

(1) See the section titled “Underwriting” for a description of the compensation payable to the underwriters.

We, and the selling stockholders, have granted the underwriters the right to purchase up to                  additional shares of common stock to cover over-allotments.

The Securities and Exchange Commission and any state securities regulators have not approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to purchasers on                     , 2013.

MORGAN STANLEY	J.P. MORGAN	BofA MERRILL LYNCH
WILLIAM BLAIR	LAZARD CAPITAL MARKETS	PACIFIC CREST SECURITIES

                    , 2013

TABLE OF CONTENTS

	Page
Prospectus Summary		1
Risk Factors		13
Special Note Regarding Forward-Looking Statements		41
Market and Industry Data		43
Use of Proceeds		44
Dividend Policy		44
Capitalization		45
Dilution		47
Selected Consolidated Financial Data		49
Management’s Discussion and Analysis of Financial Condition and Results of Operations		55
Business		88

	Page
Management		108
Executive Compensation		116
Certain Relationships and Related Party Transactions		126
Principal and Selling Stockholders		131
Description of Capital Stock		133
Shares Eligible for Future Sale		138
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders		141
Underwriting		145
Legal Matters		153
Experts		153
Additional Information		153
Index to Consolidated Financial Statements		F-1

Neither we, the selling stockholders, nor the underwriters have authorized anyone to provide any information or make any representations other than those contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.

Through and including                     , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

For investors outside of the United States: Neither we, the selling stockholders, nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus outside of the United States.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. You should read the following summary together with the more detailed information appearing in this prospectus, including “Risk Factors,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and our consolidated financial statements and related notes before deciding whether to purchase shares of our common stock. Unless the context otherwise requires, the terms “Barracuda Networks,” “Barracuda,” “the company,” “we,” “us” and “our” in this prospectus refer to Barracuda Networks, Inc., and its subsidiaries. Our fiscal year end is February 28/29, and our fiscal quarters end on May 31, August 31, November 30 and February 28/29. Our fiscal years ended February 28, 2010, February 28, 2011, February 29, 2012 and February 28, 2013 are referred to herein as fiscal 2010, 2011, 2012 and 2013, respectively.

BARRACUDA NETWORKS, INC.

Overview

Barracuda designs and delivers powerful yet easy-to-use security and storage solutions. We offer cloud-connected solutions that help our customers address security threats, improve network performance and protect and store their data. Our solutions are designed to simplify IT operations for our customers, allowing them to enhance their return on technology investment. Our business model is built on the core values of speed and agility, which we apply to all aspects of our approach, including our technology innovations, the delivery and deployment of our solutions and responses to customer inquiries. This model has enabled us to be highly scalable in reaching a large number of potential customers. Since inception, we have sold our solutions to more than 150,000 customers located in more than 100 countries.

Our security and storage solutions are connected to our cloud services which enable continuous software updates, offsite redundancy and distributed capacity, and are offered on a subscription basis. Our solutions are delivered as cloud-connected appliances and virtual appliances, as well as cloud-only solutions. Our security solutions are designed to protect and optimize the performance of the most critical points within our customers’ IT infrastructures, including email servers, web applications, data centers and core networks. Our storage solutions are designed to backup and archive business-critical data and make such data accessible for purposes such as compliance, disaster recovery and business intelligence. Our storage solutions also allow users to securely and quickly access, share, synchronize and sign files from Internet-connected devices. Our solutions can be managed centrally in any size or type of deployment through integrated, easy-to-use web interfaces that support configuration, monitoring and reporting.

We design our solutions specifically for IT professionals in resource-constrained environments who seek to benefit from current and emerging trends in information technology such as the rapid growth in cloud computing, adoption of virtualization, proliferation of mobile devices and the associated explosion of data. Our customers work in all types of organizations, from mid-market businesses, governments and educational institutions, to departments or divisions within Fortune 2000 enterprises.

We nurture a culture that delivers value through simplicity to optimize our customers’ experiences. From the design of our solutions to our sales processes, customer support, manufacturing and delivery, we strive to make our solutions easy to purchase, install, maintain and update. We believe that Barracuda has become a highly visible and recognizable brand as a trusted IT partner. We design our solutions to be easy to use and to deploy without the need for special expertise or external support from IT specialists, and also to provide powerful capabilities that can be optimized to meet the requirements of resource-constrained environments. We employ

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a high-velocity sales model that incorporates a 30-day right to return, real-time order fulfillment and a simple, low-cost entry point to make our customers’ purchase decisions and deployments seamless, easy and efficient. Through our recurring subscription services, we provide our customers with up-to-date features, functionality and real-time security protection, eliminating the need for costly upgrades or additional software purchases. We answer our phones live 24x7x365, and endeavor to treat every customer call with the same high priority. Central to our culture is a focus on the long-term customer experience, including an ongoing dialogue with our customers to enhance our features and solutions. Our development and fulfillment processes rapidly deliver new services and functionality to our customers, enabling them to improve their time to value and return on technology investment through low total cost of ownership, easy integration and accelerated deployment of our security and storage solutions.

For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our gross billings were $191.3 million, $233.2 million, $264.2 million and $150.5 million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our total revenue was $142.1 million, $160.9 million, $198.9 million and $114.1 million, respectively. We believe that the subscription nature of our solutions provides us with enhanced financial visibility. Subscription revenue for fiscal 2011, 2012 and 2013 and for the six months ended August 31, 2013 represented approximately 63%, 73%, 70% and 69% of our total revenue, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, net income (loss) to Barracuda was $3.0 million, $0.6 million, $(7.4) million and $(4.6) million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our free cash flow, adjusted for acquisition costs and other non-recurring charges, was $34.4 million, $35.4 million, $41.1 million and $11.0 million, respectively.

Industry Background

Modern IT Trends Offer Attractive Benefits to All Organizations

Organizations are looking to take advantage of important technology trends, particularly the rapid growth of cloud computing, proliferation of mobile devices, widespread use of web applications like Facebook, LinkedIn, Twitter and YouTube and increased adoption of virtualization and software defined networking, or SDN. These advanced technology trends can be exploited by organizations to gain significant competitive advantages and to support core business operations, enable dramatic efficiency gains and open up new go-to-market channels and revenue opportunities.

The Confluence of IT Trends Creates a Set of Obstacles that IT Professionals Must Address

IT trends are significantly changing the way that IT infrastructures are designed, deployed and secured, creating a complex and rapidly evolving set of challenges that need to be addressed by IT professionals.

• Escalating Security Threat Environment. Organizations face security threats from a variety of attackers that can result in organizational disruption, as well as the theft of sensitive information, and can cause financial and reputational damage. Organizations of all sizes are being forced to reexamine their security risks and technology investments as security threats evolve and increase in number, complexity, variety and severity.

• Productivity and Security Challenges Posed by Web Applications. Organizations can benefit greatly from popular web applications, such as Facebook, LinkedIn, Twitter and YouTube, which enable new channels to communicate and collaborate with customers and business partners, as well as a means to market their products and recruit employees. In order to take advantage of these benefits, organizations need to safely enable the use of these applications within a secure infrastructure, such that only the right individuals are using the right set of applications for their business functions.

• Explosion of Data and Increased Storage Consumption. The volume of digital information created and replicated worldwide is growing, and organizations are increasingly dependent on the availability

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of this information at all times. As a result, organizations cannot afford to lose access to business critical data and need a cost effective and scalable way to ensure that their data is being stored safely and can be recovered rapidly.

• Constrained IT Budgets. Macroeconomic conditions have kept IT budgets under significant pressure and, despite recent innovations in the industry, security and storage infrastructures increasingly require greater investments to implement, run and manage. As a result, there is a need for security and storage environments to become vastly more efficient against the backdrop of constrained IT budgets.

Organizations Need a New Approach to IT in Resource-Constrained Environments

Rapidly changing dynamics in today’s IT landscape are forcing organizations of all sizes to evolve their IT strategies. Fortune 500 companies are better positioned to address these challenges as they typically have core IT departments that can comprise a significant number of highly skilled and specialized computer scientists and engineers, as well as IT budgets that can be in the billions of dollars. We believe that there are millions of underserved organizations without these resources. These organizations include small and mid-market businesses, governments, educational institutions and departments or divisions within Fortune 2000 enterprises. IT professionals within these organizations seek powerful yet easy-to-use solutions to address the challenges posed by these trends.

We believe most traditional software and hardware vendors have designed their products and business operations to cater primarily to the largest companies. These solutions typically fail to meet the needs of resource-constrained organizations in several key ways:

• Complex to Deploy and Use. Traditional IT solutions often are difficult to install, require significant configuration and necessitate specialized services and technical support to get the systems up and running.

• Marketing Optimized for Large Organizations. Traditional IT solution vendors tend to focus marketing efforts primarily on high-touch, senior level interactions with a smaller number of large customers. As a result, IT professionals within resource-constrained organizations are frequently challenged to work effectively with these vendors to identify the products they require to solve their problems.

• Lengthy, High-Touch Sales Cycle. The complexity of traditional IT solutions and the requirement for customers to tailor traditional IT solutions to their needs lead to longer sales cycles, prolonging the period of time before customers can solve their problems.

• Lengthy Manufacturing and Fulfillment. Solutions from traditional IT vendors often have long delivery and installation times. In addition, vendors periodically experience delivery delays due to the inability of their supply chain to meet quality and delivery requirements consistently.

• Lack of Investment Protection. To meet increasing performance and solution requirements, customers often are forced to perform “forklift” system upgrades or purchase new software licenses.

• Inadequate Customer Support. Traditional IT solution vendors often rely heavily on self-service telephone support and outsourced customer support staff located in remote geographies. This approach can lead to an inadequate and frustrating customer support experience and lengthy time to resolution.

Our Market Opportunity

We operate in a number of established, multi-billion dollar segments across the security and storage markets that we estimate were approximately $30 billion in 2012, based on market data from established third-party market research firms. We define our security market as the web access management, secure email gateway,

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secure web gateway, intrusion prevention systems equipment, secure socket layer virtual private network, or VPN, equipment, VPN/firewall equipment and application delivery controllers segments. According to Gartner, estimated spending on these security segments was $14.4 billion worldwide in 2012. We define our storage market as the archival disk-based storage, archiving software, purpose-built backup appliances and data protection software and hardware segments. According to IDC, estimated spending on these storage segments was $15.9 billion worldwide in 2012. The market for the above security and storage segments for companies with less than 5,000 employees was $14.8 billion in 2012, according to a study we commissioned from Compass Intelligence. Compass Intelligence further estimates there were 20.8 million companies worldwide with less than 5,000 employees in 2012.

Our Business Model

Since our founding, we have designed our solutions, established our culture and built our business model to cater specifically to the needs of IT professionals in resource-constrained environments. We maintain control of the value chain across our solutions, marketing efforts, sales processes, manufacturing, delivery and customer support. This integrated model enables us to tailor the customer experience to deliver powerful yet easy-to-use security and storage solutions and high-value, recurring subscriptions to IT professionals in the way that works best for their organizations.

Key elements of our business model include:

• Powerful, Easy-to-Use Cloud-Connected Solutions. Our solutions are purpose-built to be easy to use and to deploy without the need for special expertise or external support from IT specialists. We believe that whether a solution is an entry-level or company-wide deployment, it should provide  powerful functionality and be easy to use. 

• Trusted Brand and Innovative Marketing. We believe partners and customers alike have come to rely on Barracuda as a  trusted IT partner.  The principal focus of our marketing programs is to reach IT professionals within resource-constrained organizations and elevate their awareness of our comprehensive portfolio of security and storage solutions.

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• High-Velocity Sales. We believe our  “product often sells itself”  based on its breadth of functionality, ease of use and simple pricing. With our global partner network of more than 5,000 distributors and value added resellers and our solutions and sales specialists, we offer straightforward, competitive pricing and a 30-day right to return, making our solutions easier to purchase.

• Efficient Manufacturing and Fulfillment. We manage our operations through customized, streamlined processes, using our backend logistics software system that enables efficient manufacturing and physical and digital distribution of our solutions. This gives us the  speed and agility  to facilitate quick and precise responses to customer needs.

• High-Value, Recurring Subscriptions. Our recurring subscription services provide our customers with  up-to-date features, functionality and real-time security protection,  as well as eliminate the need for future “forklift” system upgrades or additional software purchases.

• Proactive, Live, “Insourced” Customer Support. We provide our customers with high-quality, proactive customer support, including remote support, preventative diagnostics and a direct line to Barracuda support technicians available 24x7x365—with  no phone trees —to answer customer calls and quickly and efficiently respond to their needs.

By offering a portfolio of solutions that includes cloud-connected appliances and virtual appliances, as well as cloud-only solutions, we are able to engineer functionality to align with, and take advantage of, the benefits of each form factor. This alignment increases overall value for our customers through more integrated solutions, and for our business through lower infrastructure and fewer materials costs. Our high-velocity sales model enables faster adoption of our solutions by customers and benefits our business by enabling us to improve our return on investment in sales and marketing. Our efficient manufacturing and fulfillment enables fast delivery of our solutions to customers and benefits our business through our ability to maintain low inventory levels and minimal overhead expenses. Our customer support proactively resolves customer issues and, we believe, results in higher renewal rates and new cross-sell opportunities for us. Our subscription model provides our customers with continuous and transparent access to the latest functionality enhancements and a highly visible, recurring revenue stream for our business.

Our Competitive Strengths

We believe we have a number of competitive advantages that will enable us to maintain and extend our leadership position including:

• Vertically-Integrated Approach. Our vertically-integrated approach, in which we control the value chain across our solutions, enables us to tailor the customer experience to deliver powerful yet easy-to-use security and storage solutions to organizations in the way that works best for IT professionals in resource-constrained environments.

• Hybrid, Cloud-Connected Solution Design. By offering a portfolio of solutions and multiple deployment options, we are able to engineer functionality optimally to align with the benefits of each form factor, thereby increasing overall value for our customers.

• Large, Engaged Customer Base. Our broad customer base and solution portfolio provide us with a platform from which we can cross-sell solutions to our existing customers.

• Leadership and Dedicated Focus. Since our founding, we have demonstrated our ability to execute our innovative business model successfully and establish a leadership position across multiple markets.

• Innovative Technology and Intellectual Property. We continue to invest in research and development to ensure our solutions are powerful yet easy to use. Additionally, as of August 31, 2013, we had 43 issued patents and 63 patent applications pending in the United States.

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• Strong Brand. We have built our brand with IT professionals in mind, and our brand is at the core of our business model. We believe Barracuda is widely recognized as a trusted IT partner who combines leading technology solutions with highly responsive customer service in order to simplify IT for IT professionals.

Our Strategy

Our goal is to maintain and extend our leadership position as a global provider of solutions that simplify complex IT problems for IT professionals in resource-constrained organizations. Key elements of our growth strategy include:

• Increase Sales to New Customers. We plan to continue to engage with IT professionals through our differentiated business model in order to expand our customer base.

• Increase Our Solution and Deployment Footprint within Our Existing Customer Base. We plan to pursue cross-sell opportunities with our diverse, worldwide customer base, especially as these customers look to consolidate IT suppliers to reduce overall IT spending.

• Apply Our Business Model to New Technologies and Markets. We intend to focus on developing and acquiring technologies that fit within our business model and can address the needs of IT professionals.

• Expand and Optimize Our Worldwide Channel and Partner Network. We intend to continue driving operating leverage by expanding our distributor and value added reseller network, especially in international regions where we can benefit from the local expertise of our partners.

Risks Affecting Us

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, but are not limited to, the following:

• we must increase sales of our solutions to new customers and sell additional solutions to our existing customers;

• we rely significantly on revenue from subscriptions, which may decline;

• we experienced net losses on a GAAP basis in recent periods and may not achieve or maintain profitability in the future;

• we must successfully continue to develop, manufacture and market solutions that respond promptly to meet our customers’ needs;

• we may not gain broad market acceptance for new solutions;

• we must generate significant volumes of sales leads;

• our quarterly and annual operating results may vary and be unpredictable;

• if we fail to cost-effectively promote or protect our brand, our business may be harmed;

• we face intense competition; and

• if we fail to comply with governmental laws and regulations, our business could be harmed.

Corporate Information

We were incorporated in 2003 in the State of California under the name Barracuda Networks, Inc. and in 2004 reincorporated in the State of Delaware. Our principal executive offices are located at 3175 S. Winchester

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Blvd., Campbell, California 95008, and our telephone number is (408) 342-5400. Our website is www.barracuda.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

Our design logos and the marks “Barracuda,” “Barracuda Networks,” “Copy” and “SignNow” are the property of Barracuda Networks, Inc. This prospectus contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We will remain an emerging growth company until the earlier of the last day of the fiscal year following the fifth anniversary of the completion of this offering, the last day of the fiscal year in which we have total annual gross revenue of at least $1.0 billion, the date on which we are deemed to be a large accelerated filer (this means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year), or the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

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THE OFFERING

Common stock offered by us	shares
Common stock offered by the selling stockholders	shares
Total common stock offered	shares
Over-allotment option	shares
Common stock to be outstanding after this offering	shares
Use of proceeds	The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock, thereby enabling access to public equity markets by our stockholders and employees, facilitate an orderly distribution of shares for the selling stockholders and increase our visibility in the marketplace. We intend to use the net proceeds we receive from this offering primarily for capital expenditures and general corporate purposes, including working capital, sales and marketing activities, product development and general and administrative matters. We also may use a portion of the net proceeds from this offering to make complementary acquisitions or investments. However, we do not have agreements or commitments for any specific acquisitions or investments at this time. See the section titled “Use of Proceeds.”
Proposed              symbol	“CUDA”

The number of shares of our common stock to be outstanding after this offering is based on 137,637,591 shares of our common stock outstanding as of August 31, 2013, and excludes:

• 15,345,507 shares of common stock issuable upon the exercise of options outstanding as of August 31, 2013, with a weighted-average exercise price of $3.79 per share;

• 3,247,677 shares of common stock issuable upon the vesting of restricted stock units, or RSUs, outstanding as of August 31, 2013; and

• 2,403,521 shares of common stock reserved for future issuance under our 2012 Equity Incentive Plan and shares that become available under our 2012 Equity Incentive Plan, pursuant to provisions thereof that automatically increase the share reserves under the plans each year, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

Except as otherwise indicated, all information in this prospectus assumes:

• the effectiveness of our amended and restated certificate of incorporation upon the completion of this offering;

• the automatic conversion of all shares of our redeemable convertible preferred stock outstanding as of August 31, 2013 into an aggregate of 52,878,666 shares of common stock immediately prior to the completion of this offering;

• no exercise of outstanding options or vesting of outstanding RSUs subsequent to August 31, 2013; and

• no exercise of the underwriters’ over-allotment option.

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SUMMARY CONSOLIDATED FINANCIAL DATA

We have derived the summary consolidated statements of operations data for our fiscal years ended February 28, 2011, February 29, 2012 and February 28, 2013 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the summary consolidated statements of operations data for the six months ended August 31, 2012 and 2013 and the summary consolidated balance sheet data as of August 31, 2013 from our unaudited consolidated financial statements included elsewhere in this prospectus. Our unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, include all adjustments, which consist only of normal recurring adjustments, necessary for the fair presentation of those unaudited consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results for the six months ended August 31, 2013 are not necessarily indicative of operating results to be expected for the fiscal year ending February 28, 2014 or any other period. You should read the following summary consolidated financial data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus.

	Year Ended February 28/29,								Six Months Ended August 31,
	2011		2012			2013			2012			2013
	(in thousands, except per share data)
Consolidated Statements of Operations Data:
Revenue:
Appliance	$	52,477	$	43,258		$	59,528		$	27,775		$	35,409
Subscription		89,655		117,662			139,403			67,258			78,658
Total revenue		142,132		160,920			198,931			95,033			114,067
Cost of revenue(1)		31,972		34,966			45,088			21,286			26,481
Gross profit		110,160		125,954			153,843			73,747			87,586
Operating expenses:
Research and development(1)		23,979		27,824			35,167			16,090			22,480
Sales and marketing(1)		69,963		84,885			102,329			49,302			57,228
General and administrative(1)		13,021		14,428			28,777			12,882			14,505
Total operating expenses		106,963		127,137			166,273			78,274			94,213
Income (loss) from operations		3,197		(1,183	)		(12,430	)		(4,527	)		(6,627	)
Other income (expense), net		282		476			(839	)		(888	)		(450	)
Income (loss) before income taxes and non-controlling interest		3,479		(707	)		(13,269	)		(5,415	)		(7,077	)
Provision (benefit) for income taxes		1,136		(453	)		(5,084	)		(1,293	)		(2,136	)
Consolidated net income (loss)		2,343		(254	)		(8,185	)		(4,122	)		(4,941	)
Net loss attributable to non-controlling interest		620		859			794			462			362
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963	$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Net income (loss) attributable to common stockholders	$	2,281	$	466		$	(9,203	)	$	(3,660	)	$	(4,579	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Diluted	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)

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	Year Ended February 28/29,							Six Months Ended August 31,
	2011		2012		2013			2012		2013
	(in thousands, except per share data)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		100,890		101,488		96,094			104,460		84,424
Diluted		134,943		136,066		96,094			104,460		84,424
Pro forma net income (loss) per share attributable to common stockholders:
Basic and diluted					$	(0.05	)			$	(0.03	)
Pro forma weighted-average shares outstanding used to compute net income (loss) per share attributable to common stockholders:
Basic and diluted						135,461					137,303

(1) Includes stock-based compensation expense as follows:

	Year Ended February 28/29,						Six Months Ended August 31,
	2011		2012		2013		2012		2013
	(in thousands)
Cost of revenue	$	84	$	51	$	146	$	65	$	88
Research and development		848		766		2,059		883		1,264
Sales and marketing		627		527		1,182		499		700
General and administrative		417		527		5,400		3,187		3,076
Total stock-based compensation	$	1,976	$	1,871	$	8,787	$	4,634	$	5,128

	August 31, 2013
	Actual			Pro Forma(1)			Pro Forma as  Adjusted(2)
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	30,192		$	30,192		$
Working capital (deficit)		(66,479	)		(66,479	)
Total assets		236,168			236,168
Deferred revenue, current and non-current		286,792			286,792
Note payable, current and non-current		4,983			4,983
Redeemable convertible preferred stock		167,554			—
Common stock, including additional paid-in capital		30,792			198,346
Total stockholders’ deficit		(257,671	)		(90,117	)

(1) The pro forma column gives effect to the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into 52,878,666 shares of common stock and the effectiveness of our amended and restated certificate of incorporation which will occur immediately prior to the completion of this offering, as if such conversion had occurred and our amended and restated certificate of incorporation had become effective on August 31, 2013.

(2) The pro forma as adjusted column gives effect to the pro forma adjustments and the sale of shares of common stock by us in this offering, based on an assumed initial public offering price of $             per share, the midpoint of the estimated price range reflected on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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Key Metrics

We monitor the following key metrics to help us evaluate growth trends, establish budgets and assess operational efficiencies. In addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our operating performance.

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands, except percentages and active subscribers)
Gross billings	$	191,306		$	233,211		$	264,225		$	129,653		$	150,488
Year-over-year percentage increase					22	%		13	%					16	%
Year-over-year percentage increase on a constant currency basis(1)					22	%		17	%					17	%
Adjusted EBITDA	$	46,200		$	55,251		$	49,095		$	25,792		$	23,425
Adjusted EBITDA as a percentage of total revenue		33	%		34	%		25	%		27	%		21	%
Free cash flow	$	34,422		$	35,416		$	41,085		$	16,091		$	11,023
Free cash flow as a percentage of total revenue		24	%		22	%		21	%		17	%		10	%
Active subscribers at period end		134,807			156,976			179,952			167,674			190,700

(1) In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, we compare the percentage change in our gross billings from one period to another using a constant currency. To present this gross billings information, the current and comparative prior period results for entities that operate in other than U.S. dollars are converted into U.S. dollars at constant exchange rates. For example, the rates in effect at February 28, 2013, which was the last day of our prior fiscal year, were used to convert current and comparable prior period gross billings rather than the actual exchange rates in effect during the respective period.

Gross billings. We define gross billings as total revenue plus the change in deferred revenue and other adjustments, which primarily reflect returns and reserves with respect to the 30-day right to return we provide to our customers, as well as rebates for certain channel partner activities, during a particular period. We use gross billings as a performance measurement and a leading indicator of our future revenue, based on our business model of invoicing our customers at the time of sale of our solutions and recognizing revenue ratably over subsequent periods. Accordingly, we believe gross billings provide valuable insight into the sales of our solutions and the performance of our business. The gross billings we record in any period reflect sales to new customers plus renewals and additional sales to existing customers adjusted for returns, rebates and other offsets, which we do not expect to be recognized as revenue in future periods. In many cases, these returns, rebates and other offsets occur in periods different from the period of sale, and are unrelated to the marketing efforts leading to the initial sale, and therefore by adjusting for such offsets, we believe our computation of gross billings better reflects the effectiveness of our sales and marketing efforts.

Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus non-cash and non-operating charges, which includes acquisition and other non-recurring charges. Because of our business model, where revenue from gross billings is deferred and recognized ratably over subsequent periods, substantially all of our gross billings increase deferred revenue. Therefore, we believe that adjusting net income (loss) for increases in deferred revenue and increases in the associated deferred costs provides another indication of profitability from our operations. We use adjusted EBITDA to measure our performance, prepare our budgets and establish metrics for variable compensation. Because adjusted EBITDA excludes certain non-cash and non-operating charges, this measure enables us to eliminate the impact of items we do not consider indicative of our core operating performance and to better measure our performance on a consistent basis from period to period.

Free cash flow. We define free cash flow as cash provided by operating activities, less purchases of property and equipment plus acquisition and other non-recurring charges. We consider free cash flow to be a useful

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liquidity measure that considers the investment in cloud and corporate infrastructure required to support our business and the impact of acquisition related expenses and other non-recurring charges. We use free cash flow to assess our business performance and evaluate the amount of cash generated by our business after adjusting for purchases of property and equipment and acquisition and other non-recurring charges.

Active subscribers. We define an active subscriber as a discrete appliance, virtual appliance or cloud-only service that has at least one valid subscription that has not been terminated. We monitor the total number of active subscribers as a measure of the growth in our installed base, the success of our sales and marketing activities and the value that our solutions bring to our customers.

See “Selected Consolidated Financial Data—Key Metrics” for more information and reconciliations of gross billings to revenue, adjusted EBITDA to net income (loss) and free cash flow to cash flow provided by (used in) operating activities. Each of these metrics has been reconciled to the most directly comparable financial measure calculated and presented in accordance with GAAP.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including our consolidated financial statements and the related notes thereto, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. If any of the following risks occur, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Our Industry

If we are unable to increase sales of our solutions to new customers and sell additional distinct solutions from our portfolio of solutions to our existing customers, our future revenue and operating results will be harmed.

Our future success depends on our ability to increase sales of our solutions to new customers as well as to increase sales of additional solutions to our existing customers. The rate at which new and existing customers purchase solutions depends on a number of factors, including those outside of our control, such as customers’ perceived need for security and storage solutions and general economic conditions. If our efforts to sell our solutions to new customers and additional solutions to our existing customers are not successful, our business and operating results may suffer.

Furthermore, customers that purchase our subscriptions have no contractual obligation to renew their contracts after the initial contract period, which typically ranges from one to five years, and we may not maintain our historical subscription renewal rates. The substantial majority of our subscriptions are for one-year periods. If renewal subscriptions decline, our revenue or revenue growth may decline and our business may suffer.

A substantial majority of our billings in any particular period are derived from sales to customers with whom we began to engage during that same period and therefore our sales may be variable and difficult to predict. Given this unpredictability, we may be unable to accurately forecast our sales in any given period. A failure to accurately predict the level of demand for our solutions may adversely impact our future revenue and operating results, and we are unlikely to forecast such effects with any certainty in advance.

We rely significantly on revenue from subscriptions, which may decline, and, because we recognize revenue from subscriptions over the term of the relevant subscription period, downturns or upturns in sales are not immediately reflected in full in our operating results.

Our subscription revenue accounted for approximately 70% and 69% of our total revenue for fiscal 2013 and the six months ended August 31, 2013, respectively. Customers that purchase our subscriptions have no contractual obligation to renew their contracts after the initial contract period, which typically ranges from one to five years, and we may not maintain our historical subscription renewal rates. The substantial majority of our subscriptions are for one-year periods. New or renewal subscriptions may decline or fluctuate as a result of a number of factors, including our customers’ level of satisfaction with our solutions and our customer support, the frequency and severity of subscription outages, our solution functionality and performance, the timeliness and success of product enhancements and introductions by us and those of our competitors, the prices of our solutions, the prices of solutions offered by our competitors or reductions in our customers’ spending levels. If new or renewal subscriptions decline, our revenue or revenue growth may decline, and our business may suffer. In addition, we recognize subscription revenue ratably over the term of the relevant subscription period, which typically ranges from one to five years. As a result, much of the revenue we report each quarter is the recognition of billings from subscriptions entered into during previous quarters. Consequently, a decline in new or renewal subscriptions in any one quarter will not be fully reflected in revenue in that quarter, but will negatively affect

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our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our solutions would not be reflected in full in our results of operations until future periods.

We have experienced net losses on a GAAP basis in recent periods and may not achieve or maintain profitability in the future. If we cannot achieve or maintain profitability, our financial performance will be harmed.

We have not been profitable on a quarterly or annual basis in recent periods. We experienced net losses on a GAAP basis for fiscal 2013 and the six months ended August 31, 2012 and August 31, 2013, respectively. While we have experienced revenue growth over these same periods, we may not be able to sustain or increase our growth or achieve profitability in the future or on a consistent basis. Over the past year, we have spent substantial amounts of time and money to develop new security and storage solutions and enhanced versions of our existing security and storage solutions to position us for future growth. Additionally, we have incurred substantial expenses and expended significant resources upfront to market, promote and sell our solutions. In fiscal 2013, we incurred substantial costs in connection with our CEO transition and other non-recurring charges. We also expect to continue to invest for future growth. In addition, as a public company, we will incur significant accounting, legal and other expenses that we did not incur as a private company.

As a result of our increased expenditures, we will have to generate and sustain increased revenue to achieve future profitability. Achieving profitability will require us to increase revenues, manage our cost structure and avoid significant liabilities. Revenue growth may slow, revenue may decline, or we may incur significant losses in the future for a number of possible reasons, including general macroeconomic conditions, increasing competition, a decrease in the growth of the markets in which we operate, or if we fail for any reason to continue to capitalize on growth opportunities. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods. If these losses exceed our expectations or our revenue growth expectations are not met in future periods, our financial performance will be harmed and our stock price could be volatile or decline.

If we cannot successfully execute on our strategy and continue to develop, manufacture and market solutions that respond promptly to the security and storage needs of our customers’ needs, our business and operating results may suffer.

The security and storage markets are characterized by constant change and innovation, and we expect them to continue to evolve rapidly. Moreover, many of our customers operate in markets characterized by rapidly changing technologies and business models, which require them to develop and manage increasingly complex enterprise networks, incorporating a variety of hardware, software applications, operating systems and networking protocols. Our historical success has been based on our ability to identify common customer needs and design solutions to address complex IT problems in email security and web security, and more recently in backup. To the extent we are not able to continue to identify IT challenges and execute our business model to timely and effectively design and market solutions to address these challenges, our business, operating results and financial condition will be adversely affected.

Although the market expects rapid introduction of new solutions or enhancements to respond to new threats and address evolving customer needs, the development of these solutions is difficult, and the timetable for commercial release and availability is uncertain as there are periods of delay between releases and the availability of new solutions. We may experience delays in the development and availability of new solutions and fail to timely meet customer needs. If we do not respond to the rapidly changing and rigorous needs of our customers by developing and making available on a timely basis new solutions or enhancements that can respond adequately to new security threats and address evolving customer needs, our competitive position and business prospects will be harmed.

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Additionally, the process of developing new technology is complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological trends or if we fail to achieve the benefits expected from our investments, our business could be harmed. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position and we must commit significant resources to developing new solutions before knowing whether our investments will result in solutions the market will accept. Our new solutions or solution enhancements could fail to attain sufficient market acceptance for many reasons, including:

• delays in releasing our new solutions or enhancements to the market;

• failure to accurately predict market demand or customer demands;

• inability to protect against new types of attacks or techniques used by hackers;

• defects, errors or failures in their design or performance;

• negative publicity about their performance or effectiveness;

• introduction or anticipated introduction of competing solutions by our competitors;

• poor business conditions for our customers, causing them to delay IT purchases;

• the perceived value of our solutions or enhancements relative to their cost;

• easing of regulatory requirements around security or storage; and

• reluctance of customers to purchase solutions incorporating open source software.

There can be no assurance that we will successfully identify new opportunities, develop and bring new solutions to market on a timely basis or achieve market acceptance of our solutions, or that solutions and technologies developed by others will not render our solutions or technologies obsolete or noncompetitive, all of which could adversely affect our business and operating results. If our new solutions or enhancements do not achieve adequate acceptance in the market, or if our new solutions do not result in increased subscriptions, our competitive position will be impaired, our revenue will be diminished and the negative impact on our operating results may be particularly acute because of the upfront research, development, marketing, sales and other expenses we incurred in connection with the new solution or enhancement.

We have recently introduced, and will continue to introduce, new security and storage solutions, such as the Barracuda Firewall, and we may not gain broad market acceptance for these new solutions.

Over the past year, we have released several new security and storage solutions and enhanced versions of our existing security and storage solutions, such as the Barracuda Firewall, to incorporate additional features, improve functionality or deliver other enhancements in order to meet our customers’ rapidly evolving demands. The return on our investments in these development efforts may be lower, or may develop more slowly, than we expect. Further, given their recent introduction, we cannot assure you that these solutions will gain broad market acceptance and that they will prove to be profitable in the longer term. Additionally, we intend to continue introducing new security and storage solutions to respond to the needs of our customers. If we fail to achieve high levels of market acceptance for these solutions or if market acceptance is delayed, we may fail to justify the amount of our investment in developing and bringing them to market, and our business, operating results and financial performance could be adversely affected.

Our business is substantially dependent on sales leads from Internet search engines and if we are unable to generate significant volumes of such leads, traffic to our websites and our revenue may decrease.

We generate a substantial portion of our sales leads through visits to our websites by potential customers interested in our solutions. Many of these potential customers find our websites by searching for security and storage solutions through Internet search engines, particularly Google. A critical factor in attracting potential customers to our websites is how prominently our websites are displayed in response to search inquiries. If we

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are listed less prominently or fail to appear in search result listings for any reason, visits to our websites by customers and potential customers could decline significantly and we may not be able to replace this traffic. Furthermore, if the costs of search engine marketing services, such as Google AdWords, increase we may be required to increase our sales and marketing expenses, which may not be offset by additional revenue, and our business and operating results could be adversely affected.

Our quarterly and annual operating results and key metrics have varied in the past and may continue to vary and be unpredictable, which may cause our stock price to fluctuate.

Our quarterly and annual operating results and key metrics have varied from period to period in the past, and we expect that they may continue to fluctuate as a result of a number of factors, many of which are outside of our control, including:

• the timing and success of introductions of our new solutions;

• changes in the growth rate of the security and storage markets;

• changes in renewal rates for our subscriptions and our ability to cross-sell additional solutions in a period;

• the timing of orders from our customers;

• the timing of our marketing expenditures;

• the mix of solutions sold;

• fluctuations in demand for our products and services, particularly seasonal variations in customer spending patterns in more than one of our addressable markets;

• our ability to control costs, including operating expenses, the costs of hardware and software components, and other manufacturing costs;

• the budgeting cycles and purchasing priorities of our customers;

• the timing of payments of sales commissions, bonuses or performance earnouts;

• the timing and potential provision of valuation allowances against our deferred tax assets;

• the level of perceived threats to network security, which may fluctuate from period to period;

• government regulations and customer requirements surrounding data storage and protection;

• fines, penalties or changes or increases in liabilities for regulatory actions, litigation or warranty claims, including our current voluntary disclosures to the U.S. Commerce Department, Bureau of Industry and Security, or BIS, and the U.S. Treasury Department, Office of Foreign Assets Control, or OFAC, as described in greater detail below;

• deferral of orders from customers in anticipation of new solutions or solution enhancements announced by us or our competitors;

• any significant changes in the competitive environment, including the entry of new competitors and increased price competition;

• disruption in our supply chain and the availability of the components of our appliances;

• levels of solution returns, particularly in connection with our 30-day right to return;

• the timing of revenue recognition for our sales, which may be affected by the term of subscriptions;

• increases or decreases caused by fluctuations in foreign currency exchange rates, since a significant portion of our revenues are received, and our expenses are incurred and paid, in currencies other than U.S. dollars;

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• general economic conditions, both domestically and in our foreign markets, which impact purchasing patterns of customers; and

• future accounting pronouncements or changes in our accounting policies.

Any one of the factors above, or the cumulative effect of some of the factors referred to above, may result in significant fluctuations in our quarterly or annual operating results, including fluctuations in our key financial metrics. This variability and unpredictability could result in our failing to meet our revenue, billings or operating results expectations or those of securities analysts or investors for any period. In addition, a significant percentage of our operating expenses are fixed in nature and based on forecasted revenue trends. Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on operating results in the short term. If we fail to meet or exceed such expectations for these or any other reasons, our business and stock price could be materially adversely affected and we could face costly lawsuits, including securities class action suits.

We believe that our brand is integral to our success and if we fail to cost-effectively promote or protect our brand, our business and competitive position may be harmed.

We believe that cost-effectively promoting and maintaining awareness and integrity of our company and our brand are vital to achieving widespread acceptance of our existing and future solutions and are important elements in attracting new customers and retaining our existing customers, particularly as we seek to expand internationally. We believe that the importance of brand recognition will increase as competition in our market further intensifies. We have invested and expect to continue to invest substantial resources to promote and maintain our brand and generate sales leads, both domestically and internationally, but there is no guarantee that our brand development strategies will enhance the recognition of our brand or lead to increased sales. For example, we use signs and billboards in key locations such as airports where target customers often travel and vehicles wrapped in highly-visible branding. We also engage in activities such as promotional events and attending trade shows. Some of our existing and potential competitors have well-established brands with equal or greater recognition than we have. If our efforts to cost-effectively promote and maintain our brand are not successful, our operating results and our ability to attract and retain customers may be adversely affected. In addition, even if our brand recognition and loyalty increases, this may not result in increased use of our solutions or higher revenue. Moreover, if we fail to generate a sufficient volume of leads from these various activities, they may not be offset by revenues and our business and operating results could be adversely affected.

In addition, independent industry analysts often provide reviews of our solutions, as well as those of our competitors, and perception of our solutions in the marketplace may be significantly influenced by these reviews. We have no control over what these industry analysts report, and because industry analysts may influence current and potential customers, our brand could be harmed if they do not provide a positive review of our solutions or view us as a market leader.

We face intense competition in the security and storage markets and other markets in which we compete, which are characterized by constant change and innovation, and we may lack sufficient financial or other resources to maintain or improve our competitive position.

The markets for security and storage solutions are intensely competitive and are characterized by constant change and innovation, and we expect competition to increase in the future from larger, well-established competitors and new market entrants. Changes in the application, threat and technology landscape result in evolving customer requirements. Our main competitors in these markets fall into two categories:

• Independent network security, storage and application delivery vendors such as Blue Coat Systems, Inc., Check Point Software Technologies, Ltd., CommVault Systems, Inc., EMC Corporation, F5 Networks, Inc., Fortinet, Inc., Imperva, Inc., Juniper Networks, Inc., Palo Alto Networks, Inc. and Symantec Corporation that offer competing solutions.

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• Diversified IT suppliers such as Cisco Systems, Inc., Dell Inc., Hewlett-Packard Company, the McAfee division of Intel Corporation, or Intel, and International Business Machines that have acquired large security specialist vendors in recent years, that have software- or hardware-based storage solutions or that have the technical and financial resources to bring competitive solutions to the market.

In addition, we compete with companies that offer point solutions that compete with some of the features present in our platform. As our market grows, we believe it will attract more highly specialized vendors as well as larger vendors that may continue to acquire or bundle their solutions more effectively.

Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as:

• substantially greater financial, technical and other resources;

• greater name recognition, stronger reputations and longer operating histories;

• larger sales and marketing budgets;

• broader distribution and established relationships with distribution partners and customers;

• lower labor and development costs;

• greater customer support resources;

• larger and more mature intellectual property portfolios; and

• greater resources to make acquisitions.

In addition, our larger competitors have substantially broader solution offerings and leverage their relationships based on other solutions or incorporate functionality into existing solutions to gain business in a manner that discourages customers and potential customers from purchasing our solutions, including through selling at low or negative margins, product bundling or closed technology platforms. Potential customers may also prefer to purchase from their existing suppliers rather than a new supplier regardless of solution performance, price or features. These larger competitors often have broader product lines and market focus and will therefore not be as susceptible to downturns in our markets, thereby reducing their overall risk profile as compared to ours. Many of our smaller competitors that specialize in providing protection from a single type of network security threat are often able to deliver these specialized network security solutions to the market more quickly than we can, which could reduce the addressable market for our new solutions or enhancements to existing solutions. Conditions in our market could change rapidly and significantly as a result of technological advancements, partnering by our competitors or continuing market consolidation. New start-up companies that innovate and large competitors that are making significant investments in research and development may invent similar or superior solutions and technologies that compete with our solutions and technology. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their ability to compete.

Some of our competitors have made acquisitions of businesses that may allow them to offer more directly competitive and comprehensive solutions than they had previously offered, such as Intel’s acquisition of McAfee. As a result of such acquisitions, our current or potential competitors might be able to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their solutions and services, initiate or withstand substantial price competition, take advantage of acquisition or other opportunities more readily, or develop and expand their solution offerings more quickly than we do.

Organizations may be more willing to incrementally add solutions to their existing IT infrastructure from competitors than to replace it with our solutions. These competitive pressures in our market or our failure to compete effectively may result in price reductions, fewer orders, reduced revenue and gross margins and loss of market share. Any failure to meet and address these factors could seriously harm our business and operating results.

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Our business is dependent on overall demand for security and storage solutions and therefore reduced security and storage solution spending or overall adverse economic conditions may negatively impact our business and operating results.

Our business depends on the overall demand for security and storage solutions. In addition, the purchase of our solutions is often discretionary. Weak global economic conditions, or a reduction in security and storage solution spending even if economic conditions improve, could adversely impact our business, financial condition and operating results in a number of ways, including longer sales cycles, lower prices for our solutions, higher default rates among our customers and channel partners, reduced subscription renewals and lower our sales levels. Market and financial uncertainty and instability in the United States and Europe could intensify or spread further, particularly if ongoing stabilization efforts prove insufficient. Deterioration of economic conditions, as well as economic uncertainty in the United States and Europe, may harm our business and operating results in the future.

We have made significant investments in recent periods to support our growth, including investments in our information technology, infrastructure and management team, and these investments may achieve delayed or lower than expected benefits, which could harm our operating results. Furthermore, if we do not effectively manage any future growth, or are unable to improve our systems and processes, our operating results will be adversely affected.

We continue to increase the breadth and scope of our offerings and, correspondingly, the breadth and scope of our operations. To support this growth, and to manage any future growth effectively, we must continue to improve and expand our information technology and financial infrastructure, our operating and administrative systems and our ability to manage headcount, capital and processes in an efficient manner. We have incurred, and will continue to incur, expenses as we invest in international operations and infrastructure such as the expansion of our sales and marketing presence in Asia Pacific and Japan, the addition of higher touch sales and marketing field resources to liaise with our channel partners as we continue to grow our sales both domestically and internationally and investments in software systems and additional data center resources to keep pace with the growth in the cloud and cloud-based solutions markets. In fiscal 2013, we made significant incremental investments in product development, corporate infrastructure and broadened distribution, including hiring a new chief executive officer and a number of other key executives across our organization, and we intend to continue to invest in development of our solutions, our infrastructure and sales and marketing. We are likely to recognize the costs associated with these investments earlier than some of the anticipated benefits, and the return on these investments may be lower, or may develop more slowly, than we expect. If we do not achieve the benefits anticipated from these investments, or if the achievement of these benefits is delayed, our operating results may be adversely affected.

We may be subject to fines or other penalties for potential past violations of U.S. export control and economic sanctions laws.

In late 2011, following a voluntary internal review of our compliance with U.S. export control and sanctions laws, our management team became aware that certain of our physical appliances had been sold indirectly into embargoed countries via our distributors and resellers, potentially in violation of U.S. export control and economic sanctions laws. These laws restrict or prohibit the sale of certain products, including our solutions, into certain countries, including Iran, Sudan and Syria. In addition, certain of our solutions incorporate encryption components and may be exported from the U.S. only with the required approvals; in the past, we may have exported products prior to receiving these required authorizations. We believe that these potential violations were inadvertent and occurred because we and certain of our resellers did not have sufficient compliance procedures in place to prevent the transactions at issue. As a result, we were unable to preclude certain of our channel partners and resellers from selling our solutions into countries subject to a U.S. embargo until late 2011.

Commencing in late 2011, we took a series of corrective actions intended to remediate the effect of any unauthorized past actions, including actions to permanently disable appliances located in sanctioned countries

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and termination of certain distributors and resellers. In addition, we believe that we have implemented systematic and process changes to our sales and distribution processes to block and prohibit sale or use of our solutions in sanctioned countries or to denied parties.

After completion of a comprehensive internal investigation conducted by outside counsel, we submitted voluntary disclosures regarding these matters to BIS and to OFAC. These disclosures summarized potential violations of export controls and economic sanctions laws, including reexports by third parties and provision of services to end users in embargoed countries including Iran, Sudan and Syria. The voluntary disclosures also summarized the remedial actions we have taken, including those described above, as well as the hiring of an export compliance manager and a general counsel with export controls experience, and the enhancement of employee training programs, periodic notices to our resellers and company-wide policies and procedures designed to help us comply with these laws.

The reviews of our voluntary disclosures by BIS and OFAC are still pending and in the early stages, and their reviews of our voluntary disclosures may continue for a long period of time. BIS and OFAC may conclude that our actions resulted in violations of U.S. export control and economic sanctions laws and warrant the imposition of penalties that could include fines, termination of our ability to export our products and/or referral for criminal prosecution. Any such penalties may be material to our financial results in the period in which they are imposed and could significantly affect our quarterly operating results for that quarter. The penalties may be imposed against us and/or our management. Also, disclosure of our conduct and any fines or other action relating to this conduct could harm our reputation and indirectly have a material adverse effect on our business, operating results and financial condition. We cannot predict when BIS and OFAC will complete their reviews or make determinations regarding the imposition of possible penalties. We also cannot assure you that additional violations will not be discovered or that our policies and procedures will be effective to prevent future violations.

Failure to comply with governmental laws and regulations could harm our business.

Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws and tax laws and regulations. In certain foreign jurisdictions, these regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and financial condition.

We generate a significant amount of revenue from sales outside of North America, and we are therefore subject to a number of risks associated with international sales and operations.

Sales outside of North America represented approximately 26% and 27% of our total revenue for fiscal 2013 and the six months ended August 31, 2013, respectively. As a result, we must continue to hire and train experienced personnel to staff and manage our foreign operations. To the extent that we experience difficulties in recruiting, training, managing and retaining an international staff, and specifically staff related to sales management and sales personnel, we may experience difficulties in sales productivity in foreign markets. If we are not able to maintain successful channel partner and distributor relationships internationally or recruit additional companies to enter into strategic channel partner and distributor relationships, our future success in these international markets could be limited.

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Additionally, our international sales and operations are subject to a number of risks, including the following:

• greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;

• increased expenses incurred in establishing and maintaining office space and equipment for our international operations;

• greater costs and expenses associated with international sales and operations;

• management communication and integration problems resulting from cultural and geographic dispersion;

• risks associated with trade restrictions and foreign legal requirements, including the importation, certification and localization of our solutions required in foreign countries;

• greater risk of unexpected changes in regulatory practices, tariffs and tax laws and treaties;

• the uncertainty of protection for intellectual property rights in some countries;

• greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the U.S. Foreign Corrupt Practices Act and any trade regulations ensuring fair trade practices;

• heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;

• the potential for political unrest, terrorism, hostilities or war; and

• multiple and possibly overlapping tax structures.

In addition, the expansion of our existing international operations and entry into additional international markets have required and will continue to require significant management attention and financial resources. These factors and other factors could harm our ability to gain future international revenues and, consequently, materially impact our business, operating results and financial condition.

We may acquire other businesses which could require significant management attention, disrupt our business, dilute stockholder value and adversely affect our operating results.

As part of our business strategy, we have in the past made, and may in the future make, acquisitions or investments in complementary companies, solutions and technologies that we believe fit within our business model and can address the needs of IT professionals. With respect to our previous acquisitions, we cannot ensure that we will be able to successfully integrate the technology and resources to increase subscriptions and grow revenue derived from these acquisitions. In the future, we may not be able to acquire and integrate other companies, solutions or technologies in a successful manner. We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. Furthermore, we may not be able to find suitable acquisition candidates that enhance our subscription offerings. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, including increases in subscriptions, and any acquisitions we complete could be viewed negatively by our customers, investors and industry analysts.

Future acquisitions may reduce our cash available for operations and other uses and could result in an increase in amortization expense related to identifiable assets acquired. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition or the value of our common stock. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage

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our operations. In addition, our future operating results may be impacted by performance earnouts or contingent bonuses. Furthermore, acquisitions may require large one-time charges and can result in increased debt or contingent liabilities, adverse tax consequences, additional stock-based compensation expense and the recording and subsequent amortization of amounts related to certain purchased intangible assets, any of which items could negatively impact our future results of operations. We may also record goodwill in connection with an acquisition and incur goodwill impairment charges in the future.

In addition, if we are unsuccessful at integrating such acquisitions, or the technologies associated with such acquisitions, into our company, the revenue and operating results of the combined company could be adversely affected. Any integration process may result in unforeseen operating difficulties and require significant time and resources, and we may not be able to manage the process successfully. In particular, we may encounter difficulties assimilating or integrating the companies, solutions, technologies, personnel or operations we acquire, particularly if the key personnel are geographically dispersed or choose not to work for us. Acquisitions may also disrupt our core business, divert our resources and require significant management attention that would otherwise be available for development of our business. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. If we fail to properly evaluate, execute or integrate acquisitions or investments, the anticipated benefits may not be realized, we may be exposed to unknown or unanticipated liabilities, and our business and prospects could be harmed.

Defects, errors or vulnerabilities in our solutions, the failure of our solutions to block a virus or prevent a security breach or a false detection of applications, viruses, spyware, vulnerability exploits, data patterns or URL categories could harm our reputation and adversely impact our operating results.

Because our solutions are complex, they have contained and may in the future contain design or manufacturing defects or errors that are not detected until after their commercial release and deployment by our customers. For example, from time to time, certain of our customers have reported defects in our solutions related to performance, functionality and compatibility that were not detected before shipping the solution. Additionally, defects may cause our solutions to be vulnerable to security attacks, cause them to fail to help secure networks or temporarily interrupt customers’ networking traffic. Because the techniques used by computer hackers to access or sabotage networks change frequently and generally are not recognized until launched against a target, our solutions may not be able to protect our customers’ networks. Our security solutions may also fail to detect or prevent viruses, worms or similar threats due to a number of reasons such as the evolving nature of such threats and the continual emergence of new threats that we may fail to add to our threat intelligence database or other virus databases in time to protect our customers’ networks. In addition, defects or errors in our subscription updates or our solutions could result in a failure to effectively update customers’ solutions and thereby leave our customers vulnerable to attacks. Our data centers and networks may experience technical failures and downtime, may fail to distribute appropriate updates, or may fail to meet the increased requirements of a growing customer base, any of which could temporarily or permanently expose our customers’ networks, leaving their networks unprotected against the latest security threats. Any defects, errors or vulnerabilities in our solutions could result in:

• expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate or work-around errors or defects or to address and eliminate vulnerabilities;

• loss of existing or potential customers;

• delayed or lost revenue;

• delay or failure to attain market acceptance;

• negative publicity, which will harm our reputation and brand;

• an increase in warranty claims compared with our historical experience, or an increased cost of servicing warranty claims, either of which would adversely affect our operating results; and

• litigation, regulatory inquiries, or investigations that may be costly and harm our reputation and brand.

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Furthermore, our security solutions may falsely detect applications, content or threats that do not actually exist based on our classifications of application type, virus, malware, vulnerability exploits, data or URL categories. This risk is increased by the inclusion of “heuristics” analysis in our solutions, which attempts to identify threats not based on any known signatures but based on characteristics or anomalies which indicate that a particular item may be a threat. These false positives, while typical in our industry, may impair the perceived reliability of our solutions and may therefore adversely affect market acceptance of our solutions. Also, our anti-spam and anti-malware solutions may falsely identify emails or programs as unwanted spam or potentially unwanted programs, or alternatively fail to properly identify unwanted emails or programs, particularly as spam emails or malware are often designed to circumvent anti-spam or anti-malware solutions. Parties whose emails or programs are blocked by our solutions may seek redress against us for labeling them as spammers or malware or for interfering with their business. In addition, false identification of emails or programs as unwanted spam or potentially unwanted programs may reduce the adoption of our solutions. If our solutions restrict important files or applications based on falsely identifying them as malware or some other item that should be restricted, this could adversely affect customers’ systems and cause material system failures. Any such false identification of important files or applications could result in damage to our reputation, negative publicity, loss of customers and sales, increased costs to remedy any problem and risk of litigation.

If our security measures are breached or unauthorized access to customer data is otherwise obtained or our customers experience data losses, our brand, reputation and business could be harmed and we may incur significant liabilities.

Our customers rely on our security and storage solutions to secure and store their data, which may include financial records, credit card information, business information, customer information, health information, other personally identifiable information or other sensitive personal information. A breach of our network security and systems or other events that cause the loss or public disclosure of, or access by third parties to, our customers’ stored files or data could have serious negative consequences for our business, including possible fines, penalties and damages, reduced demand for our solutions, an unwillingness of our customers to use our solutions, harm to our brand and reputation, and time-consuming and expensive litigation. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, often are not recognized until launched against a target, and may originate from less regulated or remote areas around the world. As a result, we may be unable to proactively prevent these techniques, implement adequate preventative or reactionary measures, or enforce the laws and regulations that govern such activities. In addition, because of the large amount of data that we store for our customers, it is possible that hardware failures, human errors or errors in our systems could result in data loss or corruption, or cause the information that we collect to be incomplete or contain inaccuracies that our customers regard as significant. If our customers experience any data loss, or any data corruption or inaccuracies, whether caused by security breaches or otherwise, our brand, reputation and business could be harmed. Moreover, if a high profile security breach occurs with respect to another provider of cloud services, our clients and potential clients may lose trust in the security of the cloud business model generally, which could adversely impact our ability to retain existing clients or attract new ones.

If an actual or perceived breach of network security occurs in our internal systems, our services may be perceived as not being secure and clients may curtail or stop using our solutions.

As a provider of network security solutions, we are a high profile target and our networks and solutions may have vulnerabilities that may be targeted by hackers and could be targeted by attacks specifically designed to disrupt our business and harm our reputation. We will not succeed unless the marketplace continues to be confident that we provide effective network and security protection. If an actual or perceived breach of network security occurs in our internal systems it could adversely affect the market perception of our solutions. We may not be able to correct any security flaws or vulnerabilities promptly, or at all. In addition, such a security breach could impair our ability to operate our business, including our ability to provide subscription and support services to our customers. If this happens, our business and operating results could be adversely affected.

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Because our solutions could be used to collect and store personal information of our customers’ employees or customers, privacy concerns could result in additional cost and liability to us or inhibit sales of our solutions.

Personal privacy has become a significant issue in the United States and in many other countries where we offer our solutions. The regulatory framework for privacy issues worldwide is currently complex and evolving, and it is likely to remain uncertain for the foreseeable future. Many federal, state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use and disclosure of personal information. In the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Health Insurance Portability and Accountability Act of 1996 and state breach notification laws. Internationally, virtually every jurisdiction in which we operate has established its own data security and privacy legal framework with which we or our customers must comply, including the Data Protection Directive established in the European Union, or the EU, and the Federal Data Protection Act recently passed in Germany.

In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us. Because the interpretation and application of privacy and data protection laws are still uncertain, it is possible that these laws may be interpreted and applied in a manner that is in conflict with one another, and is inconsistent our existing data management practices or the features of our solutions. If so, in addition to the possibility of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our software, which could have an adverse effect on our business. Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, damage our reputation, inhibit sales and harm our business.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our solutions. Privacy concerns, whether valid or not valid, may inhibit market adoption of our solutions particularly in certain industries and foreign countries.

Our business is subject to the risks of warranty claims and product liability claims and given our 30-day right to return policy on many of our solutions, we may experience increased frequency of returns, any of which may adversely affect our operating results and financial performance.

Our solutions have contained and may contain undetected defects or errors, especially when first introduced or when new versions are released. Defects or errors could affect the performance of our solutions and could delay the development or release of new solutions or new versions of solutions, adversely affect our reputation and our customers’ willingness to buy solutions from us and adversely affect market acceptance or perception of our offerings. Any such errors or delays in releasing new solutions or new versions of solutions or allegations of unsatisfactory performance could cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs in redesigning the solutions, cause us to lose significant customers, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, operating results and financial condition. Furthermore, we offer customers a 30-day right to return for many of our solutions which is integral to our sales model. If we experience appliance defects, or if we experience increased frequency of returns, our sales cycles, operating results and financial performance may be adversely affected.

In addition, the occurrence of hardware or software errors which resulted in increase warranty or support claims could result in increased expenses or require us to maintain greater warranty reserves which would have an adverse effect on our business and financial performance.

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Our ability to increase sales of our solutions is highly dependent on the quality of our customer support, and our failure to offer high-quality support would have an adverse effect on our business, reputation and operating results.

Our solutions are designed to be deployed by customers in resource-constrained IT environments. Our customers depend on our support services to assist them with questions as they implement our solutions within their IT infrastructure, and after deployment, our customers depend on our support organization to quickly resolve any issues relating to those solutions. A significant level of high-quality support is critical to ensure high rates of renewals and cross-selling of our solutions. If we do not effectively assist our customers in deploying our solutions, succeed in helping them quickly resolve post-deployment issues or provide effective ongoing support, it could adversely affect our ability to sell our solutions to existing customers, decrease our subscription renewal rates and harm our reputation with potential new customers, all of which would have an adverse effect on our business, reputation and operating results.

If we are unable to hire, retain, train and motivate qualified personnel and senior management, or if our senior management team is unable to perform effectively, our business could suffer.

Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel and the continued services of our senior management and other key personnel to execute on our business plan and to identify and pursue new opportunities and solution innovations. The loss of the services of our senior management or any of our key personnel, the inability to attract or retain qualified personnel, or delays in hiring required personnel, particularly in engineering and sales and marketing, could significantly delay or prevent the achievement of our development and strategic objectives, and may adversely affect our business, financial condition and operating results. Although we have entered into employment offer letters with our key personnel, these agreements have no specific duration and constitute at-will employment. In addition, many members of our management team have only joined us in the last year as part of our investment in the expansion of our business, including our chief executive officer, William D. Jenkins, Jr. Our productivity and the quality of our solutions may be adversely affected if we do not integrate and train our new employees quickly and effectively. Furthermore, if we are not effective in retaining our key personnel, our business could be adversely impacted and our operating results and financial condition could be harmed.

Competition for highly skilled personnel is often intense, especially in the San Francisco Bay Area where we have a substantial presence and need for highly skilled personnel. We may not be successful in attracting, integrating or retaining qualified personnel to fulfill our current or future needs. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited, or that they have divulged proprietary or other confidential information, or that their former employers own their inventions or other work product.

We may be unsuccessful in managing or expanding our operations, which could adversely affect our operating results.

We have office locations throughout the United States and in various international locations, including Austria, India and the United Kingdom. If we are unable to effectively manage a large and geographically dispersed group of employees or to anticipate our future growth and personnel needs, our business may be adversely affected. As we expand our business, we add complexity to our organization and must expand and adapt our operational infrastructure and effectively coordinate throughout our organization. For example, we recently leased additional office space in San Jose, California, and intend to hire new employees and have relocated and will continue to relocate certain employees to this location from our headquarters in Campbell, California. We recently relocated our manufacturing to this new facility. As a result, we have incurred and expect to continue to incur additional expense and the additional location may disrupt our operations and distract our management team. Failure to manage any future growth effectively could result in increased costs, negatively impact our customers’ satisfaction with our solutions, and harm our operating results.

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Our customer-centric and collaborative corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.

We believe that a critical contributor to our success has been our corporate culture, which we believe fosters innovation, creativity, a customer-centric focus, collaboration and loyalty. As we grow and change, we may find it difficult to maintain these important aspects of our corporate culture, which could limit our ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to retain and recruit personnel, continue to perform at current levels or execute on our business strategy.

We rely on third-party distributors and channel partners to fulfill substantially all of our sales orders. If our distributors and reseller channel partners fail to perform, our ability to sell our solutions will be limited, and, if we fail to optimize our distributor and reseller channel partner model going forward, our operating results will be harmed.

Substantially all of our sales orders are fulfilled by our channel partners, which include distributors and resellers. We also depend upon our channel partners to manage the customer sales process and to generate sales opportunities. To the extent our channel partners are unsuccessful in fulfilling our sales, managing the sales process or selling our solutions, or we are unable to enter into arrangements with, and retain a sufficient number of high-quality, motivated channel partners in each of the regions in which we sell our offerings, our ability to sell our solutions and operating results will be harmed. In order to support our growth strategy, we recently entered into an agreement with an additional distributor in North America. If we are unable to successfully develop our relationship with the new distributor, or if we experience reseller shifts between distributors or any channel conflict occurs, it could negatively impact our ability to meet our revenue and profitability goals.

We provide our channel partners with specific programs to assist them in selling our solutions, but there can be no assurance that these programs will be effective. In addition, our channel partners may be unsuccessful in marketing, selling and supporting our solutions. Our channel partners do not have minimum purchase requirements. They may also market, sell and support solutions that are competitive with ours, and may devote more resources to the marketing, sales and support of such solutions. Our agreements with our channel partners may generally be terminated for any reason by either party with advance written notice and our channel partners may stop selling our solutions at any time. We cannot assure you that we will retain these channel partners, that channel partners will sell our solutions effectively or that we will be able to secure additional or replacement channel partners. The loss of one or more of our significant channel partners or a decline in the number or size of orders from them could harm our operating results. In addition, our channel partner sales structure could subject us to lawsuits, potential liability, and reputational harm if, for example, any of our channel partners misrepresent the functionality of our solutions to customers or violate laws or our corporate policies.

We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and operating results.

Given our volume of international sales, a substantial portion of our total revenue is subject to foreign currency risk. As an example, during fiscal 2013 and the six months ended August 31, 2013, approximately 30% and 32% of our total revenue was generated from sales to customers located outside of the United States, respectively. Additionally, a strengthening of the U.S. dollar could increase the real cost of our solutions to our customers outside of the United States, which could adversely affect our financial condition and operating results. In addition, an increasing portion of our operating expenses is incurred outside of the United States, is denominated in foreign currencies, and is subject to fluctuations due to changes in foreign currency exchange rates. If we are not able to successfully manage or hedge against the risks associated with currency fluctuations, our financial condition and operating results could be adversely affected.

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We rely on a single source or a limited number of sources for some of our components. Insufficient supply and inventory may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.

Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to forecast accurately and effectively manage the supply of our components. Additionally, we carry very little inventory of our appliances or components, and we rely on our suppliers to deliver necessary components in a timely manner. Insufficient supply levels may lead to shortages that result in delayed revenue or loss of sales opportunities altogether as potential customers turn to competitors’ solutions that could be more readily available. Additionally, any increases in the time required to manufacture our solutions could adversely affect our business, brand, sales cycle and reputation. If we are unable to effectively manage our supply and inventory, our operating results could be adversely affected.

We currently depend on a single source or a limited number of sources for certain components used in the manufacture of our solutions. We are therefore subject to the risk of shortages in supply of these components and the risk that component suppliers discontinue or modify components used in our solutions. If these suppliers were to discontinue production of a necessary part or component, we would be required to expend resources and time in locating and integrating replacement parts or components from another vendor. In addition, the introduction by component suppliers of new versions of their components, particularly if not anticipated by us, could require us to expend resources to incorporate these new components into our solutions. Our reliance on a single source or a limited number of suppliers involves a number of additional risks, including risks related to:

• supplier capacity constraints;

• price increases;

• timely delivery;

• component quality;

• failure of a key supplier to remain in business and adjust to market conditions;

• delays in, or the inability to execute on, a supplier roadmap for components and technologies; and

• natural disasters.

In addition, for certain components, we are subject to potential price increases and limited availability as a result of market demand for these components. In the past, unexpected demand for computer and network products has caused worldwide shortages of certain electronic parts. If similar shortages occur in the future, our business could be adversely affected. We rely on purchase orders rather than long-term contracts with these suppliers, and as a result we might not be able to secure sufficient components, even if they were available, at reasonable prices or of acceptable quality to build appliances in a timely manner and, therefore, might not be able to meet customer demands for our solutions, which would have a material and adverse effect on our business, operating results and financial condition.

Assertions by third parties of infringement or other violations by us of their intellectual property rights, or other lawsuits brought against us, could result in significant costs and substantially harm our business and operating results.

Patent and other intellectual property disputes are common in the IT markets in which we compete. Some companies in the IT markets in which we compete, including some of our competitors, own large numbers of patents, copyrights, trademarks and trade secrets, which they may use to assert claims of infringement, misappropriation or other violations of intellectual property rights against us. There also is a market for intellectual property rights and a competitor, or other entity, could acquire intellectual property rights and assert similar claims based on the acquired intellectual property. They may also assert such claims against our customers or channel partners. As the number of patents and competitors in our market increase and overlaps

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occur, claims of infringement, misappropriation and other violations of intellectual property rights may increase. From time to time, we face allegations that we, our customers or our channel partners have infringed, misappropriated and violated intellectual property rights, including allegations made by our competitors or by non-practicing entities. For example, on August 13, 2013, Parallel Networks, LLC, which we believe is a non-practicing entity, filed a lawsuit against us alleging that our appliances infringe two of their patents as more fully described in the section titled “Business—Legal Proceedings.” Our broad solution portfolio and the number of network and IT markets in which we compete further exacerbate this risk. Any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from our business.

In addition, future assertions of patent rights by third parties, and any resulting litigation, may involve non-practicing entities or other adverse patent owners who have no relevant revenue and against whom our own patents may therefore provide little or no deterrence or protection. We cannot assure you that we are not infringing or otherwise violating any third-party intellectual property rights.

An adverse outcome of a dispute may require us to pay substantial damages including treble damages if we are found to have willfully infringed a third party’s patents or copyrights; cease making, using, selling, licensing, importing or otherwise commercializing solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to attempt to redesign our solutions or otherwise to develop non-infringing technology, which may not be successful; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights or have royalty obligations imposed by a court; and indemnify our customers, partners and other third parties. Furthermore, we have agreed in certain instances to defend our channel partners against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay judgments entered on such claims. Any damages or royalty obligations we may become subject to, any prohibition against our commercializing our solutions and any third-party indemnity we may need to provide, as a result of an adverse outcome could harm our operating results.

Our use of open source technology could impose limitations on our ability to commercialize our solutions.

We use open source software in our solutions, and although we monitor our use of open source software to avoid subjecting our solutions to conditions we do not intend, the terms of many open source licenses have not been interpreted by U.S. courts. As a result, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our solutions. In such an event, we could be required to seek licenses from third parties to continue offering our solutions, to make our proprietary code generally available in source code form, to re-engineer our solutions or to discontinue the sale of our solutions if re-engineering could not be accomplished on a timely basis, any of which could adversely affect our business, operating results and financial condition.

Failure to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results.

The success of our business depends on our ability to protect and enforce our patents, trademarks, copyrights, trade secrets and other intellectual property rights. We attempt to protect our intellectual property under patent, trademark, copyright and trade secret laws, and through a combination of confidentiality procedures, contractual provisions and other methods, all of which offer only limited protection.

As of August 31, 2013, we had 43 issued patents in the United States, but this number is relatively small in comparison to some of our competitors and potential competitors. Additionally, as of August 31, 2013, we had 63 pending U.S. patent applications, and may file additional patent applications in the future. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may choose not to seek patent

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protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions. Furthermore, it is possible that our patent applications may not issue as granted patents, that the scope of our issued patents will be insufficient or not have the coverage originally sought, that our issued patents will not provide us with any competitive advantages, and that our patents and other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. In addition, issuance of a patent does not guarantee that we have an absolute right to practice the patented invention, or that we have the right to exclude others from practicing the claimed invention. As a result, we may not be able to obtain adequate patent protection or to enforce our issued patents effectively.

In addition to patented technology, we rely on our unpatented proprietary technology and trade secrets. Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them. The contractual provisions that we enter into with employees, consultants, partners, vendors and customers may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights. Moreover, policing unauthorized use of our technologies, solutions and intellectual property is difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. We may be unable to determine the extent of any unauthorized use or infringement of our solutions, technologies or intellectual property rights.

From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results, financial condition and cash flows. If we are unable to protect our intellectual property rights, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative solutions that have enabled us to be successful to date.

We rely on the availability of third-party licenses for some of our solutions.

Some of our solutions include software or other intellectual property licensed from third parties. It may be necessary in the future to renew licenses relating to various aspects of these solutions or to seek new licenses for existing or new solutions. There can be no assurance that the necessary licenses will be available on acceptable terms, if at all. The inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms, could result in delays in solution releases until equivalent technology can be identified, licensed or developed, if at all, and integrated into our solutions and may have a material adverse effect on our business, operating results and financial condition. In addition, third parties may allege that additional licenses are required for our use of their software or intellectual property, and we may be unable to obtain such licenses on commercially reasonable terms or at all. Moreover, the inclusion in our solutions of software or other intellectual property licensed from third parties on a nonexclusive basis could limit our ability to differentiate our solutions from those of our competitors.

As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.

Ensuring 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 is a costly and time-consuming effort. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. We are in the very

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early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404 of the Sarbanes-Oxley Act. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.

If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of our fiscal year 2014. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We will be required to disclose changes made in our internal control and procedures on a quarterly basis. However, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions contained in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Our remediation efforts may not enable us to avoid a material weakness in the future.

Additionally, to comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff, which may adversely affect our operating results and financial condition.

There are limitations on the effectiveness of controls, and the failure of our control systems may materially and adversely impact us.

We do not expect that disclosure controls or internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could materially and adversely impact us.

Significant developments in IT infrastructure deployments, particularly cloud computing and other alternative IT infrastructure technologies, may materially adversely affect the demand for our products.

Developments or changes in IT infrastructure, such as the emergence of hosted cloud storage, software as a service and mobile data access are driving significant changes in storage and compute architectures and solution requirements as well as presenting significant challenges in the security market, which may materially and adversely affect our business and prospects in ways we do not currently anticipate. The impact of these trends on overall long-term growth patterns is uncertain, especially in resource-constrained environments. The emergence of cloud computing and other alternative IT infrastructure technologies, in which technology services are provided on a remote-access basis, may have a significant impact on the market for security and storage solutions and may result in rapid changes in customer demands. This could be the case even if such advances do not deliver all of the benefits of our solutions. If alternative models gain traction, any failure by us to develop new or enhanced technologies or processes, or to react to changes or advances in existing technologies, could adversely affect our business and operating results.

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If our solutions do not interoperate with our end-customers’ infrastructure, sales of our solutions could be negatively affected, which would harm our business.

Our solutions must interoperate with our end-customers’ existing infrastructure, which often have different specifications, utilize multiple protocol standards, deploy products from multiple vendors, and contain multiple generations of products that have been added over time. As a result, when problems occur in a network, it may be difficult to identify the sources of these problems. Any delays in identifying the sources of problems or in providing necessary modifications to our software or hardware could have a negative impact on our reputation and our customers’ satisfaction with our solutions, and our ability to sell solutions could be adversely affected. In addition, customers may require our solutions to comply with certain security or other certifications and standards. If our solutions are late in achieving or fail to achieve compliance with these certifications and standards, or our competitors achieve compliance with these certifications and standards, we may be disqualified from selling our solutions to such end-customers, or at a competitive disadvantage, which would harm our business, operating results and financial condition.

If our solutions fail to help our customers achieve and maintain compliance with government regulations and industry standards, our business and operating results could be materially adversely affected.

We generate a portion of our revenues from our solutions because they help organizations achieve and maintain compliance with government regulations and industry standards. For example, many of our customers purchase our security and storage solutions to help them comply with the security standards developed and maintained by the Payment Card Industry Security Standards Council, or the PCI Council, which apply to companies that process or store credit card information. Industry organizations like the PCI Council may significantly change their security standards with little or no notice, including changes that could make their standards more or less onerous for businesses. Governments may also adopt new laws or regulations, or make changes to existing laws or regulations, that could impact whether our solutions enable our customers to demonstrate, maintain or audit their compliance. If we are unable to adapt our solutions to changing regulatory standards in a timely manner, or if our solutions fail to expedite our customers’ compliance initiatives, our customers may lose confidence in our solutions and could switch to solutions offered by our competitors. In addition, if regulations and standards related to data security are changed in a manner that makes them less onerous, our customers may view government and industry regulatory compliance as less critical to their businesses, and our customers may be less willing to purchase our solutions. In either case, our business, financial condition and operating results may suffer.

Our sales to government entities are subject to a number of challenges and risks.

We sell to state and local governmental agency customers, particularly schools, and we may in the future increase sales to government entities. Sales to government entities are subject to a number of challenges and risks. Selling to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government certification requirements for solutions like ours may change and in doing so restrict our ability to sell into the federal government sector until we have attained the revised certification. Government demand and payment for our solutions may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our solutions. Government entities may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such termination may adversely impact our future operating results.

Our failure to generate the significant capital necessary to expand our operations and invest in new solutions could reduce our ability to compete and could harm our business.

We may need to raise additional funds in the future, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the per share value of our common stock could

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decline. Furthermore, if we engage in debt financing, the holders of debt would have priority over the holders of our common stock, and we may be required to accept terms that restrict our ability to incur additional indebtedness. We may also be required to take other actions that would otherwise be in the interests of the debt holders and force us to maintain specified liquidity or other ratios, any of which could harm our business, operating results and financial condition. If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

• develop or enhance our solutions;

• continue to expand our sales and marketing and research and development organizations;

• acquire or invest in complementary businesses, solutions or technologies;

• expand operations in the United States or internationally;

• hire, train and retain employees; or

• respond to competitive pressures or unanticipated working capital requirements.

Our failure to do any of these things could adversely affect our business, financial condition and operating results.

The terms of our existing credit facility with Silicon Valley Bank and future indebtedness could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.

Our existing credit facility with Silicon Valley Bank, or SVB, contains, and any future indebtedness would likely contain, a number of restrictive covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to take actions that may be in our best interests. Our credit facility requires us to satisfy specified financial covenants. Our ability to meet those financial covenants can be affected by events beyond our control, and we may not be able to continue to meet those covenants. A breach of any of these covenants or the occurrence of other events specified in the credit facility could result in an event of default under the credit facility. Upon the occurrence of an event of default, SVB could elect to declare all amounts outstanding under the credit facility to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, SVB could proceed against the collateral granted to them to secure such indebtedness. We have pledged all of our assets, including our intellectual property, as collateral under the credit facility. If SVB accelerates the repayment of borrowings, if any, we may not have sufficient funds to repay our existing debt.

We are exposed to the credit risk of some of our distributors, resellers and customers and to credit exposure in weakened markets, which could result in material losses.

Most of our sales are on an open credit basis. Although we have programs in place that are designed to monitor and mitigate these risks, and our broad customer base and channel partner network mitigate these risks, we cannot assure you these programs will be effective in reducing our credit risks, especially as we expand our business internationally. If we are unable to adequately control these risks, our business, operating results and financial condition could be adversely affected.

If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below expectations of securities analysts and investors, resulting in a decline in our stock price.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in greater detail in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the results of which form the basis for making

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judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in our stock price. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, stock-based compensation, valuation of inventory, warranty liabilities and accounting for income taxes.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.

We are subject to income taxes in the United States and various foreign jurisdictions, and our domestic and international tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

• changes in the valuation of our deferred tax assets and liabilities;

• expected timing and amount of the release of tax valuation allowances;

• expiration of, or detrimental changes in, research and development tax credit laws;

• tax effects of stock-based compensation;

• costs related to intercompany restructurings;

• changes in tax laws, regulations, accounting principles or interpretations thereof; or

• future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates.

In addition, we may be subject to audits of our income and sales taxes by the Internal Revenue Service and other foreign and state tax authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

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

Changes in financial accounting standards or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our business and financial results.

Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events and to interruption by man-made problems such as terrorism.

A significant natural disaster, such as an earthquake, fire, flood or significant power outage could have a material adverse impact on our business, operating results and financial condition. Both our corporate headquarters and the location where our solutions are manufactured are located in the San Francisco Bay Area, a region known for seismic activity. In addition, natural disasters could affect our supply chain, manufacturing vendors, logistics providers’ or data center hosting providers’ ability to provide materials and perform services on a timely basis. In the event our or our service providers’ IT systems or manufacturing or logistics abilities are hindered by any of the events discussed above, shipments could be delayed, and our solutions could become unavailable resulting in missed financial targets, such as revenue and shipment targets, for a particular quarter. In addition, acts of terrorism and other geo-political unrest could cause disruptions in our business or the business of our supply chain, manufacturers, logistics providers, partners or customers or the economy as a whole. Any disruption in the business of our supply chain, manufacturers, logistics providers, data center hosting partners or

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customers that impacts sales at the end of a fiscal quarter could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be further increased if the disaster recovery plans for us and our suppliers prove to be inadequate. To the extent that any of the above should result in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of our solutions, our business, financial condition and operating results would be adversely affected.

If we fail to comply with environmental requirements, our business, financial condition, operating results and reputation could be adversely affected.

We are subject to various environmental laws and regulations including laws governing the hazardous material content of our solutions and laws relating to the collection of and recycling of electrical and electronic equipment. Examples of these laws and regulations include the EU Restrictions of Hazardous Substances Directive, or RoHS, and the EU Waste Electrical and Electronic Equipment Directive, or WEEE, as well as the implementing legislation of the EU member states. Similar laws and regulations have been passed or are pending in China, South Korea, Norway and Japan and may be enacted in other regions, including in the United States, and we are, or may in the future be, subject to these laws and regulations.

The EU RoHS and the similar laws of other jurisdictions ban the use of certain hazardous materials such as lead, mercury and cadmium in the manufacture of electrical equipment, including our solutions. Currently, we and other manufacturers of our hardware appliances and major component part suppliers comply with the EU RoHS requirements. However, if there are changes to this or other laws (or their interpretation) or if new similar laws are passed in other jurisdictions, we may be required to re-engineer our solutions to use components compatible with these regulations. This re-engineering and component substitution could result in additional costs to us or disrupt our operations or logistics.

The WEEE Directive requires electronic goods producers to be responsible for the collection, recycling and treatment of such solutions. Changes in interpretation of the directive may cause us to incur costs or have additional regulatory requirements to meet in the future in order to comply with this directive, or with any similar laws adopted in other jurisdictions.

Our failure to comply with past, present and future similar laws could result in reduced sales of our solutions, inventory write-offs, reputational damage, penalties and other sanctions, any of which could harm our business and financial condition. We also expect that our solutions will be affected by new environmental laws and regulations on an ongoing basis. To date, our expenditures for environmental compliance have not had a material impact on our results of operations or cash flows, and although we cannot predict the future impact of such laws or regulations, they will likely result in additional costs and may increase penalties associated with violations or require us to change the content of our solutions or how they are manufactured, which could have a material adverse effect on our business, operating results and financial condition.

New regulations related to conflict minerals may cause us to incur additional expenses and could limit the supply and increase the costs of certain metals used in the manufacturing of our appliances.

As a public company, we will be subject to new requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, that will require us to diligence, disclose and report whether or not our appliances contain conflict minerals. The implementation of these new requirements could adversely affect the sourcing, availability and pricing of the materials used in the manufacture of components used in our solutions. In addition, we will incur additional costs to comply with the disclosure requirements, including costs related to conducting diligence procedures to determine the sources of conflict minerals that may be used or necessary to the production of our appliances and, if applicable, potential changes to appliances, processes or sources of supply as a consequence of such verification activities. It is also possible that we may face reputational harm if we determine that certain of our appliances contain minerals not determined to be conflict free or if we are unable to alter our appliances, processes or sources of supply to avoid such materials.

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Risks Related to this Offering, the Securities Markets and Ownership of Our Common Stock

An active trading market for our common stock may never develop or be sustained.

We cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of common stock when desired or the prices that you may obtain for your shares.

Our share price may be volatile, and you may be unable to sell your shares at or above the offering price.

Prior to this offering, there has been no public market for shares of our common stock. Technology stocks have historically experienced high levels of volatility. The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that may cause the market price of our common stock to fluctuate include:

• price and volume fluctuations in the overall stock market from time to time;

• significant volatility in the market price and trading volume of technology companies in general, and of companies in our industry;

• actual or anticipated changes in our results of operations or fluctuations in our operating results;

• whether our operating results meet the expectations of securities analysts or investors;

• actual or anticipated changes in the expectations of investors or securities analysts;

• actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;

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

• litigation or investigations involving us, our industry or both;

• regulatory developments in the United States, foreign countries or both;

• general economic conditions and trends;

• major catastrophic events;

• the expiration of market stand-offs or contractual lock-up agreements;

• sales of large blocks of our stock; or

• major changes in our board of directors or management or departures of key personnel.

In addition, if the market for technology stocks or the stock market in general experience a 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.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business, and this could have a material adverse effect on our business, operating results and financial condition.

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Sales of outstanding shares of our common stock into the market in the future could cause the market price of our common stock to drop significantly.

If our existing stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market after the contractual lock-up and other legal restrictions on resale lapse, the trading price of our common stock could decline. After this offering, approximately                 shares of common stock will be outstanding. Of these shares, the             shares of our common stock to be sold in this offering will be freely tradable, unless such shares are held by “affiliates,” as that term is defined in Rule 144 of the Securities Act of 1933, as amended, or the Securities Act.

Our directors, officers and holders of substantially all of our capital stock and securities convertible into capital stock are subject to a 180-day market stand-off or contractual lock-up agreements that prevents them from selling their shares prior to the expiration of the 180-day period. Morgan Stanley & Co. LLC. may, in its sole discretion, permit shares subject to the lock-up to be sold prior to its expiration. See the section titled “Shares Eligible for Future Sale—Lock-Up Agreements” for additional information.

After the market stand-offs and lock-up agreements pertaining to this offering expire, up to an additional                 shares will be eligible for sale in the public market,             of which are, based on the number of shares outstanding as of August 31, 2013 and after giving effect to the exercise of options and the sale of shares by the selling stockholders in connection with the completion of this offering, held by directors, executive officers and other affiliates and will be subject to volume limitations under Rule 144 under the Securities Act and various vesting agreements.

In addition, following the completion of this offering, we intend to file a registration statement to register all shares subject to options outstanding or reserved for future issuance under our equity compensation plans. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline. See the section titled “Shares Eligible for Future Sale” for additional information.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution of $         per share, based on an assumed initial public offering price of $         per share, which is the midpoint of the range as reflected on the cover page of this prospectus, because the price that you pay will be substantially greater than the net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our founders and earlier investors paid substantially less than the initial public offering price when they purchased their shares of our capital stock. In addition, investors who purchase shares in this offering will contribute approximately     % of the total amount of equity capital raised by us through the date of this offering, but will only own approximately     % of our outstanding shares. In addition, we have issued options to acquire our common stock at prices significantly below the expected initial public offering price and we have unvested RSUs outstanding. To the extent outstanding options are ultimately exercised and RSUs vest, there will be further dilution to investors in this offering.

If securities analysts do not publish research or reports about our business, or if they downgrade our stock, the price of our stock could decline.

The trading market for our common stock could be influenced by any research and reports that securities or industry analysts publish about us or our business. We do not currently have, and may never obtain, research coverage by securities analysts. If no securities analysts commence coverage of our company, the trading price for our stock would be negatively impacted. In the event securities analysts cover our company and one or more of these analysts downgrade our stock or publish inaccurate or unfavorable research about our business, 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, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

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The concentration of ownership among our existing directors, executive officers and principal stockholders will provide them, collectively, with substantial control over us after this offering, which could limit your ability to influence the outcome of key transactions, including a change of control.

Our directors, executive officers and each of our stockholders who own greater than 5% of our outstanding common stock and their affiliates, in the aggregate, will own approximately     % of the outstanding shares of our common stock after this offering, based on the number of shares outstanding as of August 31, 2013 and after giving effect to the sale of shares by the selling stockholders in connection with this offering. As a result, these stockholders, if acting together, will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.

We have broad discretion in the use of the net proceeds from our initial public offering and may not use them effectively.

We cannot specify with any certainty the particular uses of the net proceeds that we will receive from our initial public offering. Our management will have broad discretion in the application of the net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and we may spend or invest these proceeds in a way with which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition, which could cause our stock price to decline. Pending their use, we may invest the net proceeds from our initial public offering in a manner that does not produce income or that loses value.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the             and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company,” as defined in the JOBS Act. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time

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and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely affected.

However, for as long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We would cease to be an “emerging growth company” upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of this offering, (ii) the first fiscal year after our annual gross revenues are $1.0 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with

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new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

As an “emerging growth company” we have also chosen to take advantage of certain provisions of the JOBS Act that allow us to provide you with less information in this prospectus than would otherwise be required if we are not an “emerging growth company.” As a result, this prospectus includes less information about us than would otherwise be required if we were not an “emerging growth company” within the meaning of the JOBS Act, which may make it more difficult for you to evaluate an investment in our company.

We do not intend to pay dividends for the foreseeable future.

We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. In addition, our existing credit facility restricts and any future indebtedness may restrict our ability to pay dividends. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. Investors seeking cash dividends should not purchase our common stock.

We will incur increased costs as a result of being a public company.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, rules implemented by the SEC and the             require changes in corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We will also incur additional costs associated with our public company reporting requirements. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors or as executive officers.

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

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

• establish a classified board of directors so that not all members of our board of directors are elected at one time;

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

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

• prohibit stockholders from calling a special meeting of our stockholders;

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

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

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• provide that a state or federal court located within the State of Delaware will be the exclusive forum for any derivative action brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising under the Delaware General Corporation Law and certain other claims.

Additionally, we will be subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder and which may discourage, delay or prevent a change of control of our company.

The provisions of our amended and restated certificate of incorporation and amended and restated bylaws may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. The provisions of our certificate of incorporation and bylaws or Delaware law may also have the effect of delaying or deterring a change in control, which could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business” contains forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

• our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve, and maintain, future profitability;

• our business plan and our ability to effectively manage our growth and associated investments;

• anticipated trends, growth rates and challenges in our business and in the markets in which we operate;

• market acceptance of recently introduced security and storage solutions;

• beliefs and objectives for future operations;

• our ability to increase sales of our solutions and renewals of our subscriptions;

• our ability to attract and retain customers;

• our ability to cross-sell to our existing customers;

• maintaining and expanding our customer base and our relationships with our channel partners;

• our ability to timely and effectively scale and adapt our existing solutions;

• our ability to develop new solutions and bring them to market in a timely manner;

• our ability to maintain, protect and enhance our brand and intellectual property;

• our ability to continue to expand internationally;

• the effects of increased competition in our markets and our ability to compete effectively;

• sufficiency of cash to meet cash needs for at least the next 12 months;

• future acquisitions or investments;

• our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

• economic and industry trends or trend analysis;

• the attraction and retention of qualified employees and key personnel;

• the estimates and estimate methodologies used in preparing our consolidated financial statements and determining option exercise prices; and

• the future trading prices of our common stock.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in very competitive and rapidly changing environments, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.

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

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

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MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, including reports from Compass Intelligence, or Compass, Gartner, Inc., or Gartner, International Data Corporation, or IDC, and International Data Group, or IDG, on assumptions we have made based on such data and other similar sources and on our knowledge of the markets for our solutions. While we are not aware of any misstatements regarding any third-party information presented in this prospectus, estimates of third parties, particularly as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the third parties and by us.

The Gartner Reports described herein (the “Gartner Reports”), represent data, research opinion or viewpoints published as part of a syndicated subscription service, by Gartner, and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner Reports are subject to change without notice. The Gartner Reports consist of:

(1) Gartner, Competitive Landscape: Next-Generation Firewall Appliance Market, Worldwide, 2013, dated April 3, 2013, by Eric Ahlm.

(2) Gartner, Forecast: Enterprise Network Equipment by Market Segment, Worldwide, 2010-2017, 3Q13, by Christian Canales, Naresh Singh, Joe Skorupa and Severine Real.

(3) Gartner, Forecast: Information Security, Worldwide, 2011-2017, 2Q13 Update, by Ruggero Contu, Christian Canales and Lawrence Pingree.

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USE OF PROCEEDS

We estimate that the net proceeds from our sale of                 shares of common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range reflected on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $         million, or $         million if the underwriters exercise their over-allotment option in full. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from this offering by $         million, assuming the number of shares offered by us, as reflected on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. We will not receive any proceeds from the sale of common stock by the selling stockholders.

The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our stock, thereby enabling access to the public equity markets by our stockholders and employees, facilitate an orderly distribution of shares for the selling stockholders and increase our visibility in the marketplace. We intend to use the net proceeds received from this offering primarily for capital expenditures and general corporate purposes, including working capital, sales and marketing activities, product development and general and administrative matters. At this time, we cannot quantify the amounts we intend to expend on any of these activities. However, with respect to capital expenditures, we expect to continue to invest in data center infrastructure to enable us to expand our cloud-based services and to invest to improve and expand our corporate headquarters and other domestic and worldwide facilities as well as continue to invest in our IT infrastructure. With respect to sales and marketing activities, we intend to continue to invest in our brand development and customer-focused marketing initiatives, including advertising and event marketing. We also may use a portion of the net proceeds from this offering to make complementary acquisitions or investments. However, we do not have agreements or commitments for any specific acquisitions or investments at this time.

We will have broad discretion over the uses of the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds from this offering in short-term, investment-grade interest-bearing securities such as money market accounts, certificates of deposit, commercial paper and guaranteed obligations of the U.S. government, as well as equity investments in marketable securities.

DIVIDEND POLICY

In October 2012, in connection with our recapitalization, we declared $130.0 million of cash dividends. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—The Recapitalization” for additional information. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future, if at all. Additionally, our ability to pay dividends on our common stock is limited by restrictions on our ability to pay dividends or make distributions, under the terms of our existing credit facility. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant.

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CAPITALIZATION

The following table sets forth our cash, cash equivalents and marketable securities and capitalization as of August 31, 2013 on:

• an actual basis;

• a pro forma basis, giving effect to the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into 52,878,666 shares of common stock and the effectiveness of our amended and restated certificate of incorporation which will occur immediately prior to the completion of this offering, as if such conversion had occurred and our amended and restated certificate of incorporation had become effective on August 31, 2013; and

• a pro forma as adjusted basis, giving effect to the pro forma adjustments and the sale of                 shares of common stock by us in this offering, based on an assumed initial public offering price of $         per share, the midpoint of the estimated price range reflected on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and related notes included elsewhere in this prospectus.

	August 31, 2013
	Actual			Pro Forma			Pro Forma  as Adjusted(1)
	(in thousands, except share and per share data)
Cash, cash equivalents and marketable securities	$	30,192		$	30,192		$
Note payable, current and non-current	$	4,983		$	4,983		$
Redeemable convertible preferred stock, $0.001 par value; 52,878,666 shares authorized, issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted		167,554			—
Stockholders’ deficit:
Preferred stock, par value $0.001; no shares authorized, issued and outstanding, actual;                  shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted		—			—
Common stock, $0.001 par value; 160,000,000 shares authorized, 84,758,925 shares issued and outstanding, actual;                  shares authorized, 137,637,591 shares issued and outstanding, pro forma;                  shares authorized,                  shares issued and outstanding, pro forma as adjusted		85			138
Additional paid-in capital		30,707			198,208
Accumulated other comprehensive loss		(1,351	)		(1,351	)
Accumulated deficit		(284,265	)		(284,265	)
Total stockholders’ deficit, controlling interest		(254,824	)		(87,270	)
Total stockholders’ deficit, non-controlling interest		(2,847	)		(2,847	)
Total stockholders’ deficit		(257,671	)		(90,117	)
Total capitalization	$	(85,134	)	$	(85,134	)	$

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(1) The pro forma as adjusted information set forth above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease each of cash and cash equivalents, additional paid-in capital, total stockholders’ deficit and total capitalization by approximately $         million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions. Similarly, each increase or decrease of one million shares in the number of shares offered by us would increase or decrease, as applicable, cash and cash equivalents, additional paid-in capital, total stockholders’ deficit and total capitalization by approximately $         million, assuming an initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions. The pro forma as adjusted information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

The number of shares of our common stock set forth in the table above is based on 137,637,591 shares of our common stock outstanding as of August 31, 2013, and excludes:

• 15,345,507 shares of common stock issuable upon the exercise of options outstanding as of August 31, 2013, with a weighted-average exercise price of $3.79 per share;

• 3,247,677 shares of common stock issuable upon the vesting of RSUs outstanding as of August 31, 2013; and

• 2,403,521 shares of common stock reserved for future issuance under our 2012 Equity Incentive Plan and shares that become available under our 2012 Equity Incentive Plan, pursuant to provisions thereof that automatically increase the share reserves under the plans each year, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

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DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the amount per share paid by purchasers of shares of common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after the completion of this offering.

As of August 31, 2013, our pro forma net tangible book value was approximately $         million, or $         per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of August 31, 2013, assuming the conversion of all outstanding shares of our redeemable convertible preferred stock into shares of our common stock.

After giving effect to our sale in this offering of             shares of our common stock, at an assumed initial public offering price of $         per share, the estimated midpoint of the estimated price range reflected on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book value as of August 31, 2013 would have been approximately $         million, or $         per share of our common stock. This represents an immediate increase in pro forma net tangible book value of $         per share to our existing stockholders and an immediate dilution of $         per share to investors purchasing shares in this offering.

The following table illustrates this dilution:

Assumed initial public offering price per share		$
Decrease in book value per share attributable to conversion of redeemable convertible preferred stock	$
Pro forma net tangible book value per share as of August 31, 2013, before giving effect to this offering
Increase per share attributable to this offering
Pro forma net tangible book value, as adjusted to give effect to this offering		$
Dilution in pro forma net tangible book value per share to new investors purchasing shares in this offering		$

The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $         per share, the midpoint of the price range reflected on the cover page of this prospectus, would increase (decrease) our pro forma net tangible book value, as adjusted to give effect to this offering, by $         per share, the increase (decrease) attributable to this offering by $         per share, and the dilution in pro forma as adjusted net tangible book value per share to new investors purchasing shares in this offering by $         per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions.

If the underwriters exercise their over-allotment option in full, the pro forma net tangible book value per share of our common stock after giving effect to this offering would be $         per share, and the dilution in net tangible book value per share to investors in this offering would be $         per share.

The following table summarizes, on a pro forma as adjusted basis as of August 31, 2013 after giving effect to (i) the automatic conversion of all of our redeemable convertible preferred stock into common stock, and (ii) the completion of this offering at an assumed initial public offering price of $         per share, the estimated midpoint of the estimated price range reflected on the cover page of this prospectus, the difference between

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existing stockholders and new investors with respect to the number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share paid, before deducting estimated underwriting discounts and commissions and estimated offering expenses:

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%	$			%	$
New public investors
Total			100.0	%	$		100.0	%

The information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $        per share, the midpoint of the price range reflected on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors and total consideration paid by all stockholders by approximately $        million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

To the extent that our outstanding options are exercised or RSUs vest, investors will experience further dilution.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ over-allotment option. If the underwriters exercise their over-allotment option in full, our existing stockholders would own     % and our new investors would own     % of the total number of shares of our common stock outstanding upon the completion of this offering.

The number of shares of our common stock set forth in the table above is based on 137,637,591 shares of our common stock outstanding as of August 31, 2013, and excludes:

• 15,345,507 shares of common stock issuable upon the exercise of options outstanding as of August 31, 2013, with a weighted-average exercise price of $3.79 per share;

• 3,247,677 shares of common stock issuable upon the vesting of RSUs outstanding as of August 31, 2013; and

• 2,403,521 shares of common stock reserved for future issuance under our 2012 Equity Incentive Plan and shares that become available under our 2012 Equity Incentive Plan, pursuant to provisions thereof that automatically increase the share reserves under the plans each year, as more fully described in the section titled “Executive Compensation—Employee Benefit Plans.”

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SELECTED CONSOLIDATED FINANCIAL DATA

We have derived the selected consolidated statements of operations data for our fiscal years ended February 28, 2011, February 29, 2012 and February 28, 2013 and the selected consolidated balance sheet data as of February 29, 2012 and February 28, 2013 from our audited consolidated financial statements included elsewhere in this prospectus. We have derived the selected consolidated statements of operations data for the fiscal years ended February 28, 2009 and 2010 and the selected consolidated balance sheet data as of February 28, 2009, 2010 and 2011 from our audited consolidated financial statements not included in this prospectus. We have derived the selected consolidated statements of operations data for the six months ended August 31, 2012 and 2013 and the selected consolidated balance sheet data as of August 31, 2013 from our unaudited consolidated financial statements included elsewhere in this prospectus. Our unaudited consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, include all adjustments, which consist only of normal recurring adjustments, necessary for the fair presentation of those unaudited consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results for the six months ended August 31, 2013 are not necessarily indicative of operating results to be expected for the fiscal year ending February 28, 2014 or any other period. You should read the following selected consolidated financial data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus.

	Year Ended February 28/29,												Six Months Ended August 31,
	2009		2010		2011		2012			2013			2012			2013
	(in thousands, except per share data)
Consolidated Statements of Operations Data:(1)
Revenue:
Appliance	$	46,584	$	55,965	$	52,477	$	43,258		$	59,528		$	27,775		$	35,409
Subscription		54,657		67,725		89,655		117,662			139,403			67,258			78,658
Total revenue		101,241		123,690		142,132		160,920			198,931			95,033			114,067
Cost of revenue(2)		19,826		25,315		31,972		34,966			45,088			21,286			26,481
Gross profit		81,415		98,375		110,160		125,954			153,843			73,747			87,586
Operating expenses:
Research and development(2)		13,022		19,691		23,979		27,824			35,167			16,090			22,480
Sales and marketing(2)		45,221		57,598		69,963		84,885			102,329			49,302			57,228
General and administrative(2)		15,748		12,104		13,021		14,428			28,777			12,882			14,505
Total operating expenses		73,991		89,393		106,963		127,137			166,273			78,274			94,213
Operating income (loss)		7,424		8,982		3,197		(1,183	)		(12,430	)		(4,527	)		(6,627	)
Other income (expense), net		1,211		1,067		282		476			(839	)		(888	)		(450	)
Income (loss) before income taxes and non-controlling interest		8,635		10,049		3,479		(707	)		(13,269	)		(5,415	)		(7,077	)
Provision (benefit) for income taxes		3,197		5,486		1,136		(453	)		(5,084	)		(1,293	)		(2,136	)
Consolidated net income (loss)		5,438		4,563		2,343		(254	)		(8,185	)		(4,122	)		(4,941	)
Net loss attributable to non-controlling interest		—		1,165		620		859			794			462			362
Net income (loss) attributable to Barracuda Networks, Inc.	$	5,438	$	5,728	$	2,963	$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Net income (loss) attributable to common stockholders:	$	4,161	$	4,393	$	2,281	$	466		$	(9,203	)	$	(3,660	)	$	(4,579	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.04	$	0.04	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Diluted	$	0.04	$	0.04	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		98,226		99,176		100,890		101,488			96,094			104,460			84,424
Diluted		131,039		133,064		134,943		136,066			96,094			104,460			84,424
Pro forma net income (loss) per share attributable to common stockholders:
Basic and diluted										$	(0.05	)				$	(0.03	)
Pro forma weighted-average shares outstanding used to compute net income (loss) per share attributable to common stockholders:
Basic and diluted											135,461						137,303

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(1) Certain amounts in fiscal 2009 and fiscal 2010 have been reclassified to conform to the current year presentation.

(2) Includes stock-based compensation expense as follows:

	Year Ended February 28/29,										Six Months Ended August  31,
	2009		2010		2011		2012		2013		2012		2013
	(in thousands)
Cost of revenue	$	49	$	64	$	84	$	51	$	146	$	65	$	88
Research and development		420		597		848		766		2,059		883		1,264
Sales and marketing		321		514		627		527		1,182		499		700
General and administrative		306		327		417		527		5,400		3,187		3,076
Total stock-based compensation	$	1,096	$	1,502	$	1,976	$	1,871	$	8,787	$	4,634	$	5,128

	February 28/29,															August  31, 2013
	2009			2010			2011			2012			2013
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	70,678		$	66,626		$	100,187		$	128,783		$	31,645		$	30,192
Working capital (deficit)		29,237			22,901			52,912			61,180			(67,797	)		(66,479	)
Total assets		128,378			173,591			218,655			283,899			212,248			236,168
Deferred revenue, current and non-current		99,975			122,882			160,699			217,209			261,243			286,792
Note payable, current and non-current		—			1,431			—			5,295			5,094			4,983
Redeemable convertible preferred stock		40,010			40,010			40,010			40,010			167,554			167,554
Common stock and additional paid-in capital		3,177			10,522			13,377			13,479			23,108			30,792
Total stockholders’ deficit		(25,688	)		(10,682	)		(4,984	)		(7,583	)		(259,620	)		(257,671	)

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Key Metrics

We monitor the following key metrics to help us evaluate growth trends, establish budgets and assess operational efficiencies. In addition to our results determined in accordance with GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our operating performance.

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands, except active subscribers and percentages)
Gross billings	$	191,306		$	233,211		$	264,225		$	129,653		$	150,488
Year-over-year percentage increase					22	%		13	%					16	%
Year-over-year percentage increase on a constant currency basis(1)					22	%		17	%					17	%
Adjusted EBITDA	$	46,200		$	55,251		$	49,095		$	25,792		$	23,425
Adjusted EBITDA as a percentage of total revenue		33	%		34	%		25	%		27	%		21	%
Free cash flow	$	34,422		$	35,416		$	41,085		$	16,091		$	11,023
Free cash flow as a percentage of total revenue		24	%		22	%		21	%		17	%		10	%
Active subscribers as of period end		134,807			156,976			179,952			167,674			190,700

(1) In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, we compare the percentage change in our gross billings from one period to another using a constant currency. To present this gross billings information, the current and comparative prior period results for entities that operate in other than U.S. dollars are converted into U.S. dollars at constant exchange rates. For example, the rates in effect at February 28, 2013, which was the last day of our prior fiscal year, were used to convert current and comparable prior period gross billings rather than the actual exchange rates in effect during the respective period.

Gross billings. We define gross billings as total revenue plus the change in deferred revenue and other adjustments which primarily reflect returns and reserves with respect to the 30-day right to return we provide to our customers, as well as rebates for certain channel partner activities, during a particular period. We use gross billings as a performance measurement and a leading indicator of our future revenue, based on our business model of invoicing our customers at the time of sale of our solutions and recognizing revenue ratably over subsequent periods. Accordingly, we believe gross billings provide valuable insight into the sales of our solutions and the performance of our business. The gross billings we record in any period reflect sales to new customers plus renewals and additional sales to existing customers adjusted for returns, rebates and other offsets, which we do not expect to be recognized as revenue in future periods. In many cases, these returns, rebates and other offsets occur in periods different from the period of sale, and are unrelated to the marketing efforts leading to the initial sale, and therefore by adjusting for such offsets, we believe our computation of gross billings better reflects the effectiveness of our sales and marketing efforts.

Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus non-cash and non-operating charges, which includes acquisition and other non-recurring charges. Because of our business model, where revenue from gross billings is deferred and recognized ratably over subsequent periods, substantially all of our gross billings increase deferred revenue. Therefore, we believe that adjusting net income (loss) for increases in deferred revenue and increases in the associated deferred costs provides another indication of profitability from our operations. We use adjusted EBITDA to measure our performance, prepare our budgets and establish metrics for variable compensation. Because adjusted EBITDA excludes certain non-cash and non-operating charges, this measure enables us to eliminate the impact of items we do not consider indicative of our core operating performance and to better measure our performance on a consistent basis from period to period.

Free cash flow. We define free cash flow as cash provided by operating activities, less purchases of property and equipment plus acquisition and other non-recurring charges. We consider free cash flow to be a useful liquidity measure that considers the investment in cloud and corporate infrastructure required to support our

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business and the impact of acquisition related expenses and other non-recurring charges. We use free cash flow to assess our business performance and evaluate the amount of cash generated by our business after adjusting for purchases of property and equipment and acquisition and other non-recurring charges.

Active subscribers. We define an active subscriber as a discrete appliance, virtual appliance or cloud-only service that has activated at least one valid subscription that has not been terminated. We monitor the total number of active subscribers as a measure of the growth in our installed base, the success of our sales and marketing activities and the value that our solutions bring to our customers.

Acquisition and Other Non-Recurring Charges

In calculating adjusted EBITDA and free cash flow, we also adjust for acquisition and other charges that we do not expect to recur in our continuing operating results. We believe that adjusting for these charges allows us to better compare adjusted EBITDA and free cash flow from period to period in order to assess the ongoing operating results of our business. We refer to costs related to our CEO transition, export compliance, acquisitions and option holder bonuses as our “acquisition and other non-recurring charges” throughout this prospectus. These costs consist of the following:

CEO transition. CEO transition costs include severance payments made to our former chief executive officer and related legal expenses, as well as recruitment and other fees related to the hiring of our new chief executive officer. These costs also include costs and bonuses related to the office of the CEO and bonuses for certain executives paid in connection with the transition. These costs are classified primarily as general and administrative expenses in our consolidated statements of operations.

Export compliance. Export compliance costs include legal expenses incurred in connection with an internal investigation of our export controls compliance procedures and the submission of our voluntary self-disclosures to the U.S. government in this regard. These costs are classified as general and administrative expenses in our consolidated statements of operations.

Acquisition costs. Acquisition costs include legal expenses incurred in acquiring the remaining outstanding equity of phion AG as well as contingent consideration payments made under the terms of certain acquisition agreements. The phion AG related legal costs are classified as general and administrative expenses and the contingent consideration payments are primarily classified as research and development expenses in our consolidated statements of operations.

Option holder bonuses. Option holder bonus costs include bonus payments made in lieu of dividends to employees who held fully vested options to acquire our common stock at the time of our October 2012 recapitalization. These costs impacted our research and development, sales and marketing and general and administrative expenses in our consolidated statements of operations.

The following tables present the details of our acquisition and other non-recurring charges and their impact on adjusted EBITDA and free cash flow.

	Year Ended February  28/29,						Six Months Ended August 31,
	2011		2012		2013		2012		2013
	(in thousands)
Impact of acquisition and other non-recurring charges on adjusted EBITDA:
CEO transition	$	—	$	—	$	6,058	$	1,412	$	—
Export compliance		—		—		1,411		884		211
Option holder bonuses		—		—		1,420		—		—
Acquisition costs		—		—		904		504		656
Total acquisition and other non-recurring charges	$	—	$	—	$	9,793	$	2,800	$	867

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	Year Ended February 28/29,						Six Months Ended August 31,
	2011		2012		2013		2012		2013
	(in thousands)
Impact of acquisition and other non-recurring charges on free cash flow:
CEO transition	$	—	$	—	$	4,108	$	1,412	$	1,946
Export compliance		—		—		—		—		940
Option holder bonuses		—		—		1,420		—		—
Acquisition costs		—		—		904		504		583
Total acquisition and other non-recurring charges	$	—	$	—	$	6,432	$	1,916	$	3,469

Reconciliation of Non-GAAP Financial Measures

Our non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. First, gross billings, adjusted EBITDA and free cash flow are not substitutes for total revenue, net income and cash provided by operating activities, respectively. Second, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Finally, adjusted EBITDA excludes some costs, namely, non-cash stock-based compensation and depreciation and amortization expense, which are recurring. Therefore adjusted EBITDA does not reflect the non-cash impact of stock-based compensation or working capital needs, that will continue for the foreseeable future.

The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands)
Gross billings:
Total revenue	$	142,132		$	160,920		$	198,931		$	95,033		$	114,067
Total deferred revenue, end of period		160,699			217,209			261,243			241,734			286,792
Less: total deferred revenue, beginning of period		(122,882	)		(160,699	)		(217,209	)		(217,209	)		(261,243	)
Add: deferred revenue adjustments		11,357			15,781			21,260			10,095			10,872
Total change in deferred revenue and adjustments		49,174			72,291			65,294			34,620			36,421
Gross billings	$	191,306		$	233,211		$	264,225		$	129,653		$	150,488

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	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands)
Adjusted EBITDA:
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963		$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Total deferred revenue, end of period		160,699			217,209			261,243			241,734			286,792
Less: total deferred revenue, beginning of period		(122,882	)		(160,699	)		(217,209	)		(217,209	)		(261,243	)
Less: total deferred costs, end of period		(18,324	)		(29,254	)		(39,470	)		(35,347	)		(46,058	)
Total deferred costs, beginning of period		13,261			18,324			29,254			29,254			39,470
Other (income) expense, net		(282	)		(476	)		839			888			450
Provision (benefit) for income taxes		1,136			(453	)		(5,084	)		(1,293	)		(2,136	)
Depreciation and amortization		7,653			8,124			8,333			3,991			4,734
Stock-based compensation		1,976			1,871			8,787			4,634			5,128
Acquisition and other non-recurring charges		—			—			9,793			2,800			867
Adjusted EBITDA	$	46,200		$	55,251		$	49,095		$	25,792		$	23,425
	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands)
Free cash flow:
Cash provided by operating activities	$	36,909		$	43,926		$	39,375		$	15,718		$	12,083
Less: purchases of property and equipment		(2,487	)		(8,510	)		(4,722	)		(1,543	)		(4,529	)
Acquisition and other non-recurring charges		—			—			6,432			1,916			3,469
Free cash flow	$	34,422		$	35,416		$	41,085		$	16,091		$	11,023

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes that are included elsewhere in this prospectus. The last day of our fiscal year is February 28/29. Our fiscal quarters end on May 31, August 31, November 30 and February 28/29. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth above in the section titled “Risk Factors” and elsewhere in this prospectus.

Overview

Barracuda designs and delivers powerful yet easy-to-use security and storage solutions. We offer cloud-connected solutions that help our customers address security threats, improve network performance and protect and store their data. Our solutions are designed to simplify IT operations for our customers, allowing them to enhance their return on technology investment. Our business model is built on the core values of speed and agility, which we apply to all aspects of our approach, including our technology innovations, the delivery and deployment of our solutions and responses to customer inquiries.

We were founded in 2003 with the vision to design industry-leading solutions to solve mainstream IT problems efficiently and cost effectively, with a high level of customer support. We have built our broad solution portfolio through organic product development as well as through selective technology acquisitions. We launched our first commercial product, the Barracuda Spam & Virus Firewall, in October 2003. Since then, we have invested a substantial amount of resources to rapidly design and develop new purpose-built solutions for our portfolio. We launched our Web Filter in 2005, our Load Balancer in 2006, our Message Archiver in 2007, our first virtual appliances and Barracuda Email Security Service in 2010 and our Copy service, Application Delivery Controller and Barracuda Firewall solutions in 2013. We have also identified, acquired and integrated a number of complementary technologies in order to expand our solution portfolio. We acquired our capabilities for web application security in 2007, secure virtual private network in 2008, backup, disaster recovery and deduplication in 2008, next generation firewall and cloud-based web security in 2009 and eSignature in 2013. We will continue to evaluate complementary acquisitions or investments, although we do not have agreements or commitments for any specific acquisitions or investments at this time.

We derive revenue from sales of appliances and subscriptions. Revenue from the sale of our appliances includes hardware and a perpetual license. Subscription revenue is generated primarily from our subscription services such as our Barracuda Energize Updates as well as our cloud solutions—Barracuda Email Security Service, Barracuda Web Security Service and Barracuda Backup. Subscription revenue also includes revenue from fixed term licenses of our virtual appliance software support and maintenance. Our subscription terms range from one to five years, the substantial majority of which are for one-year periods. Subscriptions are billed in advance of the purchased subscription period. Renewal rates from subscriptions, on a dollars basis, have been 89%, 90% and 93% in fiscal 2011, 2012 and 2013, respectively.

We have a differentiated operating model that enables rapid adoption of our solutions and enhanced time to value for our customers. We employ a high-velocity sales model that incorporates a 30-day right to return, real-time order fulfillment and a simple, low-cost entry point. Our product and sales specialists work closely with prospective customers to answer questions and guide them to participate in our evaluation program. We fulfill sales of our solutions through our global partner network of over 5,000 distributors and value added resellers. Customers typically receive our solutions and can deploy and begin to realize value within 24 hours. We believe our solutions are highly price competitive, and our pricing includes many of the features and services others charge separately for, greatly simplifying and expediting our customers’ purchasing process. We manage our business with a culture and set of systems and processes that help us achieve a high degree of consistency and visibility, and focuses on sales productivity, marketing effectiveness and customer satisfaction.

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Our customer base represents a broad range of industries including automotive, education, electronics, financial services, food service, government, industrial manufacturing, medicine, media, real estate, retail, software and telecommunications. In fiscal 2013 and for the six months ended August 31, 2013, one distribution partner accounted for 13% and 17% of our total revenue, respectively. No customer or distribution partner accounted for greater than 10% of our total revenue in fiscal 2011 or 2012.

To support our goal of sustainable, long-term growth, we have made and continue to make significant incremental investments in product development, corporate infrastructure and broadened distribution. For example, in fiscal 2013, we hired a new chief executive officer and a number of other key executives across our organization. We also maintained a level of investment in brand development that we believed would continue to help us expand our reach. We intend to continue to invest in development of our solutions, our infrastructure and sales and marketing to drive long-term growth.

The growth of our business and our future success depend on many factors, including our ability to continue to expand our customer base, pursue cross-sale opportunities and grow revenues from our existing customer base, expand our distribution channels, particularly internationally, and continue to develop new solutions to promptly respond to our customers’ needs. While these areas represent significant opportunities for us, they also pose risks and challenges that we must successfully address in order to sustain the growth of our business and improve our operating results as more fully described in the section titled “—Factors Affecting our Performance” below.

Additionally, our quarterly and annual operating results and key metrics have varied from period to period in the past, and we expect that they may continue to fluctuate as a result of a number of factors, many of which are outside of our control, including the timing and success of introductions of our new solutions, changes in the growth rate of the security and storage markets, changes in renewal rates for our subscriptions and our ability to cross-sell additional solutions in a period, amongst others. This variability and unpredictability could result in our failing to meet our revenue, billings or operating results expectations or those of securities analysts or investors for any period.

Furthermore, our business depends on the overall demand for security and storage solutions. Weak global economic conditions, particularly market and financial uncertainty and instability in the United States and Europe, or a reduction in security and storage solution spending even if economic conditions improve, could adversely impact our business, financial condition and operating results in a number of ways. Additionally, we face significant competition across all of our market segments, and must continue to execute across all functions and add qualified personnel to succeed in these markets.

For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our gross billings were $191.3 million, $233.2 million, $264.2 million and $150.5 million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our total revenue was $142.1 million, $160.9 million, $198.9 million, and $114.1 million, respectively. We believe that the subscription nature of our solutions provides value to our customers and financial visibility to us. Subscription revenue for fiscal 2011, 2012 and 2013 and for the six months ended August 31, 2013 represented approximately 63%, 73%, 70% and 69% of our total revenue, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our net income (loss) to Barracuda was $3.0 million, $0.6 million, $(7.4) million and $(4.6) million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our free cash flow, adjusted for acquisition costs and other non-recurring charges, was $34.4 million, $35.4 million, $41.1 million and $11.0 million, respectively.

Our Business Model

We invoice at the time of sale for the total price of the solutions we deliver, and we typically collect cash in 30 to 60 days. We refer to the total amount of invoices we issue in a period as gross billings. All of the gross billings we record are recognized as revenue ratably under GAAP, once all revenue recognition criteria have

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been met. Gross billings are initially recorded as deferred revenue, less reserves. The appliance component of our gross billings is recognized ratably as revenue over the estimated customer relationship period, which is typically three years, commencing upon the activation of the unit by the end customer. The subscription component of our gross billings is recognized ratably as revenue over the contractual period of the subscription. Because we bill in advance for the entire term, substantially all of our new and renewal gross billings increase our deferred revenue balance, which contributes significantly to our cash flow.

Key Metrics

We monitor the following key metrics to help us evaluate growth trends, establish budgets and assess operational efficiencies. In addition to our results determined in accordance with GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our operating performance.

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
	(in thousands, except active subscribers and percentages)
Gross billings	$	191,306		$	233,211		$	264,225		$	129,653		$	150,488
Year-over-year percentage increase					22	%		13	%					16	%
Year-over-year percentage increase on a constant currency basis (1)					22	%		17	%					17	%
Adjusted EBITDA	$	46,200		$	55,251		$	49,095		$	25,792		$	23,425
Adjusted EBITDA as a percentage of total revenue		33	%		34	%		25	%		27	%		21	%
Free cash flow	$	34,422		$	35,416		$	41,085		$	16,091		$	11,023
Free cash flow as a percentage of total revenue		24	%		22	%		21	%		17	%		10	%
Active subscribers at period end		134,807			156,976			179,952			167,674			190,700

(1) In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, we compare the percentage change in our gross billings from one period to another using a constant currency. To present this gross billings information, the current and comparative prior period results for entities that operate in other than U.S. dollars are converted into U.S. dollars at constant exchange rates. For example, the rates in effect at February 28, 2013, which was the last day of our prior fiscal year, were used to convert current and comparable prior period gross billings rather than the actual exchange rates in effect during the respective period.

Gross billings. We define gross billings as total revenue plus the change in deferred revenue and other adjustments which primarily reflect returns and reserves with respect to the 30-day right to return we provide to our customers, as well as rebates for certain channel partner activities, during a particular period. We use gross billings as a performance measurement and a leading indicator of our future revenue, based on our business model of invoicing our customers at the time of sale of our solutions and recognizing revenue ratably over subsequent periods. Accordingly, we believe gross billings provide valuable insight into the sales of our solutions and the performance of our business. The gross billings we record in any period reflect sales to new customers plus renewals and additional sales to existing customers adjusted for returns, rebates and other offsets, which we do not expect to be recognized as revenue in future periods. In many cases, these returns, rebates and other offsets occur in periods different from the period of sale, and are unrelated to the marketing efforts leading to the initial sale, and therefore by adjusting for such offsets, we believe our computation of gross billings better reflects the effectiveness of our sales and marketing efforts.

Gross billings increased 22% from fiscal 2011 to 2012 and 13% from fiscal 2012 to 2013. In addition, in the six months ended August 31, 2013, gross billings increased 16% over the six months ended August 31, 2012. The increase in gross billings was primarily driven by our continued ability to cross-sell additional solutions to existing customers and the growth in our renewal subscriptions as a result of our high level of customer retention. The increase was also due to continued investment in sales and marketing, which resulted in additional lead generation opportunities and associated new customer billings. When evaluating our gross billings from period to period, we also evaluate our gross billings for the two comparable periods using a fixed exchange rate, thereby excluding the effect of currency fluctuations.

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Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus non-cash and non-operating charges, which includes acquisition and other non-recurring charges. Because of our business model, where revenue from gross billings is recognized ratably over subsequent periods, substantially all of our gross billings increase deferred revenue. Therefore, we believe that adjusting net income (loss) for increases in deferred revenue and increases in the associated deferred costs provides another indication of profitability from our operations. We use adjusted EBITDA to measure our performance, prepare our budgets and establish metrics for variable compensation. Because adjusted EBITDA excludes certain non-cash and non-operating charges, this measure enables us to eliminate the impact of items we do not consider indicative of our core operating performance and to better measure our performance on a consistent basis from period to period.

Adjusted EBITDA increased from $46.2 million in fiscal 2011 to $55.3 million fiscal 2012 and decreased to $49.1 million in fiscal 2013. In addition, adjusted EBITDA decreased from $25.8 million for the six months ended August 31, 2012 to $23.4 million for the six months ended August 31, 2013. The fluctuations in adjusted EBITDA from period to period were based primarily upon changes in gross billings and our investments in research and development. Our adjusted EBITDA increased from fiscal 2011 to fiscal 2012 as a result of the growth in gross billings. Our adjusted EBITDA in fiscal 2013 decreased due to increased investment in research and development and sales and marketing. Specifically, in fiscal 2013, research and development headcount increased by 28% compared to fiscal 2012, and sales and marketing headcount increased 25% compared to fiscal 2012.

Free cash flow. We define free cash flow as cash provided by operating activities, less purchases of property and equipment plus acquisition and other non-recurring charges. We consider free cash flow to be a useful liquidity measure that considers the investment in cloud and corporate infrastructure required to support our business and the impact of acquisition related expenses and other non-recurring charges. We use free cash flow to assess our business performance and evaluate the amount of cash generated by our business after adjusting for purchases of property and equipment and acquisition and other non-recurring charges.

Free cash flow increased from $34.4 million in fiscal 2011 to $35.4 million fiscal 2012 and to $41.1 million in fiscal 2013. In addition, free cash flow decreased from $16.1 million for the six months ended August 31, 2012 to $11.0 million for the six months ended August 31, 2013. The decrease in free cash flow in the six months ended August 31, 2013 was driven primarily by $3.0 million in capital expenditures to further expand our cloud infrastructure, as well as expenses and investments related to the move of our manufacturing to our new San Jose facility and other changes in working capital.

Active subscribers. We define an active subscriber as a discrete appliance, virtual appliance or cloud-only service that has activated at least one valid subscription that has not been terminated. We monitor the total number of active subscribers as a measure of the growth in our installed base, the success of our sales and marketing activities and the value that our solutions bring to our customers. As of fiscal 2011, 2012 and 2013 and the six months ended August 31, 2013, we had 134,807, 156,976, 179,952 and 190,700 active subscribers, respectively. The increase in active subscribers over these periods is primarily related to the increase in the renewal rate of our subscriptions, which has increased on a dollar basis from 89% in fiscal 2011 to 93% in fiscal 2013, as well as our ability to attract and retain new customers.

Factors Affecting our Performance

We believe that our future success will be dependent on many factors, including our ability to increase sales of our solutions to new customers as well as to increase sales of additional solutions to our existing customers and to add incremental capabilities that will solve emerging customer issues. While these areas present significant opportunity, they also present risks that we must manage to ensure successful results. See the section titled “Risk Factors.” Additionally, we face significant competition across all of our market segments and must continue to execute across all functions and add qualified personnel to succeed in these markets. If we are unable to address these challenges, our business could be adversely affected.

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Investment in Sales and Marketing. In order to support future sales, we will need to continue to invest significant resources devoted to our sales force and global network of partners and resellers. We have made and plan to continue to make significant investments in expanding our sales teams and distribution programs with our channel partners and increasing our brand awareness. Any investments we make in our sales and marketing will occur in advance of our experiencing any benefits from such investments, and so it may be difficult for us to determine if we are efficiently allocating our resources in this area. We cannot assure that the investments we have made, or intend to make, to strengthen our sales and marketing efforts will result in an increase in revenue or an improvement in our results of operations.

Investment in Product Development. Our performance is significantly dependent on the investments we make in our research and development efforts, and in our ability to continue to innovate, improve functionality, adapt to new technologies or changes to existing technologies. Our investments in this area include an increase in our research and development headcount by 28% in fiscal 2013 and the resulting increases in overhead expenses. We intend to continue to invest in new solution development and enhancements to our existing solutions. We cannot be assured that we will realize increased revenues from our development initiatives.

Investment in Infrastructure. In order to support our operations, we have made and expect to continue to make substantial investments in our infrastructure in connection with enhancing and expanding our operations domestically and internationally. For example, we intend to continue to invest in our software systems and additional data center resources to keep pace with the growth in the cloud and cloud-based solutions markets. We also expect to make additional investments in our infrastructure as we continue to transition to operation as a public company, which will result in increased general and administrative expenses.

Renewal Rates. Our solutions include a required subscription to our Barracuda Energize Updates subscription service. Customers also purchase subscriptions to virtual appliance software, cloud services and enhanced support services. The renewal rate of our subscriptions will affect our gross billings and recognized revenue in future periods. Renewal rates from subscriptions, on a dollars basis, have been 89%, 90% and 93% in fiscal 2011, 2012 and 2013, respectively.

We believe the renewal rate is an important metric to measure long-term value of customer agreements and our ability to retain our customers. We calculate our renewal rate by comparing the actual dollar amount of contracts renewed in a period to the dollar amount of the expiring contracts in that period, less the value of the expiring contracts that are upgraded to a higher model of the same product in lieu of a renewal.

Cross-sell Opportunity. The continued growth of our business partially depends on our ability to sell additional solutions to our existing customers. We define a solution as a distinct product line that we offer, such as Web Filter or Message Archiver. As our existing customers’ IT buying needs evolve, or as our customers realize the benefits of the solutions that they previously purchased, our portfolio of solutions provides us an opportunity to cross-sell additional solutions. Customers who successfully deploy more than one type of solution provide substantially more customer lifetime value to us, and can derive greater value from our solutions as they benefit from synergies in management, support and functionality. For example, at the end of fiscal 2010, we had approximately 10,350 multi-solution customers, approximately 1,490 of which purchased three or more of our distinct solutions. At the end of fiscal 2013, we had approximately 21,800 multi-solution customers, representing a compound annual growth rate of approximately 28% since fiscal 2010. Of the approximately 21,800 multi-solution customers, approximately 5,520 purchased three or more of our distinct solutions, representing a compound annual growth rate of approximately 55% since fiscal 2010. To support our cross-sell efforts, we intend to continue adding higher touch sales and marketing field resources to liaise with our channel partners as we continue to grow our sales both domestically and internationally.

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Components of Results of Operations

Revenue

We generate revenue from the sales of our appliances and subscriptions.

• Appliance Revenue. Revenue from the sale of our appliances includes hardware and a perpetual license. We recognize appliance revenue over the estimated customer relationship period of three years, commencing with the end-user’s activation of the appliance and related subscription, provided all other criteria for the recognition of appliance revenue are met.

• Subscription Revenue. Subscription revenue is generated primarily from our subscription services such as our Barracuda Energize Updates as well as our cloud solutions—Barracuda Email Security Service, Barracuda Web Security Service and Barracuda Backup. Subscription revenue also includes revenue from fixed term licenses of our virtual appliance software support and maintenance. Our subscription terms range from one to five years, the substantial majority of which are for one-year periods. We recognize revenue from subscriptions and support and maintenance over the contractual service period.

Cost of Revenue

Cost of revenue consists of costs related to our appliance and subscription revenue. Such costs include hardware, manufacturing, shipping and logistics, customer support, warranty, personnel costs, data center costs and amortization of intangible assets related to acquired technology. We expect our cost of revenue to increase in absolute dollars, although it may fluctuate as a percentage of total revenue from period to period, as we continue to grow.

Gross Margin

Gross margin, or gross profit as a percentage of total revenue, has been and will continue to be affected by a variety of factors, including manufacturing costs, cost of technical support and the mix of our solutions sold. We expect our gross margins to fluctuate over time depending on the factors described above.

Operating Expenses

Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, stock-based compensation and travel-related expenses. Operating expenses also include allocated overhead costs for facilities, IT and depreciation. We expect operating expenses to increase in absolute dollars, although they may fluctuate as a percentage of total revenue from period to period, as we continue to grow. In particular, we expect our stock-based compensation expense to increase in absolute dollars as a result of our existing stock-based compensation to be recognized as options and RSUs vest and as we issue additional stock-based awards to attract and retain employees.

• Research and development. Research and development expenses consist primarily of salaries, benefits and stock-based compensation for employees and executives on our engineering and technical teams who are responsible for increasing the functionality and enhancing the ease-of-use of our appliance and subscription services, as well as the development of new products. We expense our research and development costs as they are incurred. We expect research and development expenses to increase in absolute dollars as we continue to invest in our future solutions, although our research and development expenses may fluctuate as a percentage of total revenue.

• Sales and marketing. Our sales and marketing expenses consist primarily of advertising, as well as salaries, commissions, benefits and stock-based compensation for our employees and executives engaged in sales, sales support, marketing, business development and customer service functions. Our

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advertising expenses include the costs of cooperative marketing programs developed with our channel partners, other marketing programs such as online lead generation, promotional events and web seminars. We market and sell our subscription services worldwide through our sales organization and distribution channels, such as strategic resellers and distributors. We capitalize and amortize the direct and incremental portion of our sales commissions over the period the related revenue is recognized. We expect sales and marketing expenses to continue to increase in absolute dollars as we increase the size of our sales and marketing organizations, although our sales and marketing expenses may fluctuate as a percentage of total revenue.

• General and administrative. Our general and administrative expenses consist primarily of salaries, benefits and stock-based compensation for our finance, legal, regulatory and compliance, human resources and other administrative employees and executives. In addition, general and administrative expenses include outside consulting, legal and accounting services, and facilities and other supporting overhead costs. We expect general and administrative expenses to increase in absolute dollars following the completion of this offering due to accounting, insurance, investor relations and other costs associated with being a public company, although our general and administrative expenses may fluctuate as a percentage of total revenue.

Other Income (Expense), Net

Other income (expense), net consists primarily of foreign exchange gains and losses, interest expense on our outstanding debt and interest income earned on our cash, cash equivalents and marketable securities. We expect interest income will vary each reporting period depending on our average investment balances during the period, types and mix of investments, and market interest rates.

Provision (Benefit) for Income Taxes

Our provision for income taxes consists primarily of federal and state income taxes in the United States and income taxes in foreign jurisdictions in which we conduct business. We estimate income taxes in each of the jurisdictions in which we operate. This process involves determining income tax expense together with calculating the deferred income tax expense related to temporary differences resulting from the differing treatment of items for tax and accounting purposes. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. These temporary differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss and credits carryforwards, if it is more likely than not that the tax benefits will be realized. As of February 28, 2013, we have a $7.0 million valuation allowance provided against our deferred tax assets primarily related to foreign net operating losses and California research credits acquired as part of our business acquisitions.

As of February 28, 2013, we had federal and state net operating loss carryforwards of approximately $1.1 million and $7.5 million, respectively, which will begin to expire at various dates beginning in fiscal 2019 and 2014, respectively. Additionally, as of February 28, 2013, we had foreign net operating loss carryforwards of approximately $22.9 million, of which approximately $19.1 million can be carried forward indefinitely, and the remaining amounts expire at various dates beginning in fiscal 2014. The Internal Revenue Code provides limitations on our ability to utilize net operating loss carryforwards and tax credit carryforwards, after an ownership change, as defined in Section 382 of the Internal Revenue Code. California has similar rules that may limit our ability to utilize our state net operating loss carryforwards. If we were to experience an ownership change in the future, this could limit our use of our net operating loss carryforwards.

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Results of Operations

The following tables summarize our consolidated results of operations for the periods presented and as a percentage of our total revenue for those periods.

	Year Ended February 28/29,								Six Months Ended August 31,
	2011		2012			2013			2012			2013
									(unaudited)
	(in thousands)
Consolidated Statements of Operations Data:
Revenue:
Appliance	$	52,477	$	43,258		$	59,528		$	27,775		$	35,409
Subscription		89,655		117,662			139,403			67,258			78,658
Total revenue		142,132		160,920			198,931			95,033			114,067
Cost of revenue		31,972		34,966			45,088			21,286			26,481
Gross profit		110,160		125,954			153,843			73,747			87,586
Operating expenses:
Research and development		23,979		27,824			35,167			16,090			22,480
Sales and marketing		69,963		84,885			102,329			49,302			57,228
General and administrative		13,021		14,428			28,777			12,882			14,505
Total operating expenses		106,963		127,137			166,273			78,274			94,213
Operating income (loss)		3,197		(1,183	)		(12,430	)		(4,527	)		(6,627	)
Other income (expense), net		282		476			(839	)		(888	)		(450	)
Income (loss) before income taxes and non-controlling interest		3,479		(707	)		(13,269	)		(5,415	)		(7,077	)
Provision (benefit) for income taxes		1,136		(453	)		(5,084	)		(1,293	)		(2,136	)
Consolidated net income (loss)		2,343		(254	)		(8,185	)		(4,122	)		(4,941	)
Net loss attributable to non-controlling interest		620		859			794			462			362
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963	$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)

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	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
										(unaudited)
	(as a percentage of total revenue)
Revenue:
Appliance		37	%		27	%		30	%		29	%		31	%
Subscription		63			73			70			71			69
Total revenue		100			100			100			100			100
Cost of revenue		22			22			23			22			23
Gross profit		78			78			77			78			77
Operating expenses:
Research and development		17			17			18			17			20
Sales and marketing		49			53			51			52			50
General and administrative		9			9			14			14			13
Total operating expenses		75			79			83			83			83
Operating income (loss)		3			(1)			(6)			(5)			(6)
Other income (expense), net		—			1			(1)			(1)			—
Income (loss) before income taxes and non-controlling interest		3			—			(7)			(6)			(6)
Provision (benefit) for income taxes		1			—			(3)			(2)			(2)
Consolidated net income (loss)		2			—			(4)			(4)			(4)
Net loss attributable to non-controlling interest		—			—			—			—			—
Net income (loss) attributable to Barracuda Networks, Inc.		2	%		—	%		(4)	%		(4)	%		(4)	%

Comparison of the Six Month Periods Ended August 31, 2012 and 2013

Revenue

	Six Months Ended August 31,
	2012					2013					Change
	Amount		% of Total Revenue			Amount		% of Total Revenue			Amount		%
	(unaudited)
	(dollars in thousands)
Revenue:
Appliance	$	27,775		29	%	$	35,409		31	%	$	7,634		27	%
Subscription		67,258		71	%		78,658		69	%		11,400		17	%
Total revenue	$	95,033		100	%	$	114,067		100	%	$	19,034		20	%

Total revenue increased $19.0 million, or 20%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012. Subscription revenue increased by $11.4 million, or 17%, primarily due to an increase in active subscribers during the period of 23,026, or 14%, from 167,674 active subscribers as of August 31, 2012 to 190,700 active subscribers as of August 31, 2013. Total appliance revenue increased by $7.6 million, or 27% due to increased demand for our solutions. Appliance revenue was also impacted by the prospective adoption of new accounting standards effective beginning in fiscal 2011 whereby appliance revenue is recognized over the estimated customer relationship period of three years, rather than the contractual subscription period.

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Cost of Revenue and Gross Margin

	Six Months Ended August 31,
	2012					2013					Change
	Amount		Gross Margin			Amount		Gross Margin			Amount		%
	(unaudited)
	(dollars in thousands)
Cost of revenue	$	21,286				$	26,481				$	5,195		24	%
Gross profit	$	73,747		78	%	$	87,586		77	%	$	13,839		19	%

Cost of revenue increased for the six months ended August 31, 2013 compared to the six months ended August 31, 2012 commensurate with the increase in appliance and subscription revenue for the comparable periods and included $2.2 million in amortization expense. Gross margin was comparable for the six months ended August 31, 2013 compared to the six months ended August 31, 2012.

Operating Expenses

	Six Months Ended August 31,
	2012					2013					Change
	Amount		% of Total Revenue			Amount		% of Total Revenue			Amount			%
	(unaudited)
	(dollars in thousands)
Operating expenses:
Research and development	$	16,090		17	%	$	22,480		20	%	$	6,390			40	%
Sales and marketing		49,302		52			57,228		50			7,926			16
General and administrative		12,882		14			14,505		13			1,623			13
Total operating expenses	$	78,274		83	%	$	94,213		83	%	$	15,939			20	%
Includes stock-based compensation of:
Research and development	$	883				$	1,264				$	381
Sales and marketing		499					700					201
General and administrative		3,187					3,076					(111	)
Total	$	4,569				$	5,040				$	471

Research and development expense increased $6.4 million, or 40%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012, primarily due to a $4.0 million increase in personnel related costs resulting from a 26% increase in research and development headcount, as we continued to invest in our solutions to innovate and improve functionality, and a $0.4 million increase in stock-based compensation.

Sales and marketing expense increased $7.9 million, or 16%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012, primarily due to a $4.1 million increase in personnel related costs resulting from incremental investments in sales infrastructure and programs as well as a 4% increase in sales and marketing headcount and a $2.0 million increase in marketing expenses associated with advertising and trade shows, as we increased our sales and marketing efforts to grow our revenue.

General and administrative expense increased $1.6 million, or 13%, for the six months ended August 31, 2013 compared to the six months ended August 31, 2012 primarily due to a $1.1 million increase in personnel related costs resulting from a 24% increase in general and administrative headcount, a $0.9 million increase in

64

other IT-related expense as we improved our infrastructure to support our growth, a $0.9 million increase in bad debt expense, a $0.3 million increase in legal costs and a $0.2 million increase in professional services fees, partially offset by a $2.2 million reduction in acquisition and other non-recurring charges in the six months ended August 31, 2013 as compared to the six months ended August 31, 2012.

Other Income (Expense), Net

	Six Months Ended August 31,
	2012		2013		Change
	Amount		Amount		Amount			%
	(dollars in thousands)
Other expense, net	$	888	$	450	$	(438	)		(49	)%

The change in other expense, net during the six months ended August 31, 2013 compared to the six months ended August 31, 2012 was primarily due to a $0.7 million decrease in net foreign exchange losses, partially offset by a $0.2 million increase in interest expense.

Provision (Benefit) for Income Taxes

	Six Months Ended August 31,
	2012		2013		Change
	Amount		Amount		Amount		%
	(dollars in thousands)
Benefit for income taxes	$	1,293	$	2,136	$	843		65	%

We recorded an income tax benefit of $2.1 million for the six months ended August 31, 2013. The difference between the income tax benefit that would be derived by applying the statutory rate to our loss before tax and the income tax benefit actually recorded is primarily due to the impact of non-deductible stock-based compensation expenses and other currently non-deductible items, and various discrete items. For the six months ended August 31, 2012, we recorded an income tax benefit of $1.3 million.

Comparison of the Fiscal Years Ended February 29, 2012 and February 28, 2013

Revenue

	Year Ended February 29/28,
	2012		2013		Change
	Amount		Amount		Amount		%
	(dollars in thousands)
Revenue:
Appliance	$	43,258	$	59,528	$	16,270		38	%
Subscription		117,662		139,403		21,741		18	%
Total revenue	$	160,920	$	198,931	$	38,011		24	%

Total revenue increased $38.0 million, or 24%, for fiscal 2013 compared to fiscal 2012. Subscription revenue increased by $21.7 million, or 18%, primarily due to a 22,976 increase in active subscribers, or 15%, from 156,976 active subscribers as of February 29, 2012 to 179,952 active subscribers as of February 28, 2013. Total appliance revenue increased by $16.3 million, or 38% due to increased demand for our solutions.

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Appliance revenue was also impacted by the prospective adoption of new accounting standards effective beginning in fiscal 2011 whereby appliance revenue is recognized over the estimated customer relationship period of three years, rather than the contractual subscription period.

Cost of Revenue and Gross Margin

	Year Ended February 29/28,
	2012					2013					Change
	Amount		Gross Margin			Amount		Gross Margin			Amount		%
	(dollars in thousands)
Cost of revenue	$	34,966				$	45,088				$	10,122		29	%
Gross profit	$	125,954		78	%	$	153,843		77	%	$	27,889		22	%

Cost of revenue increased for fiscal 2013 compared to fiscal 2012 commensurate with the increase in appliance and subscription revenue for the comparable periods and included $5.5 million in amortization expense in fiscal 2013 compared to $6.0 million in fiscal 2012. Gross margin was consistent, decreasing one percentage point for fiscal 2013 compared to fiscal 2012.

Operating Expenses

	Year Ended February 29/28,
	2012					2013					Change
	Amount		% of Total Revenue			Amount		% of Total Revenue			Amount		%
	(dollars in thousands)
Operating expenses:
Research and development	$	27,824		17	%	$	35,167		18	%	$	7,343		26	%
Sales and marketing		84,885		53			102,329		51			17,444		21
General and administrative		14,428		9			28,777		14			14,349		99
Total operating expenses	$	127,137		79	%	$	166,273		83	%	$	39,136		31	%
Includes stock-based compensation of:
Research and development	$	766				$	2,059				$	1,293
Sales and marketing		527					1,182					655
General and administrative		527					5,400					4,873
Total stock-based compensation	$	1,820				$	8,641				$	6,821

Research and development expense increased $7.3 million, or 26%, in fiscal 2013 compared to fiscal 2012 primarily due to a $3.5 million increase in personnel related costs as a result of a 28% increase in research and development headcount as we continued to invest in our solutions to innovate and improve functionality, $1.4 million of acquisition and other non-recurring charges, consisting of $0.6 million in option holder bonuses, $0.4 million in CEO transition costs and $0.4 million in acquisition costs, and a $1.3 million increase in stock-based compensation.

Sales and marketing expense increased $17.4 million, or 21%, in fiscal 2013 compared to fiscal 2012 primarily due to a $6.2 million increase in marketing expenses primarily associated with advertising and trade shows as we increased our sales and marketing efforts to grow our revenue, a $5.4 million increase in personnel related costs resulting from a 25% increase in sales and marketing headcount, a $1.5 million increase in

66

commission expense, $1.1 million in acquisition and other non-recurring charges, consisting of $0.7 million in option holder bonuses and $0.4 million in CEO transition costs, a $1.1 million increase in travel related expense and a $0.6 million increase in sales consulting expense.

General and administrative expense increased $14.3 million, or 99%, in fiscal 2013 compared to fiscal 2012 primarily due to $7.3 million in acquisition and other non-recurring charges, consisting of $5.3 million in CEO transition costs, $1.4 million in export compliance costs, $0.5 million in acquisition costs and $0.1 million in option holder bonuses, a $4.9 million increase in stock-based compensation and a $1.0 million increase in other IT-related expense as we improved our infrastructure to support our growth.

Other Income (Expense), Net

	Year Ended February 29/28,
	2012		2013			Change
	Amount		Amount			Amount			%
	(dollars in thousands)
Other income (expense), net	$	476	$	(839	)	$	(1,315	)		(276	)%

The change in other income (expense), net was due to an increase of $0.4 million in interest expense associated with our assumption of a note payable in December 2011, as we incurred a full year of interest expense during fiscal 2013. In addition, other income, net in fiscal 2012 included a $0.9 million gain on the sale of an investment.

Provision (Benefit) for Income Taxes

	Year Ended February 29/28,
	2012			2013			Change
	Amount			Amount			Amount			%
	(dollars in thousands)
Benefit for income taxes	$	(453	)	$	(5,084	)	$	(4,631	)		NM

We recorded an income tax benefit of $5.1 million for fiscal 2013. We recorded an income tax benefit of $0.5 million for fiscal 2012. The difference between the income tax benefit that would be derived by applying the statutory rate to our loss before tax and the income tax benefit actually recorded for fiscal 2013 and 2012 is primarily due to the impact of non-deductible stock-based compensation expenses and other currently non-deductible items, offset by the use of the tax credits and the tax benefit we received from manufacturing domestically.

Comparison of the Fiscal Years Ended February 28, 2011 and February 29, 2012

Revenue

	Year Ended February 28/29,
	2011		2012		Change
	Amount		Amount		Amount			%
	(dollars in thousands)
Revenue:
Appliance	$	52,477	$	43,258	$	(9,219	)		(18	)%
Subscription		89,655		117,662		28,007			31	%
Total revenue	$	142,132	$	160,920	$	18,788			13	%

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Total revenue increased $18.8 million, or 13%, for fiscal 2012 compared to fiscal 2011. Subscription revenue increased by $28.0 million, or 31%, primarily due to an increase in active subscribers during the period of 22,169, of 16%, from 134,807 active subscribers as of February 28, 2011 to 156,976 active subscribers as of February 29, 2012. Appliance revenue decreased by $9.2 million, or 18%, principally due to the prospective adoption of new accounting standards effective beginning in fiscal 2011 whereby appliance revenue is recognized over the estimated customer relationship period of three years, rather than the contractual subscription period.

Cost of Revenue and Gross Margin

	Year Ended February 28/29,
	2011					2012					Change
	Amount		Gross Margin			Amount		Gross Margin			Amount		%
	(dollars in thousands)
Cost of revenue	$	31,972				$	34,966				$	2,994		9	%
Gross profit	$	110,160		78	%	$	125,954		78	%	$	15,794		14	%

Cost of revenue increased for fiscal 2012 compared to fiscal 2011 commensurate with the increase in appliance and subscription revenue for the comparable periods and included $6.0 million in amortization expense in each of fiscal 2012 and fiscal 2011. Gross margin was comparable for fiscal 2012 compared to fiscal 2011.

Operating Expenses

	Year Ended February 28/29,
	2011					2012					Change
	Amount		% of Total Revenue			Amount		% of Total Revenue			Amount			%
	(dollars in thousands)
Operating expenses:
Research and development	$	23,979		17	%	$	27,824		17	%	$	3,845			16	%
Sales and marketing		69,963		49			84,885		53			14,922			21
General and administrative		13,021		9			14,428		9			1,407			11
Total operating expenses	$	106,963		75	%	$	127,137		79	%	$	20,174			19	%
Includes stock-based compensation of:
Research and development	$	848				$	766				$	(82	)
Sales and marketing		627					527					(100	)
General and administrative		417					527					110
Total stock-based compensation	$	1,892				$	1,820				$	(72	)

Research and development expense increased $3.8 million, or 16%, in fiscal 2012 compared to fiscal 2011 primarily due to a $3.6 million increase in personnel-related costs as a result of a 27% increase in research and development headcount.

Sales and marketing expense increased $14.9 million, or 21%, in fiscal 2012 compared to fiscal 2011 primarily due to a $4.0 million increase in personnel related costs resulting from a 25% increase in sales and marketing headcount, a $5.8 million increase in marketing expenses primarily associated with advertising and trade shows as we increased our sales and marketing efforts to grow our revenue, a $1.5 million increase in travel-related expense, a $1.1 million increase in commission expense and a $0.6 million increase in amortization of intangibles.

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General and administrative expense increased $1.4 million, or 11%, in fiscal 2012 compared to fiscal 2011 primarily due to a $0.6 million increase in personnel related costs resulting from a 25% increase in general and administrative headcount and a $0.3 million increase in other IT-related expense.

Other Income (Expense), net

	Year Ended February 28/29,
	2011		2012		Change
	Amount		Amount		Amount		%
	(dollars in thousands)
Other income, net	$	282	$	476	$	194		69%

The change in other income, net was due to a $0.9 million gain on the sale of an investment, partially offset by an increase in foreign exchange losses of $0.5 million and a decrease in interest income of $0.2 million during fiscal 2012 compared to fiscal 2011.

Provision (Benefit) for Income Taxes

	Year Ended February 28/29,
	2011		2012		Change
	Amount		Amount		Amount		%
	(dollars in thousands)
Provision (benefit) for income taxes	$	1,136	$	(453)	$	(1,589)		(140)%

We recorded an income tax benefit of $0.5 million for fiscal 2012. We recorded an income tax provision of $1.1 million for fiscal 2011. The difference between the income tax provision (benefit) that would be derived by applying the statutory rate to our income (loss) before tax and the income tax provision (benefit) actually recorded for fiscal 2012 and 2011 is primarily due to the impact of non-deductible stock-based compensation expenses and other currently non-deductible items, offset by the use of the tax credits and the tax benefit we received from manufacturing domestically.

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Quarterly Results of Operations

The following tables set forth selected unaudited quarterly consolidated statements of operations data for each of the six quarters in the period ended August 31, 2013, as well as the percentage that each line item represents of total revenue. The information for each of these quarters has been prepared on the same basis as the audited annual financial statements included elsewhere in this prospectus and, in the opinion of management, includes all adjustments, which includes only normal recurring adjustments, necessary for the fair presentation of the results of operations for these periods in accordance with GAAP. This data should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this prospectus.

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug. 31, 2013
	(unaudited) (in thousands)
Consolidated Statements of Operations Data:
Revenue
Appliance	$	13,318		$	14,457		$	15,424		$	16,329		$	17,503		$	17,906
Subscription		32,691			34,567			36,003			36,142			38,774			39,884
Total revenue		46,009			49,024			51,427			52,471			56,277			57,790
Cost of revenue		10,274			11,012			11,394			12,408			13,074			13,407
Gross profit		35,735			38,012			40,033			40,063			43,203			44,383
Operating expenses
Research and development		7,656			8,434			8,925			10,152			10,842			11,638
Sales and marketing		24,027			25,275			25,471			27,556			28,836			28,392
General and administrative		6,420			6,462			9,198			6,697			6,678			7,827
Total operating expenses		38,103			40,171			43,594			44,405			46,356			47,857
Operating loss		(2,368	)		(2,159	)		(3,561	)		(4,342	)		(3,153	)		(3,474	)
Other income (expense), net		(1,074	)		186			362			(313	)		(457	)		7
Loss before income taxes and non-controlling interest		(3,442	)		(1,973	)		(3,199	)		(4,655	)		(3,610	)		(3,467	)
Benefit for income taxes		(902	)		(391	)		(1,076	)		(2,715	)		(1,047	)		(1,089	)
Consolidated net loss		(2,540	)		(1,582	)		(2,123	)		(1,940	)		(2,563	)		(2,378	)
Net loss attributable to non-controlling interest		206			256			150			182			159			203
Net loss attributable to Barracuda Networks, Inc.	$	(2,334	)	$	(1,326	)	$	(1,973	)	$	(1,758	)	$	(2,404	)	$	(2,175	)

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The following table presents the unaudited consolidated statement of operations data as a percentage of total revenue:

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug. 31, 2013
Revenue
Appliance		29	%		29	%		30	%		31	%		31	%		31	%
Subscription		71			71			70			69			69			69
Total revenue		100			100			100			100			100			100
Cost of revenue		22			22			22			24			23			23
Gross profit		78			78			78			76			77			77
Operating expenses
Research and development		17			17			17			19			19			20
Sales and marketing		52			52			50			53			51			49
General and administrative		14			13			18			13			12			14
Total operating expenses		83			82			85			85			82			83
Operating loss		(5)			(4)			(7)			(9)			(5)			(6)
Other income (expense), net		(3)			—			1			—			(1)			—
Loss before income taxes and non-controlling interest		(8)			(4)			(6)			(9)			(6)			(6)
Benefit for income taxes		(2)			(1)			(2)			(5)			(2)			(2)
Consolidated net loss		(6)			(3)			(4)			(4)			(4)			(4)
Net loss attributable to non-controlling interest		1			—			—			1			—			—
Net loss attributable to Barracuda Networks, Inc.		(5)	%		(3)	%		(4)	%		(3)	%		(4)	%		(4)	%

Key Metrics

The following table presents key metrics for each of the six quarters in the period ended August 31, 2013. In addition to our results determined in accordance with GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our operating performance.

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug. 31, 2013
	(in thousands, except active subscribers and percentages)
Gross billings	$	65,362		$	64,291		$	65,047		$	69,525		$	74,865		$	75,623
Period-over-period percentage increase					(2)	%		1	%		7	%		8	%		1	%
Adjusted EBITDA	$	14,110		$	11,682		$	10,499		$	12,804		$	12,053		$	11,372
Adjusted EBITDA as a percentage of total revenue		31	%		24	%		20	%		24	%		21	%		20	%
Free cash flow	$	9,866		$	6,225		$	14,865		$	10,129		$	1,607		$	9,415
Free cash flow as a percentage of total revenue		21	%		13	%		29	%		19	%		3	%		16	%
Active subscribers as of period end		161,998			167,674			173,484			179,952			184,232			190,700

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The following table reconciles total revenue to gross billings:

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug. 31, 2013
	(in thousands)
Gross billings:
Total revenue	$	46,009		$	49,024		$	51,427		$	52,471		$	56,277		$	57,790
Total deferred revenue, end of period		231,131			241,734			250,163			261,243			274,444			286,792
Less: total deferred revenue, beginning of period		(217,209	)		(231,131	)		(241,734	)		(250,163	)		(261,243	)		(274,444	)
Add: deferred revenue adjustments		5,431			4,664			5,191			5,974			5,387			5,485
Total change in deferred revenue and adjustments		19,353			15,267			13,620			17,054			18,588			17,833
Gross billings	$	65,362		$	64,291		$	65,047		$	69,525		$	74,865		$	75,623

The following table reconciles net income (loss) to adjusted EBITDA:

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug.  31, 2013
	(in thousands)
Adjusted EBITDA:
Net loss attributable to Barracuda Networks, Inc.	$	(2,334	)	$	(1,326	)	$	(1,973	)	$	(1,758	)	$	(2,404	)	$	(2,175	)
Total deferred revenue, end of period		231,131			241,734			250,163			261,243			274,444			286,792
Less: total deferred revenue, beginning of period		(217,209	)		(231,131	)		(241,734	)		(250,163	)		(261,243	)		(274,444	)
Less: total deferred costs, end of period		(32,904	)		(35,347	)		(37,299	)		(39,470	)		(42,556	)		(46,058	)
Total deferred costs, beginning of period		29,254			32,904			35,347			37,299			39,470			42,556
Other (income) expense, net		1,074			(186	)		(362	)		313			457			(7	)
Provision (benefit) for income taxes		(902	)		(391	)		(1,076	)		(2,715	)		(1,047	)		(1,089	)
Depreciation and amortization		1,998			1,993			2,015			2,327			2,245			2,489
Stock-based compensation		3,241			1,393			1,723			2,430			2,497			2,631
Acquisition and other non-recurring charges(1)		761			2,039			3,695			3,298			190			677
Adjusted EBITDA	$	14,110		$	11,682		$	10,499		$	12,804		$	12,053		$	11,372

(1) The following table details the acquisition and other non-recurring charges affecting adjusted EBITDA:

	Three Months Ended
	May 31, 2012		Aug. 31, 2012		Nov. 30, 2012		Feb. 28, 2013		May 31, 2013		Aug. 31, 2013
	(in thousands)
Impact of acquisition and other non-recurring charges on adjusted EBITDA:
CEO transition	$	19	$	1,393	$	3,281	$	1,365	$	—	$	—
Export compliance		481		403		265		262		—		211
Option holder bonuses		—		—		—		1,420		—		—
Acquisition costs		261		243		149		251		190		466
Total acquisition and other non-recurring charges	$	761	$	2,039	$	3,695	$	3,298	$	190	$	677

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The following table reconciles cash provided by operating activities to free cash flow:

	Three Months Ended
	May 31, 2012			Aug. 31, 2012			Nov. 30, 2012			Feb. 28, 2013			May 31, 2013			Aug. 31, 2013
	(in thousands)
Free cash flow:
Cash provided by operating activities	$	10,195		$	5,523		$	14,893		$	8,764		$	194		$	11,888
Less: purchases of property and equipment		(609	)		(934	)		(1,508	)		(1,671	)		(1,663	)		(2,866	)
Acquisition and other non-recurring charges(1)		280			1,636			1,480			3,036			3,076			393
Free cash flow	$	9,866		$	6,225		$	14,865		$	10,129		$	1,607		$	9,415

(1) The following table details the acquisition and other non-recurring charges affecting free cash flow:

	Three Months Ended
	May 31, 2012		Aug. 31, 2012		Nov. 30, 2012		Feb. 28, 2013		May 31, 2013		Aug. 31, 2013
	(in thousands)
Impact of acquisition and other non-recurring charges on free cash flow:
CEO transition	$	19	$	1,393	$	1,331	$	1,365	$	1,946	$	—
Export compliance		—		—		—		—		940		—
Option holder bonuses		—		—		—		1,420		—		—
Acquisition costs		261		243		149		251		190		393
Total acquisition and other non-recurring charges	$	280	$	1,636	$	1,480	$	3,036	$	3,076	$	393

Quarterly Revenue Trends

Our quarterly total revenue has increased sequentially for all periods presented. In our second quarter of fiscal 2014, our subscription revenue increased by $1.1 million, or 3%, from $38.8 million in the quarter ending May 31, 2013 to $39.9 million in the quarter ending August 31, 2013. This growth in our subscription rate was the result of an increase in active subscribers.

Our GAAP revenues have not been significantly impacted by seasonality.

Quarterly Gross Margin Trends

Gross profit increased sequentially, and total gross margin was consistently between 77% and 78% for all periods presented. Our cost of revenue has increased over the period as we have added technical support headcount in line with our gross billings growth. Our cost of revenue related to appliance fulfillment has increased over the period. This increase in appliance fulfillment costs is related to a product mix shift in gross billings towards solutions that have lower gross profit margins. This product mix shift was partially offset by increases in subscription revenue during the period. We expect continued pressures on the gross margin trends as a result of product mix, and as we continue our investment in cloud infrastructure delivery.

Quarterly Operating Expenses Trends

Total operating expenses increased sequentially for all periods presented primarily due to the addition of personnel in connection with the expansion of our business. The increase in research and development expense was primarily related to a 28% increase in headcount during fiscal 2013, and our sales and marketing expense increase was primarily related to a 25% increase in headcount during fiscal 2013. The timing of acquisition and other non-recurring charges also impacted our operating expenses. Total operating expenses included acquisition and other non-recurring charges of $0.8 million, $2.0 million, $3.7 million, $3.3 million, $0.2 million and $0.7 million in the three months ended May 31, 2012, August 31, 2012, November 30, 2012, February 28, 2013,

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May 31, 2013 and August 31, 2013, respectively. Our acquisition and other non-recurring charges in the first three quarters of fiscal 2013 related to CEO transition, export compliance and acquisition costs, which primarily impacted general and administrative expenses. The $3.3 million in acquisition and other non-recurring charges in the fourth quarter of fiscal 2013 related primarily to CEO transition costs and option holder bonuses, and the total expense had an approximately equal impact on each of research and development, sales and marketing and general and administrative expenses.

Quarterly Non-GAAP Financial Measure Trends

Gross billings. Our quarterly gross billings results reflect some seasonality in sales of our solutions. We typically have seasonally higher gross billings in our first and fourth quarters. The increase in gross billings during the first quarter primarily related to subscription renewals, where we have large blocks of subscription expirations occurring annually in our first quarter. Due to our high rate of customer retention, we typically experience an increase in gross billings as a result of renewals in this first quarter. Additionally, certain industries make purchases more frequently in our first quarter. The increase in gross billings in our fourth quarter is primarily related to calendar year-end activity, due to customer deployment of solutions prior to, or shortly after, the calendar year-end, both of which impact our fourth quarter ending February. In general, gross billings in our second quarter period are impacted by fewer selling days and reduced economic activity, particularly in Europe, over the summer period. Gross billings trends during the period reported have been impacted by foreign currency fluctuations.

The increase in gross billings in the three months ended February 28, 2013, May 31, 2013 and August 31, 2013 were primarily driven by our continued ability to cross-sell adjacent solutions to existing customers and the growth in our renewal subscriptions as a result of our high level of customer retention. In addition, we continue to invest in sales and marketing, resulting in an increase in our ability to attract and retain new customers.

Adjusted EBITDA. Adjusted EBITDA is subject to the same seasonality trends that affect gross billings, since adjusted EBITDA adds back the increase in deferred revenue during the period to net income. Additionally, adjusted EBITDA is subject to quarterly changes based on investment objectives. We typically experience higher sales and marketing expenses in our fourth quarter as a result of certain conferences and trade shows that occur in the fourth quarter ending February.

The trends in adjusted EBITDA from period to period were based primarily upon changes in gross billings and operating expenses. Our increases in operating expenses in fiscal 2013 consisted primarily of sales and marketing and research and development expenses related to investment in headcount. Research and development headcount increased by 28%, and sales and marketing headcount increased by 25%. The improved trend in adjusted EBITDA in the three months ended February 28, 2013 and May 31, 2013 was consistent with our increase in gross billings during the same periods.

Free cash flow. Free cash flow is impacted by the seasonality trends in gross billings and adjusted EBITDA discussed above. Additionally, free cash flow is subject to the timing of investments in capital expenditures, the majority of which are made in the first half of our fiscal year, which principally relate to investment in cloud and corporate infrastructure, required to support the growth of our business. While our management plans for these types of infrastructure investments, the timing of the investment is driven, most importantly, by customer need, and can vary from our plan.

The trends in free cash flow during the periods presented were primarily impacted by the trends in our gross billings and adjusted EBITDA. The increase in free cash flow in the three months ended November 30, 2012 was driven primarily by an increase in our net cash provided by operating activities as a result of the timing of certain payments which were paid in the subsequent period compared to when the expense was recorded.

Active Subscribers. To date, changes in active subscribers have not been materially impacted by seasonal trends. The increase and linearity of the active subscribers is related to our ability to maintain a high renewal rate of

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subscriptions. Active subscribers are also impacted by our ability to attract and acquire new customers. During fiscal year 2013, we renewed 93% of the expiring subscriptions, on a dollar basis, and continued to invest in sales and marketing infrastructure to attract and retain new customers which contributed to the increase in active subscribers.

Liquidity and Capital Resources

	As of February 28/29,						As of August 31, 2013
	2011		2012		2013
							(unaudited)
	(in thousands)
Cash, cash equivalents and marketable securities	$	100,187	$	128,783	$	31,645	$	30,192

	Year Ended February 28/29,									Six Months Ended  August 31, 2013
	2011			2012			2013
										(unaudited)
	(in thousands)
Cash provided by operating activities	$	36,909		$	43,926		$	39,375		$	12,083
Cash provided by (used in) investing activities		2,951			(11,120	)		(8,504	)		(13,342	)
Cash provided by (used in) financing activities		(1,450	)		(5,048	)		(127,111	)		195

As of August 31, 2013, we had cash, cash equivalents and marketable securities of $30.2 million, of which approximately $4.0 million was held outside of the United States and not presently available to fund domestic operations and obligations. If we were to repatriate cash held outside of the United States, it could be subject to U.S. income taxes, less any previously paid foreign income taxes.

To date, we have funded our operations primarily through cash generated from operations, and to a lesser extent, private sales of equity securities. We believe that our existing cash and cash equivalents, together with our existing credit facility, will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced solutions and service offerings, and the continuing market acceptance of our solutions. 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 would be adversely affected.

The Recapitalization

In October 2012, we completed our Recapitalization pursuant to a recapitalization agreement entered into with our founders and their affiliates and certain of our existing investors. As part of the Recapitalization, we (i) declared $130.0 million of cash dividends, (ii) sold 22,727,913 shares of our Series B redeemable convertible preferred stock to certain of our existing investors at a price per share of approximately $5.62, for an aggregate purchase price of $127.5 million, and (iii) repurchased 22,727,913 shares of common stock from our founders and their affiliates at a price per share of approximately $5.62, for an aggregate repurchase price of $127.5 million. The shares of our common stock which we repurchased were subsequently cancelled. In December 2012, in lieu of dividends, we paid an aggregate of $1.4 million in bonus payments to our employees who held fully vested options to purchase our common stock at the time of the Recapitalization.

The dividend paid was accounted for as a return of capital to holders of our common stock and redeemable convertible preferred stock by reducing the carrying value of our additional paid-in capital (excess of capital return over carrying value of contributed capital) and redeemable convertible preferred stock, respectively.

As part of the Recapitalization, we entered into a $40.0 million credit facility with SVB consisting of a revolving loan facility which includes a letter of credit sub facility of up to $10.0 million. The credit facility expires in October 2014. The credit facility is secured by substantially all of our assets, and contains restrictive covenants as

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described in the agreement. These covenants require us to maintain a minimum adjusted EBITDA, as defined in the credit facility, in excess of $25.0 million for any trailing four quarter period and a minimum adjusted quick ratio in excess of 0.5 as of the last day of each month. The minimum required adjusted quick ratio will increase to 1.1 over the term of the credit facility. The adjusted quick ratio is calculated as the ratio of qualified cash plus net billed accounts receivable to consolidated current liabilities plus revolving credit extension under the credit facility, less (i) any deferred payments in connection with permitted acquisitions and (ii) the current portion of deferred revenue. We were in compliance with each of these covenants as of August 31, 2013. The terms of the credit facility require payment of an unused line fee of 0.375% per quarter of the unused portion. ABR loans under the credit facility bear interest at a rate per annum equal to the highest of the prime rate, the federal funds effective rate plus 0.5% and the eurodollar rate for a one-month interest period plus 1%. Eurodollar loans under the credit facility bear interest at a rate per annum equal to the eurodollar rate plus 1.5%. The credit facility also sets forth specified events of default. No amounts had been drawn under the credit facility as of February 28, 2013 and August 31, 2013.

In this prospectus, we refer to all of the transactions related to recapitalization and the related transactions collectively as the “Recapitalization.”

Operating Activities

Our primary source of cash from operating activities has been from cash collections from our customers. We expect cash inflows from operating activities to be affected by increases in sales and timing of collections. Our primary uses of cash from operating activities have been for personnel costs and investment in sales and marketing and research and development infrastructure. We expect cash outflows from operating activities to be affected by increases in sales and increases in personnel costs as we grow our business.

For the six months ended August 31, 2013, operating activities provided $12.1 million in cash as a result of a net loss of $4.9 million, offset by non-cash charges of $4.2 million as well as a net change of $12.8 million in our net operating assets and liabilities.

For the six months ended August 31, 2012, operating activities provided $15.7 million in cash, primarily as a result of a net loss of $4.1 million, offset by non-cash charges of $7.3 million and a net change of $12.5 million in our net operating assets and liabilities.

For fiscal 2013, operating activities provided $39.4 million in cash, primarily as a result of a net loss of $8.2 million, offset by non-cash charges of $2.1 million as well as a net change of $45.5 million in our net operating assets and liabilities. Non-cash charges primarily included stock-based compensation and depreciation and amortization, offset by deferred income taxes. The net change in our operating assets and liabilities was primarily the result of a $44.2 million increase in deferred revenue resulting from an increase in sales.

For fiscal 2012, operating activities provided $43.9 million in cash, primarily as a result of a net loss of $0.3 million and non-cash charges of $2.1 million, offset by a net change of $46.2 million in our net operating assets and liabilities. Non-cash charges included stock-based compensation and depreciation and amortization, offset by deferred income taxes. The net change in our operating assets and liabilities was primarily the result of a $56.6 million increase in deferred revenue offset by a $10.9 million increase in deferred costs due to an increase in sales.

For fiscal 2011, operating activities provided $36.9 million in cash, primarily as a result of net income of $2.3 million, non-cash charges of $1.3 million and a net change of $33.3 million in our net operating assets and liabilities. Non-cash charges primarily included stock-based compensation and depreciation and amortization, offset by deferred income taxes. The net change in our operating assets and liabilities was primarily the result of a $37.8 million increase in deferred revenue offset by a $5.1 million increase in deferred costs due to an increase in sales.

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Investing Activities

Our investing activities have consisted primarily of purchases of property and equipment related to providing cloud subscriptions, purchases and sales of short-term marketable securities, and activity in connection with prior acquisitions. We expect to continue to make purchases of property and equipment to support continued growth of our business.

Cash used in investing activities for the six months ended August 31, 2013 and 2012 was $13.3 million and $5.9 million, respectively. Cash used in the six months ended August 31, 2013 primarily related to purchases of property and equipment and our acquisition of SignNow, Inc. in April 2013. Cash used in the six months ended August 31, 2012 primarily related to purchases of property and equipment and payment of contingent consideration related to a previous acquisition.

For fiscal 2013 and 2012, cash used in investing activities was $8.5 million and $11.1 million, respectively, and was primarily the result of purchases of property and equipment and payment of contingent consideration related to a previous acquisition.

For fiscal 2011, cash provided by investing activities was $3.0 million and was primarily the result of proceeds from sales of marketable securities, partially offset by purchases of property and equipment.

Our annual capital expenditures generally have varied between approximately 2% and 5% of annual total revenue. We believe future capital expenditures are likely to be consistent with historical experience with variations above or below the range depending upon our need to make additional investments for facilities expansion.

Financing Activities

Our financing activities primarily consisted of proceeds from the sale of our redeemable convertible preferred stock, proceeds from the exercises of stock options, repurchases of common stock and payment of dividends declared on our common stock and redeemable convertible preferred stock. We expect the completion of our initial public offering to result in a material increase in our cash flows from financing activities.

For the six months ended August 31, 2013, financing activities provided $0.2 million in cash, primarily as a result of the net repayment of $1.9 million of employee loans and $0.4 million in proceeds from the issuance of common stock, partially offset by the payment of $1.4 million of dividends declared on our common stock and redeemable convertible preferred stock in fiscal 2013 and the repurchase of $0.7 million of our common stock. For the six months ended August 31, 2012, financing activities provided $4.0 million in cash, primarily as a result of $2.5 million in net proceeds from the exercises of stock options and $1.7 million in excess tax benefits realized from our equity incentive plans.

For fiscal 2013, financing activities used $127.1 million in cash, primarily as a result of the net payment of $128.4 million in dividends to holders of our common stock and redeemable convertible preferred stock and the repurchase of $127.5 million of our common stock from our founders and their affiliates, partially offset by net proceeds of $125.7 million from the sale of our Series B redeemable convertible preferred stock to certain of our existing investors.

For fiscal 2012, financing activities used $5.0 million, primarily related to the purchase of a non-controlling interest and the repurchase of common stock.

For fiscal 2011, financing activities used $1.5 million primarily related to the repayment of a note payable.

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Contractual Obligations and Commitments

The following summarizes our contractual obligations and commitments as of February 28, 2013:

	Payments Due by Period
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
	(in thousands)
Operating leases(1)	$	6,430	$	1,842	$	2,920	$	1,668	$	—
Debt obligations(2)		5,094		222		489		4,383		—
Purchase commitments(3)		3,479		3,479		—		—		—
Total	$	15,003	$	5,543	$	3,409	$	6,051	$	—

(1) Consists of contractual obligations from office space and equipment under non-cancelable operating lease.

(2) In December 2011, as part of the purchase of our corporate headquarters, we assumed debt obligations of $5.3 million bearing interest at 6.23% per year.

(3) Consists of non-cancelable purchase commitments for inventory.

The contractual obligation table above excludes tax liabilities of $4.0 million related to uncertain tax positions because we are unable to make a reasonably reliable estimate of the timing of settlement, if any, of these future payments.

Off-Balance Sheet Arrangements

Through August 31, 2013, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. 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.

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.

Revenue Recognition

We typically provide access to our solutions through appliances and related subscription agreements, whereby the customer is charged an upfront fee for the appliance and is required to purchase a related subscription agreement. The subscription agreements are subject to customer renewal at the end of each subscription period. Our appliances contain hardware and embedded proprietary software. The subscriptions, referred to as Barracuda Energize Updates, provide hourly spam, anti-malware, and security updates, and are required to be purchased to access our solutions. The subscriptions also entitle customers to phone support and software updates on a when and if available basis. We have determined that the elements of our customer arrangements, including the appliance and subscription, do not qualify for treatment as a separate unit of accounting. Accordingly, all fees received under our customer agreements are accounted for as a single unit of accounting and, except for any up-front fees for the appliance, such fees are recognized ratably on a daily basis over the term of the subscription agreement. Subscription revenue also includes revenue from fixed term licenses

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of our virtual appliance software support and maintenance. Recognition of revenue commences when there is persuasive evidence of an arrangement, the fee is fixed and determinable, collectability is deemed reasonably assured and the services have commenced.

We receive an upfront fee from customers for delivery and transfer of title for their appliance. No further fees related to the appliance are required to be paid by the customer in subsequent periods. Because the appliance does not have value to the customer on a stand-alone basis and requires a subscription agreement to access our solutions, the delivery of the appliance does not represent the culmination of a separate earnings process associated with the payment of the up-front fee. Accordingly, the amount of the up-front fee is recorded as deferred revenue upon invoicing and the amount is recognized as revenue ratably on a daily basis over the estimated average customer relationship period of three years.

Customers have a 30-day right to return, after which time the arrangement is non-cancelable. We make estimates and maintain a reserve for expected customer cancellations. These estimates involve inherent uncertainties and management judgment.

Stock-Based Compensation

Compensation expense related to stock-based transactions, including employee and nonemployee director stock options and RSUs, is measured and recognized in the financial statements based on fair value. The fair value of each option award is estimated on the grant date using the Black-Scholes-Merton option-pricing model and a single option award approach. The stock-based compensation expense is recognized, net of forfeitures using a straight-line basis over the requisite service periods of the awards, which is generally four years. We estimate a forfeiture rate to calculate the stock-based compensation for our awards. Our forfeiture rate is based on an analysis of our actual historical forfeitures.

The fair value of RSUs is determined based upon the fair value of the underlying common stock at the date of grant. Our outstanding RSUs vest upon the satisfaction of a time-based service component. The stock-based compensation expense is recognized ratably over the requisite service period of the RSUs, which is generally four years.

Our option-pricing model utilizes the estimated fair value of our common stock and requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The assumptions used in our option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

These assumptions are estimated as follows:

• Fair Value of our Common Stock. Because our common stock is not publicly traded, we must estimate the value of our common stock, as discussed in the section titled “—Common Stock Valuations” below.

• Expected Volatility. We determine the price volatility factor based on the historical volatilities of our peer group as we did not have a sufficient trading history for our common stock. Industry peers consist of several public companies in the technology industry that are similar to us in size, stage of life cycle, and financial leverage. We did not rely on implied volatilities of traded options in our industry peers’ common stock because the volume of activity was low. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own common stock share price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

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• Expected Term. The expected term represents the period that our stock-based awards are expected to be outstanding. We determined the expected term assumption based on the average of the contractual term and the average vesting period.

• Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes-Merton valuation model on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term of the options for each option group.

• Dividend Yield. The expected dividend assumption is based on our current expectations about our anticipated dividend policy. While we declared and paid a dividend as part of the Recapitalization, we currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeable future.

The following table summarizes the assumptions used to estimate the fair value of options granted during the periods presented:

	Year Ended February 28/29,
	2011			2012			2013
Expected volatility		50	%		41%-46	%		44	%
Expected term (in years)		6.25			6.25			6.25
Risk-free interest rate		2.02	%		1.84	%		0.96	%
Dividend yield		—			—			—
Weighted average fair value of options granted		$1.85			$1.68			$1.78

In addition to assumptions used in the Black-Scholes-Merton option-pricing model, we must also estimate a forfeiture rate to calculate the stock-based compensation for our awards. Our forfeiture rate is based on an analysis of our actual forfeitures. We will continue to evaluate the appropriateness of the forfeiture rate based on actual forfeiture experience, analysis of employee turnover, and other factors. Quarterly changes in the estimated forfeiture rate can have a significant impact on our stock-based compensation expense as the cumulative effect of adjusting the rate is recognized in the period the forfeiture estimate is changed. If a revised forfeiture rate is higher than the previously estimated forfeiture rate, an adjustment is made that will result in a decrease to the stock-based compensation expense recognized in the financial statements. If a revised forfeiture rate is lower than the previously estimated forfeiture rate, an adjustment is made that will result in an increase to the stock-based compensation expense recognized in the financial statements.

We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-based compensation expense.

Common Stock Valuations

We are required to estimate the fair value of the common stock underlying our stock-based awards when performing the fair value calculations with the Black-Scholes-Merton option-pricing model. The fair values of the common stock underlying our stock-based awards were determined by our board of directors, with input from management and contemporaneous third-party valuations. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. As described below, the exercise price of our stock-based awards was determined by our board of directors based on the most recent third-party valuation report as of the grant date.

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Given the absence of a public trading market of our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including:

• valuations of our common stock performed by unrelated third-party specialists;

• the prices, rights, preferences and privileges of our redeemable convertible preferred stock relative to those of our common stock;

• lack of marketability of our common stock;

• our actual operating and financial performance;

• current business conditions and projections;

• hiring of key personnel and the experience of our management;

• our company history and the introduction of new solutions;

• our stage of development;

• likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of our company given prevailing market conditions;

• illiquidity of stock-based awards involving securities in a private company;

• the market performance of comparable publicly traded companies; and

• the U.S. and global capital market conditions.

The dates of our valuation reports, which were prepared on a quarterly basis, were not contemporaneous with the grant dates of our stock-based awards. Therefore, we considered the amount of time between the valuation report date and the grant date to determine whether to use the latest common stock valuation report for the purposes of determining the fair value of our common stock for financial reporting purposes. If stock-based awards were granted a short period of time preceding the date of a valuation report, we assessed the fair value of such stock-based awards used for financial reporting purposes after considering the fair value reflected in the subsequent valuation report and other facts and circumstances on the date of grant as discussed below. In certain instances, the fair value that we used for financial reporting purposes exceeded the exercise price for those awards. In reaching this conclusion, we also evaluated whether the subsequent valuation report indicated that any significant change in valuation had occurred between the previous valuation report and the grant date. The additional factors considered when determining any changes in fair value between the most recent valuation report and the grant dates included, when available, the prices paid in recent transactions involving our equity securities, as well as our stage of development, our operating and financial performance, current industry conditions and the market performance of comparable publicly traded companies. There were significant judgments and estimates inherent in these valuations, which included assumptions regarding our future operating performance, the time to completing an initial public offering or other liquidity event and the determinations of the appropriate valuation methods to be applied. If we had made different estimates or assumptions, our stock-based compensation expense, net loss and net loss per share attributable to common stockholders could have been significantly different from those reported in this prospectus.

In valuing our common stock, our board of directors determined the equity value of our business generally using the income approach and the market comparable approach valuation methods. When applicable, due to a recent offering of our redeemable convertible preferred stock, the prior sale of company stock method was also utilized. The income approach determines our enterprise value on the basis of the estimated present value of our projected future cash flows. These future cash flows are discounted to their present values using a discount rate derived from an analysis of the cost of capital of comparable publicly traded companies in our industry or similar lines of business as of each valuation date and this discount rate is adjusted to reflect the risks inherent in our

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cash flows. The market comparable approach utilizes financial metrics and trading prices to determine trading multiples of a selected peer group of U.S.-based publicly traded companies. These multiples are then applied to our financial metrics to derive a range of indicated values. Once calculated, the results of the income approach and the market comparable approach are then weighted to determine an estimated enterprise value.

Our peer group of U.S.-based publicly traded companies used for valuation estimates, including the determination of the discount rate, volatility assumptions and market trading multiples is comprised of companies that focus primarily on producing IT solutions in areas in which we operate. More specifically, we focused on companies that provide security and storage solutions to customers of all sizes, companies who had similar business models of selling both products and subscription-based services and companies that have similar financial characteristics to us, such as growth rate, gross margins, working capital ratios and other factors. From time to time, we updated the set of peer group companies as new or more relevant information became available. Our peer group companies for the February 29, 2012 valuation report consisted of 12 companies, and for the August 31, 2012 valuation report we added one company. For the February 28, 2013 valuation report we added two companies and removed six companies, for a peer group of nine companies. For the May 31, 2013 valuation report we added five companies and removed one company, for a peer group of 13 companies. For the August 31, 2013 valuation report, there was no change to our peer group of 13 companies. The changes in our peer group public companies from period to period resulted primarily from the elimination of companies in our peer group that were acquired or no longer had similar characteristics, as well as the addition of newly public companies with similar characteristics. Within each valuation report, our peer group used for valuation estimates, including the determination of the discount rate, volatility assumptions and market trading multiples, was comprised of the same comparable companies. While we believe that this group of comparable companies was appropriate, there are differences in size or stage of maturity between many of our selected peer public companies and us. Therefore, had a different set of peer companies been used, a different valuation may have resulted.

The prior sale of company stock method estimates our enterprise value by considering any prior sales of our capital stock. When considering prior sales of our equity, the valuation considers the circumstances surrounding the sale, such as the size of the equity sale, the relationship of the parties involved in the transaction, the timing of the equity sale, and the rights, preferences and privileges of the capital stock sold in the transaction.

Once we determined an enterprise value, we utilized the option pricing method, or OPM, to allocate the equity value to each of our classes of stock. The OPM values each equity class by creating a series of call options on our equity value, with exercise prices based on the liquidation preferences, participation rights, and strike prices of derivatives. This method is generally preferred when future outcomes are difficult to predict and dissolution or liquidation is not imminent.

Beginning with the May 31, 2013 valuation report, due to greater clarity on potential liquidation events and our selection of a lead underwriter for our IPO, we began using the probability weighted expected return method, or PWERM, to allocate our equity value among the various potential outcomes. Using the PWERM, the value of our common stock is estimated based upon an analysis of varying values for our common stock assuming the following possible future events for our company:

• the completion of an IPO;

• the completion of a sale of the company; and

• continuation as a private company.

We applied a percentage probability weighting to each of the above scenarios based on our expectations of the likelihood of each event. We then applied the PWERM in order to allocate the derived aggregate enterprise value to our common stock.

In addition, we considered an appropriate discount adjustment to recognize the lack of marketability due to being a closely held entity.

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We granted awards with the following exercise prices between March 1, 2012 and the date of this prospectus:

Grant Date	Options or RSUs		Number of Shares Subject to Awards Granted			Exercise Price			Fair Value Per Share  of Common Stock
May 18, 2012		Options		6,878,000		$	4.13		$	4.13
May 18, 2012		RSUs		1,178,439			N/A			4.13
November 1, 2012		RSUs		3,000,000			N/A			4.22
November 1, 2012		Options		2,760,000			4.22			4.22
November 20, 2012		Options		856,000			4.22			4.22
April 30, 2013		Options		179,191	(1)		0.50	(2)		4.29
May 17, 2013		Options		615,000			4.29			5.75	(3)
August 22, 2013		Options		318,000			5.85			6.45	(3)

(1) We assumed these options in connection with our acquisition of SignNow, Inc.

(2) The exercise price of options to purchase shares of our common stock was determined by reference to the exercise price of options to purchase shares of SignNow, Inc., which were assumed in connection with our acquisition of SignNow, Inc.

(3) Reassessed fair value as described below.

As of August 31, 2013, the aggregate intrinsic value of vested and unvested options was $         million and $         million, respectively, and the aggregate value of our vested and unvested RSUs was $         million and $         million, respectively, based on the estimated fair value for our common stock of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus. As of August 31, 2013, we had $25.9 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock options and RSUs that is expected to be recognized over a weighted-average period of 3.0 years.

We have granted options to purchase              shares of common stock since August 31, 2013. The aggregate additional expense associated with these options, net of estimated forfeitures, is approximately $         million. The expected weighted-average period for these awards is              years.

The following discussion relates primarily to our determination of the fair value per share of our common stock for purposes of calculating stock-based compensation costs since March 1, 2012. No single event caused the valuation of our common stock to increase through August 31, 2013. Instead, a combination of the factors described below in each period led to the changes in the fair value of our common stock. Notwithstanding the fair value reassessment for option grants made on May 17, 2013 described below, we believe reliance on the valuation report and the underlying methodology in such report was a reasonable method to determine the exercise prices for stock-based awards on the grant date.

May 2012 Awards

We granted options to purchase 6,878,000 shares of our common stock in May 2012. Our board of directors set an exercise price of $4.13 per share for these options based, in part, on a valuation report as of February 28, 2012. In addition, we granted 1,178,439 RSUs in May 2012 which, by definition, do not have an exercise price.

We experienced sequential revenue growth, generating $43.4 million for our fiscal quarter ended February 29, 2012. Additionally during our fiscal quarter ended February 29, 2012, we continued to invest in sales and marketing, and our number of active subscribers continued to grow.

We obtained an independent valuation which determined that the fair value of our common stock was $4.06 per share as of February 29, 2012. The enterprise value was derived utilizing a weighted combination of the income approach, discounted cash flow method, and the market approach, guideline public company method, each weighted at 50%. The valuation applied a discount rate of 29% based on the risks attributable to our size,

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industry and operations. The next twelve months, or NTM, revenue multiple selected was near the median of peer group NTM revenue multiples, which ranged from a bottom quartile of 1.8x to a top quartile of 7.4x. The NTM EBITDA multiple selected took into consideration the forecast of our expected future financial performance, and was between the bottom quartile and the median of peer group NTM EBITDA multiples, which ranged from a bottom quartile of 6.0x to a top quartile of 17.2x. The enterprise value was then allocated to the common stock utilizing an OPM with the following assumptions: a time to liquidity event of one year (based on an analysis of multiple exit scenarios), a risk free rate of 0.18% and volatility of 50% over the time to a liquidity event. The results of the OPM were reduced by a discount for lack of marketability of 20% to yield the fair value of our common stock on a non-marketable, minority basis.

Our board of directors considered our most recent operating results, as well as the valuation report and the execution of a non-binding term sheet related to a proposed financing and recapitalization of our company, when it determined the fair value of our common stock was $4.13 per share as of May 18, 2012.

November 2012 Awards

We granted options to purchase 3,616,000 shares of our common stock in November 2012. Our board of directors set an exercise price of $4.22 per share for these options based, in part, on a valuation report as of August 31, 2012. In addition, we granted 3,000,000 RSUs in November 2012.

During our fiscal quarters ended May 31, 2012 and August 31, 2012, we continued to experience sequential growth in revenue, generating $46.0 million and $49.0 million in total revenue, respectively. We made significant incremental investments in product development and brand development to support our growth.

We obtained an independent valuation which determined that the fair market value of our common stock was $4.22 as of August 31, 2012. The valuation report was rendered as of October 12, 2012 and took into account the completion of our Series B financing and the recapitalization on October 3, 2012, including our declared cash dividends of $130.0 million to our stockholders, which dividend had the effect of reducing the per share fair market value of our common stock by approximately $0.88. Our enterprise value was derived using a market approach based on sales of our Series B preferred stock at $5.62 per share, as it was determined that the price paid by the investors in the financing was the most meaningful indication of our enterprise value. Accordingly, the income approach was not used in estimating our enterprise value. The enterprise value was then allocated to our common stock utilizing an OPM with the following assumptions: a time to liquidity event of one year (based on an analysis of multiple exit scenarios), a risk free rate of 0.16% and volatility of 50% over the time to a liquidity event. The results of the OPM were reduced by a discount for lack of marketability of 20% to yield the fair value of our common stock on a non-marketable, minority basis.

Our board of directors considered our most recent operating results, recent changes in our management team, including the hiring of our chief executive officer, William D. Jenkins, Jr., and the closing of the Recapitalization, as well as the valuation report, when it determined the fair value of our common stock was $4.22 per share as of both November 1, 2012 and November 20, 2012.

April 2013 Option Assumption

In connection with our acquisition of SignNow in April 2013, we assumed 179,191 unvested stock options as part of the total merger consideration. The exercise price of these options was adjusted pursuant to the exchange ratio established in the acquisition.

May 2013 Awards

We granted options to purchase 615,000 shares of our common stock in May 2013. Our board of directors set an exercise price of $4.29 per share for these options based, in part, on a valuation report as of February 28, 2013.

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We continued to experience sequential revenue growth, generating $51.4 million and $52.5 million in total revenue for the fiscal quarters ended November 30, 2012 and February 28, 2013. We continued to make incremental investments in product development and sales and marketing.

We obtained an independent valuation which determined that the fair value of our common stock was $4.29 as of February 28, 2013. The enterprise value was derived utilizing a weighted combination of the income approach, discounted cash flow method, and the market approach, guideline public company method, each weighted at 50%. The valuation applied a discount rate of 24% based on the risks attributable to our size, industry and operations. The NTM revenue multiple selected was between the bottom quartile and the median of peer group NTM revenue multiples, which ranged from a bottom quartile of 2.1x to a top quartile of 5.5x. The NTM EBITDA multiple selected took into consideration the forecast of our expected future financial performance, and was at the bottom quartile of peer group NTM EBITDA multiples, which ranged from a bottom quartile of 10.5x to a top quartile of 20.9x. The enterprise value was then allocated to the common stock utilizing an OPM with the following assumptions: a time to liquidity event of one year (based on an analysis of multiple exit scenarios), a risk free rate of 0.17% and volatility of 50% over the time to a liquidity event. The results of the OPM were reduced by a discount for lack of marketability of 20% to yield the fair value of our common stock on a non-marketable, minority basis.

On May 17, 2013, our board of directors considered our growth in revenue, the commercial acceptance of our solutions and our operating results and recent product introduction in addition to a preliminary valuation report, and granted awards with an exercise price of $4.29.

Following the date of grant, we obtained the May 31, 2013 valuation report, and using the benefit of hindsight, for financial reporting purposes, we determined that the fair value of common stock on May 17, 2013 should take into account changes that occurred in the subsequent May 31, 2013 valuation report. The independent valuation which determined that the fair value of our common stock was $5.85 as of May 31, 2013. The valuation took into account greater clarity on potential liquidation events, including progress towards our IPO. The enterprise value was derived utilizing a weighted combination of the income approach, discounted cash flow method, and the market approach, guideline public company method, each weighted at 50%. The valuation applied a discount rate of 22% based on the risks attributable to our size, industry and operations. The NTM revenue multiple selected was between the bottom quartile and the median of peer group NTM revenue multiples, which ranged from a bottom quartile of 3.2x to a top quartile of 6.0x. Based upon changes in our expected future financial performance, the May 31, 2013 valuation report determined that utilization of an NTM EBITDA multiple was not as meaningful because of dissimilarities in our sustained EBITDA margins compared to those of our peer group, and instead relied solely on the NTM revenue multiple selected. The enterprise value was then allocated to the common stock utilizing the PWERM with the following probabilities applied to each scenario: 70% to completion of an IPO with a time to liquidity of 0.75 years, 15% to completion of a sale of the company with a time to liquidity of 0.75 years, and 15% to continuation as a private company with a time to liquidity of two years. The results of the PWERM were reduced by a discount for lack of marketability of 10% for the completion of an IPO and completion of a sale scenario, and 20% for the continuation as a private company scenario to yield the fair value of our common stock on a non-marketable, minority basis. Our use of the PWERM and improved visibility over liquidation scenarios such as an IPO combined with increased revenue multiples for comparable public companies resulted in a significant increase in the fair value of our common stock at May 31, 2013 compared to February 28, 2013. After consideration of the May 31, 2013 valuation report, we reassessed the fair value of common stock on May 17, 2013 to be $5.75.

August 2013 Awards

We granted options to purchase 318,000 shares of our common stock in August 2013. Our board of directors set an exercise price of $5.85 per share for these options based, in part, on a valuation report as of May 31, 2013.

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We continued to experience sequential revenue growth, generating $56.3 million in total revenue for the fiscal quarter ended May 31, 2013. We continued to make incremental investments in product development and sales and marketing.

Following the date of grant, we obtained the August 31, 2013 valuation report, and using the benefit of hindsight, for financial reporting purposes, we determined that the fair value of common stock on August 22, 2013 should take into account changes that occurred in the August 31, 2013 valuation report. The independent valuation determined that the fair value of our common stock was $6.54 as of August 31, 2013. The valuation took into account greater clarity on potential liquidation events, including progress towards our IPO. The enterprise values for each of the near-term and mid-term completion of an IPO scenarios, respectively and the completion of a sale scenario were derived utilizing the market approach, guideline public company method, and the enterprise value for the continuation as a private company scenario was derived utilizing a weighted combination of the income approach, discounted cash flow method, and the market approach, guideline public company method, each weighted at 50%. The valuation applied a discount rate of 22% based on the risks attributable to our size, industry and operations. An NTM revenue multiple was utilized for scenarios other than the completion of a sale scenario, and the NTM revenue multiple selected was between the bottom quartile and the median of peer group NTM revenue multiples, which ranged from a bottom quartile of 3.7x to a top quartile of 6.8x. The August 31, 2013 valuation report determined that utilization of an NTM EBITDA multiple was not as meaningful because of dissimilarities in our sustained EBITDA margins compared to those of our peer group, and instead relied solely on the NTM revenue multiple selected. A last twelve months, or LTM, revenue multiple was utilized for the completion of a sale scenario, and the LTM revenue multiple selected was between the bottom quartile and the median of the peer group LTM revenue multiples, which ranged from a bottom quartile of 3.3x to a top quartile of 7.0x. An enterprise value was allocated to the common stock utilizing the PWERM with the following probabilities applied to each scenario: 49% to completion of an IPO with a time to liquidity of 0.25 years, 21% to completion of an IPO with a time to liquidity of 0.50 years, 15% to completion of a sale of the company with a time to liquidity of 0.50 years, and 15% to continuation as a private company with a time to liquidity of two years. The results of the PWERM were reduced by a discount for lack of marketability of 5% and 10% for each of the near-term and mid-term completion of an IPO scenarios, respectively, 10% for the completion of a sale scenario, and 20% for the continuation as a private company scenario to yield the fair value of our common stock on a non-marketable, minority basis. The valuation report also took into account the purchase of an aggregate of 724,000 shares of common stock from four of our employees by an unrelated third party, for a purchase price of $7.00 per share in July 2013. Based on the terms of the transaction, the relatively small number of shares purchased in the transaction (approximately 0.5% of our outstanding shares), the limited number of parties involved in the transaction, the expectation at the time that this was a one-time transaction and no future similar transactions were then contemplated, and the purchaser’s access to limited information in connection with the purchase, it was determined that the transaction was not determinative of fair value. Our use of the PWERM and improved visibility over liquidation scenarios such as an IPO combined with increased revenue multiples for comparable public companies resulted in an increase in the fair value of our common stock at August 31, 2013 compared to May 31, 2013. After consideration of the August 31, 2013 valuation report, we reassessed the fair value of common stock on August 22, 2013 to be $6.45.

Income Taxes

We account for income taxes using the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in our tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected from each subsidiary and considering prudent and feasible tax planning strategies.

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We account for uncertainty in income taxes recognized in our financial statements by applying 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 examination by the taxing authorities, based on the technical merits of the position. 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 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

The factors used to assess the likelihood of realization of our deferred tax assets include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Assumptions represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. Should actual amounts differ from our estimates, the amount of our tax expense and liabilities could be materially impacted.

Loss Contingencies

We are subject to the possibility of various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. If we determine that a loss is possible and the range of the loss can be reasonably determined, then we disclose the range of the possible loss. We regularly evaluate current information available to us to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

A portion of our revenue and operating expenses are incurred outside the United States and are denominated in foreign currencies, which are subject to foreign currency exchange rate fluctuations, particularly changes in the euro. Our reported revenues and operating results may be impacted by fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may also cause us to recognize transaction gains and losses in our statement of operations. To date, foreign currency transaction gains and losses have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions.

JOBS Act Accounting Election

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Recent Accounting Pronouncements

In June 2011, the FASB issued ASU No. 2011-05, Topic 220—Presentation of Comprehensive Income (ASU 2011-05), which requires companies to present net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. In addition, in December 2011, the FASB issued ASU No. 2011-12, Topic 220—Comprehensive Income (ASU 2011-12), which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. We adopted these standards in fiscal 2013. Our adoption of the standards did not impact our consolidated results of operations or financial condition.

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BUSINESS

Overview

Barracuda designs and delivers powerful yet easy-to-use security and storage solutions. We offer cloud-connected solutions that help our customers address security threats, improve network performance and protect and store their data. Our solutions are designed to simplify IT operations for our customers, allowing them to enhance their return on technology investment. Our business model is built on the core values of speed and agility, which we apply to all aspects of our approach, including our technology innovations, the delivery and deployment of our solutions, and responses to customer inquiries. This model has enabled us to be highly scalable in reaching a large number of potential customers. Since inception, we have sold our solutions to more than 150,000 customers located in more than 100 countries.

Our security and storage solutions are connected to our cloud services which enable continuous software updates, offsite redundancy and distributed capacity, and are offered on a subscription basis. Our solutions are delivered as cloud-connected appliances and virtual appliances, as well as cloud-only solutions. Our security solutions are designed to protect and optimize the performance of the most critical points within our customers’ IT infrastructures, including email servers, web applications, data centers and core networks. Our storage solutions are designed to backup and archive business-critical data and make such data accessible for purposes such as compliance, disaster recovery and business intelligence. Our storage solutions also allow users to securely and quickly access, share, synchronize and sign files from Internet-connected devices. Our solutions can be managed centrally in any size or type of deployment through integrated, easy-to-use web interfaces that support configuration, monitoring and reporting.

We design our solutions specifically for IT professionals in resource-constrained environments who seek to benefit from current and emerging trends in information technology such as the rapid growth in cloud computing, adoption of virtualization, proliferation of mobile devices and the associated explosion of data. Our customers work in all types of organizations, from mid-market businesses, governments and educational institutions, to departments or divisions within Fortune 2000 enterprises.

We nurture a culture that delivers value through simplicity to optimize our customers’ experiences. From the design of our solutions to our sales processes, customer support, manufacturing and delivery, we strive to make our solutions easy to purchase, install, maintain and update. We believe that Barracuda has become a highly visible and recognizable brand as a trusted IT partner. We design our solutions to be easy to use and to deploy without the need for special expertise or external support from IT specialists and also to provide powerful capabilities that can be optimized to meet the requirements of resource-constrained environments. We employ a high-velocity sales model that incorporates a 30-day right to return, real-time order fulfillment and a simple, low-cost entry point to make our customers’ purchase decisions and deployments seamless, easy and efficient. Through our recurring subscription services, we provide our customers with up-to-date features, functionality and real-time security protection, eliminating the need for costly upgrades or additional software purchases. We answer our phones live 24x7x365, and endeavor to treat every customer call with the same high priority. Central to our culture is a focus on the long-term customer experience, including an ongoing dialogue with our customers to enhance our features and solutions. Our development and fulfillment processes rapidly deliver new services and functionality to our customers, enabling them to improve their time to value and return on technology investment through the low total cost of ownership, easy integration and accelerated deployment of our security and storage solutions.

For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our gross billings were $191.3 million, $233.2 million, $264.2 million and $150.5 million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our total revenue was $142.1 million, $160.9 million, $198.9 million and $114.1 million, respectively. We believe that the subscription nature of our solutions provides us with enhanced financial visibility. Subscription revenue for fiscal 2011, 2012 and 2013 and for the six months ended August 31, 2013 represented approximately 63%, 73%, 70% and 69% of our total revenue,

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respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, net income (loss) to Barracuda was $3.0 million, $0.6 million, $(7.4) million and $(4.6) million, respectively. For fiscal 2011, 2012 and 2013, and for the six months ended August 31, 2013, our free cash flow, adjusted for acquisition costs and other non-recurring charges, was $34.4 million, $35.4 million, $41.1 million and $11.0 million, respectively.

Industry Background

Modern IT Trends Offer Attractive Benefits to All Organizations

Organizations are looking to take advantage of important technology trends, particularly the rapid growth of cloud computing, proliferation of mobile devices, widespread use of web applications like Facebook, LinkedIn, Twitter and YouTube and increased adoption of virtualization and software defined networking, or SDN. These advanced technology trends can be exploited by organizations to gain significant competitive advantages and to support core business operations, enable dramatic efficiency gains and open up new go-to-market channels and revenue opportunities.

The Confluence of IT Trends Creates a Set of Obstacles that IT Professionals Must Address

IT trends are significantly changing the way that IT infrastructures are designed, deployed and secured, creating a complex rapidly evolving set of challenges that need to be addressed by IT professionals.

• Escalating Security Threat Environment. Organizations face security threats from a variety of attackers, including state-sponsored, profit-motivated, automated and internal attackers. These attacks can result in organizational disruption, as well as the theft of sensitive information such as credit card information, and can cause financial and reputational damage. These threats are exacerbated further as customers migrate their applications to public and private clouds. According to a 2012 survey conducted by IDG, enterprise organizations have seen the number of security threats grow by more than 200% from an average of 94 events in 2011 to 300 in 2012. Organizations of all sizes are being forced to reexamine their security risks and technology investments as threats evolve and increase in number, complexity, variety and severity.

• Productivity and Security Challenges Posed by Web Applications. Organizations can benefit greatly from popular web applications, such as Facebook, LinkedIn, Twitter and YouTube, which enable new channels to communicate and collaborate with customers and business partners, as well as a means to market their products and recruit employees. While many of these applications can benefit the business, they can introduce significant security vulnerabilities as well as inappropriate and unproductive activities in the workplace. In order to take advantage of these benefits, organizations need to safely enable the use of these applications within a secure infrastructure, such that only the right individuals are using the right set of applications for their business functions.

• Explosion of Data and Increased Storage Consumption. According to IDC, the volume of digital information created and replicated worldwide will grow approximately 41% annually from 1.8 trillion gigabytes in 2011 to 40 trillion gigabytes in 2020. Organizations and employees are increasingly dependent on the availability of this information at all times. As a result, organizations cannot afford to lose access to business critical data and need a cost effective and scalable way to ensure that their data is being stored safely and can be recovered rapidly.

• Constrained IT Budgets. Macroeconomic conditions have kept IT budgets under significant pressure, and, despite recent innovations in the industry, security and storage infrastructures increasingly require greater investments to implement, run and manage. As a result, there is a need for security and storage environments to become vastly more efficient against the backdrop of constrained IT budgets.

Organizations Need a New Approach to IT in Resource-Constrained Environments

Rapidly changing dynamics in today’s IT landscape are forcing organizations of all sizes to evolve their IT strategies. Fortune 500 companies are better positioned to address these challenges as they typically have core IT

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departments that can comprise a significant number of highly skilled and specialized computer scientists and engineers, as well as IT budgets that can be in the billions of dollars. We believe that there are millions of underserved organizations without these resources. These organizations include small and mid-market businesses, governments, educational institutions and departments or divisions within Fortune 2000 enterprises. IT professionals within these organizations seek powerful yet easy-to-use solutions to address the challenges posed by these trends.

We believe most traditional software and hardware vendors have designed their products and business operations to cater primarily to the largest companies. These solutions typically fail to meet the needs of millions of resource-constrained organizations in several key ways:

• Complex to Deploy and Use. Traditional IT solutions often are difficult to install, require significant configuration and necessitate specialized services and technical support to get the systems up and running. These solutions often take months to implement and require highly trained IT staff to manage and maintain. Moreover, traditional IT solutions often provide a wide variety of features that meet the specific needs of the largest, most sophisticated customers but are of little-to-no use to the vast majority of customers.

• Marketing Optimized for Large Organizations. Traditional IT solution vendors tend to focus marketing efforts primarily on high-touch, senior level interactions with a smaller number of large customers. As a result, IT professionals within resource-constrained organizations are frequently challenged to work effectively with these vendors to discern the products they require to solve their problems.

• Lengthy, High-Touch Sales Cycle. Because of the complexity and expense related to the purchase of traditional IT solutions, traditional vendors usually use high-touch direct sales models, typically to larger customers, in order to sell their products. As a result, the complexity of traditional IT solutions and the requirement for customers to tailor traditional IT solutions to their needs lead to longer sales cycles, prolonging the period of time before customers can solve their problems. These sales-related expenses typically are passed on to their customers through product prices.

• Lengthy Manufacturing and Fulfillment. Solutions from traditional IT vendors often have long delivery and installation times. In addition, vendors periodically experience delivery delays due to the inability of their supply chain to meet quality and delivery requirements consistently. The risk of these delays can be greater where custom or semi-custom components and configurations are involved. Due to their size, traditional IT solution vendors also need to manage a high degree of operational complexity and spend a significant amount of effort rationalizing these processes to improve their profitability, manage inventory and better match demand and supply. All of these factors result in additional costs, which these traditional vendors may pass on to their customers through product prices.

• Lack of Investment Protection. To meet increasing performance and solution requirements, customers often are forced to perform “forklift” system upgrades or purchase new software licenses. A “forklift” upgrade is a system upgrade in which large parts of existing infrastructure must be removed and replaced with new infrastructure. These upgrades often require significant expenditures on contracted professional services and additional IT staff commitments, and the processes of installing and configuring new systems, and migrating users and data to them, can result in business disruptions.

• Inadequate Customer Support. Traditional IT solution vendors often rely on heavily on self-service telephone support and outsourced customer support located in remote geographies. This approach can lead to an inadequate and frustrating customer support experience and lengthy time to resolution.

Our Market Opportunity

We operate in a number of established, multi-billion dollar segments across the security and storage markets that we estimate were approximately $30 billion in 2012, based on market data from established third-party

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market research firms. We define our security market as the web access management, secure email gateway, secure web gateway, intrusion prevention systems equipment, secure socket layer VPN equipment, VPN/firewall equipment and application delivery controllers segments. According to Gartner, estimated spending on these security segments was $14.4 billion worldwide in 2012. We define our storage market as the archival disk-based storage, archiving software, purpose-built backup appliances and data protection software and hardware segments. According to IDC, estimated spending on these storage segments was $15.9 billion worldwide in 2012. Included in these markets are some high-growth segments, such as the purpose-built backup appliance segment, which, according to IDC, is projected to grow from $3.2 billion in 2012 to $5.9 billion in 2016, representing a compound annual growth rate, or CAGR, of 16.7%. According to Gartner, the next generation firewall appliance sub-segment within the VPN/firewall segment was $4.5 billion worldwide in 2011 and is forecasted to grow to $8.7 billion by 2016, a 14.1% CAGR. The market for the above security and storage segments for companies with less than 5,000 employees was $14.8 billion in 2012, according to a study we commissioned from Compass Intelligence. Compass Intelligence further estimates there were 20.8 million companies worldwide with less than 5,000 employees in 2012.

Our Business Model

Since our founding, we have designed our solutions, established our culture and built our core business model to cater specifically to the needs of IT professionals in resource-constrained environments. We provide powerful yet easy-to-use security and storage solutions. These solutions are delivered in the form of cloud-connected appliances and virtual appliances, as well as cloud-only solutions, that help our customers address security threats, improve the performance of their networks and protect and store their data. Our solutions are designed to simplify IT operations for our customers, allowing them to enhance their return on technology investment. Our business model is built on the core values of speed and agility, which we apply to all aspects of our approach, including our technology innovations, delivery and deployment of our solutions, and responses to customer inquiries. We maintain control of the value chain across our solutions, marketing efforts, sales processes, manufacturing, delivery and customer support. This integrated model enables us to tailor the customer experience to deliver powerful yet easy-to-use security and storage solutions and high-value, recurring subscriptions to IT professionals in the way that works best for their organizations.

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Key elements of our business model include:

• Powerful, Easy-to-Use Cloud-Connected Solutions. Our solutions are purpose-built to be easy to use and to deploy without the need for special expertise or external support from IT specialists. Our solutions also are designed to provide full-featured functionality to address the most common IT challenges. We believe that whether a solution is an entry-level or company-wide deployment, it should provide  powerful functionality and be easy to use . We have a continuous feedback loop with our customers, which gives us better insight into their needs and enables us to develop solutions that address our customers’ most important needs.

• Trusted Brand and Innovative Marketing. We believe partners and customers alike have come to rely on Barracuda as a  trusted IT partner . We invest in brand development efforts to help solidify our position as a go-to provider of powerful yet easy-to-use security and storage solutions. The principal focus of our marketing programs is to reach IT professionals within resource-constrained organizations and elevate their awareness of our comprehensive portfolio of security and storage solutions. As a result of our strong investment in brand and differentiated ways to reach the customer at key decision points, we believe we have developed strong brand awareness.

• High-Velocity Sales. With our global partner network of more than 5,000 distributors and value added resellers, we offer straightforward, competitive pricing, making our solutions easier to purchase. Our inside sales force uses a disciplined approach to quickly and efficiently convert leads into paying customers. Our solutions and sales specialists work closely with IT professionals to answer questions and guide prospective customers to participate in our 30-day right to return. Customers typically receive our solutions and can deploy and begin to realize value within 24 hours. We believe that our  “product often sells itself”  based on its breadth of functionality, ease of use and simple pricing.

• Efficient Manufacturing and Fulfillment. We manage our operations through customized, streamlined processes, using our backend logistics software system that enables efficient manufacturing and physical and digital distribution of our solutions. We have developed, manufactured and fulfilled our solutions primarily from our Silicon Valley locations for over 10 years. Together, this gives us the  speed and agility  to facilitate quick and precise responses to customer needs.

• High-Value, Recurring Subscriptions. Our recurring subscription services provide our customers with  up-to-date features, functionality and real-time security protection , as well as eliminate the need for future “forklift” system upgrades or additional software purchases. Customers who purchase Barracuda Energize Updates subscriptions receive the benefits of all of the new software capabilities our engineering team develops, and furthermore, customers who purchase Instant Replacement subscriptions also receive new appliances every four years. We believe this investment protection is an important differentiator in how we deliver value to our customers.

• Proactive, Live, “Insourced” Customer Support. We provide our customers with high-quality, proactive customer support, including remote support, preventative diagnostics and a direct line to Barracuda support technicians available 24x7x365—with  no phone trees —to answer customer calls and quickly and efficiently respond to their needs. Our support employees are strategically located close to our customers in geographies across the world. Our support also provides an important feedback loop, which enables us to continuously improve our solutions to better meet our customers’ needs.

By offering a portfolio of solutions that includes cloud-connected appliances and virtual appliances, as well as cloud-only solutions, we are able to engineer functionality optimally to align with, and take advantage of, the benefits of each form factor. This alignment increases overall value for our customers through more integrated solutions, and for our business through lower infrastructure and fewer materials costs. Our high-velocity sales model enables faster adoption of our solutions by customers and benefits our business by enabling us to improve our return on investment in sales and marketing. Our efficient manufacturing and fulfillment enables fast delivery of our solutions to customers and benefits our business through our ability to maintain low inventory levels and

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minimal overhead expenses. Our customer support proactively resolves customer issues and, we believe, results in higher renewal rates and new cross-sell opportunities for us. Our subscription model provides our customers with continuous and transparent access to the latest functionality enhancements and a highly visible, recurring revenue stream for our business.

Our Competitive Strengths

We believe we have a number of competitive advantages that will enable us to maintain and extend our leadership position including:

• Vertically-Integrated Approach. With our vertically-integrated approach, we control the value chain across our solutions, including product design and functionality, marketing efforts, sales processes, manufacturing, delivery and customer support. This enables us to tailor the customer experience to deliver powerful yet easy-to-use security and storage solutions to organizations in the way that works best for IT professionals in resource-constrained environments.

• Hybrid, Cloud-Connected Solution Design. Our hybrid solutions consist of cloud-connected appliances and virtual appliances, as well as cloud-only solutions, that deliver security and storage capabilities out-of-the-box. By offering a portfolio of solutions and multiple deployment options, we are able to engineer functionality optimally to align with, and take advantage of, the benefits of each form factor, thereby increasing overall value for our customers.

• Large, Engaged Customer Base. We have gained a strong foothold in our markets and, since inception, we have sold our solutions to more than 150,000 customers worldwide. Our broad customer base and solution portfolio provide us with a platform from which we can cross-sell solutions to our existing customers. We strive to maintain close contact with our customers so that we can tailor our solutions enhancements to better meet our customers’ needs and fuel our innovation cycle based on their feedback.

• Leadership and Dedicated Focus. Since our founding, we have focused on identifying common pain points and designing differentiated solutions to simplify complex IT problems for resource-constrained organizations. We have demonstrated our ability to execute our innovative business model successfully and establish a leadership position across multiple markets, starting with the markets for email security and web security and more recently in the market for backup.

• Innovative Technology and Intellectual Property. We continue to invest in research and development to ensure our solutions are powerful yet easy to use. We also operate Barracuda Central, our security intelligence center, to monitor and block the latest Internet threats. Additionally, as of August 31, 2013, we had 43 issued patents and 63 patent applications pending in the United States.

• Strong Brand. We have built our brand with IT professionals in mind and our brand is at the core of our business model. We believe Barracuda is widely recognized as a trusted IT partner who combines leading technology solutions with highly responsive customer service in order to simplify IT for IT professionals.

Our Strategy

Our goal is to maintain and extend our leadership position as a global provider of solutions that simplify complex IT problems for IT professionals in resource-constrained organizations. Key elements of our growth strategy include:

• Increase Sales to New Customers. We believe there is a significant opportunity for us to simplify the complex IT challenges for millions of businesses that have resource-constrained IT environments. We plan to continue to engage with IT professionals through our differentiated business model in order to expand our customer base. We will continue to invest in our brand and marketing efforts to introduce new customers to our broad portfolio of security and storage solutions.

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• Increase Our Solution and Deployment Footprint within Our Existing Customer Base. We believe that many customers would prefer to purchase IT solutions from fewer vendors. In addition to our initial solution sales to customers, our customers often come back to us when they need to expand into other IT solutions. We believe this cycle produces significant lifetime value in a customer. We plan to pursue cross-sell opportunities with our diverse, worldwide customer base, especially as they look to consolidate IT suppliers to reduce overall IT spending.

• Apply Our Business Model to New Technologies and Markets. We intend to focus on developing and acquiring technologies that fit within our business model and can address the needs of IT professionals. When we consider developing a new technology or acquiring a company, we evaluate each opportunity in a disciplined fashion to confirm that the new solutions can be optimized for IT professionals, produced simply, deployed easily and offered as a subscription service.

• Expand and Optimize Our Worldwide Channel and Partner Network. We believe our worldwide channel and partner networks provide us with significant operating leverage. We currently have more than 5,000 distributors and value added resellers across the globe. We intend to continue driving operating leverage by expanding our distributor and value added reseller network, especially in international regions where we can benefit from the local expertise of our partners.

Our Solution Portfolio

Our portfolio of purpose-built solutions includes cloud-connected appliances and virtual appliances, as well as cloud-only solutions. Our appliances consist of devices that are pre-installed with our proprietary software, while our virtual appliances provide the same features in a software-only offering. Our cloud-only solutions are designed for customers who cannot or do not wish to deploy additional on-premises infrastructure. Our appliances and virtual appliances leverage our cloud service to deliver a hybrid cloud-connected solution to our customers. These hybrid solutions enable us to optimize usage of on-premises hardware required while simultaneously leveraging the scalability of the cloud.

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Security

Our security offerings help protect our customers against threats which propagate over the Internet. They also help ensure that business applications and the networks they run on are performing with optimal efficiency and reliability.

Email Security. The Barracuda Spam & Virus Firewall includes spam and virus blocking, denial-of-service prevention, email continuity, encryption and policy management features. With the included Cloud Protection Layer, or CPL, Barracuda Spam & Virus Firewall customers can route their email through the Barracuda cloud performing advanced malware detection and pre-filtering to keep threats off their premises, reduce incoming connections to their network and spool mail in the event their sites become unavailable. Once delivered to the premises, inbound messages pass through up to 12 layers of security and custom policies before being delivered to the user. Outbound messages are filtered to prevent sensitive data such as credit card information from leaving the organization and to prevent spam or viruses from emanating from customer networks. The cloud-based Barracuda Email Security Service provides the same functionality as the Barracuda Spam & Virus Firewall and is designed for customers who host their own email but wish to fully offload their email security to a cloud service.

Web Security. The Barracuda Web Filter integrates several technologies for setting and enforcing granular web filtering policies to protect users from rapidly evolving web-based threats and to increase productivity and optimize bandwidth. The Barracuda Web Filter blocks user access to known malicious websites, scans web downloads for malware, enables granular enforcement based on existing user and group authentication, and provides comprehensive web usage visibility through intuitive dashboards. Our solutions protect networks and users against spyware, viruses and adware, using definitions that are updated continually through Barracuda Central. They also help monitor and regulate activity with web-based applications including Facebook, LinkedIn, Twitter and YouTube, and provide clear visibility into web activity. By integrating the Barracuda Web Filter with the Barracuda Message Archiver, organizations also can index and archive captured social media correspondences. The cloud-based Barracuda Web Security Service is designed to deliver web security and policy enforcement in highly distributed network environments. Both the Barracuda Web Filter and the Barracuda Web Security Service can filter activity from off-network or mobile users through the Barracuda Web Security Agent for Windows and Mac computers, through the Barracuda Safe Browser for iOS supporting iPhone and iPad, or through any other supported means of directing web traffic to the Barracuda Web Security Service.

Next-Generation Firewall. Our next-generation firewall solutions offer Layer 7 application visibility and add user-identity awareness to safely enable access policies for specific users and user groups. They are designed for IT administrators seeking to re-establish control of networks made chaotic and vulnerable by evasive web applications such as social media sites and by remote control or file sharing applications that can open backdoors into organizations’ networks. Our next-generation firewall solutions integrate network firewall, intrusion prevention, or IPS, VPN and Layer 7 Application control, with options for additional components such as web security. The Barracuda Firewall is delivered as a hybrid appliance and can be managed locally through a familiar web interface or from the cloud. The Barracuda NG Firewall is designed for large distributed organizations, and includes a centralized management system to simplify deployment, configuration and management across multiple units and locations.

Application Security. The Barracuda Web Application Firewall protects web servers from data breaches and downtime by intercepting sophisticated application-layer attacks, such as SQL Injection, cross-site scripting, or XSS, session hijacking and application-layer distributed denial of service, or DDoS. The Barracuda Web Application Firewall is designed to proxy all incoming web traffic to block attacks and insulate the web servers. The Barracuda Web Application Firewall also proxies outbound traffic to prevent loss of sensitive data such as social security numbers. It is available for use in virtual data centers, including public cloud-shared data centers such as Microsoft’s Windows Azure offering.

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Application Delivery Controllers. The Barracuda Load Balancer ADC optimizes application performance, availability and security. The Barracuda Load Balancer ADC is an integrated platform that distributes network traffic across multiple servers using advanced Layer 4 and Layer 7 load balancing techniques or even across multiple data centers using global server load balancing, or GSLB, content caching, data compression and connection pooling to offload computing functions from backend servers and improve application response time. Advanced features for application optimization and integrated security are designed to protect customers from malicious data, application-layer attacks and DDoS attacks before they reach internal servers.

Remote Access. The Barracuda SSL VPN provides remote users with secure access to internal network resources from any web browser while providing the security needed to protect internal systems from unauthorized access, viruses and other malware.

Storage

Our storage solutions provide a data protection portfolio for archive, backup and cloud storage.

Backup. Barracuda Backup is an end-to-end solution that simplifies the backup process and enables secure offsite replication to other Barracuda Backup appliances and to the Barracuda storage cloud. Barracuda Backup uses advanced deduplication technology to reduce the amount of backup data stored. Our LiveBoot technology enables virtual appliances to be run directly from the backup for disaster recovery purposes, from either the local appliance or the cloud, without the overhead associated with restoring backup images to their original format. Barracuda Backup provides a single solution for both hardware and virtual server applications and the hybrid appliance model allows for easy data replication and fast local recovery. Barracuda Backup is available as a physical appliance with our cloud storage service for replication and includes software required for native application backups for popular applications, such as Microsoft Exchange and Microsoft SQL Server, as well as backup over industry standard network file sharing protocols.

Archival. Email archiving requires a different solution from a typical backup because it requires the storage of all messages rather than just specific snapshots in time. The Barracuda Message Archiver substantially reduces archive sizes by eliminating duplicate messages, storing only one instance of each message attachment, and then compressing the stored data. In addition, customers can use the Barracuda Message Archiver to significantly reduce mail database sizes by reducing email retention policies on their active mail servers and by stubbing attachments, removing them from the mail server and creating references to the archived copies. The Barracuda Message Archiver also provides easy end user access to archived mails through a web interface, Outlook Add-In and mobile applications for both Apple iOS and Android devices.

Cloud Storage. Copy is our cloud-based file storage platform that allows our customers to securely access, share and sync files of any size from any device. Copy works across Windows, Mac OS X and Linux computers and offers mobile device support for Apple iOS and Android. Shared files and folders can be sent to anyone either publicly or privately and accessed from any location or device. Copy also allows users to share files privately using Copy’s built-in identity verification. Copy also includes user and group management and added controls for proprietary company data.

Cloud eSignature. SignNow is a leading mobile eSignature application. Businesses globally use the SignNow platform to electronically sign documents from Internet connected devices, reducing the need to print, fax or ship documents. Customers also can centralize contract archives with SignNow, gaining control over document signing workflow, auditing and tracking.

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Technology Architecture

Our technology architecture for both our security and storage solutions consists of several common foundational components. We utilize a common architecture so that improvements of those components benefit our solutions, reducing development time.

Key common foundational components of our architecture include:

Common Core and Secure Platform

We use a proprietary operating system, built on the Linux open source kernel, that provides security and stability to protect the solutions that secure customers’ networks. The secure platform also provides foundational services that may include:

• web and application servers that enable our user interface and application programming interfaces, or APIs;

• infrastructure interoperability services, such as Kerberos and Active Directory;

• hardware abstraction layers that allow our solutions to scale from entry-level to high-capacity systems and to rapidly respond to changes in supply chain availability;

• auto-provisioned database systems that support many of the management features and applications; and

• common logging, notification and reporting services.

Continuous Updates and Real-Time Protection

Our security and storage applications are built to provide ongoing value as the technology and security landscape evolves. Through continuous updates via Barracuda Energize Updates and Barracuda Real-time Protection, our solutions are able to continuously receive up-to-date databases and agents including:

• information that allows us to identify spam, viruses, spyware and other Layer 7 attacks by several means, including the content, behavior and source of the data;

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• web category and application databases;

• information about the latest document types to properly identify text/content for indexing and searching;

• detailed formats of social media web requests that allow us to provide data loss prevention, or DLP, and archival services;

• backup agents for the latest versions of the newest desktop and server software; and

• policy definitions for enforcement of content policies, including social security number and credit card patterns.

Shared Software Components

Many of our solutions share our proprietary software modules that are core to our business. This approach enables us to benefit from significant time and cost savings from rapid integration of our library of shared software components. For example, our antivirus technology is integrated into many solutions we have developed or acquired. Other examples include:

• powerful and versatile proxy servers for web (HTTP forward and reverse), email (SMTP) and domain name services;

• high performance packet processing and flow tracking that allows identification of users and applications for security policy, prioritization and adaptive routing;

• content indexing and search capabilities; and

• agents for endpoints such as desktops, servers and mobile devices.

Shared Cloud Services

By creating our own cloud services, we are able to deliver the benefits of a cloud delivery model while maintaining a small footprint in our customers’ networks. Our appliances and virtual appliances communicate with our cloud services so that we can deliver new features without significantly increasing the requirements of the infrastructure installed in a customer’s network. This allows us to continue delivering features in a constantly evolving environment without the potential customer satisfaction issues that arise with frequent hardware updates.

Our cloud services are used by our cloud-only and hybrid cloud-connected appliances, which allows us to rapidly develop new solutions and features. For example:

• Our email content inspection service is used by both the Barracuda Email Security Service and the CPL included with the Barracuda Spam & Virus Firewall appliances and virtual appliances deployed on the customer premises.

• Our cloud web categorization service is used by the Barracuda Web Security Service, the Barracuda Web Filter, the Barracuda Firewall and the Barracuda NG Firewall.

• Our deduplicated file storage service, developed originally for the Barracuda Backup Server, also is used by the Barracuda Email Security Service and Copy.

Common Management Layer

We have invested significant resources into developing an architecture that allows for centralized solution management. Our solutions are designed with common user interfaces and provide central control across different solutions. They also enable control over solutions dispersed across multiple geographies by relying on a cloud service where security functionality is distributed but centralized control is desired. This capability enables

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administrators to control and enforce policies once and apply them across multiple distributed locations. The management layer allows a global view of many devices so that they can have the latest firmware, definitions and security policies.

Where appropriate, we employ a multi-tenant architecture which allows us to serve multiple customers while securely segregating their data. The platform includes intelligent route-optimization technology that dynamically routes customer traffic quickly and effectively.

Our core management technologies also include:

• high availability and clustering software that allows a group of systems to be managed through a single configuration interface and allows the remaining systems to continue processing for any system that might become unavailable or fail;

• support tools that allows for rapid access and troubleshooting tools; and

• an update infrastructure for delivering new versions of our firmware, as well as the definitions and databases to ensure that the systems are up to date.

Barracuda Central

Barracuda Central is our centralized and automated security intelligence center that enables continuous threat detection and monitoring. Data collected and aggregated at Barracuda Central is analyzed and used to create definitions for continuous automatic Barracuda Energize Updates for our solutions. Barracuda Central is comprised of four primary layers.

Internal and External Data Feeds

We receive data from four primary sources:

• The Barracuda global data feed receives metadata for nearly half a billion messages every day that pass through our networks from the appliances deployed in our subscribers’ networks. We also receive the metadata for over 700 billion web requests per day.

• Barracuda Labs analyzes new threats and develops innovative security approaches. Barracuda Labs is focused on emerging threats such as social network, mobile and web-based exploits and other forms of modern malware attacks, and develops advanced detection techniques to deliver threat intelligence.

• Subscribers, their end-users, and users of our free reputation services submit feedback on categorization, false-negatives and false-positives through various means. These means include email, web forms, user interfaces on our appliances/services, and agents such as email add-ins.

• Via third-party and community data sharing, we are able to augment our accuracy while simultaneously giving back to the community.

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Automated and Manual Analysis

Through many automated and manual processes, the incoming data is analyzed and used to generate new threat definitions and new algorithms to continuously increase the effectiveness of our solutions.

• Our security engineering team develops algorithms and mitigation techniques that are deployed into our Barracuda compute cloud in order to increase effectiveness. We also develop corresponding algorithms and mitigation techniques that are delivered to the appliances or cloud services for local processing.

• Our Barracuda compute cloud processes the data feeds and is designed to automatically identify the vast majority of threats. As these threats are identified, they are added to the appropriate databases for delivery via Barracuda Energize Updates and for availability through real-time queries to Barracuda Real-time Protection.

• Our security operations team monitors the data feeds and tunes the algorithms in the Barracuda compute cloud. Our security operations team also works with our security engineering team to identify new algorithms that allow more threats to be automatically identified.

Continuous Updates and Real-time Protection

• Once threats are identified and definitions are created, the definitions are delivered securely to the appliances, virtual appliances and cloud services via Barracuda Energize Updates. Some of these definitions are updated many times over every hour and allow for fast local processing and offline operation.

• To reduce latency, size and performance impact of delivered definitions, we provide Barracuda Real-time Protection. Barracuda Real-time Protection consists of a set of protocols and services which allows appliances, virtual appliances and cloud services to have access to up-to-the-second threat detection. Instead of waiting for a local database to be updated for the latest threat information, systems contact our central database and provide metadata about a message or web page in a request. Barracuda Real-time Protection often can determine the threat level immediately and, in response, instruct the requesting system to allow or deny processing.

Deployed Appliances, Virtual Appliances and Cloud Services

Our appliances, virtual appliances and cloud services use the data produced by Barracuda Central to block the latest threats. These systems automatically provide feedback and metadata back into the Barracuda Central data feeds enabling continued improvements to accuracy and performance.

Our Customers

We target customers across a wide range of industries, including education, government, financial services, healthcare, professional services, telecommunications, retail and manufacturing. Our revenue is diversified across our entire customer base. One distribution partner accounted for 13% and 17% of total revenue in fiscal 2013 and the six months ended August 31, 2013, respectively. Sales to this distributor are subject to an agreement between the parties which provides for an initial term of one year, with automatic one year renewal terms and permits termination by either party with 90 days written notice prior to the termination date, restricts its sales to the United States and Canada and provides for net payment to us within 30 days of the date from the date of invoice. In addition, the agreement may terminate (i) at any time upon the mutual written agreement of the distributor and us, (ii) upon written notice, subject to applicable cure periods, if the other party has materially breached its obligations under the agreement or (iii) by either party upon the other party seeking an order for relief under the bankruptcy laws of the United States or similar laws of any other jurisdiction, a composition with or assignment for the benefit of creditors, or dissolution or liquidation. No other single customer or distribution partner accounted for more than 10% of our total revenue in fiscal 2011 or 2012.

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For fiscal 2012 and 2013 and the six months ended August 31, 2013, we generated approximately 34%, 30% and 32% of our total revenue, respectively, from customers located outside of the United States. Other financial information about our segment and geographic areas is incorporated herein by reference to Note 9 of the notes to our consolidated financial statements included elsewhere in this prospectus.

Customer Case Studies

The following case studies are examples of how some of our customers have selected, deployed and benefited from our solutions.

Regional Law Firm Focused on Financial Services

Challenge: This law firm is focused on collections activities with banks and financial institutions. With three offices and 170 employees, and only four IT professionals, they are challenged with keeping their network up and running, meeting regulatory compliance, and providing a high level of service to employees and customers. They also have an ongoing requirement to minimize training and IT management overhead.

Solutions & Benefits: In 2009, the company deployed the Barracuda Web Filter solution to protect users from unsafe content while browsing online. Due to the ease of use designed into our solutions, the support they received from us, and the common look and feel that enabled them to easily manage their infrastructure, the law firm adopted additional Barracuda solutions. In 2012, the customer deployed the Barracuda Spam & Virus Firewall solution, as well as four Barracuda NG Firewalls and two additional Barracuda Web Filters to further protect their users and information. In 2013, the customer deployed an additional Barracuda NG Firewall and the Barracuda Message Archiver.

Large European Retailer

Challenge: This European-based specialty retailer with thousands of stores in dozens of countries and tens of thousands of employees has a requirement to provide reliable and secure network connectivity to branch offices. The company wanted to integrate existing data connections, enable granular traffic management to cope with limited bandwidth at some locations, and reduce the resources required to operate the wide area network, or WAN.

Solutions & Benefits: Barracuda NG Firewalls were first deployed in 2010 to offices and stores to deliver user authentication, SSL VPN access and WAN optimization. This company has continued to purchase and deploy additional Barracuda NG Firewall solutions in each year between 2011 and 2013. The rollout has been accomplished quickly and remotely saving significant travel, time and expense. With secure connectivity to the remote locations, the company has been able to avoid a costly international multiprotocol label switching, or MPLS, network deployment. Ongoing management now requires less overhead and IT administration, and can be performed from a central location.

Global Communications and Document Management Company

Challenge: This Global Fortune 500 company is faced with the challenge of protecting large amounts of data. The company’s previous data protection infrastructure included multiple backup vendors that required the deployment of disparate software, servers, storage and offsite tape, resulting in a recovery time of more than five days in the event of a disaster. The company’s objective was to simplify the environment while maintaining the integrity of the backups, to reduce recovery time, and to leverage and protect investments in virtualization.

Solutions & Benefits: In 2012, Barracuda Backup was installed at the company’s headquarters and other large facilities and remote offices. Our easy-to-manage solution simplified the company’s backup infrastructure, enabled consolidation to a single vendor from six, resulted in up-front cost savings of $150,000, and reduced risk and recovery times. In 2013, the company has begun expanding its deployment of Barracuda Backup.

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Global Maritime Logistics Holding Company

Challenge: This global holding company for logistics groups specializes in maritime transport, with 20 terminals, over 100 ships, and over 50 branches worldwide. They were challenged with consolidating multiple point solutions across security and storage use cases.

Solutions & Benefits: This customer has deployed multiple Barracuda solutions to simplify their infrastructure. In 2011, the company deployed the Barracuda Link Balancer to ensure network reliability and performance. In 2012, the customer replaced several legacy point products with the Barracuda Web Filter, Barracuda Message Archiver and Barracuda SSL VPN solutions, and in 2013, the customer deployed the Barracuda NG Firewall because of the common management infrastructure and ease of use.

Large State Technical College System

Challenge: With more than 170,000 students, 26 colleges and over 100 different campuses, the IT team is faced with a number of challenges to protect their users and data. As a government entity, the college is required to monitor web activity and block on-campus access to all unauthorized content, compounded by an additional set of challenges associated with mobile devices.

Solutions & Benefits: In 2009, the Barracuda Web Security Service was deployed to provide content filtering and web policy enforcement at all of the campuses, regardless of the location inside or outside the network or type of device. The service allows the school to centrally manage and maintain policy and reporting, while enabling a pure cloud solution at some campuses and a hybrid solution that includes Barracuda Web Filter appliances and virtual appliances at others. The customer also deployed the Barracuda Message Archiver and our backup software solution in 2009. In 2010, the college increased its investment in Barracuda with an additional deployment of 20 Barracuda Web Filters, and again in 2011 with the addition of 40 Barracuda Web Filters. Each campus has the flexibility to deploy the solutions that best meet their requirements.

Sales and Marketing

Our sales and marketing approach is designed to be efficient for high volumes of transactions. Our marketing efforts focus on driving traffic to our websites and on generating high-quality sales leads. Our sales efforts focus on converting these leads into paying customers through a high volume, short duration sales process.

Sales

We sell our appliances, services and software to our customers using sales personnel and our global network of more than 5,000 distribution partners and value added resellers in more than 100 countries. Our inside sales force is devoted to turning highly qualified leads into purchasers of our solutions. The substantial majority of our leads come from potential customers who have requested a free evaluation of our solutions, or from our existing customer base. As a result, our inside sales force typically calls potential buyers who already understand the value of our solutions and do not require a lengthy sales cycle. Our sales reach is augmented by our distributors and value added resellers to efficiently interact with our customer base for initial deployment and cross-selling additional solutions.

The Barracuda Networks Reseller Program is a global network of resellers offering our solutions, service and support to our customers. We believe that our solutions and innovative marketing, lead generation and training programs provide a significant opportunity for high-quality reseller and distributor partners. Our channel network leverages our channel partners’ industry, product and geographic knowledge and their customer reach to expand our customer base. Our relationship with our channel partners are generally governed by our standard, non-exclusive and non-transferable reseller agreement, which provides for the appointment of the channel partner in a specified territory and net payment to us from the channel partner within 30 days of the date from the date of

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invoice. Additionally, either party may terminate the agreement without cause upon 30 days prior written notice or immediately by giving notice to the other party if the other party is in breach of a material provision in the reseller agreement and fails to rectify such breach within 30 days of receiving such notice.

We implement our approach through a disciplined sales process that provides clear guidelines for our sales force, and we actively measure and manage our sales results. We offer our solutions using standardized contract terms, and we enable our customers to buy our solutions in a manner convenient to them.

Marketing

We use a variety of online marketing programs for lead generation, as well as more traditional direct marketing and indirect channel partner marketing programs to drive interest in our solutions. These efforts leverage the high level of use of Internet search engines through search engine marketing and optimization programs. Once we drive traffic to our websites, we have well-defined processes that allow us to automatically track visitors’ activities on our website, communicate with potential customers, encourage evaluations of our solutions and generate highly qualified leads to our sales organization.

Our marketing approach focuses on creating brand awareness, allowing us to build and maintain, through relevant web-based content and online communications, a substantial customer base and community, many of whom act as advocates for Barracuda. We employ an innovative approach to traditional visual marketing through the use of signs and billboards in key locations such as airports where target customers often travel. We also enhance brand recognition and marketing through the use of vehicles wrapped with highly-visible branding.

In addition, we attend industry trade shows and conferences, regularly communicate with industry analysts and solicit their feedback on our solutions and strategies and host webinars on current issues to create awareness of our brand and solutions.

Our Go-to-Market Strategy. We have successfully grown our business by using a go-to-market strategy that includes the following:

• Low-Touch Sales Model. Our marketing efforts drive customers to fill out online forms in which they provide information about their business and specific IT needs. Our inside sales force is responsible for following up on these qualified leads from our partners and our website and working to turn potential customer interest into opportunities that our channel partners can fulfill. For example, based on the information a customer completes on one of our online forms, our inside sales force may call the customer and walk them through an online demo and connect them to a channel partner. In larger transactions our field sales team may become involved in a transaction to help a channel partner close an opportunity.

• Global Partner Network. We leverage our channel network to augment our inside sales force, giving us access to a broader potential customer base than we would be able to access on our own. We believe this greatly expands our distribution leverage as many times our customers order through our partner network without the involvement of our sales team.

• 30-Day Right to Return. All new sales include a 30-day right to return. The risk-free nature of the transaction allows our customers to more quickly adopt Barracuda solutions and realize the value.

• Renewals and Cross-Selling. As our existing customers grow, we may have opportunities to sell more advanced versions of our solutions as well as cross-sell adjacent solutions. We have a dedicated sales team that focuses exclusively on renewals. We employ training and marketing programs to assist our sales force and channel partners to better sell into our sizable customer base. Because of our robust solution portfolio, an existing customer provides us with multiple additional sales points as they look to consolidate suppliers while expanding their IT systems.

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Customer Support

Barracuda Technical Support. Customer support is an essential element of our business model, and we are focused on the impact of support on our customers’ experience. We offer multiple support options. All calls are answered and managed by specially trained Barracuda support agents 24x7x365. Moreover, we do not use phone trees and every call is answered live and in time zone. We also offer multilingual support.

We hire our customer support agents specifically based on their customer service experience and orientation and then provide in-house training to help them build their knowledge base and skill set. Our agents are categorized in tiers based on their skills. Tier 1 agents handle initial setup, basic support and troubleshooting. Tier 2 agents address detailed troubleshooting, analysis and support. Tier 3 agents address advanced issues, backend analysis and support. Finally, engineering support is available for any unresolved issues escalated to the development team. Agents of varying skill level sit together in groups in order to best serve our customers but also foster a collaborative environment in which our agents can learn and grow their skills.

We offer self-service support in the form of our online knowledge base, community forum and documentation portal. We also offer an online community forum, which offers information, updates and peer support. We also maintain a portal of technical documentation and whitepapers on our website.

Support Subscriptions. We provide a number of support subscriptions with our portfolio of solutions.

Barracuda Energize Updates. The required Barracuda Energize Updates subscription and virtual appliance subscriptions provide our customers with access to Barracuda Technical Support.

Instant Replacement. Instant Replacement provides replacement hardware with next business day shipping. Along with providing priority replacements in case of equipment failure, the Instant Replacement subscription also provides ongoing migration to the latest hardware platforms through the Barracuda Hardware Refresh Program, enabling customers to receive a new hardware unit every four years at no additional cost.

Premium Support. Barracuda Premium Support provides for a dedicated account manager and a team of technical engineers to provide fast resolution of high-priority support issues, helping to ensure continuous uptime. Premium Support is designed for organizations that cannot afford extended periods of downtime for their mission critical environments.

Manufacturing

We manufacture our appliances at our manufacturing facilities in Silicon Valley. By managing manufacturing locally and maintaining a highly flexible workforce, we are able to easily scale our manufacturing operations and react rapidly to customer needs. This enables us to support efficient, flexible, “just-in-time” manufacturing and key features of our business model such as real-time order fulfillment and our Instant Replacement program. Although we currently depend on a single source or a limited number of sources for certain components used in the manufacture of our appliances and are therefore subject to the risk of shortages in supply of these components, to date we have not experienced a significant delay in shipments. We generally use commodity hardware in our appliances, which is readily available from multiple sources, and we do not have any long-term supply agreements. Sourcing our materials from multiple suppliers enables us to fill orders with short lead-time and lower manufacturing costs.

Research and Development

Our research and development efforts are focused on the development of new solutions, including software and cloud solutions, and the integration of additional features and capabilities into our existing solutions. Our product management and engineering teams have extensive security and storage expertise and work closely with customers to identify their current and future needs. The experience of our design teams enables us to effectively assess the tradeoffs and advantages when determining which features and capabilities of our solutions should be implemented.

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We believe that innovation and timely development of new features and solutions is essential to meeting the needs of our customers and improving our competitive position. We test our solutions thoroughly to certify and ensure interoperability with third-party hardware and software products.

Our research and development expenses were $24.0 million, $27.8 million, $35.2 million, $16.1 million and $22.5 million, in fiscal 2011, 2012 and 2013 and the six months ended August 31, 2012 and 2013, respectively.

Intellectual Property

Our success depends in part upon our ability to protect our core technology and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including patents, trade secrets, copyrights and trademarks, as well as customary contractual protections.

We had 43 issued patents and 63 patent applications pending in the United States, as of August 31, 2013. Our issued patents expire between November 2016 and October 2030. We cannot assure you whether any of our patent applications will result in the issuance of a patent or whether the examination process will require us to narrow our claims. We also license software from third parties for integration into our solutions, including open source software and other software available on commercially reasonable terms.

We control access to and use of our proprietary software and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers and partners, and our software is protected by U.S. and international copyright laws. Despite our efforts to protect our trade secrets and proprietary rights through intellectual property rights, licenses and confidentiality agreements, unauthorized parties may still copy or otherwise obtain and use our software and technology. In addition, we intend to expand our international operations, and effective patent, copyright, trademark and trade secret protection may not be available or may be limited in foreign countries.

Our industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patent and other intellectual property rights. In particular, leading companies in our markets have extensive patent portfolios and are regularly involved in litigation. From time to time, third parties, including certain of these leading companies, may assert patent, copyright, trademark and other intellectual property rights against us, our channel partners or our customers. Our standard license and other agreements may obligate us to indemnify our channel partners and customers against such claims. Successful claims of infringement by a third party could prevent us from distributing certain solutions or performing certain services, require us to expend time and money to develop non-infringing solutions, or force us to pay substantial damages, including treble damages if we are found to have willfully infringed patents or copyrights, royalties or other fees. In addition, if we become more successful, competitors may try to develop solutions and services that are similar to ours that may infringe our proprietary rights. Competitors or other third parties may also be more likely to claim that our solutions infringe their proprietary rights. We cannot assure you that we do not currently infringe, or that we will not in the future infringe, upon any third-party patents or other proprietary rights.

Competition

We operate in the intensely competitive security and storage markets that are characterized by constant change and innovation, and we expect competition to increase in the future from larger, well-established competitors and new market entrants. Changes in the application, threat and technology landscape result in evolving customer requirements. Our main competitors in these markets fall into two categories:

• Independent network security, storage and application delivery vendors such as Blue Coat Systems, Inc., Check Point Software Technologies, Ltd., CommVault Systems, Inc., EMC Corporation, F5 Networks, Inc., Fortinet, Inc., Imperva, Inc., Juniper Networks, Inc., Palo Alto Networks, Inc. and Symantec Corporation that offer competing solutions.

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• Diversified IT suppliers such as Cisco, Dell Inc., Hewlett-Packard Company, the McAfee division of Intel and International Business Machines, that have acquired large security specialist vendors in recent years, that have software- or hardware-based storage solutions or that have the technical and financial resources to bring competitive solutions to the market.

In addition, we compete with companies that offer point solutions that compete with some of the features present in our platform. As our market grows, we believe it will attract more highly specialized vendors as well as larger vendors that may continue to acquire or bundle their solutions more effectively.

The principal competitive factors in our market include:

• solution ease-of-use;

• solution features, reliability, performance and effectiveness;

• solution line breadth and applicability;

• solution extensibility and ability to integrate with other technology infrastructures;

• price and total cost of ownership;

• proactive live technical support;

• strength of sales and marketing efforts; and

• brand awareness and reputation.

We believe we generally compete favorably on the basis of these factors. However, many of our competitors have substantially greater financial, technical and other resources; greater name recognition; stronger reputations and longer operating histories; larger sales and marketing budgets; broader distribution and established relationships with distribution partners and customers; lower labor and development costs; greater customer support resources; larger and more mature intellectual property portfolios; and greater resources to make acquisitions.

Employees

As of August 31, 2013, we had 1,108 full-time employees. None of our employees are either represented by a labor union or subject to a collective bargaining agreement. We have not experienced any work stoppages, and we consider our relations with our employees to be good.

Facilities

Our principal executive offices consist of approximately 61,400 square feet of office space that we own in Campbell, California. We also lease approximately 42,000 square feet of office space for research and development in Ann Arbor, Michigan and approximately 47,000 square feet of office space for manufacturing and customer support in San Jose, California, with leases that expire in October 31, 2017 and August 31, 2018, respectively. We have additional office locations throughout the United States and in various international locations.

We believe that our existing facilities are sufficient for our current needs. We intend to add new facilities and expand our existing facilities as we add employees and grow our business, and we believe that suitable additional or substitute space will be available on commercially reasonable terms to meet our future needs.

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Legal Proceedings

Export Compliance

In late 2011, following a voluntary internal review of our compliance with U.S. export control and sanctions laws, our management team became aware that certain of our physical appliances had been sold indirectly into embargoed countries via our distributors and resellers, potentially in violation of U.S. export control and economic sanctions laws. In addition, certain of our solutions incorporate encryption components and may be exported from the U.S. only with the required approvals; in the past, we may have exported products prior to receiving these required authorizations. We believe that these potential violations were inadvertent and occurred because we and certain of our resellers did not have sufficient compliance procedures in place to prevent the transactions at issue. As a result, we were unable to preclude certain of our channel partners and resellers from selling our solutions into countries subject to a U.S. embargo until late 2011. After completion of a comprehensive internal investigation conducted by outside counsel, we submitted voluntary disclosures regarding these matters to the U.S. Commerce Department, Bureau of Industry and Security, or BIS, and to the U.S. Treasury Department, Office of Foreign Assets Control, or OFAC. These disclosures summarized potential violations of export controls and economic sanctions laws, including reexports by third parties and provision of services to end users in embargoed countries including Iran, Sudan and Syria.

The reviews of our voluntary disclosures by BIS and OFAC are still pending and in the early stages, and their reviews of our voluntary disclosures may continue for a long period of time. BIS and OFAC may conclude that our actions resulted in violations of U.S. export control and economic sanctions laws and warrant the imposition of penalties that could include fines, termination of our ability to export our products, and/or referral for criminal prosecution. Any such penalties may be material to our financial results in the period in which they are imposed and could significantly affect our quarterly operating results for that quarter. The penalties may be imposed against us and/or our management. Also, disclosure of our conduct and any fines or other action relating to this conduct could harm our reputation and indirectly have a material adverse effect on our business, operating results and financial condition. See the section titled “Risk Factors—We may be subject to fines or other penalties for potential past violations of U.S. export control and economic sanctions laws.”

Other

On August 13, 2013, Parallel Networks, LLC, or Parallel Networks, which we believe is a non-practicing entity, filed a lawsuit against us in the U.S. District Court for the District of Delaware, Parallel Networks, LLC v. Barracuda Networks, Inc., Case No. 1:13-cv-01412-UNA, alleging that certain of our appliances infringe two of their U.S. patents: U.S. Pat. No. 7,571,217, titled “Method and System for Uniform Resource Locator Transformation,” and U.S. Pat. No. 8,352,570, titled “Method and System for Uniform Resource Locator Transformation.” Parallel Networks has asserted similar claims against other companies, including Array Networks, Inc., Brocade Communications Systems, Inc., Citrix Systems, Inc., Riverbed Technology, Inc. and SAP AG. This matter is in its earliest stages, but we intend to vigorously defend the lawsuit.

From time to time, we may be party to litigation and subject to claims that arise in the ordinary course of business. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. We currently believe that these ordinary course matters will not have a material adverse effect on our business; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

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MANAGEMENT

Executive Officers and Directors

The following table provides information regarding our executive officers and directors as of October 1, 2013:

Name	Age		Position(s)
Executive Officers:
William D. “BJ” Jenkins, Jr.		47	Chief Executive Officer and Director
David Faugno		43	Chief Financial Officer
Michael D. Perone		46	Chief Marketing Officer, Executive Vice President and Director
Michael D. Hughes		46	Senior Vice President, Worldwide Sales
Diane C. Honda		48	Vice President, General Counsel and Secretary
Other Directors:
Jeffry R. Allen(1)		61	Lead Independent Director
Dipanjan Deb		44	Director
Dean M. Drako		47	Director
James J. Goetz(2)		47	Director
David R. Golob(2)(3)		45	Director
Zachary S. Levow		41	Chief Technology Officer, Executive Vice President and Director
Gordon L. Stitt(1)(3)		57	Director
Kevin B. Thompson		48	Director

(1) Member of our audit committee.

(2) Member of our compensation committee.

(3) Member of our nominating and corporate governance committee.

Executive Officers

William D. “BJ” Jenkins, Jr. has served as our president and chief executive officer and as a member of our board of directors since November 2012. From April 1998 to November 2012, Mr. Jenkins served in various roles, including president of the Backup Recovery Systems division, at EMC Corporation, an information infrastructure company. Mr. Jenkins holds a B.S. degree in general engineering from the University of Illinois and an M.B.A. degree from Harvard Business School.

We believe that Mr. Jenkins is qualified to serve as a member of our board of directors because of the perspective he brings as our chief executive officer and his experience in senior management positions at several technology companies.

David Faugno has served as our chief financial officer since March 2006. Additionally, from April 2012 to November 2012, Mr. Faugno served as a member of the office of the president and chief executive officer, or the office of the CEO. Prior to joining our company, Mr. Faugno served as director of corporate finance, mergers and acquisitions at Cisco Systems Inc., a network equipment company, from July 2004 to February 2006, which he joined in connection with Cisco’s acquisition of Actona Technologies Inc., a wide area storage vendor, where he served as chief financial officer and vice president of operations from March 2002 to July 2004. From May 2001 to January 2002, Mr. Faugno served as chief financial officer of Soltima Inc., a wireless infrastructure software company. From 1992 to 2000, Mr. Faugno served in various finance and operational roles with AT&T, a telecommunications company. Mr. Faugno holds a B.S. degree in accounting from Rutgers University and an Executive M.B.A. degree from Duke University.

Michael D. Perone co-founded our company in 2003 and serves as a member of our board of directors and as our chief marketing officer and executive vice president. Additionally, from April 2012 to November 2012,

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Mr. Perone served as a member of the office of the CEO. Prior to co-founding our company, he co-founded Affinity Path, Inc., a private label Internet service provider company, and served as its chief marketing officer from January 2000 to January 2002. From January 1999 to December 2000, Mr. Perone co-founded Spinway, Inc., an Internet service provider, and served as its chief visionary officer. From January 1996 to January 1999, he founded and served as president of Address.com, Inc., an email and Internet access provider.

We believe that Mr. Perone is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our co-founder and because of his experience in founding and growing technology companies.

Michael D. Hughes has served as our senior vice president of worldwide sales since 2010. Prior to joining our company, he served as vice president of sales at Asempra Technologies, a provider of recovery solutions, from May 2007 to May 2009. From August 2004 to May 2007, Mr. Hughes served as the vice president of OEM sales and then as general manager and sales director of Northern Europe at McDATA Corporation, a storage networking and data infrastructure solutions company. From October 2002 to August 2004, he served as the director of business development at Invio Software, Inc., a storage software company. From August 1998 to October 2002, Mr. Hughes served in a variety of roles as at Marimba, Inc., a provider of systems management solutions, including director of business development and vice president of embedded systems. Mr. Hughes holds a B.S. degree in marketing from Miami University and an M.B.A. degree from the University of Michigan.

Diane C. Honda has served as our vice president and general counsel since October 2012. Prior to joining us, she served in several positions, including vice president, general counsel and secretary at Extreme Networks, Inc., a network infrastructure provider, from November 2004 to October 2012. From February 2003 to February 2004, Ms. Honda served as director of legal affairs at Riverstone Networks, a provider of networking switching hardware. From June 1987 to June 2001, she served in several positions, including managing attorney of the Financial Services Organization, at Hewlett-Packard Company, a computer hardware, software and services company. Ms. Honda holds B.S. degrees in computer science and industrial management from Carnegie Mellon University and a J.D. degree from Santa Clara University School of Law.

Board of Directors

Jeffry R. Allen has served as our lead independent director since September 2013 and as one of our directors since June 2007. Since May 2005, Mr. Allen has been a director at NetApp, Inc., a storage solutions company. Mr. Allen served in various roles at NetApp, including as its executive vice president of business operations, and its chief financial officer, from December 1996 to June 2005. From July 1990 through December 1996, Mr. Allen was responsible for various operations and manufacturing roles at SynOptics Communications, Inc., a computer communications company, and subsequently at Bay Networks, the company created via the merger of SynOptics and Wellfleet Communications, Inc. Previously, Mr. Allen had a 17-year career at Hewlett-Packard Company, where he served in a variety of financial, information systems, and financial management positions, including controller for the Information Networks Group. Mr. Allen holds a B.S. degree in accounting from San Diego State University.

We believe that Mr. Allen is qualified to serve as a member of our board of directors because of his financial and accounting expertise and his experience serving in a variety of finance positions at numerous public companies.

Dipanjan Deb has served as one of our directors since October 2013. Mr. Deb co-founded Francisco Partners, a private equity firm, and has been a Partner since its founding in August 1999 and has served as Managing Partner since August 2005. Prior to co-founding Francisco Partners, Mr. Deb worked at TPG Capital, a private equity firm, McKinsey & Company, a management consulting firm, and Robertson, Stephens & Company, a technology-focused investment bank. Mr. Deb currently serves on the board of directors of several privately held companies. Mr. Deb holds a B.S. degree in electrical engineering and computer science from the University of California, Berkeley and an M.B.A. degree from the Stanford Graduate School of Business.

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We believe that Mr. Deb is qualified to serve as a member of our board of directors because of his experience in the private equity and venture capital industries analyzing, investing in and serving on the boards of directors of technology companies, as well as his perspective as a representative of one of our largest stockholders.

Dean M. Drako co-founded our company in 2003 and has served as a member of our board of directors since our inception. Mr. Drako served as our president and chief executive officer and chairman from our inception through July 2012. Since July 2012, he has served as president and chief executive officer of Eagle Eye Networks, Inc., a cloud-based video security company. Mr. Drako also founded IC Manage in 2003, a design and IP management company, where he continues to serve as president, chief executive officer and chairman. Mr. Drako founded and served as president and chief executive officer of Boldfish, Inc., a provider of enterprise messaging solutions, from 1999 to 2001. Prior to this, Mr. Drako founded and served as president and chief executive officer of Design Acceleration, Inc., a maker of semiconductor design analysis and verification tools. Mr. Drako holds a B.S. degree in electrical engineering from the University of Michigan, Ann Arbor and an M.S. degree in electrical engineering from the University of California, Berkeley.

We believe that Mr. Drako is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our co-founder and former chief executive officer, and in founding and growing technology companies.

James J. Goetz has served as one of our directors since July 2009. Since June 2005, Mr. Goetz has been a managing member of Sequoia Capital Operations, LLC, a venture capital firm. Mr. Goetz currently serves on the board of directors of Jive Software, Inc., a provider of social business software, Palo Alto Networks, Inc., a network security company, and a number of privately held companies. Mr. Goetz holds B.S. degrees in electrical and computer engineering from the University of Cincinnati and an M.S. degree in electrical engineering from Stanford University.

We believe that Mr. Goetz is qualified to serve as a member of our board of directors because of his experience in venture capital industry analyzing, investing in and serving on the boards of directors of technology companies, as well as his perspective as a representative of one of our largest stockholders.

David R. Golob has served as one of our directors since December 2005. Since September 2001, Mr. Golob has been a Partner at Francisco Partners, a private equity firm. Mr. Golob currently serves on the board of directors of several privately held companies. Mr. Golob holds an A.B. degree in chemistry from Harvard College and an M.B.A. degree from the Stanford Graduate School of Business.

We believe that Mr. Golob is qualified to serve as a member of our board of directors because of his experience in the private equity and venture capital industries analyzing, investing in and serving on the boards of directors of technology companies, as well as his perspective as a representative of one of our largest stockholders.

Zachary S. Levow co-founded our company in 2003 and serves as a member of our board of directors and as our chief technology officer and executive vice president. Prior to co-founding our company, he co-founded Affinity Path, Inc., a private label Internet service provider, and served as its chief technology officer from January 2001 to January 2002. From January 1999 to December 2001, Mr. Levow co-founded Spinway, Inc., an Internet service provider, and served as its chief technology officer. Mr. Levow holds B.S. degrees in mathematics/computer science from Carnegie Mellon University.

We believe that Mr. Levow is qualified to serve as a member of our board of directors because of his technical acumen and the experience he brings as our co-founder and chief technology officer.

Gordon L. Stitt has served as one of our directors since June 2007. Additionally, from April 2012 to November 2012, Mr. Stitt served as a member of the office of the CEO. Since September 2013, Mr. Stitt has served as chairman of the board of directors and chief executive officer of Nebula, Inc., a cloud computing

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hardware and software company. Mr. Stitt co-founded Extreme Networks, Inc., a provider of high-performance Ethernet switching solutions for enterprises and data centers, and served as its president and chief executive officer from its founding in May 1996 to August 2006. Mr. Stitt currently serves as chairman of the board of directors of Nebula, Inc. Mr. Stitt holds a B.S. degree in electrical engineering and computer science from Santa Clara University and an M.B.A. degree from the Haas School of Business, U.C. Berkeley.

We believe that Mr. Stitt is qualified to serve as a member of our board of directors because of his experience in senior management positions at several technology companies and his knowledge of strategic and operational issues facing technology companies.

Kevin B. Thompson has served as one of our directors since September 2013. Since July 2006, Mr. Thompson has served in several positions, including president, chief executive officer, chief financial officer, chief operating officer and treasurer at SolarWinds, Inc., a provider of IT management software. From November 2005 to March 2006, Mr. Thompson served as the chief financial officer of Surgient, Inc., a software management solutions company. Mr. Thompson currently serves on the board of directors of SolarWinds, Inc. and NetSuite, Inc., a business management software company. Mr. Thompson holds a B.B.A. degree in business administration from the University of Oklahoma.

We believe that Mr. Thompson is qualified to serve as a member of our board of directors because of his experience in senior management positions at several technology companies, his financial and accounting expertise and his knowledge of strategic and operational issues facing technology companies.

Our executive officers are appointed by our board of directors and serve until their successors have been duly elected and qualified. There are no family relationships among any of our directors or executive officers.

Code of Business Conduct and Ethics

Prior to the completion of this offering, our board of directors will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including our chief executive officer, chief financial officer and other principal executive and senior financial officers.

Board Composition

Our business and affairs are managed under the direction of our board of directors. The current composition of the board of directors is dictated by our voting agreement, although this agreement will terminate upon the completion of this offering. The number of directors will be fixed, following the completion of this offering, by our board of directors, subject to the terms of our amended and restated certificate of incorporation and amended and restated bylaws that will become effective immediately prior to the completion of this offering. Upon the completion of this offering, our board of directors will consist of                  directors.

In accordance with our amended and restated certificate of incorporation and our amended and restated bylaws, immediately after the completion of this offering, our board of directors will be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Our directors will be divided among the three classes as follows:

• the Class I directors will be                     ,                     ,                      and                     , and their terms will expire at the annual meeting of stockholders to be held in 2014;

• the Class II directors will be                     ,                      and                     , and their terms will expire at the annual meeting of stockholders to be held in 2015; and

• the Class III directors will be                     ,                      and                     , and their terms will expire at the annual meeting of stockholders to be held in 2016.

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Each director’s term continues until the election and qualification of his successor, or his earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

Director Independence

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, our board of directors determined that Messrs. Allen, Deb, Goetz, Golob, Stitt and Thompson do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the             . In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”

Committees of the Board of Directors

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until otherwise determined by our board of directors.

Audit Committee

Our audit committee is comprised of Messrs. Allen and Stitt, with Mr. Allen serving as chairman. Messrs. Allen and Stitt meet the requirements for independence of audit committee members under current              listing standards and SEC rules and regulations. Each member of our audit committee meets the financial literacy requirements of the current              listing standards. We expect to satisfy the member independence requirements for the audit committee prior to the end of the transition period provided under current              listing standards and SEC rules and regulations for companies completing their initial public offering. In addition, our board of directors has determined that Mr. Allen is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act. Our audit committee will, among other things:

• select a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

• help to ensure the independence and performance of the independent registered public accounting firm;

• discuss the scope and results of the audit with the independent registered public accounting firm, and review with management and the independent accountants, our interim and year end operating results;

• develop procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

• review our policies on risk assessment and risk management;

• review related party transactions;

• obtain and review a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues; and

• approve (or, as permitted, pre-approve) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.

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Our audit committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable rules of the SEC and the listing standards of the             .

Compensation Committee

Our compensation committee is comprised of Messrs. Goetz and Golob, with Mr. Golob serving as chairman. Messrs. Goetz and Golob meet the requirements for independence of compensation committee members under current              listing standards and SEC rules and regulations. We expect to satisfy the member independence requirements for the compensation committee prior to the end of the transition period provided under current              listing standards and SEC rules and regulations for companies completing their initial public offering. Additionally, each member of the compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code, as amended. The purpose of our compensation committee is to discharge the responsibilities of our board of directors relating to compensation of our executive officers. Our compensation committee will, among other things:

• review, approve and determine, or make recommendations to our board of directors regarding, the compensation of our executive officers;

• administer our stock and equity incentive plans;

• review and approve and make recommendations to our board of directors regarding incentive compensation and equity plans; and

• establish and review general policies relating to compensation and benefits of our employees.

Our compensation committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable rules of the SEC and the listing standards of the             .

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee is comprised of Messrs. Golob and Stitt, with Mr. Stitt serving as chairman. Messrs. Golob and Stitt meet the requirements for independence of nominating and corporate governance committee members under current              listing standards. We expect to satisfy the member independence requirements for the compensation committee prior to the end of the transition period provided under current              listing standards for companies completing their initial public offering. Our nominating and corporate governance committee will, among other things:

• identify, evaluate and select, or make recommendations to our board of directors regarding nominees for election to our board of directors and its committees;

• evaluate the performance and compensation of our board of directors and of individual directors;

• consider and make recommendations to our board of directors regarding the composition of our board of directors and its committees;

• review developments in corporate governance practices;

• evaluate the adequacy of our corporate governance practices and reporting; and

• develop and make recommendations to our board of directors regarding corporate governance guidelines and matters.

Our nominating and corporate governance committee will operate under a written charter, to be effective prior to the completion of this offering, that satisfies the applicable rules of the SEC and the listing standards of the             .

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Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

Director Compensation

Prior to this offering, we had not implemented a formal policy with respect to compensation payable to our non-employee directors for service as directors. We did not provide cash compensation to our non-employee directors during our fiscal 2013 for service as directors. However, in fiscal 2013, we granted equity awards under our 2012 Equity Incentive Plan to Messrs. Allen and Stitt in the amount set forth below for service as directors. In addition to the foregoing amounts, we reimburse our directors for expenses associated with attending meetings of our board of directors and committees of our board of directors. The following table provides information regarding compensation of our directors for service as directors, for fiscal 2013. See “Executive Compensation—2013 Summary Compensation Table” for information regarding compensation of our directors who served as named executive officers.

Name	Option  Awards ($)(1)
Jeffry R. Allen(2)		262,440
Dipanjan Deb(3)		—
Dean M. Drako(4)		—
James J. Goetz(5)		—
David R. Golob(6)		—
William D. Jenkins, Jr.(7)		—
Zachary S. Levow(8)		—
Michael D. Perone(9)		—
Gordon L. Stitt(10)		262,440
Kevin B. Thompson(11)		—

(1) The amounts in the “Equity Awards” column do not reflect the actual economic value realized by the directors. They reflect the aggregate grant date fair value of equity awards granted during the fiscal year computed in accordance with FASB ASC Topic 718. The assumptions that we used to calculate these amounts are discussed in Note 7 to our consolidated financial statements appearing at the end of this prospectus. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

(2) As of February 28, 2013, Mr. Allen had outstanding options to purchase a total of 150,000 shares of our common stock. On May 9, 2012, Mr. Allen was granted an option to purchase 150,000 shares of our common stock. Of the shares underlying the option, 28,125 were vested as of February 28, 2013.

(3) Mr. Deb has served as a member of our board of directors since October 2013.

(4) Mr. Drako served as our chief executive officer until his resignation, effective July 2012. See “Executive Compensation – 2013 Summary Compensation Table” for information regarding his compensation in this capacity during fiscal 2013.

(5) As of February 28, 2013, Mr. Goetz did not have outstanding options to purchase our common stock or RSUs.

(6) As of February 28, 2013, Mr. Golob did not have outstanding options to purchase our common stock or RSUs.

(7) Mr. Jenkins has served as our chief executive officer since November 2012. See “Executive Compensation – 2013 Summary Compensation Table.”

(8) Mr. Levow currently serves as our chief technology officer and executive vice president. All compensation paid to Mr. Levow in fiscal 2013 was in connection with his employment as our vice president and chief technology officer and not for his service as a member of our board of directors. As of February 28, 2013, Mr. Levow had outstanding options to purchase a total of 120,000 shares of our common stock and 112,500 unvested RSUs. On November 1, 2012, Mr. Levow was granted 120,000 RSUs, of which 7,500 were vested as of February 28, 2013. The aggregate grant date fair value of the RSUs granted to Mr. Levow in November 2012 was $506,400. On November 20, 2012, Mr. Levow was granted an option to purchase 120,000 shares of our common stock, of which 7,500 were vested as of February 28, 2013. The grant date fair value of the options granted to Mr. Levow in November 2012 was $220,092. See. “Certain Relationships and Related Party Transactions” for information regarding Mr. Levow’s compensation during fiscal 2013.

(9) Mr. Perone currently serves as our chief marketing officer and executive vice president and served in the office of the CEO from April 2012 to November 2012. See “Executive Compensation – 2013 Summary Compensation Table” for information regarding his compensation in this capacity during fiscal 2013.

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(10) As of February 28, 2013, Mr. Stitt had outstanding options to purchase a total of 150,000 shares of our common stock. On May 9, 2012, Mr. Stitt was granted an option to purchase 150,000 shares of our common stock. Of the shares underlying the option, 28,125 were vested as of February 28, 2013. Mr. Stitt served in the office of the CEO from April 2012 to November 2012. See “Executive Compensation – 2013 Summary Compensation Table” for information regarding his compensation in this capacity during fiscal 2013.

(11) Mr. Thompson has served as a member of our board of directors since September 2013.

In connection with this offering, we intend to implement a formal policy pursuant to which our non-employee directors will be eligible to receive equity awards and/or annual cash retainers as compensation for service on our board of directors and committees of our board of directors.

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EXECUTIVE COMPENSATION

2013 Summary Compensation Table

The following table and narrative summarizes and explains the compensation that we paid to, or that was earned by, each person who acted as our principal executive officer, which included (i) William D. Jenkins, Jr., our current chief executive officer who joined us in November 2012, (ii) David Faugno, Michael D. Perone and Gordon L. Stitt, each of whom served in the office of the CEO from April 2012 to November 2012, and (iii) Dean M. Drako, our former chief executive officer who resigned in July 2012; as well as each of our other two most highly-compensated executive officers, Michael D. Hughes and Diane C. Honda, as required by Item 402(m)(2) of Regulation S-K during our fiscal year ended February 28, 2013. We refer to these officers in this prospectus as our named executive officers, or NEOs.

Name and Principal Position	Fiscal Year		Salary($)			Bonus($)(1)		Equity Awards($)*(2)			Non-Equity Incentive Plan Compensation ($)(3)		All Other Compensation ($)			Total($)
William D. Jenkins Jr.(4)		2013		114,198	(5)		116,000		16,709,316			—		1,950,000	(6)		18,889,514
Chief Executive Officer
David Faugno		2013		230,000			216,000		4,887,203	(7)		—		150,000	(8)		5,483,203
Chief Financial Officer, Vice President and Former Member of the Office of the CEO
Michael D. Perone		2013		250,000			250,000		726,492			—		150,000	(8)		1,376,492
Chief Marketing Officer, Executive Vice President and Former Member of the Office of the CEO
Michael D. Hughes		2013		220,000			63,171		524,880			178,742		—			986,793
Senior Vice President of Worldwide Sales
Diane C. Honda(9)		2013		85,586	(10)		—		275,115			—		—			360,701
Vice President, General Counsel and Secretary
Dean M. Drako(11)		2013		111,058	(12)		—		—			—		2,150,105	(13)		2,261,163
Former Chief Executive Officer
Gordon L. Stitt		2013		—			—		262,440	(14)		—		150,000	(8)		412,440	(14)
Former Member of the Office of the CEO

* The amounts in the “Equity Awards” column do not reflect the actual economic value realized by the NEOs.

(1) The amounts in the “Bonus” column for Messrs. Jenkins, Faugno and Perone reflect bonuses paid pursuant to discretionary bonus arrangements set forth in their respective NEO offer letter agreements. Mr. Jenkins’ bonus reflects a prorated portion of the bonus opportunity set forth in his offer letter agreement. The bonuses were determined by our compensation committee based on a subjective assessment of each individual’s achievement of individual performance objectives. The amount in the “Bonus” column for Mr. Hughes reflects his receipt of a payment in lieu of dividend related to his vested options. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—The Recapitalization.”

(2) These awards reflect the aggregate grant date fair value of equity awards granted during the fiscal year computed in accordance with FASB ASC Topic 718. The assumptions that we used to calculate these amounts are discussed in Note 7 to our consolidated financial statements appearing at the end of this prospectus. These awards vest over a period of four years. For additional information on these awards, see “Executive Compensation—Outstanding Equity Awards at Fiscal Year End.” As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

(3) The amounts included in the “Non-Equity Incentive Plan Compensation” column represent sales commissions earned and payable.

(4) Mr. Jenkins has served as our chief executive officer since November 2012.

(5) Mr. Jenkins’ salary reflects the prorated portion of his annual base salary of $350,000 paid in fiscal 2013.

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(6) The amount represents payments made to Mr. Jenkins pursuant to his offer letter to (i) reimburse him for the relocation bonus of $1,057,750 he was required to repay to his former employer and (ii) $892,250 to achieve a tax neutral position associated with the repayment of the relocation bonus.

(7) This amount includes (i) $4,866,953, the grant date fair value of RSUs granted to Mr. Faugno in May 2012 computed in accordance with FASB ASC Topic 718, and (ii) $20,250, the change in grant date fair value of 13,500 unvested options granted to Mr. Faugno in September 2008 which were accelerated in full in April 2012.

(8) From April 2012 to November 2012, Messrs. Faugno, Perone and Stitt served in the office of the CEO. In connection with their service as members of the office of the CEO, each of Messrs. Faugno, Perone and Stitt received a one-time cash payment of $150,000.

(9) Ms. Honda has served as our vice president and general counsel since October 2012.

(10) Ms. Honda’s salary reflects the prorated portion of her annual base salary of $215,000 paid in fiscal 2013.

(11) Mr. Drako served as our chief executive officer until his resignation, effective July 2012.

(12) Mr. Drako received $96,635 in salary prior to his resignation in July 2012. Mr. Drako received an additional lump sum of $14,423 for accrued personal time off in connection with his resignation in July 2012.

(13) Mr. Drako received a lump sum severance payment of $1,150,105 in July 2012, which included $25,105 for 12 months of COBRA premiums for Mr. Drako, in connection with his separation agreement and release in July 2012. Additionally, in October 2012, Mr. Drako received an additional $1,000,000 in connection with his supplemental agreement and release.

(14) All equity awards granted to Mr. Stitt in fiscal 2013 were in connection with his service as a member of our board of directors.

Named Executive Officer Employment Arrangements

William D. Jenkins, Jr.

In June 2013, we entered into an offer letter agreement with William D. Jenkins, Jr., our chief executive officer, which superseded all prior employment letter agreements he had with us. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Mr. Jenkins with an annual base salary of $350,000 and an opportunity to earn an annual incentive bonus of up to 100% of his base salary.

In connection with Mr. Jenkins’ offer letter agreement, Mr. Jenkins was granted an option to purchase 2,760,000 shares of our common stock at an exercise price per share of $4.22, and 2,760,000 RSUs, each of which were granted pursuant to our 2012 Equity Incentive Plan on November 1, 2012. The aggregate grant date value of these awards is included under “Equity Awards” in the Summary Compensation Table above.

Mr. Jenkins’ offer letter agreement further provides that upon a termination of his employment for other than for cause (as such term is defined in his offer letter agreement), death or disability, Mr. Jenkins will be eligible to receive the following separation benefits, subject to him timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to his then-current base salary for a period of 12 months;

• payment by us of up to 12 months of COBRA premiums to continue health insurance coverage for him and his eligible dependents; and

• accelerated vesting of outstanding equity awards that would have vested had he remained employed with us for an additional six months.

Mr. Jenkins’ offer letter agreement further provides that, upon a change in control (as such term is defined in his offer letter agreement), Mr. Jenkins will be eligible to receive:

• a lump sum payment equal to the base salary and bonus paid to him over the 12 months immediately preceding the date of the change in control; and

• accelerated vesting of all outstanding stock options and the RSU award that was granted to him on November 1, 2012.

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In addition, pursuant to Mr. Jenkins’ offer letter agreement we agreed to reimburse him for the relocation bonus he was required to repay to his former employer in connection with the acceptance of our offer of employment.

David Faugno

In July 2012, we entered into an offer letter agreement with David Faugno, our chief financial officer and vice president, which superseded all prior employment letter agreements he had with us. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Mr. Faugno with an annual base salary of $250,000 and an opportunity to earn an annual incentive bonus of up to 100% of his base salary.

Mr. Faugno’s offer letter agreement further provides that upon a termination of his employment other than for cause (as such term is defined in his offer letter agreement), including if the termination is a result of death or disability, or a resignation for good reason (as such term is defined in his offer letter agreement), Mr. Faugno will be eligible to receive the following separation benefits, subject to him timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to his base salary and target bonus as then in effect for a period of 12 months;

• payment by us of up to 12 months of COBRA premiums to continue health insurance coverage for him and his eligible dependents; and

• accelerated vesting of outstanding equity awards that would have vested had he remained employed with us for an additional 12 months (or the greater of (x) 50% of the number of unvested shares subject to his then outstanding equity awards or (y) 12 months, in the event if the termination or resignation occurs within the 18 months following a change in control (as such term is defined in the offer letter agreement)).

Michael D. Perone

In July 2013, we entered into an offer letter agreement with Mr. Perone, our co-founder, executive vice president and chief marketing officer, which superseded all prior employment letter agreements he had with us. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Mr. Perone with an annual base salary of $250,000 and an opportunity to earn an annual incentive bonus of up to 100% of his base salary.

Mr. Perone’s offer letter agreement further provides that upon a termination of his employment other than for cause (as such term is defined in the offer letter agreement) (including, if the termination is a result of death or disability) or a resignation for good reason (as such term is defined in the offer letter agreement), then Mr. Perone will be eligible to receive the following separation benefits, subject to him timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to his base salary and target bonus as then in effect for a period of 12 months;

• payment by us for up to 12 months of COBRA premiums to continue health insurance coverage for him and his eligible dependents; and

• accelerated vesting of outstanding equity awards that would have vested had he remained employed with us for an additional 12 months (or the greater of (x) 50% of the number of unvested shares subject to his then outstanding equity awards or (y) 12 months, in the event if the termination or resignation occurs within the 18 months following a change in control (as such term is defined in the offer letter agreement)).

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Michael D. Hughes

In August 2012, we entered into an offer letter agreement with Michael D. Hughes, our senior vice president of worldwide sales. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Mr. Hughes with an annual base salary of $220,000 and an opportunity to earn an annual incentive bonus of up to $180,000.

Mr. Hughes’ offer letter agreement further provides that upon a termination of his employment other than for cause (as such term is defined in his offer letter agreement), death or disability, Mr. Hughes will be eligible to receive the following separation benefits, subject to him timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to his base salary as then in effect for a period of six months (or 12 months if the termination occurs within the 12 months following a change in control (as such term is defined in his offer letter agreement));

• payment by us of up to six months of COBRA premiums to continue health insurance coverage for him and his eligible dependents (or 12 months if the termination occurs within the 12 months following a change in control); and

• accelerated vesting of outstanding equity awards that would have vested had he remained employed with us for an additional six months (or 12 months if the termination occurs within the 12 months following a change in control).

Diane C. Honda

In September 2012, we entered into an offer letter agreement with Diane C. Honda, our vice president, general counsel and secretary. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Ms. Honda with an annual base salary of $215,000 and an opportunity to earn an annual incentive bonus of up to $96,000.

Ms. Honda’s offer letter agreement further provides that upon a termination of her employment other than for cause (as such term is defined in her offer letter agreement), death or disability, Ms. Honda will be eligible to receive the following separation benefits, subject to her timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to her base salary as then in effect for a period of six months (or 12 months if the termination occurs within the 12 months following a change in control (as such term is defined in her offer letter agreement));

• payment by us of up to six months of COBRA premiums to continue health insurance coverage for her and her eligible dependents (or 12 months if the termination occurs within the 12 months following a change in control); and

• accelerated vesting of outstanding equity awards that would have vested had she remained employed with us for an additional six months (or 12 months if the termination occurs within the 12 months following a change in control).

Office of the President and Chief Executive Officer

From April 2012 until the appointment of Mr. Jenkins as our chief executive officer in November 2012, Messrs. Faugno, Perone and Stitt served together in the office of the CEO and collectively acted as our chief executive officer. As compensation for their service in such roles, each of Messrs. Faugno, Perone and Stitt received a one-time payment of $150,000.

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Resignation of Dean M. Drako

In December 2005, we entered into a management retention agreement with Dean M. Drako, our former chief executive officer. In July 2012, Mr. Drako resigned from his employment, and in connection with his resignation we entered into a separation agreement and release with him which entitled him to the following:

• a lump sum payment of $500,000, which represented two times his then-current base salary;

• a lump sum payment of $625,000, which represents the agreed upon pro rata bonus amount earned and not yet paid plus an additional bonus amount; and

• a lump sum payment of $25,105, which is equivalent to 12 months of premiums for his COBRA coverage.

In October 2012, Mr. Drako executed a supplemental agreement and release under which he was entitled to the following:

• a lump sum payment of $1,000,000; and

• the right to participate in the redemption of common stock from our founders in connection with the Recapitalization.

Outstanding Equity Awards at Fiscal Year End

The following table provides information regarding outstanding equity awards held by our NEOs as of February 28, 2013.

	Grant Date		Option Awards									Stock Awards
Name			Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)		Option Expiration Date		Number of Shares of Stock that Have Not Vested			Market Value of Shares of Stock that Have Not Vested ($)
William D. Jenkins, Jr.		11/01/2012		5,924		88,860	(1)		4.22		10/31/2022		—			—
		11/01/2012		166,576		2,498,640	(1)		4.22		10/31/2022		—			—
		11/01/2012		—		—			—		—		2,587,500	(2)		10,919,250
David Faugno		05/18/2012		—		—			—		—		957,482	(3)		3,594,401
Michael D. Perone		11/01/2012		—		—			—		—		112,500	(4)		474,750
		11/20/2012		7,500		112,500	(5)		4.22		11/19/2022		—			—
Michael D. Hughes		11/30/2009		85,313		13,125	(6)		3.25		10/31/2019		—			—
		07/21/2010		64,583		35,417	(7)		3.54		7/20/2020		—			—
		05/18/2012		56,250		243,750	(8)		4.13		05/17/2022		—			—
Diane C. Honda		11/20/2012		—		150,000	(9)		4.22		11/19/2022		—			—
Dean M. Drako		—		—		—			—		—		—			—
Gordon L. Stitt(10)		05/18/2012		28,125		121,875	(11)		4.13		05/17/2022		—			—

(1) This option vests, subject to Mr. Jenkins’ continued role as a service provider to us, with respect to 1/16th of the total shares every three months, beginning on the three-month anniversary of November 5, 2012.

(2) The shares underlying these RSUs vest, subject to Mr. Jenkins’ continued role as a service provider to us, with respect to 1/16th of the total shares every three months, beginning on the three-month anniversary of November 5, 2012.

(3) The shares underlying these RSUs vest, subject to Mr. Faugno’s continued role as a service provider to us, with respect to 1/48th of the total shares every month, beginning on the one-month anniversary of May 18, 2012.

(4) The shares underlying these RSUs vest, subject to Mr. Perone’s continued role as a service provider to us, with respect to 1/48th of the total shares every month, beginning on the one-month anniversary of November 5, 2012.

(5) This option vests, subject to Mr. Perone’s continued role as a service provider to us, with respect to 1/48th of the total shares every month, beginning on the one-month anniversary of November 9, 2012.

(6) This option vests, subject to Mr. Hughes’ continued role as a service provider to us, with respect to 1/4th of the total shares on the one-year anniversary of November 30, 2009, with 1/48th of the total shares vesting monthly thereafter.

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(7) This option vests, subject to Mr. Hughes’ continued role as a service provider to us, with respect to 1/4th of the total shares on the one-year anniversary of July 21, 2010, with 1/48th of the total shares vesting monthly thereafter.

(8) This option vests, subject to Mr. Hughes’ continued role as a service provider to us, with respect to 1/48th of the total shares every month, beginning on the one-month anniversary of May 9, 2012.

(9) This option vests, subject to Ms. Honda’s continued role as a service provider to us, with respect to 1/4th of the total shares on the one-year anniversary of October 8, 2012, with 1/48th of the total shares vesting monthly thereafter.

(10) All equity awards granted to Mr. Stitt in fiscal 2013 were in connection with his service as a member of our board of directors.

(11) This option vests, subject to Mr. Stitt’s continued role as a service provider to us, with respect to 1/48th of the total shares every month, beginning on the one-month anniversary of May 9, 2012.

Additionally, in January 2009, we granted Mr. Faugno an RSU award which vested upon the satisfaction of both a service condition satisfied over four years, and a liquidity condition. The liquidity condition required the occurrence of a qualifying event, defined as a change of control transaction or the effective date of an initial public offering. In April 2012, we amended the RSU grant to eliminate the liquidity condition and to accelerate the RSU award in full. Furthermore, in connection with the acceleration, we entered into an indemnification agreement with Mr. Faugno, pursuant to which we agreed to indemnify Mr. Faugno from certain taxes, penalties or interest incurred in connection with the amendment and acceleration of the RSU award.

Employee Benefit Plans

2014 Executive Bonus Plan

In September 2013, our board of directors adopted a 2014 Executive Bonus Plan, or our 2014 Bonus Plan, which sets a potential target bonus amount for each of our executive officers who participate in the 2014 Bonus Plan. The 2014 Bonus Plan provides for cash bonuses based on achievement against gross billings and adjusted EBITDA targets established by the compensation committee for fiscal 2014 and weighted 50% each. If our performance results in achievement at 100% of targeted levels, the bonus pool will fund at the targeted amount. We must achieve at least 80% of the gross billings or adjusted EBITDA target for the bonus pool to fund with respect to that specific performance objective. If we achieve greater than 100% of a specific performance objective target, the bonus pool funds additional amounts up to a maximum of 200%. Furthermore, if we exceed our semi-annual gross billing and adjusted EBITDA targets by 50% or more, our compensation committee has the discretion to pay up to 40% of each executive officer’s target bonus amount in the third quarter fiscal year 2014.

2012 Equity Incentive Plan

Our 2012 Equity Incentive Plan, or our 2012 Plan, was adopted by our board of directors in May 2012 and approved by our stockholders in October 2012. Our 2012 Plan was amended on November 1, 2012 by our board of directors and approved by our stockholders in November 2012 to increase the maximum aggregate number of shares issuable under the 2012 Plan. Our 2012 Plan was further amended in July 2013 by our board of directors and approved by our stockholders on             , with such amendments to become effective on the date of the completion of this offering. Our 2012 Plan permits the grant of incentive stock options, within the meaning of Section 422 of the Code, to our employees and any of our parent and subsidiary corporations’ employees, and the grant of nonstatutory stock options, stock appreciation rights, restricted stock and RSUs to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants. As of August 31, 2013, we had options to purchase 11,009,854 shares of our common stock, with a weighted-average exercise price of $4.21 per share, and 3,247,677 RSUs outstanding under our 2012 Plan.

Authorized Shares. The maximum aggregate number of shares issuable under the 2012 Plan is              shares of our common stock, plus any shares subject to stock options or similar awards granted under our 2004 Stock Plan that expire or terminate without having been exercised in full or are forfeited to or repurchased by us, with the maximum number of shares to be added to the 2012 Plan equal to              shares. The number of shares available for issuance under the 2012 Plan will be increased on the first day of each fiscal year of ours beginning

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with the 2015 fiscal year, in an amount equal to the least of (i)              shares, (ii) (    %) of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by our board of directors.

Shares may be authorized, but unissued, or reacquired shares of our common stock. Shares issued pursuant to awards under the 2012 Plan that expire, become unexercisable without being exercised in full, or are forfeited to or repurchased by us due to failure to vest, shares that are surrendered pursuant to an exchange program, as well as shares used to pay the exercise price of an award or to satisfy the tax withholding obligations related to an award, will become available for future grant under the 2012 Plan. In addition, to the extent that an award is paid out in cash rather than shares, such cash payment will not reduce the number of shares available for issuance under the 2012 Plan. With respect to stock appreciation rights, only shares actually issued pursuant to the award cease to be available under the 2012 Plan.

Plan Administration. Our board of directors or one or more committees appointed by our board of directors will administer the 2012 Plan. In the case of awards intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the compensation committee will consist of two or more “outside directors” within the meaning of Section 162(m) of the Code. To the extent desirable to qualify transactions under the 2012 Plan as exempt under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, the transactions will be structured to satisfy the requirements for exemption under Rule 16b-3.

Subject to the provisions of our 2012 Plan, the administrator has the power to determine the fair market value of a share of our common stock; the employees, directors, and consultants to whom awards may be granted; the number of shares of our common stock to be covered by each award under the 2012 Plan; the forms of award agreements for use under the 2012 Plan; the terms and conditions of an exchange program; and other terms, conditions and restrictions applicable to grants made under the 2012 Plan. The administrator has the power to construe and interpret the terms of the 2012 Plan and awards granted under the 2012 Plan. The administrator has the power to prescribe, amend, and rescind rules and regulations relating to the 2012 Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or qualifying for favorable tax treatment under applicable foreign laws. The administrator may modify or amend each award, including but not limited to the discretionary authority to extend the post-termination exercisability period of awards and to extend the maximum term of an option to the extent prescribed by our 2012 Plan. The administrator may allow you to satisfy withholding tax obligations in a manner prescribed in the 2012 Plan. The administrator has the power to authorize any person to execute on behalf of us any instrument required to effect the grant of an award. The administrator may allow you to defer receipt of payment of cash or delivery of shares of common stock that otherwise would be due to you under an award pursuant to procedures that the administrator determines. The administrator’s decisions are final and binding on all holders of outstanding awards granted under the 2012 Plan.

Stock Options. The administrator may grant incentive and/or nonstatutory stock options under our 2012 Plan, provided that incentive stock options are granted only to our employees or employees of our parent or subsidiary corporations. The exercise price of all options must equal at least the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed 10 years. In addition, an incentive stock option held by a participant who owns more than 10% of the total combined voting power of all classes of our stock or the stock of our parent or subsidiary corporations as of immediately before the grant (a “10% holder”) may not have a term in excess of five years and must have an exercise price of at least 110% of the fair market value of our common stock on the grant date. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, check, shares or other property acceptable to the administrator, as well as other types of consideration permitted by applicable law. Subject to the provisions of our 2012 Plan, the administrator determines the remaining terms of the options. After the termination of service of a participant, the participant may exercise his or her option, to the extent vested as of such date of termination, for the period of time stated in his or her option agreement. However, in no event may an option be exercised later than the expiration of its term. The specific terms of any grant of stock options will be set forth in an award agreement between us and the recipient.

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Stock Appreciation Rights. Stock appreciation rights may be granted under our 2012 Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the date of grant and the exercise date. Subject to the provisions of our 2012 Plan, the administrator determines the terms of stock appreciation rights, including when such rights vest and become exercisable and whether to settle such awards in cash or with shares of our common stock, or a combination thereof, except that the per share base price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant. The specific terms of any grant of stock appreciation rights will be set forth in an award agreement between us and the recipient.

Restricted Stock. Restricted stock may be granted under our 2012 Plan. Restricted stock awards are grants of shares of our common stock that are subject to various restrictions, including restrictions on transferability and forfeiture provisions. Shares of restricted stock will vest and the restrictions on such shares will lapse, in accordance with terms and conditions established by the administrator. Such terms may include, among other things, vesting upon the achievement of specific performance goals determined by the administrator and/or continued service to us. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the administrator provides otherwise. Shares of restricted stock that do not vest for any reason will be forfeited by the recipient and will revert to us. The specific terms of any grant of restricted stock will be set forth in an award agreement between us and the recipient.

Restricted Stock Units. RSUs may be granted under our 2012 Plan. Each RSU granted is a bookkeeping entry representing an amount equal to the fair market value of one share of our common stock. The administrator determines the vesting criteria in its discretion which, depending on the extent to which they are met, will determine the number of shares to be paid out to the participant. The administrator may set vesting criteria based on achievement of company-wide, divisional, business unit or individual goals (including continued employment or service) applicable federal or state securities laws, or any other basis the administrator determines, in its discretion. After the grant of a RSU award, the administrator, in its sole discretion, may reduce or waive any vesting criteria for such award. The administrator determines in its sole discretion whether an award will be settled in shares, cash or a combination of both. The specific terms of any grant of RSUs will be set forth in an award agreement between us and the recipient.

Non-employee Directors. Our 2012 Plan provides that all non-employee directors will be eligible to receive all types of awards (except for incentive stock options) under the 2012 Plan. In connection with this offering, we intend to implement a formal policy pursuant to which our non-employee directors will be eligible to receive equity awards under the 2012 Plan. Our 2012 Plan provides that the number of shares subject to awards granted to a non-employee director in a given fiscal year will not be greater than             , increased to              in the fiscal year of his or her initial service as a non-employee director.

Transferability of Awards. Unless the administrator provides otherwise, awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution. In addition, only the recipient of an award may exercise such an award during his or her lifetime.

Certain Adjustments. In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the 2012 Plan, the administrator will make adjustments to the number and class of shares that may be delivered under the 2012 Plan and/or the number, class and price of shares covered by each outstanding award and the numerical share limits contained in the 2012 Plan.

Merger or Change in Control, Dissolution or Liquidation. Our 2012 Plan provides that in the event of our merger with or into another corporation or other entity or our change in control, as defined under the 2012 Plan, each outstanding award will be treated as the administrator determines, except that if a successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding award, then such

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award will fully vest, all restrictions on such award will lapse, all performance goals or other vesting criteria applicable to such award will be deemed achieved at 100% of target levels and such award will become fully exercisable, if applicable, for a specified period prior to the transaction. The award will then terminate upon the expiration of the specified period of time. If the service of an outside director is terminated on or following a change in control, other than pursuant to a voluntary resignation, his or her awards will become fully vested and exercisable, and all performance goals or other vesting requirements will be deemed achieved at 100% of target levels. In the event of our proposed liquidation or dissolution, the administrator will notify participants as soon as practicable, and all awards will terminate immediately prior to the consummation of such proposed transaction.

Plan Amendment, Termination. The administrator has the authority to amend, suspend or terminate the 2012 Plan provided such action does not impair the existing rights of any participant. Our 2012 Plan will automatically terminate in 2022, unless we terminate it sooner.

2004 Stock Plan

Our board of directors adopted, and our stockholders approved, our 2004 Stock Plan, or 2004 Plan, in November 2004. Our 2004 Plan was terminated in connection with the adoption of our 2012 Plan in May 2012. Our 2004 Plan provided for the grant of both incentive stock options, which qualify for favorable tax treatment to their recipients under Section 422 of the Code, and nonstatutory stock options, as well as for the issuance of shares of restricted stock. The granting restrictions, exercise price and other terms for incentive stock options and nonstatutory stock options are similar to those under the 2012 Plan. In the event of a “change in control,” as defined in our 2004 Plan, our 2004 Plan provides that, unless the applicable option agreement provides otherwise, options held by current employees, directors and consultants will vest in full and become immediately exercisable if they are not assumed or substituted. As of August 31, 2013, we had options to purchase 4,146,626 shares of our common stock, with a weighted-average exercise price of $2.81 per share, outstanding under our 2004 Plan.

SignNow 2011 Equity Incentive Plan

The SignNow, Inc. 2011 Equity Incentive Plan, or the SignNow Plan, was assumed by us in connection with our acquisition of SignNow, Inc. in April 2013. The SignNow Plan provides that, in the event of a “corporate transaction,” as defined in the SignNow Plan, each outstanding award will be treated as the administrator determines. The other terms of this plan are similar to those of our 2004 Plan. The SignNow plan permitted the grant of incentive stock options, nonstatutory stock options and restricted stock. No further awards will be granted under the SignNow Plan but any options outstanding under the SignNow Plan remain subject to the terms of the SignNow Plan. As of August 31, 2013, we had options to purchase 172,637 shares of our common stock, with a weighted-average exercise price of $0.50 per share, outstanding under the SignNow Plan.

Purewire, Inc. 2008 Stock Incentive Plan

The Purewire, Inc. 2008 Stock Incentive Plan, or the Purewire Plan, was assumed by us in connection with our acquisition of Purewire, Inc. in October 2009. The terms of this plan are similar to those of our 2004 Plan, except that the Purewire plan also permitted the grant of stock appreciation rights and other stock-based awards. The Purewire Plan was terminated in October 2009, but any stock options and stock appreciation rights outstanding under the Purewire Plan remain subject to the terms of the Purewire Plan. As of August 31, 2013, we had options to purchase 16,390 shares of our common stock, with a weighted-average exercise price of $0.11 per share, outstanding under the Purewire Plan.

401(k) Plan

We maintain a tax-qualified retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation subject

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to applicable annual Code limits. We contribute a certain percentage of matching funds up to a limit of 1.25% (with a maximum payment of $1,000) or, if we meet certain performance objectives, up to a limit of 2.5% (with a maximum payment of $2,000). Employees’ pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their contributions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In addition to the compensation arrangements and indemnification arrangements, discussed, when required, above in the sections titled “Management” and “Executive Compensation” and the registration rights described below in the section titled “Description of Capital Stock—Registration Rights,” the following is a description of each transaction since January 1, 2010, below, and each currently proposed transaction in which:

• we have been or are to be a participant;

• the amounts involved exceeded or will exceed $120,000; and

• any of our directors, executive officers, or stockholders who own greater than 5% of our outstanding capital stock and their affiliates had or will have a direct or indirect material interest.

Recapitalization Transaction

In October 2012, we completed our Recapitalization pursuant to a recapitalization agreement entered into with certain entities affiliated with Francisco Partners and Sequoia Capital, our existing investors, and our founders, Dean M. Drako, Michael D. Perone and Zachary S. Levow. Pursuant to the recapitalization agreement, we (i) declared $130.0 million of cash dividends, (ii) issued and sold 22,727,913 shares of our Series B redeemable convertible preferred stock to entities affiliated with Francisco Partners and Sequoia Capital at a price per share of approximately $5.62, for an aggregate purchase price of $127.5 million and (iii) repurchased 22,727,913 shares of the our common stock from our founders and their affiliates at a price per share of approximately $5.62, for an aggregate repurchase price of $127.5 million. In December 2012, in lieu of dividends, we paid an aggregate of $1.4 million in bonus payments to our employees who held fully vested options to purchase our common stock at the time of the Recapitalization.

Dividend

In connection with the Recapitalization, we declared $130.0 million of cash dividends and distributed them to holders of our capital stock. The following directors, executive officers and greater than 5% stockholders, and their affiliates, received the approximate dividends payments listed below:

Directors, Executive Officers and 5% Stockholders (or Affiliates)	Total Dividend Received
Jeffry and Teri Allen Revocable Trust	$	530,479
Gordon L. Stitt		143,423
Dean M. Drako(1)		30,610,369
David Faugno		1,946,353
Zachary S. Levow(2)		26,813,377
Michael D. Perone(3)		26,813,377
Entities Affiliated with Francisco Partners		21,315,062
Entities Affiliated with Sequoia		14,722,329

(1) Includes dividend payments to Mr. Drako, the Dean M. Drako Living Trust and Mr. Drako’s mother.

(2) Includes dividend payments to Mr. Levow, the 2010 A Trust 1, The 2010 A Trust 2 and Mr. Levow’s spouse.

(3) Includes dividend payments to Mr. Perone, the 2010 Three Year Plan 3 Trust, the 2010 Four Year Plan 3 Trust, the 2010 Three Year Plan 9 Trust, the 2010 Four Year Plan 9 Trust and Mr. Perone’s spouse.

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Preferred Stock Financing

In connection with the Recapitalization, and immediately following the payment of the dividend, we issued and sold an aggregate of 22,727,913 shares of our Series B redeemable convertible preferred stock at a per share purchase price of approximately $5.62, for an aggregate purchase price of $127.5 million. The participants in our preferred stock financing were entities affiliated with Francisco Partners and Sequoia Capital. David R. Golob and Dipanjan Deb, members of our board of directors, are partners at Francisco Partners and James J. Goetz, a member of our board of directors, is a managing member of Sequoia Capital. The following table presents the number of shares and the total purchase price paid by these entities:

Investors	Shares of Preferred Stock		Total Purchase Price
Francisco Partners III, L.P.		14,048,028	$	78,834,478
Francisco Partners Parallel Fund III, L.P.		156,918		880,590
Sequoia Capital Growth III Principals Fund		92,157		517,165
Sequoia Capital Growth Partners III		20,410		114,536
Sequoia Capital Growth Fund III		7,754,534		43,516,758
Sequoia Capital Franchise Partners		78,704		441,670
Sequoia Capital Franchise Fund		577,162		3,238,908

Redemption of Common Stock

In connection with the Recapitalization and immediately following the preferred stock financing, we redeemed 22,727,913 shares of our common stock from our founders and their affiliates at a per share purchase price of approximately $5.62, for an aggregate repurchase price of $127.5 million. In connection with this repurchase, the following of our directors, executive officers and greater than 5% stockholders, and their affiliates, received the payments listed below:

Directors, Executive Officers and 5% Stockholders (or Affiliates)	Shares of Common Stock		Total Repurchase Price
Dean M. Drako		2,250,000	$	12,626,511
Dean M. Drako Living Trust		2,250,000		12,626,511
Michael D. Perone		1,402,147		7,868,544
Zachary S. Levow		15,378,794		86,302,447
The Zach Levow 2010 Grantor Retained Annuity Trust		723,486		4,060,046
The Holly Levow 2010 Grantor Retained Annuity Trust		723,486		4,060,046

Loans to Executive Officers

In April 2012, we entered into a promissory note with David Faugno, our chief financial officer and vice president, under which we loaned Mr. Faugno approximately $1.7 million, at an interest rate per annum of 1.15%. The loan was secured against approximately all of Mr. Faugno’s outstanding shares of our common stock. We extended the loan to Mr. Faugno to allow him to meet certain tax obligations associated with the exercise of options to purchase our common stock and the vesting of RSUs. In April 2013, the promissory note was amended to loan an additional $235,000 to Mr. Faugno on the same terms and subject to the same security interest as described above. As of May 31, 2013, the outstanding balance of the loan was approximately $1.97 million, including principal of $1.94 million and accrued interest of $26,000. The loan was repaid in full by Mr. Faugno in July 2013, including all accrued interest.

Investors’ Rights Agreement

We are party to an Amended and Restated Investors’ Rights Agreement, or IRA, dated October 3, 2012, with our founders and their affiliates and the entities affiliated with Francisco Partners and Sequoia Capital who

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hold shares of our redeemable convertible preferred stock, which provides, among other things, that the holders of our redeemable convertible preferred stock have certain rights relating to the registration of their shares of common stock upon conversion of their redeemable convertible preferred stock. See the section titled “Description of Capital Stock—Registration Rights” for additional information.

Right of First Refusal

Pursuant to our current bylaws, certain of our equity compensation plans and certain agreements with our stockholders, including a right of first refusal and co-sale agreement, we or our assignees have a right to purchase shares of our capital stock which stockholders propose to sell to other parties. This right will terminate upon the completion of this offering. Since January 1, 2010, we have waived or assigned our right of first refusal in connection with the sale of certain shares of our capital stock by certain of our executive officers.

Offer Letter Agreements

In addition to the offer letter agreements with William D. Jenkins, Jr., David Faugno, Michael D. Perone, Michael D. Hughes and Diane C. Honda discussed in the section titled “Executive Compensation—Executive Employment Arrangements,” we have entered into offer letter agreements with the following individual:

Zachary S. Levow

In July 2013, we entered into an offer letter agreement with Mr. Levow, our co-founder, executive vice president and chief technology officer, which superseded all prior employment letter agreements he had with us. The offer letter agreement has no specific term and constitutes at-will employment. The offer letter agreement provides Mr. Levow with an annual base salary of $250,000 and an opportunity to earn an annual incentive bonus of up to 100% of his base salary. Mr. Levow received $250,000 in salary and a $250,000 discretionary bonus in fiscal 2013. The bonus was paid pursuant to discretionary bonus arrangements set forth in his agreement.

Mr. Levow’s offer letter agreement further provides that upon a termination of his employment other than for cause (as such term is defined in the offer letter agreement) (including, if the termination is a result of death or disability) or a resignation for good reason (as such term is defined in the offer letter agreement), then Mr. Levow will be eligible to receive the following separation benefits, subject to him timely executing and not revoking a release of claims in a form acceptable to us:

• continued payment of severance at a rate equal to his base salary and target bonus as then in effect for a period of 12 months;

• payment by us for up to 12 months of COBRA premiums to continue health insurance coverage for him and his eligible dependents; and

• accelerated vesting of outstanding equity awards that would have vested had he remained employed with us for an additional 12 months (or the greater of (x) 50% of the number of unvested shares subject to his then outstanding equity awards or (y) 12 months, in the event if the termination or resignation occurs within the 18 months following a change in control (as such term is defined in the offer letter agreement)).

Other Transactions

In April 2012, we entered into an indemnification agreement with David Faugno in connection with the amendment and acceleration of an RSU grant to eliminate the liquidity condition and to accelerate the RSU award in full. See the narrative discussion in the section titled “Executive Compensation—Outstanding Equity Awards at Fiscal Year End” for additional information.

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Limitation of Liability and Indemnification of Officers and Directors

Our amended and restated certificate of incorporation and amended and restated bylaws, each to be effective upon the completion of this offering, will provide that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by the Delaware General Corporation Law, which prohibits our amended and restated certificate of incorporation from limiting the liability of our directors for the following:

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

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

• unlawful payment of dividends or unlawful stock repurchases or redemptions; and

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

If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to purchase insurance on behalf of any person whom we are required or permitted to indemnify.

In addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we will have entered into an indemnification agreement with each of our officers and directors prior to the completion of this offering. In addition, we plan to enter into indemnification agreements with each of our other directors, as well as our officers before the completion of this offering. These agreements will provide for the indemnification of our directors, officers and some employees for certain expenses and liabilities incurred in connection with any action, suit, proceeding or alternative dispute resolution mechanism, or hearing, inquiry or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director, officer, employee, agent or fiduciary of our company, or any of our subsidiaries, by reason of any action or inaction by them while serving as an officer, director, agent or fiduciary, or by reason of the fact that they were serving at our request as a director, officer, employee, agent or fiduciary of another entity. In the case of an action or proceeding by or in the right of our company or any of our subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

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Policies and Procedures for Related Party Transactions

Following the completion of this offering, the audit committee will have the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. For purposes of this policy, a related person will be defined as a director, executive officer, nominee for director, or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members. Our audit committee charter will provide that the audit committee shall review and approve or disapprove any related party transactions. As of the date of this prospectus, we have not adopted any formal standards, policies or procedures governing the review and approval of related-party transactions, but we expect that our audit committee will do so in the future.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of August 31, 2013, after giving effect to the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into shares common stock, and as adjusted to reflect the sale of common stock in this offering, for:

• each of our current named executive officers;

• each of our current directors;

• all of our current directors and executive officers as a group;

• each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; and

• each selling stockholders.

We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, to our knowledge, the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable community property laws.

Applicable percentage ownership prior to this offering is based on 137,637,591 shares of common stock outstanding at August 31, 2013, after giving effect to the conversion of all outstanding shares of redeemable convertible preferred stock into shares of common stock. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of common stock subject to equity awards held by the person that are currently exercisable or exercisable within 60 days of August 31, 2013. We did not deem such shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Barracuda Networks, Inc., 3175 S. Winchester Blvd., Campbell, CA 95008.

Name of Beneficial Owner	Beneficial Ownership Prior to this Offering				Number of Shares Being Offered in the Offering	Beneficial Ownership After this Offering
	Number		Percent			Number	Percent
Named Executive Officers and Directors:
William D. Jenkins, Jr.(1)		790,183		*
David Faugno(2)		1,759,384		1.3
Michael D. Perone(3)		26,695,797		19.4
Dean M. Drako(4)		27,439,053		19.9
Michael D. Hughes(5)		290,310		*
Diane C. Honda		37,500		—
Gordon L. Stitt(6)		203,124		*
Jeffry R. Allen(7)		607,929		*
Dipanjan Deb(8)		36,497,442		26.5
David R. Golob(9)		36,497,442		26.5
James J. Goetz(10)		23,920,410		17.4
Zachary S. Levow(11)		11,272,178		8.2
Kevin B. Thompson		—		—
All directors and executive officers as a group (13 Persons)(12)		129,513,310		93.4
5% Stockholders:
Entities Affiliated with Francisco Partners(13)		36,497,422		26.5
Entities Affiliated with Sequoia Capital(14)		23,920,410		17.4
Selling Stockholders:

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* Represents beneficial ownership of less than one percent (1%).

(1) Consists of (i) 272,683 shares held by Mr. Jenkins and (ii) 517,500 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(2) Consists of (i) 710,283 shares held by Mr. Faugno, (ii) 250,000 shares held by the Drop Trust 2012 Two Year Annuity Trust, of which Mr. Faugno is a grantor and a trustee, (iii) 250,000 shares held by the Drop Trust 2012 Three Year Annuity Trust, of which Mr. Faugno is a grantor and a trustee (iv) 250,000 shares held by the Rock Trust 2012 Two Year Annuity Trust, under which Mr. Faugno is a grantor and a trustee, (v) 250,000 shares held by the Rock Trust 2012 Three Year Annuity Trust, under which Mr. Faugno is a grantor and a trustee, and (vi) 49,101 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(3) Consists of (i) 16,053,709 shares held by Mr. Perone, (ii) 978,359 shares held by Michelle Perone, Mr. Perone’s spouse, (iii) 1,196,401 shares held by the 2010 Four Year Plan 3 Trust, of which Mr. Perone is a grantor and a trustee, (iv) 629,534 shares held by the 2010 Three Year Plan 3 Trust, of which Mr. Perone is a grantor and a trustee, (v) 1,196,401 shares held by the 2010 Four Year Plan 9 Trust, of which Mr. Perone is a grantor and a trustee, (vi) 629,534 shares held by the 2010 Three Year Plan 9 Trust, of which Mr. Perone is a grantor and a trustee, (vii) 1,979,359 shares held by Perone 2012 Irrevocable Trust, of which Mr. Perone is a grantor and a trustee, (viii) 4,000,000 shares held by Consulting2 LLC, of which Mr. Perone is the managing member, and (ix) 32,500 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(4) Consists of (i) 12,279,524 shares held by the Drako Trust F, of which Mr. Drako is a grantor and a trustee, (ii) 6,904,595 shares held by the DD Investment Management Trust A, of which Mr. Drako is a grantor and a trustee, (iii) 7,184,934 shares held by the Dean M. Drako Living Trust, of which Mr. Drako is a grantor and a trustee, (iv) 720,000 shares held by the DD Investment Trust B, of which Mr. Drako is a grantor and a trustee, and (v) 350,000 shares held by the DD Investment Trust A, of which Mr. Drako is a grantor and a trustee.

(5) Consists of 290,310 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(6) Consists of (i) 150,000 shares held by Mr. Stitt and (ii) 53,124 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(7) Consists of (i) 554,805 shares held by the Jeffry R. & Teri Allen TTEES The Jeffry & Terri Allen REV TRT DTD 1/29/02, of which Mr. Allen is a grantor and trustee and (ii) 53,124 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(8) Consists of the shares listed in footnote 13 below, which are held by entities affiliated with Francisco Partners.

(9) Consists of the shares listed in footnote 13 below, which are held by entities affiliated with Francisco Partners.

(10) Consists of the shares listed in footnote 14 below, which are held by entities affiliated with Sequoia Capital.

(11) Consists of (i) 9,994,058 shares held by Mr. Levow, (ii) 307,408 shares held by Holly Levow, Mr. Levow’s spouse, (iii) 469,106 shares held by The 2010 A Trust 1, of which Mr. Levow is a grantor and a trustee, (iv) 469,106 shares held by The 2010 A Trust 2, of which Mr. Levow is a grantor and a trustee, and (v) 32,500 shares issuable upon the exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(12) Consists of (i) 128,447,651 shares beneficially owned by our current executive officers and directors and (ii) 1,065,659 shares issuable upon exercise of outstanding equity awards exercisable within 60 days of August 31, 2013.

(13) Consists of (i) 16,283 shares held by FP Annual Fund Investors, LLC (“FPAFI”), (ii) 22,167,059 shares held by Francisco Partners, L.P. (“FP I”), (iii) 109,154 shares held by Francisco Partners Fund A, L.P. (“FPFA”), (iv) 14,048,028 shares held by Francisco Partners III, L.P. (“FP III”) and (v) 156,918 shares held by Francisco Partners Parallel Fund III, L.P. (“FPPF III,” and collectively with FPAFI, FP I, FPFA and FP III, the “Francisco Funds”). Francisco Partners GP, LLC is the general partner of FP I and FPFA. Francisco Partners Management, LP is the manager of FPAFI. Francisco Partners GP III, L.P. is the general partner of FP III and FPPF III. With respect to the shares of our capital stock held by the Francisco Funds, each of David R. Golob, Dipanjan Deb, Keith Geeslin and Ezra Perlman may be deemed to share voting and investment power with respect to the shares held by the Francisco Funds. The address of each of the entities listed above is One Letterman Drive, Building C, Suite 410, San Francisco, CA 94129.

(14) Consists of (i) 540,629 shares held of record by Sequoia Capital Franchise Partners, L.P., (ii) 3,964,600 shares held of record by Sequoia Capital Franchise Fund, L.P., (iii) 18,641,936 shares held of record by Sequoia Capital Growth Fund III, L.P., (iv) 140,203 shares held of record by Sequoia Capital Growth Partners III, L.P. and (v) 633,042 shares held of record by Sequoia Capital Growth III Principals Fund, LLC. SCFF Management, LLC is the general partner of each of Sequoia Capital Franchise Fund, L.P. and Sequoia Capital Franchise Partners, L.P. The managing members of SCFF Management, LLC are Douglas Leone, Michael Moritz, Michael Goguen and Mark Stevens. As a result, and by virtue of the relationships described in this footnote, each of the managing members of SCFF Management, LLC may be deemed to share beneficial ownership of the shares held by Sequoia Capital Franchise Fund, L.P. and Sequoia Capital Franchise Partners, L.P. SCGF III Management, LLC is the general partner of Sequoia Capital Growth Fund III, L.P. and Sequoia Capital Growth Partners III, L.P. and is the managing member of Sequoia Capital Growth III Principals Fund, LLC. The managing members of SCGF III Management, LLC are Roelof Botha, J. Scott Carter, James J. Goetz, Michael Goguen, Douglas Leone and Michael Moritz. As a result, and by virtue of the relationships described in this footnote, each of the managing members of SCGF III Management, LLC may be deemed to share voting and investment power with respect to the shares held by Sequoia Capital Growth Fund III, L.P., Sequoia Capital Growth Partners III, L.P. and Sequoia Capital Growth III Principals Fund, LLC. The address of each of the entities identified in this footnote is 3000 Sand Hill Road, Suite 4-250, Menlo Park, California 94025.

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DESCRIPTION OF CAPITAL STOCK

General

The following description summarizes the most important terms of our capital stock, as they are expected to be in effect upon the completion of this offering. We expect to adopt an amended and restated certificate of incorporation and amended and restated bylaws in connection with the completion of this offering, and this description summarizes the provisions that are expected to be included in such documents. This summary, which includes all of the material terms of our capital stock, is qualified in its entirety by the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part. You should refer to our amended and restated certificate of incorporation, amended and restated bylaws and IRA, which are or will be included as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of Delaware law.

Immediately prior to the completion of this offering, our authorized capital stock will consist of              shares of common stock, $0.001 par value per share, and              shares of undesignated preferred stock, $0.001 par value per share. Our board of directors is authorized, without stockholder approval, except as required by the listing standards of the             , to issue additional shares of our capital stock.

As of August 31, 2013, we had outstanding 137,637,591 shares of common stock, held by approximately 224 stockholders of record, and no shares of preferred stock, assuming the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into common stock effective immediately prior to the completion of this offering.

Common Stock

Dividend Rights

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine. In addition, the terms of our credit facility currently prohibits us from paying cash dividends on our common stock. See the section titled “Dividend Policy” for additional information.

Voting Rights

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. We have not provided for cumulative voting for the election of directors in our amended and restated certificate of incorporation. Our amended and restated certificate of incorporation establishes a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class will be subject to election by a plurality of the votes cast at each annual meeting of our stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms.

No Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Right to Receive Liquidation Distributions

If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock.

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Preferred Stock

Following this offering, our board of directors will be authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our board of directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control of our company and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares of preferred stock.

Equity Awards

As of August 31, 2013, there were 15,345,507 outstanding options to purchase shares of common stock pursuant to our equity plans, with a weighted average exercise price of $3.79 per share, and 3,247,677 shares of common stock issuable upon the vesting of outstanding RSUs.

Registration Rights

After the completion of this offering, the holders of up to approximately 118,205,694 shares of our common stock (assuming the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into shares of common stock upon the completion of this offering) will be entitled to rights with respect to the registration of their shares under the Securities Act. These registration rights are contained in our IRA and are described in additional detail below. We, along with our founders, and their assigns, and the holders of our redeemable convertible preferred stock are parties to the IRA. We entered into the IRA in connection with the Recapitalization in October 2012. These registration rights will expire (i) five years following the completion of this offering or (ii) with respect to any particular stockholder, when such stockholder is able to sell all of its shares pursuant to Rule 144 of the Securities Act in any 90-day period. We will pay the registration expenses (other than underwriting discounts, selling commissions and stock transfer taxes) of the holders of the shares registered pursuant to the registrations described below. In an underwritten offering, the managing underwriter, if any, has the right, subject to specified conditions, to limit the number of shares such holders may include. In connection with the completion of this offering, each stockholder that has registration rights agreed not to sell or otherwise dispose of any securities without the prior written consent of the underwriters for a period of 180 days after the date of this prospectus, subject to certain terms and conditions. See the section titled “Underwriters” for additional information.

Demand Registration Rights

Six months after the completion of this offering, the holders of at least 20% of the shares entitled to registration rights then outstanding can request that we register the offer and sale of their shares, provided that such registration of shares would result in an anticipated aggregate offering price to the public of at least $80 million. If we determine that it would be seriously detrimental to our stockholders to effect such a demand registration, we have the right to defer such registration, not more than once in any 12-month period, for a period of up to 90 days.

Piggyback Registration Rights

If we propose to register the offer and sale of any of our securities under the Securities Act, in connection with the public offering of such securities, our stockholders with registration rights will be entitled to certain

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“piggyback” registration rights allowing the holders to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to a registration related to a company stock plan and a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of our common stock, the holders of these shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration.

S-3 Registration Rights

Our stockholders with registration rights may make a written request that we register the offer and sale of their shares on Form S-3 if we are eligible to file a registration statement on Form S-3 so long as the request covers at least that number of shares with an anticipated aggregate offering price of at least $10 million. These stockholders may make an unlimited number of requests for registration on Form S-3; however, we will not be required to effect a registration on Form S-3 if we have effected two such registrations within the 12-month period preceding the date of the request. Additionally, if we determine that it would be seriously detrimental to our stockholders to effect such a registration, we have the right to defer such registration, not more than once in any 12-month period, for a period of up to 90 days.

Anti-Takeover Provisions

The provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws may have the effect of delaying, deferring or discouraging another person from acquiring control of our company. These provisions, which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

Delaware Law

We are governed by the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years of the date on which it is sought to be determined whether such person is an “interested stockholder,” did own, 15% or more of the corporation’s outstanding voting stock. These provisions may have the effect of delaying, deferring or preventing a change in our control.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions

Our amended and restated certificate of incorporation and our amended and restated bylaws include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of our management team, including the following:

• Board of Directors Vacancies. Our amended and restated certificate of incorporation and amended and restated bylaws will authorize only our board of directors to fill vacant directorships, including newly created seats. In addition, the number of directors constituting our board of directors will be permitted to be set only by a resolution adopted by a majority vote of our entire board of directors. These provisions would prevent a stockholder from increasing the size of our board of directors and then

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gaining control of our board of directors by filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our board of directors but promotes continuity of management.

• Classified Board. Our amended and restated certificate of incorporation and amended and restated bylaws will provide that our board is classified into three classes of directors. A third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors. See the section titled “Management—Board of Directors” for additional information.

• Stockholder Action; Special Meeting of Stockholders. Our amended and restated certificate of incorporation will provide that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. As a result, a holder controlling a majority of our capital stock would not be able to amend our amended and restated bylaws or remove directors without holding a meeting of our stockholders called in accordance with our amended and restated bylaws. Our amended and restated bylaws will further provide that special meetings of our stockholders may be called only by a majority of our board of directors, the chairman of our board of directors, our chief executive officer or our president, thus prohibiting a stockholder from calling a special meeting. These provisions might delay the ability of our stockholders to force consideration of a proposal or for stockholders controlling a majority of our capital stock to take any action, including the removal of directors.

• Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our amended and restated bylaws will provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our amended and restated bylaws will also specify certain requirements regarding the form and content of a stockholder’s notice. These provisions might preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders if the proper procedures are not followed. We expect that these provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

• No Cumulative Voting. The Delaware General Corporation Law provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation and amended and restated bylaws will not provide for cumulative voting.

• Amendment of Charter Provisions. Any amendment of the above provisions in our amended and restated certificate of incorporation would require approval by holders of at least two-thirds of our then outstanding common stock.

• Issuance of Undesignated Preferred Stock. Our board of directors will have the authority, without further action by the stockholders, to issue up to              shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means.

• Choice of Forum. Our amended and restated certificate of incorporation will provide that a state or federal court located within the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty by any director, officer or other employee, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, or any action asserting a claim against us that is governed by the internal affairs doctrine.

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Transfer Agent and Registrar

Upon the completion of this offering, the transfer agent and registrar for our common stock will be                                       . The transfer agent’s address is             , and its telephone number is             .

Exchange Listing

We intend to apply to list our common stock on the              under the symbol “CUDA”.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and we cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Future sales of our common stock in the public market, or the availability of such shares for sale in the public market, could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing market price at such time and our ability to raise equity capital in the future.

Following the completion of this offering, and after giving effect to the automatic conversion of all outstanding shares of redeemable convertible preferred stock which will occur upon the completion of this offering, based on the number of shares of our capital stock outstanding as of August 31, 2013, we will have a total of              shares of our common stock outstanding. Of these outstanding shares, all of the shares of common stock sold in this offering will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act, would only be able to be sold in compliance with the Rule 144 limitations described below.

The remaining outstanding shares of our common stock will be deemed “restricted securities” as defined in Rule 144. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which rules are summarized below. In addition, holders of substantially all of our equity securities are subject to market stand-offs or have entered into or will enter into lock-up agreements with the underwriters under which they have agreed, subject to specific exceptions, not to sell any of our stock for at least 180 days following the date of this prospectus, as described below. As a result of these agreements and the provisions of our IRA described above under “Description of Capital Stock—Registration Rights,” subject to the provisions of Rule 144 or Rule 701, based on an assumed offering date of             , shares will be available for sale in the public market as follows:

• beginning on the date of this prospectus, the              shares of common stock sold in this offering will be immediately available for sale in the public market;

• beginning 181 days after the date of this prospectus,              additional shares of common stock will become eligible for sale in the public market, of which              shares will be held by affiliates and subject to the volume and other restrictions of Rule 144, as described below; and

• the remainder of the shares of common stock will be eligible for sale in the public market from time to time thereafter, subject in some cases to the volume and other restrictions of Rule 144, as described below.

Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell such shares without complying with the manner of sale, volume limitation, or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144.

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In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described above, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

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

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

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. However, all holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling such shares pursuant to Rule 701.

Lock-Up Agreements and Market Stand-Off Provisions

We, the selling stockholders, all of our directors and officers, and the holders of substantially all of our common stock, or securities exercisable for or convertible into our common stock outstanding immediately prior to this offering have previously entered into market stand-off agreements with us or have agreed that, without the prior written consent of Morgan Stanley & Co. LLC on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus:

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock;

• enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock, whether any such transaction described in these first two bullets is to be settled by delivery of common stock or such other securities, in cash or otherwise; or

• in our case, file any registration statement with the Securities and Exchange Commission relating to the offering of and, in the case of a security holder, make any demand for or exercise any right with respect to, the registration of, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock,

whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or otherwise. This agreement is subject to certain exceptions as set forth in the section entitled “Underwriters.”

Registration Rights

On the date beginning 180 days after the date of this prospectus, our stockholders with registration rights, or their transferees, will be entitled to various rights with respect to the registration of these shares under the

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Securities Act. Registration of these shares under the Securities Act would result in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. See the section titled “Description of Capital Stock—Registration Rights” for additional information.

Registration Statements on Form S-8

Upon the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock issued or reserved for issuance under our 2012 Plan, 2004 Plan, SignNow Plan and Purewire Plan. Shares covered by this registration statement will be eligible for sale in the public market, upon the expiration or release from the terms of the lock-up agreements and subject to vesting of such shares.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the ownership and disposition of our common stock, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the Code, Treasury regulations promulgated thereunder, administrative rulings, and judicial decisions, all as of the date hereof. These authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below.

This summary also does not address the tax considerations arising under the laws of any non-U.S., state or local jurisdiction, or under U.S. federal gift and estate tax laws, except to the limited extent set forth below. In addition, this discussion does not address tax considerations applicable to an investor’s particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

• banks, insurance companies, or other financial institutions;

• persons subject to the alternative minimum tax or the Medicare contribution tax on net investment income;

• tax-exempt organizations;

• controlled foreign corporations, passive foreign investment companies, and corporations that accumulate earnings to avoid U.S. federal income tax;

• dealers in securities or currencies;

• traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

• persons that own, or are deemed to own, more than five percent of our capital stock (except to the extent specifically set forth below);

• certain former citizens or long-term residents of the United States;

• persons who hold our common stock as a position in a hedging transaction, “straddle,” “conversion transaction,” or other risk reduction transaction;

• persons who do not hold our common stock as a capital asset within the meaning of Section 1221 of the Code; or

• persons deemed to sell our common stock under the constructive sale provisions of the Code.

In addition, if a partnership or entity classified as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner generally will depend on the status of the partner and upon the activities of the partnership. Accordingly, partnerships that hold our common stock, and partners in such partnerships, should consult their tax advisors.

You are urged to consult your tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the purchase, ownership, and disposition of our common stock arising under the U.S. federal estate or gift tax rules or under the laws of any state, local, non-U.S., or other taxing jurisdiction or under any applicable tax treaty.

Non-U.S. Holder Defined

For purposes of this discussion, you are a non-U.S. holder if you are any holder other than:

• an individual citizen or resident of the United States (for tax purposes);

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

• an estate whose income is subject to U.S. federal income tax regardless of its source; or

• a trust (x) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (y) which has made an election to be treated as a U.S. person.

Distributions

We do not anticipate making any distributions on our common stock following the completion of this offering. However, if we do make distributions on our common stock, those payments will constitute dividends for U.S. tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they will constitute a return of capital and will first reduce your basis in our common stock, but not below zero, and then will be treated as gain from the sale of stock.

Any dividend paid to you generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty. In order to receive a reduced treaty rate, you must provide us with an IRS Form W-8BEN or other appropriate version of IRS Form W-8 certifying qualification for the reduced rate. A non-U.S. holder of shares of our common stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS. If the non-U.S. holder holds the stock through a financial institution or other agent acting on the non-U.S. holder’s behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then will be required to provide certification to us or our paying agent, either directly or through other intermediaries.

Dividends received by you that are effectively connected with your conduct of a U.S. trade or business (and, if an income tax treaty applies, such dividends that are attributable to a permanent establishment maintained by you in the U.S.), are includible in your gross income in the taxable year received, and are exempt from such withholding tax. In order to obtain this exemption, you must provide us with an IRS Form W-8ECI or other applicable IRS Form W-8 properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits, subject to an applicable income tax treaty providing otherwise. In addition, if you are a corporate non-U.S. holder, dividends you receive that are effectively connected with your conduct of a U.S. trade or business may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty.

Gain on Disposition of Common Stock

You generally will not be required to pay U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

• the gain is effectively connected with your conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment maintained by you in the United States);

• you are an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or

• our common stock constitutes a U.S. real property interest by reason of our status as a “United States real property holding corporation,” or USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding your disposition of, or your holding period for, our common stock.

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We believe that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock is regularly traded on an established securities market, such common stock will be treated as U.S. real property interests only if you actually or constructively hold more than five percent of such regularly traded common stock at any time during the shorter of the five-year period preceding your disposition of, or your holding period for, our common stock.

If you are a non-U.S. holder described in the first bullet above, you will be required to pay tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates, and a corporate non-U.S. holder described in the first bullet above also may be subject to the branch profits tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty. If you are an individual non-U.S. holder described in the second bullet above, you will be required to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by U.S. source capital losses for the year. You should consult any applicable income tax or other treaties that may provide for different rules.

Federal Estate Tax

Our common stock beneficially owned by an individual who is not a citizen or resident of the United States (as defined for U.S. federal estate tax purposes) at the time of their death will generally be includable in the decedent’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

Backup Withholding and Information Reporting

Generally, we must report annually to the IRS the amount of dividends paid to you, your name and address, and the amount of tax withheld, if any. A similar report will be sent to you. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to tax authorities in your country of residence.

Payments of dividends or of proceeds on the disposition of stock made to you may be subject to information reporting and backup withholding at a current rate of 28% unless you establish an exemption, for example, by properly certifying your non-U.S. status on a Form W-8BEN or another appropriate version of IRS Form W-8. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a U.S. person.

Backup withholding is not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund, or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.

Foreign Accounts

A U.S. federal withholding tax of 30% may apply to dividends and the gross proceeds of a sale or other disposition of our common stock paid to a “foreign financial institution” (as specially defined under applicable rules), unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding the U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). A U.S. federal withholding tax of 30% will also generally apply to dividends and the gross proceeds of a sale or other disposition of our common stock paid to a non-financial foreign entity unless such entity provides the withholding agent with a certification identifying the

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direct and indirect U.S. owners of the entity. These withholding obligations with respect to payments of dividends on our common stock will not begin until July 1, 2014 and with respect to payments of the gross proceeds of a sale or other disposition of our common stock will not begin until January 1, 2017. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this paragraph. Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of these rules on their investment in our common stock.

The preceding discussion of U.S. federal tax considerations is for general information only. It is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state and local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed change in applicable laws.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Merrill Lynch, Pierce Fenner & Smith Incorporated are acting as representatives, have severally agreed to purchase, and we and the selling stockholders have agreed to sell to them, severally, the number of shares indicated below:

Name	Number of Shares
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith                  Incorporated
William Blair & Company, L.L.C.
Lazard Capital Markets LLC.
Pacific Crest Securities LLC
Total

The underwriters and the representatives are collectively referred to as the “underwriters” and the “representatives,” respectively. The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ over-allotment option described below. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased.

The underwriters initially propose to offer part of the shares of common stock directly to the public at the initial public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $         a share under the initial public offering price. Any underwriter may allow a concession not in excess of $         a share to other underwriters or to certain dealers. After the initial offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the representative. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

We and the selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to             additional shares of common stock at the initial public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed next to the underwriter’s name in the preceding table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table.

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The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us and the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional             shares of our common stock.

	Total
	Per Share	No Exercise	Full Exercise
Public offering price	$	$	$
Underwriting discounts and commissions paid by:
Us
The selling stockholders
Proceeds, before expenses, to us
Proceeds, before expenses, to selling stockholders

The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately $         million, which includes legal, accounting and printing costs and various other fees associated with the registration and listing of our common stock.

The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total number of shares of common stock offered by them.

We intend to apply to have our common stock quoted on             under the trading symbol “CUDA”.

We, the selling stockholders, all of our directors and officers, and the holders of substantially all of our common stock, or securities exercisable for or convertible into our common stock outstanding immediately prior to this offering have agreed that, without the prior written consent of Morgan Stanley & Co. LLC on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus.

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or other securities convertible into or exercisable or exchangeable for common stock;

• enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction described in these first two bullets is to be settled by delivery of common stock or such other securities, in cash or otherwise; or

• in our case, file any registration statement with the SEC relating to the offering of and, in the case of a security holder, make any demand for or exercise any right with respect to, the registration of, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock.

The foregoing may be waived by Morgan Stanley & Co. LLC in its sole discretion, in whole or in part, at any time with or without notice. The restrictions described in the immediately preceding paragraph shall not apply to:

• sales and transfers of shares of common stock pursuant to the underwriting agreement;

• transfers by a security holder of shares of common stock or any security convertible into or exercisable or exchangeable for common stock (i) to immediate family member of a security holder or to a trust, or other entity formed for estate planning purposes, formed for the direct or indirect benefit of an immediate family member, (ii) by bona fide gift, will or intestacy, (iii) if a security holder is a corporation, partnership or other business entity (A) to another corporation, partnership or other entity that controls, is controlled by or is under common control with such security holder or (B) as part of a

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disposition, transfer or distribution by such security holder to its limited partners or equity holders or (iv) if a security holder is a trust, to a trustor or beneficiary of the trust, provided that in the case of any such transfer or distribution, (1) each transferee, trustee, donee or distributee shall sign and deliver a lock up agreement for the balance of the 180-day restricted period, (2) such transfer shall not involve a disposition of value, (3) in the case of any transfer or distribution pursuant clauses (i), (ii) or (iv) above, no filing under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of common stock shall be voluntarily made during the 180-day restricted period and if a security holder is required to file a report under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of common stock during the 180-day restricted period, the security holder shall include a statement in such report to the effect that such transfer is not a transfer for value and (4) in the case of any transfer or distribution pursuant to clause (iii) above, no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of common stock, shall be required or shall be voluntarily made during the 180-day restricted period;

• transfers by a security holder of shares of common stock or any securities convertible into common stock to us upon a vesting event of our securities or upon the exercise of options or warrants to purchase our securities, in each case on a “cashless” or “net exercise” basis or to cover tax withholding obligations of the security holder in connection with such vesting or exercise, provided if the security holder is required to file a report under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of common stock during the 180-day restricted period, the security holder shall include a statement in such report to the effect that the purpose of such transfer was to cover tax withholding obligations of the security holder in connection with such vesting or exercise;

• the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of common stock, provided that such plan does not provide for the transfer of common stock during the 180-day restricted period and to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of a security holder or us regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of common stock may be made under such plan during the 180-day restricted period;

• transfers by a security holder of shares of common stock or any security convertible into or exercisable or exchangeable for common stock to us, pursuant to agreements under which we have the option to repurchase such shares upon termination of service of a security holder;

• the conversion of our outstanding preferred stock into shares of our common stock, provided that such shares of common stock remain subject to the restrictions described above;

• transfers by a security holder of shares of common stock or any security convertible into or exercisable or exchangeable for common stock that occurs by operation of law, such as pursuant to a domestic order or in connection with a divorce settlement; provided that (i) such shares of common stock or securities remain subject to the restrictions described above, and (ii) if the security holder is required to file a report under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of common stock during the 180-day restricted period, the security holder shall include a statement in such report to the effect that such transfer occurred by operation of law, such as pursuant to a domestic order or in connection with a divorce settlement;

• the issuance by us of shares of common stock upon the exercise of an option or warrant or the conversion or vesting of a security outstanding on the date hereof;

• the issuance and grant by us of options, restricted stock, restricted stock units or other stock-based compensation pursuant to equity compensation plans in existence on the date of this prospectus and, in each case, described herein; provided that any recipients thereof enter into lock-up agreements with respect to the remaining 180-day restricted period or, in the case of the issuance of options, such options do not become exercisable during the 180-day restricted period;

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• the sale or issuance of or entry into an agreement to sell or issue shares of common stock or securities convertible into or exercisable for common stock in connection with any (i) mergers, (ii) acquisition of securities, businesses, property, technologies or other assets, (iii) joint ventures, (iv) strategic alliances, commercial relationships or other collaborations, (v) equipment leasing arrangements (vi) debt financing or (vii) the assumption of employee benefit plans in connection with mergers or acquisitions; provided, that the aggregate number of shares of common stock or securities convertible into or exercisable for common stock (on an as-converted or as-exercised basis, as the case may be) that we may sell or issue or agree to sell or issue shall not exceed         % of the total number of shares of our common stock issued and outstanding immediately following the completion of the transactions (determined on a fully-diluted basis and as adjusted for stock splits, stock dividends and other similar events after the date of this prospectus); and provided further, that each recipient of shares of common stock or securities convertible into or exercisable for common stock shall execute a lock-up agreement with respect to the remaining 180-day restricted period; and

• the filing of one or more registration statements with the Securities and Exchange Commission on Form S-8 with respect to shares of common stock issued or issuable under any equity compensation plan in effect on the date of this prospectus.

In order to facilitate our initial public offering of common stock, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the over-allotment option. The underwriters can close out a covered short sale by exercising the over-allotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the over-allotment option. The underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in our initial public offering. In addition, to stabilize the price of common stock, the underwriters may bid for, and purchase, shares of common stock in the open market. The underwriting syndicate also may reclaim selling concessions allowed to an underwriter or a dealer for distributing common stock in the offering, if the syndicate repurchases previously distributed common stock to cover syndicate short positions or to stabilize the price of common stock. These activities may raise or maintain the market price of common stock above independent market levels or prevent or retard a decline in the market price of the common stock. The underwriters are not required to engage in these activities and may end any of these activities at any time. The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

We, the selling stockholders and the several underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in our initial public offering. The representatives may agree to allocate a number of shares of common stock to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters that may make Internet distributions on the same basis as other allocations.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory,

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investment management, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses. During 2012, Morgan Stanley & Co. LLC provided financial advisory services to us in connection with the Recapitalization for which it earned a customary fee.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments (directly, as collateral securing other obligations or otherwise). The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

In the ordinary course of business, we have sold, and may in the future sell, products or services to one or more of the underwriters or their respective affiliates in arms-length transactions on market competitive terms.

Lazard Frères & Co. LLC referred this transaction to Lazard Capital Markets LLC and will receive a referral fee from Lazard Capital Markets LLC in connection therewith.

Pricing of the Offering

Prior to our initial public offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us, the selling stockholders and the representatives of the underwriters. Among the factors considered in determining the initial public offering price were our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours. The estimated initial public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors. Neither we nor the underwriters can assure investors that an active trading market for the shares will develop, or that after the offering the shares will trade in the public market at or above the initial public offering price.

Selling Restrictions

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive, each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Member State it has not made and will not make an offer of securities to the public in that Member State, except that it may, with effect from and including such date, make an offer of securities to the public in that Member State:

• at any time to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

• at any time to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

• at any time in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

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For the purposes of the above, the expression an “offer of securities to the public” in relation to any securities in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in that Member State.

United Kingdom

This prospectus and any other material in relation to the shares described herein is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospective Directive (“qualified investors”) that also (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order, (ii) who fall within Article 49(2)(a) to (d) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). The shares are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents.

Hong Kong

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571 Laws of Hong Kong) and any rules made thereunder.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (i) to an institutional investor under Section 274 of the

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SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (ii) where no consideration is given for the transfer; or (iii) by operation of law.

Japan

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Notice to Prospective Investors in Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Notice to Prospective Investors in Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (SIX) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

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Neither this document nor any other offering or marketing material relating to the offering, the company, or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, or the FINMA, and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or the CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of the shares.

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or the DFSA. This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

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LEGAL MATTERS

Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California, which has acted as our counsel in connection with this offering, will pass upon the validity of the shares of common stock being offered by this prospectus. The underwriters have been represented by Fenwick & West LLP, Mountain View, California.

EXPERTS

The consolidated financial statements of Barracuda Networks, Inc. at February 29, 2012 and February 28, 2013, and for each of the three years in the period ended February 28, 2013, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. You may obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements, and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act of 1934 and, in accordance with this law, will file periodic reports, proxy statements, and other information with the SEC. These periodic reports, proxy statements, and other information will be available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above. We also maintain a website at www.barracuda.com. Upon completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

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BARRACUDA NETWORKS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Comprehensive Income (Loss)	F-5
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit	F-6
Consolidated Statements of Cash Flows	F-9
Notes to Consolidated Financial Statements	F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Barracuda Networks, Inc.

We have audited the accompanying consolidated balance sheets of Barracuda Networks, Inc. as of February 29, 2012 and February 28, 2013, and the related consolidated statements of operations, comprehensive income (loss), redeemable convertible preferred stock and stockholders’ deficit and cash flows for each of the three years in the period ended February 28, 2013. Our audits also included the financial statement schedule listed at Item 16(b). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Barracuda Networks, Inc. at February 29, 2012 and February 28, 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended February 28, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

San Jose, California

July 29, 2013

F-2

BARRACUDA NETWORKS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	February 28/29,						August 31,			Pro forma Stockholders’ Equity as of August 31, 2013
	2012			2013			2013
							(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	126,507		$	30,095		$	28,996
Marketable securities		2,276			1,550			1,196
Accounts receivable, net of allowance for doubtful accounts of $1,339, $1,252 and $1,864 (unaudited) as of February 29, 2012, February 28, 2013 and August 31, 2013, respectively		22,536			24,066			25,200
Inventories		5,416			5,138			6,654
Prepaid income taxes		2,157			1,120			1,150
Deferred costs		14,034			20,119			23,185
Deferred income taxes		30,794			26,158			28,410
Other current assets		2,904			3,216			4,097
Total current assets		206,624			111,462			118,888
Property and equipment		15,184			16,972			19,802
Deferred costs, noncurrent		15,220			19,351			22,873
Deferred income taxes, noncurrent		3,184			21,065			23,726
Other noncurrent assets		1,660			1,637			4,456
Intangible assets, net		13,597			7,983			10,647
Goodwill		28,430			33,778			35,776
Total assets	$	283,899		$	212,248		$	236,168
Liabilities, redeemable convertible preferred stock, and stockholders’ deficit
Current liabilities:
Accounts payable	$	9,566		$	12,756		$	12,528
Accrued payroll and related benefits		9,665			9,967			5,805
Other accrued liabilities		4,076			9,925			10,774
Deferred revenue		121,928			146,257			155,899
Deferred income taxes		—			132			132
Note payable		209			222			229
Total current liabilities		145,444			179,259			185,367
Long-term liabilities:
Deferred revenue, noncurrent		95,281			114,986			130,893
Deferred income taxes, non current		979			660			662
Note payable, noncurrent		5,086			4,872			4,754
Other long-term liabilities		4,682			4,537			4,609
Commitments and contingencies
Redeemable convertible preferred stock:
$0.001 par value; 31,500,000 shares authorized as of February 29, 2012; 52,878,666 shares authorized as of February 28, 2013 and August 31, 2013 (unaudited); 31,150,753 shares issued and outstanding as of February 29, 2012; 52,878,666 shares issued and outstanding as of February 28, 2013 and August 31, 2013 (unaudited); aggregate liquidation preference of $219,430 as of February 28, 2013 and August 31, 2013 (unaudited); no shares issued and outstanding pro forma (unaudited)		40,010			167,554			167,554		$	—
Stockholders’ deficit:
Common stock, $0.001 par value; 160,000,000 shares authorized; 101,427,783, 84,272,820, 84,758,925 and 137,637,591 shares issued and outstanding as of February 29, 2012, February 28, 2013, August 31, 2013 (unaudited) and pro forma (unaudited), respectively (including 54,760 shares subject to repurchase at February 29, 2012 and no shares subject to repurchase at February 28, 2013 and August 31, 2013)		101			84			85			138
Additional paid-in capital		13,378			23,024			30,707			198,208
Accumulated other comprehensive loss		(521	)		(1,112	)		(1,351	)		(1,351	)
Accumulated deficit		(19,219	)		(279,131	)		(284,265	)		(284,265	)
Total stockholders’ deficit controlling interest		(6,261	)		(257,135	)		(254,824	)		(87,270	)
Total stockholders’ deficit noncontrolling interest		(1,322	)		(2,485	)		(2,847	)		(2,847	)
Total stockholders’ deficit		(7,583	)		(259,620	)		(257,671	)	$	(90,117	)
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit	$	283,899		$	212,248		$	236,168

See accompanying notes.

F-3

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Year Ended February 28/29,								Six Months Ended August 31,
	2011		2012			2013			2012			2013
									(unaudited)
Revenue:
Appliance	$	52,477	$	43,258		$	59,528		$	27,775		$	35,409
Subscription		89,655		117,662			139,403			67,258			78,658
Total revenue:		142,132		160,920			198,931			95,033			114,067
Cost of revenue		31,972		34,966			45,088			21,286			26,481
Gross profit		110,160		125,954			153,843			73,747			87,586
Operating expenses:
Research and development		23,979		27,824			35,167			16,090			22,480
Sales and marketing		69,963		84,885			102,329			49,302			57,228
General and administrative		13,021		14,428			28,777			12,882			14,505
Total operating expenses		106,963		127,137			166,273			78,274			94,213
Income (loss) from operations		3,197		(1,183	)		(12,430	)		(4,527	)		(6,627	)
Other income (expense), net		282		476			(839	)		(888	)		(450	)
Income (loss) before income taxes and noncontrolling interest		3,479		(707	)		(13,269	)		(5,415	)		(7,077	)
Provision (benefit) for income taxes		1,136		(453	)		(5,084	)		(1,293	)		(2,136	)
Consolidated net income (loss)		2,343		(254	)		(8,185	)		(4,122	)		(4,941	)
Net loss attributable to noncontrolling interest		620		859			794			462			362
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963	$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Net income (loss) attributable to common stockholders (Note 1)	$	2,281	$	466		$	(9,203	)	$	(3,660	)	$	(4,579	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Diluted	$	0.02	$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		100,890		101,488			96,094			104,460			84,424
Diluted		134,943		136,066			96,094			104,460			84,424
Pro forma net loss per share attributable to common stockholders:
Basic and diluted						$	(0.05	)				$	(0.03	)
Pro forma weighted-average shares outstanding used to compute net loss per share attributable to common stockholders:
Basic and diluted							135,461						137,303

See accompanying notes.

F-4

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Year Ended February 28/29,								Six Months Ended August 31,
	2011		2012			2013			2012			2013
									(unaudited)
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963	$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Other comprehensive income, net of tax:
Change in net foreign currency translation adjustment		411		(85	)		(511	)		(606	)		(34	)
Available-for-sale investments:
Change in net unrealized gains (losses) (net of tax effect of $80, $519, $40, $533, $126)		130		(846	)		(66	)		(869	)		(205	)
Less: reclassification adjustment for net (gains) losses included in net income (net of tax effect of $0, $328, $8, $0, $0)		—		528			(14	)		—			—
Net change		130		(318	)		(80	)		(869	)		(205	)
Other comprehensive income (loss)		541		(403	)		(591	)		(1,475	)		(239	)
Comprehensive income (loss) attributable to Barracuda Networks, Inc.	$	3,504	$	202		$	(7,982	)	$	(5,135	)	$	(4,818	)

See accompanying notes.

F-5

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(in thousands, except share data)

					Stockholders’ Deficit
	Series A Redeemable Convertible Preferred Stock				Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Deficit Controlling Interest			Total Stockholders’ Deficit Noncontrolling Interest			Total Stockholders’ Deficit
	Shares		Amount		Shares			Amount
Balance at February 28, 2010		30,150,753	$	40,010		100,679,549		$	101	$	10,421		$	(659	)	$	(22,787	)	$	(12,924	)	$	2,242		$	(10,682	)
Issuance of common stock		—		—		581,587			—		919			—			—			919			—			919
Repurchase of common stock		—		—		(15,000	)		—		(30	)		—			—			(30	)		—			(30	)
Stock-based compensation expense		—		—		—			—		1,976			—			—			1,976			—			1,976
Excess tax benefits from employee stock-based option plan		—		—		—			—		14			—			—			14			—			14
Noncontrolling interest		—		—		—			—		(24	)		—			—			(24	)		(135	)		(159	)
Change in unrealized gain on available-for-sale securities, net of tax effect		—		—		—			—		—			130			—			130			—			130
Foreign currency translation adjustment		—		—		—			—		—			411			—			411			94			505
Net income (loss)		—		—		—			—		—			—			2,963			2,963			(620	)		2,343
Balance at February 28, 2011		30,150,753		40,010		101,246,136			101		13,276			(118	)		(19,824	)		(6,565	)		1,581			(4,984	)
Issuance of common stock		—		—		438,550			—		1,462			—			—			1,462			—			1,462
Employee loans for purchase of stock		—		—		—			—		(255	)		—			—			(255	)		—			(255	)
Repurchase of common stock		—		—		(256,903	)		—		(1,186	)		—			—			(1,186	)		—			(1,186	)
Stock-based compensation expense		—		—		—			—		1,871			—			—			1,871			—			1,871
Excess tax benefits from employee stock-based option plan		—		—		—			—		82			—			—			82			—			82
Noncontrolling interest		—		—		—			—		(1,872	)		—			—			(1,872	)		(2,114	)		(3,986	)
Change in unrealized gain on available-for-sale securities, net of tax effect		—		—		—			—		—			(318	)		—			(318	)		—			(318	)
Foreign currency translation adjustment		—		—		—			—		—			(85	)		—			(85	)		70			(15	)
Net income (loss)		—		—		—			—		—			—			605			605			(859	)		(254	)
Balance at February 29, 2012		30,150,753	$	40,010		101,427,783		$	101	$	13,378		$	(521	)	$	(19,219	)	$	(6,261	)	$	(1,322	)	$	(7,583	)

See accompanying notes.

F-6

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (CONTINUED)

(in thousands, except share data)

									Stockholders’ Deficit
	Series A Redeemable Convertible Preferred Stock				Series B Redeemable Convertible Preferred Stock				Common Stock						Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Deficit Controlling Interest			Total Stockholders’ Deficit Noncontrolling Interest			Total Stockholders’ Deficit
	Shares		Amount		Shares		Amount		Shares			Amount
Balance at February 29, 2012		30,150,753	$	40,010		—	$	—		101,427,783		$	101		$	13,378		$	(521	)	$	(19,219	)	$	(6,261	)	$	(1,322	)	$	(7,583	)
Issuance of common stock		—		—		—		—		5,589,950			6			8,745			—			—			8,751			—			8,751
Repurchase of common stock		—		—		—		—		(22,744,913	)		(23	)		(5,069	)		—			(122,521	)		(127,613	)		—			(127,613	)
Issuance of Series B Preferred Stock		—		—		22,727,913		125,732		—			—			—			—			—			—			—			—
Employee loans for purchase of stock																(2,861	)								(2,861	)					(2,861	)
Accretion of preferred stock to redemption value				—				1,812								(1,812	)								(1,812	)					(1,812	)
Stock-based compensation expense		—		—		—		—		—			—			8,787			—			—			8,787			—			8,787
Excess tax benefits from employee stock-based option plan		—		—		—		—		—			—			1,687			—			—			1,687			—			1,687
Cash dividend declared		—		—		—		—		—			—			—			—			(130,000	)		(130,000	)		—			(130,000	)
Noncontrolling interest		—		—		—		—		—			—			169			—			—			169			(369	)		(200	)
Change in unrealized gain on available-for-sale securities, net of tax effect		—		—						—			—			—			(80	)		—			(80	)		—			(80	)
Foreign currency translation adjustment		—		—		—		—		—			—			—			(511	)		—			(511	)		—			(511	)
Net loss		—		—		—		—		—			—			—			—			(7,391	)		(7,391	)		(794	)		(8,185	)
Balance at February 28, 2013		30,150,753	$	40,010		22,727,913	$	127,544		84,272,820		$	84		$	23,024		$	(1,112	)	$	(279,131	)	$	(257,135	)	$	(2,485	)	$	(259,620	)

F-7

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (CONTINUED)

(in thousands, except share data)

									Stockholders’ Deficit
	Series A Redeemable Convertible Preferred Stock				Series B Redeemable Convertible Preferred Stock				Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Deficit Controlling Interest			Total Stockholders’ Deficit Noncontrolling Interest			Total Stockholders’ Deficit
	Shares		Amount		Shares		Amount		Shares			Amount
Balance at February 28, 2013		30,150,753		40,010		22,727,913		127,544		84,272,820		$	84	$	23,024		$	(1,112	)	$	(279,131	)	$	(257,135	)	$	(2,485	)	$	(259,620	)
Issuance of common stock (unaudited)		—		—		—		—		618,865			1		440			—			—			441			—			441
Repurchase of common stock (unaudited)		—		—		—		—		(132,760	)		—		(168	)		—			(555	)		(723	)		—			(723	)
Employee loans for purchase of stock (unaudited)		—		—		—		—		—			—		(1,257	)		—			—			(1,257	)		—			(1,257	)
Stock-based compensation expense (unaudited)		—		—		—		—		—			—		5,128			—			—			5,128			—			5,128
Excess tax benefits from employee stock-based option plan (unaudited)		—		—		—		—		—			—		226			—			—			226			—			226
Repayment of employee loans (unaudited)		—		—		—		—		—			—		3,185			—			—			3,185			—			3,185
Options assumed in acquisition (unaudited)		—		—		—		—		—			—		129			—			—			129			—			129
Noncontrolling interest (unaudited)		—		—		—		—		—			—		—			—			—			—			—			—
Change in unrealized gain on available-for-sale securities, net of tax effect (unaudited)		—		—		—		—		—			—		—			(205	)		—			(205	)		—			(205	)
Foreign currency translation adjustment (unaudited)		—		—		—		—		—			—		—			(34	)		—			(34	)		—			(34	)
Net loss (unaudited)		—		—		—		—		—			—		—			—			(4,579	)		(4,579	)		(362	)		(4,941	)
Balance at August 31, 2013 (unaudited)		30,150,753	$	40,010		22,727,913	$	127,544		84,758,925		$	85	$	30,707		$	(1,351	)	$	(284,265	)	$	(254,824	)	$	(2,847	)	$	(257,671	)

See accompanying notes.

F-8

BARRACUDA NETWORKS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
										(unaudited)
Operating activities
Consolidated net income (loss)	$	2,343		$	(254	)	$	(8,185	)	$	(4,122	)	$	(4,941	)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Depreciation and amortization		7,653			8,124			8,333			3,991			4,734
Stock-based compensation expense		1,976			1,871			8,787			4,634			5,128
Excess tax benefits from employee stock-based option plan		(14	)		(82	)		(1,687	)		(1,687	)		(226	)
Loss on disposal of property and equipment		—			240			60			111			36
(Gain) loss on sale of marketable securities		—			(852	)		25			—			—
Deferred income taxes		(8,338	)		(11,367	)		(13,374	)		269			(5,467	)
Changes in operating assets and liabilities:
Accounts receivable		(1,699	)		(4,025	)		(1,582	)		74			(1,016	)
Inventory		(588	)		(1,219	)		278			127			(1,515	)
Income taxes, net		1,701			2,210			4,403			(4,852	)		(514	)
Deferred costs		(5,063	)		(10,931	)		(10,214	)		(6,093	)		(6,588	)
Other current assets		609			150			(60	)		(974	)		(902	)
Other noncurrent assets		(576	)		(172	)		(61	)		(930	)		211
Accounts payable		3,081			2,085			3,206			(2,786	)		(264	)
Accrued payroll and related benefits		(165	)		443			2,791			1,825			(1,883	)
Other accrued liabilities		(1,772	)		1,274			2,349			1,297			(303	)
Other long-term liabilities		(4	)		(200	)		114			25			71
Deferred revenue		37,765			56,631			44,192			24,809			25,522
Net cash provided by operating activities		36,909			43,926			39,375			15,718			12,083
Investing activities
Purchase of marketable securities		—			(1,666	)		—			—			—
Proceeds from sales of marketable securities		6,000			1,189			575			—			—
Purchase of investment in nonmarketable equity and debt securities		—			(750	)		—			—			(310	)
Purchase of property and equipment		(2,487	)		(8,510	)		(4,722	)		(1,543	)		(4,529	)
Purchase of intangible assets		(275	)		(366	)		—			—			(28	)
Business combinations, net of cash acquired		(287	)		(1,017	)		(4,357	)		(4,356	)		(8,475	)
Net cash provided by (used in) investing activities		2,951			(11,120	)		(8,504	)		(5,899	)		(13,342	)
Financing activities
Proceeds from issuance of common stock		349			161			2,203			2,489			441
Dividends paid		—			—			(128,385	)		—			(1,419	)
Proceeds from issuance of Series B stock, net of issuance costs		—			—			125,732			—			—
Issuance costs on line of credit		—			—			(313	)		—			—
Repurchase of common stock		(30	)		(1,186	)		(127,613	)		(69	)		(723	)
Excess tax benefits from employee stock-based option plan		14			82			1,687			1,687			226
Repayment of employee loans, net of loans extended		—			—			—			—			1,928
Payments under capital lease and long-term debt		(193	)		(81	)		(222	)		—			—
Repayment of note payable		(1,431	)		(38	)		—			(94	)		(111	)
Purchase of noncontrolling interest		(159	)		(3,986	)		(200	)		—			—
Payments of deferred financing costs		—			—			—			—			(147	)
Net cash (used in) provided by financing activities		(1,450	)		(5,048	)		(127,111	)		4,013			195
Effect of exchange rate changes on cash and cash equivalents		37			7			(172	)		(158	)		(35	)
Net increase (decrease) in cash and cash equivalents		38,447			27,765			(96,412	)		13,674			(1,099	)
Cash and cash equivalents at beginning of period		60,295			98,742			126,507			126,507			30,095
Cash and cash equivalents at end of period	$	98,742		$	126,507		$	30,095		$	140,181		$	28,996
Supplemental cash flow disclosures
Cash paid during the period for:
Interest paid	$	21		$	36		$	485		$	115		$	313
Income taxes, net of tax refunds	$	7,384		$	8,142		$	3,408		$	3,266		$	3,654
Noncash financing and investing activities:
Issuance of shares in business combination	$	287		$	—		$	3,528		$	—		$	—
Assumption of note payable in connection with the purchase of land and buildings	$	—		$	5,332		$	—		$	—		$	—
Accretion of issuance costs	$	—		$	—		$	1,812		$	—		$	—

See accompanying notes.

F-9

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies

Nature of Operations

Barracuda Networks, Inc., also referred to in this report as “we,” “our” or “us,” headquartered in Campbell, California, designs and delivers powerful yet easy-to-use security and storage solutions. We offer cloud-connected solutions that help our customers address security threats, improve network performance and protect and store their data. Our solutions are designed to simplify IT operations for our customers, allowing them to enhance their return on technology investment. We refer to the fiscal years ended February 28, 2011, February 29, 2012 and February 28, 2013 as fiscal 2011, fiscal 2012 and fiscal 2013, respectively.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Barracuda Networks, Inc. and our wholly and majority-owned subsidiaries. All significant intercompany accounts and transactions are eliminated.

Unaudited Interim Consolidated Financial Information

The accompanying interim consolidated balance sheet as of August 31, 2013, the consolidated statements of operations, comprehensive income (loss) and cash flows for the six month periods ended August 31, 2012 and 2013, the consolidated statement of redeemable convertible preferred stock and stockholders’ deficit for the six month period ended August 31, 2013 and the related footnote disclosures are unaudited. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our statement of financial position as of August 31, 2013 and our results of operations, comprehensive income (loss) and cash flows for the six month periods ended August 31, 2012 and 2013. The results for the six month period ended August 31, 2013 are not necessarily indicative of the results expected for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the fair values of stock-based awards, income taxes and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

Unaudited Pro Forma Consolidated Balance Sheet

In July 2013, our board of directors approved the filing of a registration statement with the Securities and Exchange Commission (the “SEC”) to sell shares of our common stock to the public. If the contemplated offering is completed, we expect that all 52,878,666 shares of redeemable convertible preferred stock would convert into 52,878,666 shares of common stock based on the shares of redeemable convertible preferred stock outstanding as of August 31, 2013. The unaudited pro forma stockholders’ equity as of August 31, 2013 gives effect to the automatic conversion of all outstanding shares of our redeemable convertible preferred stock into shares of common stock to additional paid-in capital in stockholders’ equity (deficit).

F-10

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit with banks and money market funds with an original maturity of three months or less.

Marketable Securities

Marketable securities, other than auction-rate securities, have been classified as available-for-sale securities in the accompanying consolidated financial statements. Available-for-sale securities are carried at fair value, and realized gains and losses and declines in value determined to be other than temporary are included in other income (expense), net in the accompanying consolidated statements of operations. Interest income on securities classified as available-for-sale securities is also included in other income (expense), net. The cost of securities sold is based on the specific-identification method.

Fair Value

The carrying value of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and note payable, approximates fair values.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and accounts receivable.

We primarily invest only in high-quality credit instruments and maintain our cash, cash equivalents and marketable securities with high-quality institutions. Deposits held with banks, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand and bear minimal risk.

Our accounts receivable are derived from customers located in North America and certain foreign countries and regions, including Europe, the Middle East, Latin America and Asia-Pacific. Sales to foreign customers accounted for 32%, 29% and 26% of total revenue for fiscal 2011, 2012 and 2013, respectively. We perform ongoing credit evaluations of our customers’ financial condition and typically require no collateral from our customers. No single customer or distribution partner accounted for over 10% of receivables at February 29, 2012 and February 28, 2013.

One distribution partner accounted for 13% and 17% of total revenue in fiscal 2013 and the six months ended August 31, 2013, respectively. No single customer or distribution partner accounted for greater than 10% of total revenue in fiscal 2011 or 2012.

We currently depend on a single source or a limited number of sources for certain components used in the manufacture of our appliances. The inability of any supplier to fulfill our supply requirements could negatively impact future operating results.

Inventories

Inventories are recorded at the lower of cost (using the first-in, first-out method) or market.

F-11

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Land is not depreciated. Depreciation is calculated using the straight-line method over the following estimated useful lives:

Asset Classification	Estimated Useful Life
Buildings	39 years
Computer equipment and software	3 years
Vehicles, machinery and equipment	3 years
Leasehold improvements	Lesser of the useful life of the asset, generally 5 years, or remaining lease term

Intangible Assets and Impairment of Long-Lived Assets

Intangible assets consist of customer relationships, trade names, acquired technology, developed software, in-process research and development and patents. Intangible assets are recorded at fair values at the date of the acquisition and, for those assets having finite useful lives, are amortized using the straight-line method over their estimated useful lives, which range from two to seven years. In-process research and development is recorded as an indefinite-lived asset until the underlying project is completed, at which time the intangible asset is amortized over the estimated useful life. We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. No impairment charges were recorded in the three-year period ended February 28, 2013 and the six months ended August 31, 2013.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. We test goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that this asset may be impaired. These tests are based on our single operating segment and reporting unit structure. No impairment charges were recorded in the three-year period ended February 28, 2013 and the six months ended August 31, 2013.

Deferred Offering Costs

Deferred offering costs, consisting of legal, accounting and filing fees relating to our initial public offering, are capitalized. The deferred offering costs will be offset against initial public offering proceeds upon the completion of the offering. In the event the offering is terminated, deferred offering costs will be expensed. As of August 31, 2013, we had capitalized $2.7 million of deferred offering costs, which is classified as a noncurrent asset in the consolidated balance sheets. No amounts were deferred as of February 28, 2013.

Revenue Recognition

We typically provide access to our solutions through appliances and related subscription agreements, whereby the customer is charged an upfront fee for the appliance and is required to purchase a related subscription agreement. The subscription agreements are subject to customer renewal at the end of each subscription period. Our appliances contain hardware and embedded proprietary software. The subscriptions,

F-12

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

referred to as Barracuda Energize Updates, provide hourly spam, anti-malware and security updates, and are required to be purchased to access our solutions. The subscriptions also entitle customers to phone support and software updates on a when and if available basis. We have determined that the elements of our customer arrangements, including the appliance and subscription, do not qualify for treatment as a separate unit of accounting. Accordingly, all fees received under our customer agreements are accounted for as a single unit of accounting, and, except for any up-front fees for the appliance, such fees are recognized ratably on a daily basis over the term of the subscription agreement. Subscription revenue also includes revenue from fixed term licenses of our virtual appliance software support and maintenance. Recognition of revenue commences when there is persuasive evidence of an arrangement, the fee is fixed and determinable, collectability is deemed reasonably assured and the services have commenced.

We receive an upfront fee from customers for delivery and transfer of title for their appliance. No further fees related to the appliance are required to be paid by the customer in subsequent periods. Because the appliance does not have value to the customer on a stand-alone basis and requires a subscription agreement to access our solutions, the delivery of the appliance does not represent the culmination of a separate earnings process associated with the payment of the up-front fee. Accordingly, the amount of the up-front fee is recorded as deferred revenue upon invoicing and the amount is recognized as revenue ratably on a daily basis over the estimated average customer relationship period of three years.

Customers have a 30-day right to return, after which time the arrangement is non-cancelable. We make estimates and maintain a reserve for expected customer cancellations. These estimates involve inherent uncertainties and management judgment.

Cost of Revenue

Cost of revenue consists of costs related to our appliance and subscription revenue. Such costs include hardware, manufacturing, shipping and logistics, customer support, warranty, personnel costs, data center costs and amortization of intangible assets related to acquired technology. We jointly manage the cost of providing appliances and subscription services and, accordingly, we present aggregate cost of revenues.

Deferred Revenue

Deferred revenue represents amounts billed to customers or payments received from customers for which revenue has not yet been recognized. Deferred revenue that is expected to be recognized as revenue within one year is recorded as current deferred revenue and the remaining portion is recorded as noncurrent deferred revenue.

Warranty and Instant Replacement Service

We provide a standard one-year warranty on our appliances. We also offer separately priced extended warranty contracts on our appliances, which entitle customers to expedited replacement hardware, with next business day shipping, on our appliances. Such separately-priced extended warranty contracts are available to customers coterminous with the standard one-year warranty. Revenue from extended warranty contracts is recognized ratably over the contractual term. Costs associated with our standard warranty and extended warranty contracts are expensed as incurred.

F-13

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Deferred Appliance Costs

We receive an up-front fee from our customers related to the sale of our appliance. We defer the costs of the appliance, including shipping costs, as they are directly related to the revenues that we derive from the sale of the appliance. Such deferred costs are amortized ratably over the estimated average customer relationship period of three years. Amortization of deferred appliance costs is included in costs of revenues in the accompanying consolidated statements of operations.

Deferred Commissions

We capitalize commission costs that are incremental and directly related to the acquisition of customer contracts. Sales commissions are deferred when earned and amortized over the same period that revenues are recognized. Commission payments are paid in full after the customer has paid. Amortization of deferred commission costs is included in sales and marketing costs in the accompanying consolidated statements of operations.

Income Taxes

We account for income taxes using the liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in our tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected from each subsidiary and considering prudent and feasible tax planning strategies.

We account for uncertainty in income taxes recognized in our financial statements by applying 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 examination by the taxing authorities, based on the technical merits of the position. 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 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Software Development Costs

Software development costs incurred prior to the establishment of technological feasibility are charged to research and development expense as incurred. Technological feasibility is established upon completion of a working model, which is typically demonstrated by initial beta shipment. Software development costs incurred subsequent to the time a product’s technological feasibility has been established through the time the product is available for general release to customers are capitalized if material. No software development costs have been capitalized in the periods presented.

F-14

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Advertising Costs

We expense advertising costs as incurred. Advertising expense totaled $44.8 million, $46.5 million and $52.9 million for fiscal 2011, 2012 and 2013, respectively.

Stock-Based Compensation

We use the Black-Scholes-Merton option-pricing model to estimate the fair value of our employee stock options on the dates of grant. The resulting cost is recognized on a straight-line basis over the vesting period of the stock options. The grant date fair value of restricted stock units is based on the fair value of our common stock.

Foreign Currency Translation

For those subsidiaries whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollar equivalents at the exchange rate in effect on the balance sheet date and revenues and expenses are translated into U.S. dollars using the average exchange rate over the period. Resulting currency translation adjustments are recorded in accumulated other comprehensive income (loss) in the consolidated balance sheets.

Accumulated Other Comprehensive Income (Loss)

The accumulated other comprehensive loss balance consists of unrealized gains and losses on available-for-sale securities and translation gains and losses related to our international subsidiaries with functional currencies other than the U.S. dollar, primarily the euro.

Net Income (Loss) Per Share

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Our Series A and Series B redeemable convertible preferred stock are participating securities. In the event a dividend is declared or paid on our common stock, holders of Series A and Series B redeemable convertible preferred stock are entitled to a proportionate share of such dividend in proportion to the holders of common stock on an as-if converted basis.

Under the two-class method, basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Net income (loss) attributable to common stockholders is determined by allocating undistributed earnings between common and redeemable convertible preferred stockholders. Diluted net income (loss) per share attributable to common stockholders is computed by using the weighted average number of shares of common stock outstanding, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units, common stock subject to repurchase or forfeiture and redeemable convertible preferred stock using the treasury stock method. For periods in which there is a net loss, the number of shares used in the computation of diluted net loss per share is the same as that used for the computation of basic net loss per share, as the inclusion of dilutive securities would be antidilutive. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible redeemable preferred stock as the convertible redeemable preferred stock do not have a contractual obligation to share in our losses.

F-15

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

The following table presents the calculation of historical basic and diluted net income (loss) per share attributable to common stockholders under the two-class method (in thousands, except per share amounts):

	Year Ended February 28/29,									Six Months Ended August 31,
	2011			2012			2013			2012			2013
Basic:
Net income (loss) attributable to common stockholders:
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963		$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Accretion to redemption value of redeemable convertible preferred stock		—			—			(1,812	)		—			—
Undistributed earnings allocated to redeemable convertible preferred stockholders		(682	)		(139	)		—			—			—
Net income (loss) attributable to common stockholders	$	2,281		$	466		$	(9,203	)	$	(3,660	)	$	(4,579	)
Shares used to compute net income (loss) per share attributable to common stockholders:
Weighted average common shares outstanding		101,095			101,595			96,112			104,494			84,424
Less: Weighted average shares subject to repurchase or forfeiture		(205	)		(107	)		(18	)		(34	)		—
Weighted average shares used to compute net income (loss) per share, basic		100,890			101,488			96,094			104,460			84,424
Diluted:
Net income (loss) attributable to Barracuda Networks, Inc.	$	2,963		$	605		$	(7,391	)	$	(3,660	)	$	(4,579	)
Accretion to redemption value of redeemable convertible preferred stock		—			—			(1,812	)		—			—
Net income (loss) attributable to common stockholders	$	2,963		$	605		$	(9,203	)	$	(3,660	)	$	(4,579	)
Weighted average common shares used to compute net income (loss) per share, basic		100,890			101,488			96,094			104,460			84,424
Add weighted average effect of dilutive securities:
Stock options and restricted stock units		3,697			4,320			—			—			—
Common stock subject to repurchase or forfeiture		205			107			—			—			—
Redeemable convertible preferred stock		30,151			30,151			—			—			—
Weighted average shares used to compute net income (loss) per share, diluted		134,943			136,066			96,094			104,460			84,424
Net income (loss) per share attributable to common stockholders:
Basic	$	0.02		$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)
Diluted	$	0.02		$	0.00		$	(0.10	)	$	(0.04	)	$	(0.05	)

F-16

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Unaudited Pro Forma Net Loss per Share

Pro forma basic and diluted net loss per share have been computed to give effect to the conversion of our redeemable convertible preferred stock into common stock as of the beginning of the period presented or the original issuance date, if later. The following table shows our calculation of pro forma basic and diluted net loss per share (in thousands, except per share data):

	Year Ended			Six Months Ended
	February 28, 2013			August 31, 2013
Numerator:
Net loss attributable to Barracuda Networks, Inc.	$	(7,391	)	$	(4,579	)
Denominator:
Shares used to compute net loss per share, basic and diluted		96,094			84,424
Pro forma adjustment to reflect weighted average effect of assumed conversion of redeemable convertible preferred stock		39,367			52,879
Weighted average shares used to compute pro forma net loss per share, basic and diluted		135,461			137,303
Pro forma net loss per share, basic and diluted	$	(0.05	)	$	(0.03	)

Effect of Recent Accounting Pronouncements

In June 2011, the FASB issued ASU No. 2011-05, Topic 220—Presentation of Comprehensive Income (ASU 2011-05), which requires companies to present net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. In addition, in December 2011, the FASB issued ASU No. 2011-12, Topic 220—Comprehensive Income (ASU 2011-12), which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. We adopted these standards in fiscal 2013. Our adoption of the additional disclosures is reflected in a separate statement, Consolidated Statements of Comprehensive Income (Loss).

2. Balance Sheet Information

Cash, Cash Equivalents and Marketable Securities

	February 28/29,				August 31,
	2012		2013		2013
	(in thousands)
Cash and cash equivalents:
Cash	$	22,778	$	20,812	$	19,565
Money market funds		103,729		9,283		9,431
Total cash and cash equivalents	$	126,507	$	30,095	$	28,996
Marketable securities:
Auction-rate securities	$	388	$	—	$	—
Equity securities		1,888		1,550		1,196
Total marketable securities	$	2,276	$	1,550	$	1,196

F-17

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

2. Balance Sheet Information (continued)

The following table summarizes our marketable securities:

	February 29, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Auction-rate securities	$	400	$	—	$	(12	)	$	388
Equity securities		1,668		220		—			1,888
	$	2,068	$	220	$	(12	)	$	2,276
	February 28, 2013
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Equity securities	$	1,458	$	92	$	—		$	1,550
	August 31, 2013
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Equity securities	$	1,440	$	—	$	244		$	1,196

Fair Value Measurements

We determine the fair values of our financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3: Inputs are unobservable inputs based on our assumptions.

F-18

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

2. Balance Sheet Information (continued)

Cash equivalents and marketable securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Our investments in auction-rate securities are classified within Level 3 because they are valued using a discounted cash flow model. Some of the inputs to this model are unobservable in the market and are significant. We have no financial assets or liabilities measured utilizing Level 2 inputs.

Financial assets measured at fair value on a recurring basis are summarized below:

	Level 1		Level 2		Level 3		Total February 29, 2012
	(in thousands)
Money market funds	$	103,729	$	—	$	—	$	103,729
Auction-rate securities		—		—		388		388
Equity securities		1,888		—		—		1,888
	$	105,617	$	—	$	388	$	106,005
	Level 1		Level 2		Level 3		Total February 28, 2013
	(in thousands)
Money market funds	$	9,283	$	—	$	—	$	9,283
Equity securities		1,550		—		—		1,550
	$	10,833	$	—	$	—	$	10,833
	Level 1		Level 2		Level 3		Total August 31, 2013
	(in thousands)
Money market funds	$	9,431	$	—	$	—	$	9,431
Equity securities		1,196		—		—		1,196
	$	10,627	$	—	$	—	$	10,627

Inventories

Inventories consisted of the following:

	February 28/29,				August 31,     2013
	2012		2013
	(in thousands)
Raw materials	$	3,109	$	3,042	$	3,583
Finished goods		2,307		2,096		3,071
Total inventories	$	5,416	$	5,138	$	6,654

F-19

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

2. Balance Sheet Information (continued)

Deferred Costs

Deferred costs consisted of the following:

	February 28/29,				August 31,     2013
	2012		2013
	(in thousands)
Appliance	$	21,857	$	27,751	$	31,843
Commissions		7,397		11,719		14,215
Total deferred costs	$	29,254	$	39,470	$	46,058

Property and Equipment

Property and equipment consisted of the following:

	February 28/29,				August 31,     2013
	2012		2013
	(in thousands)
Land	$	5,100	$	5,100	$	5,100
Building		6,549		6,549		6,549
Computer hardware and software		6,882		8,656		12,016
Vehicles, machinery and equipment		1,372		1,478		1,892
Leasehold improvements		237		1,488		2,205
		20,140		23,271		27,762
Less: accumulated depreciation		4,956		6,299		7,960
	$	15,184	$	16,972	$	19,802

Depreciation expense was $1.6 million, $2.1 million and $2.8 million for fiscal 2011, 2012 and 2013, respectively.

Investment in Nonmarketable Equity Security

In October 2011, we acquired stock in a privately held company for $750,000, which represents an ownership interest of approximately 24%. Under the equity method of accounting, we recognize our proportional share of earnings and losses of the investee in our financial statements and adjust the carrying amount of our investment accordingly. For fiscal 2012 and 2013, our proportionate share of the investee’s losses was not material.

The investment is classified in other noncurrent assets in the consolidated balance sheets.

F-20

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

2. Balance Sheet Information (continued)

Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of tax, were as follows (in thousands, unaudited):

	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for- Sale Investments			Total
Balance as of February 28, 2013	$	(1,169	)	$	57		$	(1,112	)
Other comprehensive loss before reclassifications		(34	)		(205)			(239)
Amounts reclassified from accumulated other comprehensive loss		—			—			—
Other comprehensive loss		(34	)		(205	)		(239	)
Balance as of August 31, 2013	$	(1,203	)	$	(148	)	$	(1,351	)

3. Acquisitions

SignNow

On April 24, 2013, we completed our acquisition of SignNow, Inc. (“SignNow”), a privately-held provider of mobile eSignature applications located in California. The acquisition of SignNow will enable us to expand our cloud-based offerings. We acquired all outstanding stock of SignNow for aggregate cash consideration of approximately $6.7 million. In addition, $4.5 million of cash consideration is contingent upon the continued employment of certain key employees of SignNow and is recognized as compensation expense over the requisite service period. We assumed $0.6 million of unvested SignNow stock options, which will be recorded as stock compensation expense over the weighted-average remaining service period of approximately 2.7 years.

We recorded the assets acquired and liabilities assumed at their estimated fair value, with the difference between the fair value of the net assets acquired and the purchase consideration reflected as goodwill.

The following table reflects the fair values of assets acquired and liabilities assumed as of the acquisition date (in thousands):

Cash	$	56
Accounts receivable		110
Developed technology		4,780
Customer relationships		510
Trade name		390
Goodwill		1,899
Accrued expenses		(340	)
Deferred tax liability		(686	)
Total value of assets acquired and liabilities assumed	$	6,719

F-21

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

3. Acquisitions (continued)

The goodwill of $1.9 million is primarily attributed to the synergies expected to arise after the acquisition. No goodwill was deemed to be deductible for income tax purposes.

Included in our results of operations for the six months ended August 31, 2013 are $0.3 million and $1.0 million of revenue and net loss, respectively, attributable to SignNow since the April 24, 2013 date of acquisition. The following table presents our unaudited pro forma revenue and net loss for fiscal 2013 and the six months ended August 31, 2012 assuming the acquisition had occurred on March 1, 2012, and for the six months ended August 31, 2013:

	Fiscal 2013			Six Months Ended August 31,
				2012			2013
	(in thousands)
Pro forma revenue	$	199,006		$	95,035		$	114,192
Pro forma net loss attributable to Barracuda Networks, Inc.	$	(10,873	)	$	(5,461	)	$	(5,108	)

BitLeap, LLC

In September 2008, we acquired BitLeap, LLC, a privately held company, and were required to pay contingent consideration in cash and stock based upon the attainment of certain earnings milestones over a period of four years ended September 2012. During fiscal 2012 and 2013, we recorded $5.1 million and $5.6 million, respectively, of such consideration, which became due and was recorded as additional goodwill. No additional contingent consideration is due under this arrangement.

4. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for fiscal 2012, 2013 and the six months ended August 31, 2013 are summarized below:

	February 28/29,						August  31, 2013
	2012			2013
	(in thousands)
Balance at beginning of fiscal period	$	23,584		$	28,430		$	33,778
Contingent consideration earned		5,057			5,580			—
Goodwill acquired		—			—			1,899
Effect of foreign exchange rates		(211	)		(232	)		99
Balance at end of fiscal period	$	28,430		$	33,778		$	35,776

F-22

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

4. Goodwill and Intangible Assets (continued)

Intangible assets subject to amortization are summarized below:

	February 29, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(in thousands)
Acquired developed technology	$	21,480	$	12,833	$	8,647
Software license		400		400		—
Customer relationships		6,895		3,661		3,234
Patents		1,625		502		1,123
Trade name		619		498		121
Acquired developed software		200		137		63
	$	31,219	$	18,031	$	13,188

	February 28, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(in thousands)
Acquired developed technology	$	21,403	$	16,910	$	4,493
Software license		400		400		—
Customer relationships		6,814		4,708		2,106
Patents		1,625		687		938
Trade name		273		259		14
Acquired developed software		200		177		23
	$	30,715	$	23,141	$	7,574

	August 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
	(in thousands)
Acquired developed technology	$	26,216	$	19,279	$	6,937
Software license		400		400		—
Customer relationships		7,359		5,316		2,043
Patents		1,625		780		845
Trade name		662		280		382
Acquired developed software		200		197		3
	$	36,462	$	26,252	$	10,210

In addition to the above, we maintain other intangible assets not subject to amortization, principally related to the domain name www.barracuda.com, of $409,000 as of February 29, 2012 and February 28, 2013 and $437,000 as of August 31, 2013.

Acquired developed technology, software license, customer relationships, patents, trade name and acquired developed software are amortized on a straight-line basis and have weighted-average useful lives from the date of

F-23

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

4. Goodwill and Intangible Assets (continued)

purchase of 5.0 years, 5.0 years, 5.8 years, 9.0 years, 3.7 years and 5.0 years, respectively, as of February 28, 2013, and 5.0 years, 5.0 years, 5.9 years, 9.0 years, 7.4 years and 5.0 years, respectively, as of August 31, 2013.

Amortization expense for fiscal 2011, 2012 and 2013, and the six months ended August 31, 2013 was $6.0 million, $6.0 million, $5.5 million and $3.1 million respectively.

As of February 28, 2013, amortization expense for intangible assets for each of the next five years is as follows: $4.5 million in fiscal 2014, $1.9 million in fiscal 2015, $0.6 million in fiscal 2016, $0.4 million in fiscal 2017, $0.1 million in fiscal 2018 and $0.1 million thereafter.

5. Recapitalization Transaction

In October 2012, we completed our recapitalization pursuant to a recapitalization agreement entered into with our founders and their affiliates and certain of our existing investors. As part of the recapitalization agreement, we (i) declared $130.0 million of cash dividends, which was recorded as an increase to accumulated deficit, (ii) sold 22,727,913 shares of our Series B redeemable convertible preferred stock (“Series B Preferred Stock”) to certain of our existing investors at a price per share of approximately $5.62, for an aggregate purchase price of $127.5 million and (iii) repurchased 22,727,913 shares of common stock from our founders and their affiliates at a price per share of approximately $5.62, which was determined to be the fair value after giving consideration to the control premium, for an aggregate repurchase price of $127.5 million. The shares of our common stock which we repurchased were subsequently cancelled.

6. Redeemable Convertible Preferred Stock

Significant terms of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) and Series B Preferred Stock (collectively “Preferred Stock”), are as follows:

Conversion—Each share of Series A Preferred Stock and Series B Preferred Stock is convertible at the option of the holder into common stock using a conversion rate of $1.327 and $5.61178 per share, respectively, and will automatically convert into common stock in the event of an underwritten public offering of our common stock or upon the request of at least two thirds of the Preferred Stock then outstanding.

Voting—Preferred Stock has voting rights, on an as-if-converted basis, identical to common stock and shall vote together with common stock, and not as separate classes.

Dividends—Any dividends declared or paid in any fiscal year shall be made among the holders of Preferred Stock and common stock then outstanding in proportion to the greatest number of shares of common stock that would be held by each such holder if all Preferred Stock were converted at the then-effective conversion rate.

Liquidation—In the event of liquidation, the holders of Series B Preferred Stock are entitled to receive in preference to any distribution to Series A Preferred Stock or common stock holders, a liquidation preference equal to the greater of (i) $7.01472 and (ii) the amount to which such holder of Series B Preferred Stock would be entitled to receive upon a liquidation if such holders of Series B Preferred Stock was converted into common stock, plus any dividends declared but unpaid on such shares. The holders of Series A Preferred Stock are entitled to receive in preference to any distribution to holders of common stock, a liquidation preference equal to the greater of (i) $1.99 and (ii) the amount to which such holder of Series A Preferred Stock would be entitled to

F-24

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

6. Redeemable Convertible Preferred Stock (continued)

receive upon a liquidation if such holders of Series A Preferred Stock were converted into common stock, plus any dividends declared but unpaid on such shares. Any surplus assets or funds will then be distributed ratably between the holders of common stock.

If assets and funds are insufficient to meet the liquidation preference of the Preferred Stock such assets and funds will first be distributed ratably between the holders of the Series B Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive and then to holders of Series A Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive.

Redemption—In October 2017, all outstanding shares of Preferred Stock are eligible to be redeemed for cash in full upon a written notice by at least two-thirds of the holders of the outstanding Preferred Stock. In the event of redemption, each holder of the Preferred Stock would be entitled to receive the original issue price per share ($1.327 for each Series A Preferred Stock and $5.61178 for each Series B Preferred Stock), plus all unpaid dividends on such shares that have been declared.

Costs related to the issuance of Preferred Stock have been accreted to additional paid-in capital.

7. Stockholders’ Deficit

Authorized Stock

Holders of our common stock are entitled to one vote per share on all matters to be voted upon by our stockholders.

Fair Value of Common Stock

Given the absence of a public trading market, our Board of Directors considered numerous objective and subjective factors to determine the fair value of our common stock at each grant date. These factors included, but were not limited to, (i) contemporaneous valuations of common stock performed by unrelated third-party specialists; (ii) the prices for our Preferred Stock sold to outside investors; (iii) the rights, preferences and privileges of our Preferred Stock relative to our common stock; (iv) the lack of marketability of our common stock; (v) developments in the business; and (vi) the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of our company, given prevailing market conditions.

Stock Option Plan and Restricted Stock Units

Our 2004 Stock Option Plan (the 2004 Plan) authorized the Board of Directors to grant incentive stock options and nonstatutory stock options, as well as for the issuance of shares of restricted stock, or RSU, to employees, directors, and consultants. In May 2012, our Board of Directors approved the termination of the 2004 Plan and the introduction of the 2012 Equity Incentive Plan (the 2012 Plan), which provides for the grant of stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.

We estimate the fair value of stock options using the Black-Scholes-Merton option-pricing formula and a single-option-award approach. We amortize the fair value of an award expected to vest on a straight-line basis

F-25

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

7. Stockholders’ Deficit (continued)

over the requisite service period of the award, which is generally the period from the grant date to the end of the vesting period. The weighted-average expected option term for such options is calculated as the average of the contractual term and the average vesting period. Estimated volatility is based upon the historical volatility of similar entities whose share prices are publicly available. The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award is granted, with a maturity equal to the expected term of the stock option award. We use historical data to estimate the number of future stock option forfeitures.

The following assumptions were used to estimate the fair value of employee stock option grants:

	Year Ended February 28/29,
	2011			2012			2013
Expected volatility		50	%		41–46	%		44	%
Expected term (in years)		6.25			6.25			6.25
Risk-free interest rate		2.02	%		1.84	%		0.97	%
Dividend yield		—			—			—
Weighted-average estimated fair value of stock options granted during the year	$	1.85		$	1.68		$	1.78

The following table summarizes stock option activity under our plans:

	Options Outstanding
	Available for Grant			Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value(1)
									(in years)		(in thousands)
Balance at February 29, 2012		380,528			8,722,582		$	2.23
Authorized		12,759,151			—			—
Granted		(10,494,000	)		10,494,000			4.16
Exercised(2)		—			(3,946,087	)		1.48
Canceled/forfeited		663,193			(663,193	)		3.91
Balance at February 28, 2013		3,308,872			14,607,302			3.74
As of February 28, 2013:
Vested and exercisable		—			4,904,773		$	2.87		6.37	$	6,989
Vested and expected to vest		—			13,636,514			3.68		8.21		8,353

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the fair value of our common stock at February 28, 2013.

(2) Includes stock options vested during the period that were early exercised.

For the six months ended August 31, 2013, options to purchase 933,000 shares of common stock were granted and options to purchase 179,191 shares of common stock were assumed in the acquisition of SignNow (Note 3).

F-26

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

7. Stockholders’ Deficit (continued)

During fiscal 2011, 2012 and 2013, the total grant-date fair value of stock options vested was $1.7 million, $1.5 million and $3.7 million, respectively. During fiscal 2011, 2012, and 2013, the aggregate intrinsic value of stock option awards exercised, which is measured as the difference between the exercise price and the value of our common stock at the date of exercise, was $1.5 million, $0.6 million and $10.3 million, respectively.

As of February 28, 2013, there was $14.8 million of unrecognized compensation cost related to outstanding employee stock options, net of forecasted forfeitures, expected to be recognized over a weighted-average period of 3.27 years. To the extent the forfeiture rate is different from what management has anticipated, stock-based compensation related to these awards will be different from management’s expectations.

The following table summarizes RSU activity under our plans:

	Unvested Restricted Stock Units
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at February 29, 2012		600,000		$	2.90
Granted		4,178,439			4.21
Vested		(1,008,457	)		3.43
Unvested at February 28, 2013		3,769,982			4.21
Expected to vest after February 28, 2013		3,347,772			4.21

As of February 28, 2013, there was $13.4 million of unrecognized compensation cost related to unvested employee RSUs, net of forecasted forfeitures. This amount is expected to be recognized over a weighted-average period of 3.59 years. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be different from our expectations.

Total stock-based compensation expense has been classified as follows in the accompanying consolidated statements of operations:

	Year Ended February 28/29,
	2011		2012		2013
	(in thousands)
Cost of revenue	$	84	$	51	$	146
Research and development		848		766		2,059
Sales and marketing		627		527		1,182
General and administrative		417		527		5,400
Total compensation expense	$	1,976	$	1,871	$	8,787

F-27

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

8. Income Taxes

Income (loss) before income taxes and noncontrolling interest consists of the following:

	Year Ended February 28/29,
	2011			2012			2013
	(in thousands)
United States	$	8,218		$	5,226		$	(9,206	)
Foreign		(4,739	)		(5,933	)		(4,063	)
Total	$	3,479		$	(707	)	$	(13,269	)

The provision (benefit) for income taxes consists of the following:

	Year Ended February 28/29,
	2011			2012			2013
	(in thousands)
Current:
Federal	$	7,816		$	9,860		$	6,824
State		1,223			537			940
Foreign		435			517			526
Total		9,474			10,914			8,290
Deferred:
Federal		(6,759	)		(9,501	)		(11,507	)
State		(461	)		(770	)		(617	)
Foreign		(1,118	)		(1,096	)		(1,250	)
Total		(8,338	)		(11,367	)		(13,374	)
Total provision (benefit) for income taxes	$	1,136		$	(453	)	$	(5,084	)

F-28

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

8. Income Taxes (continued)

Deferred tax assets (liabilities) comprise the following:

	February 28/29,
	2012			2013
	(in thousands)
Deferred tax assets:
Deferred revenue	$	28,851		$	41,577
Reserves and other		5,069			5,277
Research and development credits		1,895			2,003
Net operating losses		6,870			6,389
Total deferred tax assets		42,685			55,246
Valuation allowance		(6,867	)		(7,008	)
Total deferred tax assets, net of valuation allowance		35,818			48,238
Deferred tax liabilities:
Depreciation and amortization		(2,819	)		(1,807	)
Total deferred tax liabilities		(2,819	)		(1,807	)
Net deferred tax assets	$	32,999		$	46,431

The following is a reconciliation of the statutory federal income tax to our effective tax rate:

	Year Ended February 28/29,
	2011			2012			2013
	(in thousands)
Tax at federal statutory rate	$	1,218		$	(247	)	$	(4,644	)
State taxes, net of federal benefit		333			(423	)		(11	)
Nondeductible meals and entertainment		115			146			289
Stock-based compensation		641			461			910
Foreign rate differential		976			1,373			535
Research and development credit		(608	)		(726	)		(1,331	)
Domestic production activities deduction		(900	)		(1,023	)		(760	)
Other		(639	)		(14	)		(72	)
	$	1,136		$	(453	)	$	(5,084	)

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Based on the available objective evidence, management believes it is more likely than not that a portion of our net deferred tax assets may not be realized in the future. Accordingly, a valuation allowance of $7.0 million is provided against our deferred tax assets, primarily related to foreign net operating losses and California research credits acquired as part of our acquisitions. The net change in valuation allowance for fiscal 2013 was an increase of approximately $0.1 million related to a change in the estimated utilization of the foreign net operating loss.

F-29

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

8. Income Taxes (continued)

As of February 28, 2013, we had approximately $1.1 million of federal and approximately $7.5 million of state net operating loss carryforwards available. If not utilized, the federal net operating losses expire in various fiscal years ending between fiscal 2019 and fiscal 2029. The state net operating losses expire in various fiscal years ending between fiscal 2014 and fiscal 2029. We have foreign net operating losses of approximately $22.9 million. Of these, approximately $19.1 million of the net operating losses can be carried forward indefinitely. The remaining foreign net operating losses expire in various fiscal years, starting with fiscal 2014, if not utilized.

We had research and development credit carryforwards of approximately $0.3 million, $2.7 million and $0.1 million for federal, California and other state income tax purposes, respectively. If not utilized, the federal research and development credit begins to expire in fiscal 2028, while the California credit can be carried forward indefinitely. If not utilized, other state research and development credit begins to expire in fiscal 2021.

Utilization of our net operating loss and credit carryforwards may be subject to annual limitations due to ownership change provisions by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

As of February 28, 2013, we have $4.4 million of cumulative undistributed earnings of our foreign subsidiaries. Deferred tax liabilities have not been recognized for undistributed earnings of foreign subsidiaries because we intend to permanently reinvest such undistributed earnings outside the United States. If these foreign earnings were to be repatriated in the future, the related U.S. tax liability may be reduced by any foreign income taxes previously paid on these earnings. Determination of the amount of an unrecognized deferred tax liability related to these earnings is not practicable.

Our total unrecognized tax benefits as of fiscal 2011, 2012 and 2013, were $3.0 million, $4.2 million and $4.0 million, respectively. Total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $2.4 million, $2.5 million and $3.1 million as of fiscal 2011, 2012 and 2013, respectively.

The following table summarizes the activity related to our gross unrecognized tax benefits (in thousands):

	Year Ended February 28/29,
	2011			2012			2013
Balance at beginning of year	$	1,878		$	3,026		$	4,150
Tax positions related to the current year:
Additions		1,197			978			1,122
Tax positions related to prior years:
Additions		44			1,009			76
Deductions		(51	)		(528	)		(1,341	)
Settlements with taxing authorities
Releases—statute of limitations expired		(42	)		(335	)		(36	)
Balance at the end of the year	$	3,026		$	4,150		$	3,971

We recognize interest and/or penalties related to uncertain tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and

F-30

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

8. Income Taxes (continued)

reflected as a reduction of the overall income tax provision in the period that such determination is made. During fiscal 2011, 2012 and 2013, interest and penalties recorded in the consolidated statements of operations were $63,000, $8,000 and $92,000, respectively. The amounts of accrued interest and penalties recorded on the consolidated balance sheets as of February 29, 2012 and February 28, 2013, were approximately $354,000 and $446,000, respectively. We do not believe there will be material changes in our unrecognized tax positions over the next 12 months.

We file income tax returns in the U.S. federal jurisdiction, various states, and certain foreign jurisdictions. The statute of limitations remains open to audit for fiscal 2009 through fiscal 2013 in the U.S. federal and state jurisdictions, and for fiscal 2008 through fiscal 2013 in foreign jurisdictions.

9. Segment Information

Our chief operating decision maker reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, we have determined that we operate in a single reporting segment.

Revenue by geographic region is presented as follows:

	Year Ended February 28/29,
	2011		2012		2013
	(in thousands)
North America	$	96,584	$	113,934	$	147,231
United States		90,590		106,760		138,879
Other		5,994		7,174		8,352
Latin America		3,118		3,183		3,290
Asia-Pacific		10,994		12,475		14,497
EMEA		31,436		31,328		33,913
Total	$	142,132	$	160,920	$	198,931

Revenue earned in any one foreign country did not exceed 10% of total revenue in fiscal 2011, 2012, or 2013.

Long-lived assets, excluding intercompany receivables, investments in subsidiaries, intangible assets and deferred tax assets, by geographic region are presented as follows:

	February 28/29,
	2012		2013
	(in thousands)
United States	$	30,478	$	34,873
International		2,186		3,087
Total	$	32,664	$	37,960

F-31

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

10. Borrowings

Note Payable

In December 2011, as part of the purchase of land and buildings in California related to our headquarters, we assumed a note payable of $5.3 million with a financial institution bearing interest at 6.23% per annum. The estimated fair value of the note payable approximates its carrying value. The debt is repayable in equal monthly payments of principal and interest of $44,445, with a final payment of unpaid principal and interest in July 2017. Penalty interest of 0.0625% is due on default of payments, and prepayment of amounts owed are subject to a prepayment fee calculated as the greater of a) 1% of the principal being repaid and b) the present value of the future principal and interest payments less the principal repaid. Interest expense for fiscal 2012 and 2013, was $28,000 and $357,000, respectively, and was recorded as other income, net, in the consolidated statement of operations.

Minimum principal payments for our note payable are as follows (in thousands):

Fiscal Years Ending February 28/29
2014	$	222
2015		237
2016		252
2017		268
2018		4,115
	$	5,094

Credit Facility

In connection with the recapitalization agreement (Note 5), we entered into a $40.0 million credit facility with Silicon Valley Bank (“SVB”) consisting of a revolving loan facility which includes a letter of credit sub facility of up to $10.0 million. The credit facility expires in October 2014. The credit facility is secured by substantially all of our assets, and contains restrictive covenants as described in the agreement. These covenants require us to maintain a minimum adjusted EBITDA, as defined in the credit facility, in excess of $25.0 million for any trailing four quarter period and a minimum adjusted quick ratio in excess of 0.5 as of the last day of each month. The minimum required adjusted quick ratio will increase to 1.1 over the term of the credit facility. The adjusted quick ratio is calculated as the ratio of qualified cash plus net billed accounts receivable to consolidated current liabilities plus revolving credit extensions under the credit facility, less (i) any deferred payments in connection with permitted acquisitions and (ii) the current portion of deferred revenue. We were in compliance with each of these covenants as of August 31, 2013. The terms of the credit facility require payment of an unused line fee of 0.375% per quarter of the unused portion. ABR loans under the credit facility bear interest at a rate per annum equal to the highest of the prime rate, the federal funds effective rate plus 0.5% and the eurodollar rate for a one-month interest period plus 1%. Eurodollar loans under the credit facility bear interest at a rate per annum equal to the eurodollar rate plus 1.5%. The adjusted credit facility also sets forth specified events of default. No amounts had been drawn under the credit facility as of February 28, 2013 and August 31, 2013.

11. Commitments and Contingencies

Lease Arrangements

We lease facilities and equipment under noncancelable operating lease arrangements with various expiration dates through fiscal 2018. We account for rent of our facilities on a straight-line basis over the respective lease terms. Rent expense was approximately $2.7 million, $2.6 million and $2.0 million in fiscal 2011, 2012 and 2013, respectively.

F-32

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

11. Commitments and Contingencies (continued)

Minimum payments under our operating leases agreements are as follows (in thousands):

Fiscal Years Ending February 28/29
2014	$	1,842
2015		1,631
2016		1,289
2017		1,035
2018		633
	$	6,430

Subsequent to February 28, 2013, we signed a lease for offices in San Jose, California. Minimum payments under the agreement are $0 in fiscal 2014 and 2015, $0.2 million in fiscal 2016, $0.5 million in fiscal 2017, $0.5 million in fiscal 2018 and $0.3 million thereafter.

Other Commitments

We purchase components from a variety of suppliers. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, we place purchase orders with our suppliers to procure inventory. As of February 28, 2013, we had total noncancelable purchase commitments for inventory of $3.5 million.

Legal Matters

In late 2011, following a voluntary internal review of our compliance with U.S. export control and sanctions laws, our management team became aware that certain of our physical appliances had been sold indirectly into embargoed countries via our distributors and resellers, potentially in violation of U.S. export control and economic sanctions laws. In addition, certain of our solutions incorporate encryption components and may be exported from the U.S. only with the required approvals; in the past, we may have exported products prior to receiving these required authorizations. After completion of a comprehensive internal investigation conducted by outside counsel, we submitted voluntary disclosures regarding these matters to the U.S. Commerce Department, Bureau of Industry and Security (“BIS”), and to the U.S. Treasury Department, Office of Foreign Assets Control (“OFAC”). These disclosures summarized potential violations of export controls and economic sanctions laws, including reexports by third parties and provision of services to end users in embargoed countries including Iran, Sudan and Syria. If we are found to have violated U.S. export control laws, we may be subject to various penalties available under the laws, the amount of which is currently not estimable.

On August 13, 2013, Parallel Networks, LLC, or Parallel Networks, which we believe is a non-practicing entity, filed a lawsuit against us in the U.S. District Court for the District of Delaware, Parallel Networks, LLC v. Barracuda Networks, Inc., Case No. 1:13-cv-01412-UNA, alleging that certain of our appliances infringe two of their U.S. patents: U.S. Pat. No. 7,571,217, titled “Method and System for Uniform Resource Locator Transformation,” and U.S. Pat. No. 8,352,570, titled “Method and System for Uniform Resource Locator Transformation.” Parallel Networks has asserted similar claims against other companies, including Array Networks, Inc., Brocade Communications Systems, Inc., Citrix Systems, Inc., Riverbed Technology, Inc. and SAP AG. This matter is in its earliest stages, but we intend to vigorously defend the lawsuit. Given the early stage of the litigation, we are unable to estimate a possible loss or range of possible loss.

F-33

BARRACUDA NETWORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Information as of August 31, 2013 and for the six months ended August 31, 2012 and 2013 is unaudited)

11. Commitments and Contingencies (continued)

From time to time, we are party to litigation and subject to claims that arise in the ordinary course of our business, including actions with respect to employment claims and other matters. Although the results of litigation and claims are inherently unpredictable, we believe that the final outcome of such matters will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows.

12. Employee Benefit Plan

Our 401(k) tax-deferred savings plan (the “401(k) Plan”) permits participants to make contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the 401(k) Plan, participating employees may defer a portion of their pre-tax earnings, up to the IRS annual contribution limit. In April 2013 our Board of Directors approved our matching of employee contributions up to 2.5% of each employee’s eligible earnings, 1.25% of which is a guaranteed contribution match and 1.25% is matched if performance goals are met.

13. Subsequent Events

We evaluated subsequent events through July 29, 2013, which is the date the financial statements were available to be issued.

14. Subsequent Events (unaudited)

For our interim consolidated financial statements as of August 31, 2013, and for the six months then ended, we have evaluated subsequent events through October 1, 2013, which is the date financial statements were available to be issued.

F-34

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all expenses to be paid by the Registrant, other than underwriting discounts and commissions, upon completion of this offering. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

SEC registration fee	$	12,880
FINRA filing fee		15,500
Exchange listing fee			*
Printing and engraving			*
Legal fees and expenses			*
Accounting fees and expenses			*
Blue sky fees and expenses (including legal fees)			*
Transfer agent and registrar fees and expenses			*
Miscellaneous			*
Total	$		*

* To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

On completion of this offering, the Registrant’s amended and restated certificate of incorporation will contain provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, the personal liability of the Registrant’s directors and executive officers for monetary damages for breach of their fiduciary duties as directors or officers. The Registrant’s amended and restated certificate of incorporation and bylaws will provide that the Registrant must indemnify its directors and executive officers and may indemnify its employees and other agents to the fullest extent permitted by the General Corporation Law of the State of Delaware.

Sections 145 and 102(b)(7) of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was serving at the request of a corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which such person is adjudged to be liable to the corporation.

The Registrant has entered into indemnification agreements with its directors and executive officers in addition to the indemnification provided for in its amended and restated certificate of incorporation and bylaws, and the Registrant intends to enter into indemnification agreements with any new directors and executive officers in the future.

The Registrant has purchased and intends to maintain insurance on behalf of each and any person who is or was a director or officer of the Registrant against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.

II-1

The Underwriting Agreement (Exhibit 1.1 hereto) provides for indemnification by the underwriters of the Registrant and its executive officers and directors, and by the Registrant of the underwriters, for certain liabilities, including liabilities arising under the Securities Act.

See also the undertakings set out in response to Item 17 herein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since March 1, 2011, we have issued the following securities that were not registered under the Securities Act:

Sale of Series B Preferred Stock

On October 3, 2012, we issued 22,727,913 shares of our Series B redeemable convertible preferred stock to seven accredited investors at a per share purchase price of approximately $5.62, for an aggregate purchase price of $127.5 million.

Option and Common Stock Issuances

From March 1, 2011 to August 31, 2013, we issued an aggregate of 1,146,966 shares of common stock upon the settlement of the RSUs issued to certain of our officers, directors, employees and consultants under our 2004 Plan and 2012 Equity Incentive Plan.

From March 1, 2011 to August 31, 2013, we granted stock options to purchase an aggregate of 12,230,691 shares of our common stock to certain of our officers, directors, employees and consultants under our 2004 Stock Plan, our SignNow Option Plan and our 2012 Equity Incentive Plan at exercise prices per share ranging from $0.51 to $5.85. In addition, we have granted 4,178,439 RSUs to certain of our officers, directors, employees and consultants under our 2012 Equity Incentive Plan.

On April 30, 2013, we assumed options to purchase 179,191 shares of our common stock in connection with our acquisition of SignNow, Inc.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering, and the registrant believes the transactions were exempt from the registration requirements of the Securities Act in reliance on Section 4(2) thereof and Rule 701 thereunder as transactions by an issuer not involving a public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

See Exhibit Index immediately following the Signature Pages.

(b) Financial Statement Schedules.

The following schedule is filed as part of this registration statement: Schedule II—Valuation and Qualifying Accounts.

All other financial statement schedules have been omitted because the information called for is not required or is shown either in the consolidated financial statements or in the notes thereto.

II-2

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

	Year Ended February 28/29,
	2011			2012			2013
	(in thousands)
Allowance for doubtful accounts:
Beginning balance	$	1,129		$	924		$	1,339
Charged to costs and expenses		305			424			(77	)
Bad debt write-offs		(510	)		(9	)		(10	)
Ending balance	$	924		$	1,339		$	1,252
Sales return reserve:
Beginning balance	$	1,538		$	1,724		$	1,977
Charged to deferred revenue		9,226			11,347			13,072
Sales returns		(9,040	)		(11,094	)		(12,678	)
Ending balance	$	1,724		$	1,977		$	2,371

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Campbell, California, on the 1st day of October, 2013.

BARRACUDA NETWORKS, INC.
By:	/s/ William D. Jenkins, Jr.
	William D. Jenkins, Jr.
	Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints William D. Jenkins, Jr. and David Faugno, and each of them, as his true and lawful attorney-in-fact and agent with full power of substitution, for him in any and all capacities, to sign any and all amendments to this registration statement (including post-effective amendments or any abbreviated registration statement and any amendments thereto filed pursuant to Rule 462(b) increasing the number of securities for which registration is sought), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact, proxy, and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact, proxy and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ William D. Jenkins, Jr. William D. Jenkins, Jr.	Chief Executive Officer and Director (Principal Executive Officer)	October 1, 2013
/s/ David Faugno David Faugno	Chief Financial Officer (Principal Financial Officer)	October 1, 2013
/s/ Dustin Driggs Dustin Driggs	Corporate Controller (Principal Accounting Officer)	October 1, 2013
/s/ Jeffry R. Allen Jeffry R. Allen	Lead Independent Director	October 1, 2013
/s/ Dipanjan Deb Dipanjan Deb	Director	October 1, 2013
/s/ Dean M. Drako Dean M. Drako	Director	October 1, 2013
/s/ James J. Goetz James J. Goetz	Director	October 1, 2013

II-4

Signature	Title	Date
/s/ David R. Golob David R. Golob	Director	October 1, 2013
/s/ Zachary S. Levow Zachary S. Levow	Director	October 1, 2013
/s/ Michael D. Perone Michael D. Perone	Director	October 1, 2013
/s/ Gordon L. Stitt Gordon L. Stitt	Director	October 1, 2013
/s/ Kevin B. Thompson Kevin B. Thompson	Director	October 1, 2013

II-5

EXHIBIT INDEX

Exhibit Number	Description
1.1**	Form of Underwriting Agreement
3.1	Amended and Restated Certificate of Incorporation of the registrant, as currently in effect.
3.2	Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of the registrant, as currently in effect.
3.3	Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation of the registrant, as currently in effect.
3.4**	Form of Amended and Restated Certificate of Incorporation of the registrant, to be in effect upon the completion of this offering.
3.5	Bylaws of the registrant, as currently in effect.
3.6**	Form of Amended and Restated Bylaws of the registrant, to be in effect upon the completion of this offering.
4.1	Amended and Restated Investors’ Rights Agreement dated as of October 3, 2012, between the registrant and the other parties thereto
4.2**	Specimen common stock certificate of the registrant
5.1**	Form of Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
10.1	Form of Indemnification Agreement between the registrant and its directors and officers
10.2	2004 Stock Option Plan, and form of agreements thereunder
10.3**	2012 Equity Incentive Plan, as amended, and form of agreements thereunder
10.4	SignNow 2011 Equity Incentive Plan, form of agreements thereunder
10.5	Purewire, Inc. 2008 Stock Incentive Plan, form of agreements thereunder
10.6	Offer Letter, between the registrant and William D. Jenkins, Jr., dated June 7, 2013
10.7	Offer Letter, between the registrant and David Faugno, dated June 30, 2012
10.8	Offer Letter, between the registrant and Michael D. Perone, dated July 24, 2013
10.9	Offer Letter, between the registrant and Diane C. Honda, dated September 13, 2012
10.10	Offer Letter, between the registrant and Michael D. Hughes, dated August 25, 2012
10.11	Offer Letter, between the registrant and Zachary S. Levow, dated July 24, 2013
10.12	Purchase and Sale Agreement and Escrow Instructions dated as of July 31, 2011, between the registrant and Bryan Family Partnership II, Ltd.
10.13	Credit Agreement dated as of October 3, 2012, between the registrant and Silicon Valley Bank
10.14	Lease dated as of June 19, 2013, between the registrant and M West Propco XVII, LLC
10.15†	Recapitalization Agreement dated as of August 23, 2012, among the registrant and the other parties thereto
10.16†	Amendment No. 1 and Waivers to Recapitalization Agreement, dated as of October 3, 2012, among the registrant and the other parties thereto
10.17	Lease dated as of May 24, 2012, between the registrant and 317 Maynard LLC
10.18	Indemnification Agreement dated as of April 13, 2012, between the registrant and David Faugno
21.1	List of subsidiaries of registrant
23.1	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
23.2**	Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in Exhibit 5.1)
24.1	Power of Attorney (included in pages II-4 and II-5 to this registration statement on Form S-1)
99.1	Consent of Compass Intelligence

** To be filed by amendment.

† Portions of this exhibit have been omitted pending a determination by the Securities and Exchange Commission as to whether these portions should be granted confidential treatment.

EX-3.1

Exhibit 3.1

FOURTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

BARRACUDA NETWORKS, INC.

The undersigned, David Faugno, hereby certifies that:

A. He is the duly appointed Senior Vice President and Chief Financial Officer of Barracuda Networks, Inc., a Delaware corporation (the “Corporation”):

B. The name of this Corporation is Barracuda Networks, Inc. The original Certificate of Incorporation was filed with the Secretary of the State of Delaware on November 17, 2004.

C. Pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, this Fourth Amended and Restated Certificate of Incorporation restates, integrates and amends the provisions of the Corporation’s Third Amended and Restated Certificate of Incorporation.

D. The terms and provisions of this Fourth Amended and Restated Certificate of Incorporation have been duly approved by the Board of Directors of the Corporation (the “Board of Directors”) and the written consent of the required number of shares of outstanding stock of the Corporation pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, and written notice pursuant to Subsection 228(e) of the General Corporation Law of the State shall be given to those stockholders whose consent has not been obtained.

E. The Certificate of Incorporation of the Corporation shall be amended and restated to read in full as follows:

ARTICLE I

The name of the Corporation is Barracuda Networks, Inc.

The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE II

The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware as the same exists or may hereafter be amended.

ARTICLE III

The total number of shares of stock that the Corporation shall have authority to issue is Two Hundred Twelve Million Eight Hundred Seventy Eight Thousand Six Hundred Sixty-Six (212,878,666) shares, consisting of One Hundred Sixty Million (160,000,000) shares of Common Stock, $0.001 par value per share, and Fifty Two Million Eight Hundred Seventy Eight Thousand Six Hundred Sixty-Six (52,878,666) shares of Preferred Stock, $0.001 par value per share. Thirty Million One Hundred Fifty Thousand Seven Hundred Fifty Three (30,150,753) shares of Preferred Stock shall be designated “Series A Preferred Stock” and Twenty Two Million Seven Hundred Twenty Seven Thousand Nine Hundred Thirteen (22,727,913) shares of Preferred Stock shall be designated “Series B Preferred Stock.”

ARTICLE IV

The terms and provisions of the Common Stock and Preferred Stock are as follows:

1. Definitions. For purposes of this Article IV, the following definitions shall apply:

(a) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock.

(b) “Corporation” shall mean Barracuda Networks, Inc.

(c) “Distribution” shall mean (i) the transfer of cash or other property without consideration whether by way of dividend or otherwise, other than dividends on Common Stock payable in Common Stock, or (ii) the purchase or redemption of shares of the Corporation for cash or property other than: (A) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation, at a per share price equal to the lower of cost or the then fair market value, upon termination of their employment or services pursuant to agreements providing for the right of said repurchase; (B) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation pursuant to rights of first refusal contained in agreements providing for such right; (C) any other repurchase or redemption of capital stock of the Corporation approved by the Board of Directors, including both Series A Directors (as defined herein); or (D) the redemption of Series A Preferred Stock and Series B Preferred Stock as provided in Section 6 hereof.

(d) “Equity Incentive Plan” shall mean the Company’s 2004 Stock Option Plan, the Company’s 2012 Stock Option Plan, Purewire, Inc.’s 2008 Stock Incentive Plan and Restricted Stock Units issued by the Company.

(e) “Options” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(f) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).

(g) “Preferred Stock” shall mean the Series A Preferred Stock and the Series B Preferred Stock.

(h) “Recapitalization” shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.

(i) “Redemption Price” means, with respect to the Series A Preferred Stock, the Series A Original Issue Price plus an amount equal to all declared and unpaid dividends thereon, and with respect to the Series B Preferred Stock, the Series B Liquidation Preference.

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(j) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(k) “Series A Conversion Price” shall mean $1.327 per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations and as otherwise set forth elsewhere herein).

(l) “Series A Liquidation Preference” shall mean the greater of (i) $1.990 and (ii) the amount to which such holder of Series A Preferred Stock would be entitled to receive upon a Liquidation if such holder’s Series A Preferred Stock was converted into Common Stock immediately prior to such event, in each case, per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

(m) “Series A Original Issue Price” shall mean $1.327 per share for the Series A Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

(n) “Series B Conversion Price” shall mean $5.61178 per share for the Series B Preferred Stock (subject to adjustment from time to time for Recapitalizations and as otherwise set forth elsewhere herein).

(o) “Series B Liquidation Preference” shall mean the greater of (i) $7.01472 and (ii) the amount to which such holder of Series B Preferred Stock would be entitled to receive upon a Liquidation if such holder’s Series B Preferred Stock was converted into Common Stock immediately prior to such event, in each case, per share for the Series B Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

(p) “Series B Original Issue Price” shall mean $5.61178 per share for the Series B Preferred Stock (subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

2. Dividends.

(a) Dividends. Any dividends (other than dividends on Common Stock payable solely in Common Stock) declared or paid in any fiscal year shall be declared or paid among the holders of the Preferred Stock and Common Stock then outstanding in proportion to the greatest whole number of shares of Common Stock which would be held by each such holder if all shares of Preferred Stock were converted at the then-effective Conversion Rate (as defined in Section 4 hereof).

(b) Non-Cash Distributions. Whenever a Distribution provided for in this Section 2 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors, except that any publicly-traded securities to be distributed to stockholders as a Distribution shall be valued as set forth in Section 3(e) below.

(c) Consent to Certain Distributions. In accordance with Section 500 of the California Corporations Code, a distribution can be made without regard to any preferential

3

dividends arrears amount (as defined in Section 500 of the California Corporations Code) or any preferential rights amount (as defined in Section 500 of the California Corporations Code) in connection with (i) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of Common Stock or Preferred Stock in connection with the settlement of disputes with any stockholder, or (iv) any other repurchase or redemption of Common Stock or Preferred Stock approved by the holders of Preferred Stock of the Corporation.

3. Liquidation Rights.

(a) Liquidation Preference. In the event of any Liquidation (as defined below), either voluntary or involuntary:

(i) the holders of the Series B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of the Series A Preferred Stock and Common Stock by reason of their ownership of such stock, an amount per share for each share of Series B Preferred Stock held by them equal to the sum of (A) the Series B Liquidation Preference and (B) all declared but unpaid dividends (if any) on such share of Series B Preferred Stock; and

(ii) thereafter, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of the Common Stock by reason of their ownership of such stock, an amount per share for each share of Series A Preferred Stock held by them equal to the sum of (A) the Series A Liquidation Preference and (B) all declared but unpaid dividends (if any) on such share of Series A Preferred Stock;

provided, that, if upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation legally available for distribution to the holders of the Preferred Stock are insufficient to permit the payment to such holders of the full amounts specified in this Section 3(a), then the entire assets of the Corporation legally available for distribution shall be first distributed with equal priority and pro rata among the holders of the Series B Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section 3(a) and, thereafter, to the extent any assets of the Corporation legally available for distribution remain after such distribution to the Series B Preferred Stock, such remaining assets shall be distributed with equal priority and pro rata among the holders of the Series A Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section 3(a).

(b) Remaining Assets. After the payment or setting aside for payment to the holders of Preferred Stock of the full amounts specified in Section 3(a) above, the entire remaining assets of the Corporation legally available for distribution shall be distributed pro rata to holders of the Common Stock of the Corporation in proportion to the number of shares of Common Stock held by them.

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(c) Shares not Treated as Both Preferred Stock and Common Stock in any Distribution. Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in order to participate in any distribution, or series of distributions, as shares of Common Stock, without first foregoing participation in the distribution, or series of distributions, as shares of Preferred Stock.

(d) Liquidation; Deemed Liquidation. For purposes of this Section 3, a “Liquidation” shall be deemed to be occasioned by, or to include: (i) a merger or consolidation of the Corporation with or into any other entity or entities (but excluding any merger effected solely for the purpose of reincorporating into another state) or the merger of any other entity or entities into the Corporation, in which the holders of the Corporation’s voting power immediately prior to such merger or consolidation, hold (together with their affiliates), immediately after such merger or consolidation, less than a majority of the voting power of the Corporation or the surviving or successor entity in such merger or consolidation (or its parent); (ii) a sale, lease or other conveyance of, including the grant of an exclusive license with respect to, all or substantially all of the assets of the Corporation; (iii) any sale, transfer, or issuance or series of sales, transfers, and/or issuances of shares of the Corporation’s capital stock by the Corporation or the holders thereof as a result of which the holders of the Corporation’s outstanding voting stock immediately prior to such sale or issuance own less than 50% of the Corporation’s outstanding voting stock immediately after such sale or issuance; (iv) an exclusive, irrevocable licensing of all or substantially all of the Corporation’s intellectual property to a third party; or (v) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. Notwithstanding the foregoing, the treatment of a transaction as a Liquidation pursuant to this Section 3(d) may be waived, either prospectively or retrospectively and either generally or in a particular instance, by the consent or vote of the holders of two-thirds of the outstanding Preferred Stock.

(e) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors, except that any publicly-traded securities to be distributed to stockholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as follows:

(i) If the securities are then traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange over the ten (10) trading day period ending five (5) trading days prior to the distribution;

(ii) if the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the distribution.

In the event of a merger or other acquisition of the Corporation by another entity, the distribution date shall be deemed to be the date such transaction closes.

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4. Conversion. The holders of the Preferred Stock shall have conversion rights as follows:

(a) Right to Convert. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Series A Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing the Series A Original Issue Price by the Series A Conversion Price. Each share of Series B Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Series B Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing the Series B Original Issue Price by the Series B Conversion Price. The rate at which each share of Preferred Stock may be converted into share(s) of Common Stock is referred to herein as the “Conversion Rate” for such share of Preferred Stock. Upon any decrease or increase in the Series A Conversion Price or Series B Conversion Price (as applicable) for any share of Preferred Stock, as described in this Section 4, the Conversion Rate for such share of Preferred Stock shall be appropriately increased or decreased.

(b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion Rate for such share: (i) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act covering the offer and sale of the Corporation’s Common Stock (a “Public Offering”); or (ii) upon the receipt by the Corporation of a written request for such conversion from the holders of at least two-thirds of the Preferred Stock then outstanding, or, if later, the effective date for conversion specified in such requests (each of the events referred to in (i) and (ii) are referred to herein as an “Automatic Conversion Event”).

(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then fair market value of a share of Common Stock as determined by the Board of Directors. For such purpose, all shares of Preferred Stock held by each holder of Preferred Stock that are then being converted shall be aggregated, and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to receive certificates therefor, he shall either: (i) surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock; or (ii) notify the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that on the date of an Automatic Conversion Event, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided further, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above,

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or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. On the date of the occurrence of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, notwithstanding that the certificates representing such shares of Preferred Stock shall not have been surrendered at the office of the Corporation, that notice from the Corporation shall not have been received by any holder of record of shares of Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be actually delivered to such holder.

The Corporation shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act or a merger, sale, financing, or liquidation of the Corporation or other event, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing of such transaction or upon the occurrence of such event, in which case the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such transaction or the occurrence of such event.

(d) Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, the Series A Conversion Price and Series B Conversion Price in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Common Stock, the Series A Conversion Price and Series B Conversion Price in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

(e) Adjustments for Subdivisions or Combinations of Series A Preferred Stock. In the event the outstanding shares of Series A Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series A Preferred Stock, the Series A Original Issue Price and Series A Liquidation Preference in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Series A Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Series A Preferred Stock, the Series A Original Issue Price and Series A Liquidation Preference in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

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(f) Adjustments for Subdivisions or Combinations of Series B Preferred Stock. In the event the outstanding shares of Series B Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Series B Preferred Stock, the Series B Original Issue Price and Series B Liquidation Preference in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Series B Preferred Stock shall be combined (by reclassification or otherwise) into a lesser number of shares of Series B Preferred Stock, the Series B Original Issue Price and Series B Liquidation Preference in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 3 above, if the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive each holder of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon conversion of the Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

(h) No Impairment. The Corporation will not, through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in carrying out of all the provision of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of the Preferred Stock against impairment. Notwithstanding the foregoing, nothing in this Section 4(h) shall prohibit the Corporation from amending its Certificate of Incorporation with the requisite consent of its stockholders and the Board of Directors, in accordance with applicable law and as provided herein.

(i) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of a Series A Conversion Price or Series B Conversion Price pursuant to this Section 4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock or Series B Preferred Stock, as the case may be, a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Series A Conversion Price or Series B Conversion Price, as the case may be, at the time in effect; and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock.

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(j) Notices of Record Date. In the event that this Corporation shall propose at any time:

(i) to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

(ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or

(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a Liquidation;

then, in connection with each such event, this Corporation shall send to the holders of the Preferred Stock at least (10) days’ prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (ii) and (iii) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the vote or written consent of the holders of two-thirds of the Preferred Stock.

In the event the notice requirements of this section are not complied with or waived, the Corporation shall forthwith either cause the closing of the transaction to be postponed until such requirements have been complied with, or cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in this subsection.

(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

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5. Voting.

(a) Restricted Class Voting. Except as otherwise expressly provided herein or required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes.

(b) No Series Voting. Other than as provided herein or as required by law, there shall be no series voting.

(c) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock held by such holder could be converted as of the record date. The holders of shares of the Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote. Holders of Preferred Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted), shall be disregarded.

(d) Composition of the Board of Directors; Voting. Directors shall be divided into two separate classes: “Class 1 Directors” and “Class 2 Directors.” The Board of Directors shall initially consist of eight (8) members, each of whom shall be a Class 1 Director and have one (1) vote per director on all matters to be considered by the Board of Directors. The number of directors constituting the Board of Directors shall, at the request of the holders of a majority of the Preferred Stock, be increased by one (1) and such director shall be a Class 2 Director and have four (4) votes on all matters to be considered by the Board of Directors.

(e) Election of Directors. The Class 1 Directors shall be designated pursuant to a written consent of the Corporation’s stockholders as follows: the holders of Common Stock, voting as a separate class, shall be entitled to designate four (4) Class 1 Directors; the holders of Series A Preferred Stock, voting as a separate class, shall be entitled to designate two (2) Class 1 Directors (the “Series A Directors”); and the holders of Series B Preferred Stock, voting as a separate class, shall be entitled to designate (2) Class 1 Directors (the “Series B Directors”). In the event the number of directors constituting the Board is, at the request of the holders of a majority of the Preferred Stock, increased pursuant to Section 5(d), the holders of a majority of the Preferred Stock, voting, on an as-converted basis as a single class, shall be entitled to designate one (1) Class 2 Director pursuant to a written consent of the holders of a majority of the Preferred Stock. Any vacancy created by the death, removal or resignation of a director, shall be filled only by the holders of shares of such class or series having the right to elect such director and may be accomplished by: (i) voting for their own designee to fill such vacancy at a meeting of the Corporation’s stockholders; or (ii) written consent, if the consenting stockholders hold a number of shares that would be sufficient to elect their designee at a meeting of the stockholders. Any director may be removed during his or her term of office with cause only upon the affirmative vote of the majority of the Directors; any director may be removed during his or her term of office without cause only upon the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent.

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(f) Quorum, Required Vote and Adjournment. Directors then in office holding a majority of the votes (or such greater number required by applicable law) of all directors then in office shall constitute a quorum for the transaction of business. The vote of directors holding a majority of votes present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

(g) Adjustment in Authorized Common Stock. Subject to any separate class vote required by Article 7 hereof, the number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by an affirmative vote of the holders of Preferred Stock and the holders of Common Stock, voting together and not as separate classes, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of Delaware.

6. Redemption.

(a) At any time after the fifth (5th) anniversary of the initial issuance of the shares of Series B Preferred Stock, and at the election of the holders of at least two-thirds of the then outstanding shares of Preferred Stock, this Corporation shall redeem, out of funds legally available therefor, all or a portion (as determined by such holders of Preferred Stock) of the outstanding shares of Preferred Stock which have not been converted into Common Stock pursuant to Section 4 hereof. Within ninety (90) days after receipt of such redemption request (each, a “Redemption Date”), the Corporation shall redeem each share of Preferred Stock by paying in cash an amount per share equal to the Redemption Price applicable to such share.

(b) Any redemption effected pursuant to Section 6(a) shall be made on a pro rata basis among the holders of the Preferred Stock in proportion to the shares of Preferred Stock then held by them.

(c) At least fifteen (15), but no more than thirty (30) days prior to each Redemption Date, written notice shall be mailed, first class postage prepaid, to each holder of record (at the close of business on the business day next preceding the day on which notice is given) of the Preferred Stock to be redeemed, at the address last shown on the records of the Corporation for such holder, notifying such holder of the redemption to be effected, specifying the number of shares to be redeemed from such holder, the Redemption Date, the Redemption Price, the place at which payment may be obtained and calling upon such holder to surrender to the Corporation, in the manner and at the place designated, the holder’s certificate or certificates representing the shares to be redeemed (the “Redemption Notice”). Except as provided herein, on or after the Redemption Date each holder of Preferred Stock to be redeemed shall surrender to this Corporation the certificate or certificates representing such shares, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be cancelled. In the event less than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares.

(d) From and after the applicable Redemption Date, unless there shall have been a default in payment of the Redemption Price, all rights of the holders of shares of Preferred

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Stock designated for redemption in the Redemption Notice as holders of Preferred Stock (except the right to receive the Redemption Price without interest upon surrender of their certificate or certificates) shall cease with respect to the shares designated for redemption on such date, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever. If the funds of the Corporation legally available for redemption of shares of Preferred Stock on any Redemption Date are insufficient to redeem the total number of shares of Preferred Stock to be redeemed on such date, those funds which are legally available will first be used to redeem the maximum possible number of such shares ratably among the holders of Series B Preferred Stock (if applicable) to be redeemed based upon their holdings of Series B Preferred Stock and, thereafter, the maximum possible number of such shares ratably among the holders of Series A Preferred Stock (if applicable) to be redeemed based upon their holdings of Series A Preferred Stock. The shares of Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. At any time thereafter when additional funds of the Corporation are legally available for the redemption of shares of Preferred Stock such funds will immediately be used to redeem the balance of the shares which the Corporation has become obliged to redeem on any Redemption Date, but which it has not redeemed.

(e) On or prior to each Redemption Date, the Corporation may deposit the Redemption Price of all shares of Preferred Stock designated for redemption in the Redemption Notice and not yet redeemed with a bank or trust corporation having aggregate capital and surplus in excess of $2,000,000,000, as a trust fund for the benefit of the respective holders of the shares designated for redemption and not yet redeemed, with irrevocable instructions and authority to the bank or trust corporation to pay the Redemption Price for such shares to their respective holders on or after the Redemption Date upon receipt of notification from the Corporation that such holder has surrendered a share certificate to the Corporation pursuant to Section 6(e) above. As of the Redemption Date, the deposit shall constitute full payment of the shares to their holders, and from and after the Redemption Date the shares so called for redemption shall be redeemed and shall be deemed to be no longer outstanding, and the holders thereof shall cease to be stockholders with respect to such shares and shall have no rights with respect thereto except the right to receive from the bank or trust corporation payment of the Redemption Price of the shares, without interest, upon surrender of their certificates therefor. Such instructions shall also provide that any moneys deposited by the Corporation pursuant to this Section 6(e) for the redemption of shares thereafter converted into shares of the Corporation’s Common Stock pursuant to Section 4 hereof prior to the Redemption Date shall be returned to the Corporation forthwith upon such conversion. The balance of any moneys deposited by the Corporation pursuant to this Section 6(e) remaining unclaimed at the expiration of two (2) years following the Redemption Date shall thereafter be returned to the Corporation upon its request expressed in a resolution of its Board.

7. Amendments and Changes.

The Corporation shall not (by merger, consolidation or otherwise), without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than two-thirds of the outstanding shares of the Preferred Stock:

(i) amend, alter or waive any provision of the Certificate of Incorporation of the Corporation or the Bylaws of the Corporation in a manner that is adverse to the holders of Preferred Stock;

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(ii) alter or change the rights, preferences or privileges of any equity interest or capital stock of the Corporation;

(iii) increase or decrease (other than decreases resulting from conversion of the Preferred Stock) the authorized number of shares of Common Stock or Preferred Stock;

(iv) create or issue any securities of the Corporation having rights, preferences or privileges which are senior to any of the rights of any of the Preferred Stock, or effect a merger, business combination, or other corporate transaction or series of related transactions pursuant to which the rights, preferences or privileges of the Preferred Stock will be changed in any way or pursuant to which the Corporation or a successor corporation will have authorized any securities having rights, preferences, privileges or preferences which are senior to the rights of any of the Preferred Stock;

(v) authorize or enter into any transaction or series of related transaction deemed to be a Liquidation;

(vi) authorize or enter into (1) a dissolution or winding up of the Corporation, including any transaction set forth in Section 3(d), or (2) any transaction or series of related transactions constituting a Liquidation under Section 3(d);

(vii) increase or decrease the size or change the composition of the Board of Directors;

(viii) declare, pay or make any Distribution with respect to the Preferred Stock, Common Stock or other capital stock of the Corporation;

(ix) amend or alter any Equity Incentive Plan in existence at the time of the issuance of the Series B Preferred Stock or adopt, grant, or implement any new Equity Incentive Plan;

(x) enter into any arrangement or agreement (whether written or oral) with any director, officer, employee, or stockholders of the Corporation, or any affiliate thereof, other than employment compensation arrangements (including pursuant to the Equity Incentive Plans);

(xi) engage in any material respect in any line of business or business activity which is unrelated to any of the Corporation’s lines of business or business activities;

(xii) remove or replace the chief executive officer or the chief financial officer of the Corporation;

(xiii) issue any note, bond, or other debt security or create, incur, assume, or guarantee any indebtedness for borrowed money or capitalized lease obligation;

(xiv) approve the Corporation’s annual budget or business plan;

(xv) make any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans, and acquisitions) not included in the company’s annual business plan and budget approved by the Board of Directors; or

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(xvi) take any other action, including without limitation by way of merger, business combination, recapitalization, reincorporation or other corporate transaction or series of related transactions, the consummation of which would have substantially the same effect of any of the foregoing.

8. Reissuance of Preferred Stock. In the event that any shares of Preferred Stock shall be converted pursuant to Section 4 or otherwise repurchased by the Corporation, the shares so converted or repurchased shall be cancelled and shall not be issuable by this Corporation.

9. Notices. Any notice required by the provisions of this Article IV to be given to the holders of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holder’s address appearing on the books of the Corporation.

ARTICLE V

The Corporation is to have perpetual existence.

ARTICLE VI

Elections of directors need not be by written ballot unless a stockholder demands election by written ballot at the meeting and before voting begins or unless the Bylaws of the Corporation shall so provide.

ARTICLE VII

Unless otherwise set forth herein, the number of directors which constitute the Board of Directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation.

ARTICLE VIII

To the fullest extent permitted by the Delaware General Corporation Law, or any other applicable law, as the same exists or may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any action taken, or any failure to take any action, as a director. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article VIII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law as so amended.

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the Delaware General Corporation Law, or any other applicable law, as the same exists or may hereafter be amended, any director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director, officer,

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employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized by the Board of Directors.

The Corporation shall have the power to indemnify and hold harmless, to the extent permitted by the Delaware General Corporation Law, or any other applicable law, as the same exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.

Neither any amendment nor repeal of this Article, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article, shall eliminate or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit or claim accruing or arising or that, but for this Article, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

ARTICLE IX

Except as provided in Article IV above, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

* * *

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The undersigned hereby certifies, under penalty of perjury under the laws of the State of Delaware that the matters set forth in this certificate are true and correct of his own knowledge.

Executed at Campbell, California, on December 7, 2012.

/s/ David Faugno

David Faugno

Senior Vice President and Chief Financial Officer

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EX-3.2

EXHIBIT 3.2

CERTIFICATE OF AMENDMENT

TO THE

FOURTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

BARRACUDA NETWORKS, INC.

Barracuda Networks, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), certifies that:

A. The name of the Corporation is Barracuda Networks, Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 17, 2004.

B. Section 5(d) of Article IV of the Fourth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

“Composition of the Board of Directors; Voting. Directors shall be divided into two separate classes: “Class 1 Directors” and “Class 2 Directors.” The Board of Directors shall initially consist of nine (9) members, each of whom shall be a Class 1 Director and have one (1) vote per director on all matters to be considered by the Board of Directors. The number of directors constituting the Board of Directors shall, at the request of the holders of a majority of the Preferred Stock, be increased by one (1) and such director shall be a Class 2 Director and have four (4) votes on all matters to be considered by the Board of Directors.”

C. Section 5(e) of Article IV of the Fourth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

“Election of Directors. The Class 1 Directors shall be designated pursuant to a written consent of the Corporation’s stockholders as follows: the holders of Common Stock, voting as a separate class, shall be entitled to designate four (4) Class 1 Directors; the holders of Series A Preferred Stock, voting as a separate class, shall be entitled to designate two (2) Class 1 Directors (the “Series A Directors”); the holders of Series B Preferred Stock, voting as a separate class, shall be entitled to designate (2) Class 1 Directors (the “Series B Directors”); and the holders of Preferred Stock and Common Stock, voting together as a single class, shall be entitled to designate one (1) Class 1 Director . In the event the number of directors constituting the Board is, at the request of the holders of a majority of the Preferred Stock, increased pursuant to Section 5(d), the holders of a majority of the Preferred Stock, voting, on an as-converted basis as a single class, shall be entitled to designate one (1) Class 2 Director pursuant to a written consent of the holders of a majority of the Preferred Stock. Any vacancy created by the death, removal or resignation of a director, shall be filled only by the holders of shares of such class or series having the right to elect such director and may be accomplished by: (i) voting for their own designee to fill such vacancy at a meeting of the Corporation’s stockholders; or (ii) written consent, if the consenting stockholders hold a number of shares that would be sufficient to elect their designee at a meeting of the stockholders. Any director may be removed during his or her term of office with cause only upon the affirmative vote of the majority of the Directors; any director may be removed during his or her term of office without cause only upon the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent.”

D. This Amendment of the Corporation’s Fourth Amended and Restated Certificate of Incorporation has been duly authorized and adopted by the Corporation’s Board of Directors in accordance with the provisions of Section 242 of the Delaware General Corporation Law and the Corporation’s stockholders in accordance with the provisions of Section 228 of the Delaware General Corporation Law.

IN WITNESS WHEREOF, Barracuda Networks, Inc. has caused this Certificate of Amendment to be signed by a duly authorized officer of the Corporation, on September 17, 2013.

/s/ BJ Jenkins

BJ Jenkins

President & CEO

EX-3.3

Exhibit 3.3

CERTIFICATE OF AMENDMENT

TO THE

FOURTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION OF

BARRACUDA NETWORKS, INC.

Barracuda Networks, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), certifies that:

A. The name of the Corporation is Barracuda Networks, Inc. The Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 17, 2004.

B. Section 5(d) of Article IV of the Fourth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

“Composition of the Board of Directors; Voting. Directors shall be divided into two separate classes: “Class 1 Directors” and “Class 2 Directors.” The Board of Directors shall initially consist of ten (10) members, each of whom shall be a Class 1 Director and have one (1) vote per director on all matters to be considered by the Board of Directors. The number of directors constituting the Board of Directors shall, at the request of the holders of a majority of the Preferred Stock, be increased by one (1) and such director shall be a Class 2 Director and have four (4) votes on all matters to be considered by the Board of Directors.”

C. Section 5(e) of Article IV of the Fourth Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

“Election of Directors. The Class 1 Directors shall be designated pursuant to a written consent of the Corporation’s stockholders as follows: the holders of Common Stock, voting as a separate class, shall be entitled to designate four (4) Class 1 Directors; the holders of Series A Preferred Stock, voting as a separate class, shall be entitled to designate three (3) Class 1 Directors (the “Series A Directors”); the holders of Series B Preferred Stock, voting as a separate class, shall be entitled to designate (2) Class 1 Directors (the “Series B Directors”); and the holders of Preferred Stock and Common Stock, voting together as a single class, shall be entitled to designate one (1) Class 1 Director . In the event the number of directors constituting the Board is, at the request of the holders of a majority of the Preferred Stock, increased pursuant to Section 5(d), the holders of a majority of the Preferred Stock, voting, on an as-converted basis as a single class, shall be entitled to designate one (1) Class 2 Director pursuant to a written consent of the holders of a majority of the Preferred Stock. Any vacancy created by the death, removal or resignation of a director, shall be filled only by the holders of shares of such class or series having the right to elect such director and may be accomplished by: (i) voting for their own designee to fill such vacancy at a meeting of the Corporation’s stockholders; or (ii) written consent, if the consenting stockholders hold a number of shares that would be sufficient to elect their designee at a meeting of the stockholders. Any director may be removed during his or her term of office with cause only upon the affirmative vote of the majority of the Directors; any director may be removed during his or her term of office without cause only upon the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent.”

D. This Amendment of the Corporation’s Fourth Amended and Restated Certificate of Incorporation has been duly authorized and adopted by the Corporation’s Board of Directors in accordance with the provisions of Section 242 of the Delaware General Corporation Law and the Corporation’s stockholders in accordance with the provisions of Section 228 of the Delaware General Corporation Law.

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IN WITNESS WHEREOF, Barracuda Networks, Inc. has caused this Certificate of Amendment to be signed by a duly authorized officer of the Corporation, on October 1, 2013.

/s/ William D. Jenkins, Jr.

William BJ Jenkins,

Chief Executive Officer

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EX-3.5

Exhibit 3.5

BYLAWS

OF

BARRACUDA NETWORKS, INC.

(initially adopted on November 17, 2004)

TABLE OF CONTENTS

		Page
ARTICLE I - CORPORATE OFFICES			1
1.1	REGISTERED OFFICE.		1
1.2	OTHER OFFICES.		1
ARTICLE II - MEETINGS OF STOCKHOLDERS			1
2.1	PLACE OF MEETINGS.		1
2.2	ANNUAL MEETING.		1
2.3	SPECIAL MEETING.		1
2.4	NOTICE OF STOCKHOLDERS’ MEETINGS.		2
2.5	MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.		2
2.6	QUORUM.		2
2.7	ADJOURNED MEETING; NOTICE.		2
2.8	CONDUCT OF BUSINESS.		3
2.9	VOTING.		3
2.10	STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.		3
2.11	RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.		3
2.12	PROXIES.		4
2.13	LIST OF STOCKHOLDERS ENTITLED TO VOTE.		4
ARTICLE III - DIRECTORS			5
3.1	POWERS.		5
3.2	NUMBER OF DIRECTORS.		5
3.3	ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.		5
3.4	RESIGNATION AND VACANCIES.		5
3.5	PLACE OF MEETINGS; MEETINGS BY TELEPHONE.		6
3.6	REGULAR MEETINGS.		6
3.7	SPECIAL MEETINGS; NOTICE.		6
3.8	QUORUM.		7
3.9	BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.		7
3.10	FEES AND COMPENSATION OF DIRECTORS.		7
3.11	APPROVAL OF LOANS TO OFFICERS.		7
3.12	REMOVAL OF DIRECTORS.		7
ARTICLE IV - COMMITTEES			8
4.1	COMMITTEES OF DIRECTORS.		8
4.2	COMMITTEE MINUTES.		8
4.3	MEETINGS AND ACTION OF COMMITTEES.		8
ARTICLE V - OFFICERS			9
5.1	OFFICERS.		9
5.2	APPOINTMENT OF OFFICERS.		9
5.3	SUBORDINATE OFFICERS.		9
5.4	REMOVAL AND RESIGNATION OF OFFICERS.		9

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TABLE OF CONTENTS

(continued)

		Page
5.5	VACANCIES IN OFFICES.		9
5.6	CHAIRPERSON OF THE BOARD.		10
5.7	CHIEF EXECUTIVE OFFICER.		10
5.8	PRESIDENT.		10
5.9	VICE PRESIDENTS.		10
5.10	SECRETARY.		10
5.11	CHIEF FINANCIAL OFFICER.		11
5.12	ASSISTANT SECRETARY.		11
5.13	ASSISTANT TREASURER.		11
5.14	REPRESENTATION OF SHARES OF OTHER CORPORATIONS.		12
5.15	AUTHORITY AND DUTIES OF OFFICERS.		12
ARTICLE VI - RECORDS AND REPORTS			12
6.1	MAINTENANCE AND INSPECTION OF RECORDS.		12
6.2	INSPECTION BY DIRECTORS.		12
ARTICLE VII - GENERAL MATTERS			13
7.1	CHECKS.		13
7.2	EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.		13
7.3	STOCK CERTIFICATES; PARTLY PAID SHARES.		13
7.4	SPECIAL DESIGNATION ON CERTIFICATES.		13
7.5	LOST CERTIFICATES.		14
7.6	CONSTRUCTION; DEFINITIONS.		14
7.7	DIVIDENDS.		14
7.8	FISCAL YEAR.		14
7.9	SEAL.		14
7.10	TRANSFER OF STOCK.		15
7.11	STOCK TRANSFER AGREEMENTS.		15
7.12	REGISTERED STOCKHOLDERS.		15
7.13	WAIVER OF NOTICE.		15
ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION			15
8.1	NOTICE BY ELECTRONIC TRANSMISSION.		15
8.2	DEFINITION OF ELECTRONIC TRANSMISSION.		16
8.3	INAPPLICABILITY.		16
ARTICLE IX - AMENDMENTS			16

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BYLAWS OF BARRACUDA NETWORKS, INC.

ARTICLE I - CORPORATE OFFICES

1.1 REGISTERED OFFICE.

The registered office of Barracuda Networks, Inc. shall be fixed in the corporation’s certificate of incorporation, as the same may be amended from time to time.

1.2 OTHER OFFICES.

The corporation’s Board of Directors (the “Board”) may at any time establish other offices at any place or places where the corporation is qualified to do business.

ARTICLE II - MEETINGS OF STOCKHOLDERS

2.1 PLACE OF MEETINGS.

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the corporation’s principal executive office.

2.2 ANNUAL MEETING.

The annual meeting of stockholders shall be held each year. The Board shall designate the date and time of the annual meeting. In the absence of such designation the annual meeting of stockholders shall be held on the second Tuesday of May of each year at 10:00 a.m. However, if such day falls on a legal holiday, then the meeting shall be held at the same time and place on the next succeeding business day. At the annual meeting, directors shall be elected and any other proper business may be transacted.

2.3 SPECIAL MEETING.

A special meeting of the stockholders may be called at any time by the Board, chairperson of the Board, chief executive officer or president (in the absence of a chief executive officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting.

If any person(s) other than the Board calls a special meeting, the request shall:

(i) be in writing;

(ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and

(iii) be delivered personally or sent by registered mail or by facsimile transmission to the chairperson of the Board, the chief executive officer, the president (in the absence of a chief executive officer) or the secretary of the corporation.

The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with the provisions of Sections 2.4 and 2.5 of these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.

2.4 NOTICE OF STOCKHOLDERS’ MEETINGS.

All notices of meetings of stockholders shall be sent or otherwise given in accordance with either Section 2.5 or Section 8.1 of these bylaws not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.

Notice of any meeting of stockholders shall be given:

(i) if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the corporation’s records; or

(ii) if electronically transmitted as provided in Section 8.1 of these bylaws.

An affidavit of the secretary or an assistant secretary of the corporation or of the transfer agent or any other agent of the corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

2.6 QUORUM.

The holders of a majority of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

2.7 ADJOURNED MEETING; NOTICE.

When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place if any thereof, and the means of remote communications if any by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned

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meeting are announced at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

2.8 CONDUCT OF BUSINESS.

The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.

2.9 VOTING.

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.

Except as may be otherwise provided in the certificate of incorporation or these bylaws, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder.

2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

Unless otherwise provided in the certificate of incorporation, any action required by the DGCL to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.

2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other such action.

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If the Board does not so fix a record date:

(i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

(ii) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the day on which the first written consent is expressed.

(iii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

2.12 PROXIES.

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.

2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE.

The officer who has charge of the stock ledger of the corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the corporation’s principal executive office. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

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ARTICLE III - DIRECTORS

3.1 POWERS.

Subject to the provisions of the DGCL and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.

3.2 NUMBER OF DIRECTORS.

The authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one member. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.

Except as provided in Section 3.4 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors. Each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

All elections of directors shall be by written ballot, unless otherwise provided in the certificate of incorporation; if authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must be either set forth or be submitted with information from which it can be determined that the electronic transmission authorized by the stockholder or proxy holder.

3.4 RESIGNATION AND VACANCIES.

Any director may resign at any time upon notice given in writing or by electronic transmission to the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these bylaws:

(i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

(ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

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If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.

3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE.

The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.6 REGULAR MEETINGS.

Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

3.7 SPECIAL MEETINGS; NOTICE.

Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or any two directors.

Notice of the time and place of special meetings shall be:

(i) delivered personally by hand, by courier or by telephone;

(ii) sent by United States first-class mail, postage prepaid;

(iii) sent by facsimile; or

(iv) sent by electronic mail,

directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the corporation’s records.

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If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the corporation’s principal executive office) nor the purpose of the meeting.

3.8 QUORUM.

At all meetings of the Board, a majority of the authorized number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.

Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

3.10 FEES AND COMPENSATION OF DIRECTORS.

Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.

3.11 APPROVAL OF LOANS TO OFFICERS.

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the corporation.

3.12 REMOVAL OF DIRECTORS.

Unless otherwise restricted by statute, the certificate of incorporation or these bylaws, any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

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No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

ARTICLE IV - COMMITTEES

4.1 COMMITTEES OF DIRECTORS.

The Board may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the corporation,

4.2 COMMITTEE MINUTES.

Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

4.3 MEETINGS AND ACTION OF COMMITTEES.

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

(i) Section 3.5 (place of meetings and meetings by telephone);

(ii) Section 3.6 (regular meetings);

(iii) Section 3.7 (special meetings and notice);

(iv) Section 3.8 (quorum);

(v) Section 7.13 (waiver of notice); and

(vi) Section 3.9 (action without a meeting)

with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:

(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;

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(ii) special meetings of committees may also be called by resolution of the Board; and

(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

ARTICLE V - OFFICERS

5.1 OFFICERS.

The officers of the corporation shall be a president and a secretary. The corporation may also have, at the discretion of the Board, a chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer or treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.

5.2 APPOINTMENT OF OFFICERS.

The Board shall appoint the officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 and 5.5 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.

5.3 SUBORDINATE OFFICERS.

The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.

5.4 REMOVAL AND RESIGNATION OF OFFICERS.

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

5.5 VACANCIES IN OFFICES.

Any vacancy occurring in any office of the corporation shall be filled by the Board or as provided in Section 5.2.

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5.6 CHAIRPERSON OF THE BOARD.

The chairperson of the Board, if such an officer be elected, shall, if present, preside at meetings of the Board and exercise and perform such other powers and duties as may from time to time be assigned to him by the Board or as may be prescribed by these bylaws. If there is no chief executive officer or president, then the chairperson of the Board shall also be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these bylaws.

5.7 CHIEF EXECUTIVE OFFICER.

Subject to such supervisory powers, if any, as the Board may give to the chairperson of the Board, the chief executive officer, if any, shall, subject to the control of the Board, have general supervision, direction, and control of the business and affairs of the corporation and shall report directly to the Board. All other officers, officials, employees and agents shall report directly or indirectly to the chief executive officer. The chief executive officer shall see that all orders and resolutions of the Board are carried into effect. The chief executive officer shall serve as chairperson of and preside at all meetings of the stockholders. In the absence of a chairperson of the Board, the chief executive officer shall preside at all meetings of the Board.

5.8 PRESIDENT.

In the absence or disability of the chief executive officer, the president shall perform all the duties of the chief executive officer. When acting as the chief executive officer, the president shall have all the powers of, and be subject to all the restrictions upon, the chief executive officer. The president shall have such other powers and perform such other duties as from time to time may be prescribed for him by the Board, these bylaws, the chief executive officer or the chairperson of the Board.

5.9 VICE PRESIDENTS.

In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the Board or, if not ranked, a vice president designated by the Board, shall perform all the duties of the president. When acting as the president, the appropriate vice president shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board, these bylaws, the chairperson of the Board, the chief executive officer or, in the absence of a chief executive officer, the president.

5.10 SECRETARY.

The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show

(i) the time and place of each meeting;

(ii) whether regular or special (and, if special, how authorized and the notice given);

(iii) the names of those present at directors’ meetings or committee meetings;

(iv) the number of shares present or represented at stockholders’ meetings;

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(v) and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the Board, a share register, or a duplicate share register showing;

(i) the names of all stockholders and their addresses;

(ii) the number and classes of shares held by each;

(iii) the number and date of certificates evidencing such shares; and

(iv) the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board required to be given by law or by these bylaws. The secretary shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board or by these bylaws.

5.11 CHIEF FINANCIAL OFFICER.

The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.

The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as the Board may designate. The chief financial officer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, the president and directors, whenever they request it, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.

The chief financial officer shall be the treasurer of the corporation.

5.12 ASSISTANT SECRETARY.

The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the stockholders or Board (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of the secretary’s inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.

5.13 ASSISTANT TREASURER.

The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the stockholders or Board (or if there be no such determination, then in the order of their election), shall, in the absence of the chief financial officer or in the event of the chief financial officer’s inability or refusal to act, perform the duties and exercise the powers of the chief financial officer and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.

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5.14 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.

The chairperson of the Board, the president, any vice president, the treasurer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

5.15 AUTHORITY AND DUTIES OF OFFICERS.

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board or the stockholders.

ARTICLE VI - RECORDS AND REPORTS

6.1 MAINTENANCE AND INSPECTION OF RECORDS.

The corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records.

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal executive office.

6.2 INSPECTION BY DIRECTORS.

Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

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ARTICLE VII - GENERAL MATTERS

7.1 CHECKS.

From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

7.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.

The Board, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

7.3 STOCK CERTIFICATES; PARTLY PAID SHARES.

The shares of the corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

7.4 SPECIAL DESIGNATION ON CERTIFICATES.

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue

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to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

7.5 LOST CERTIFICATES.

Except as provided in this Section 7.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

7.6 CONSTRUCTION; DEFINITIONS.

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

7.7 DIVIDENDS.

The Board, subject to any restrictions contained in either (i) the DGCL, or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

The Board may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.

7.8 FISCAL YEAR.

The fiscal year of the corporation shall be fixed by resolution of the Board and may be changed by the Board.

7.9 SEAL.

The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

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7.10 TRANSFER OF STOCK.

Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

7.11 STOCK TRANSFER AGREEMENTS.

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

7.12 REGISTERED STOCKHOLDERS.

The corporation:

(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;

(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and

(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

7.13 WAIVER OF NOTICE.

Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.

ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION

8.1 NOTICE BY ELECTRONIC TRANSMISSION.

Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the corporation under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the corporation. Any such consent shall be deemed revoked if:

(i) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent; and

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(ii) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice.

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

Any notice given pursuant to the preceding paragraph shall be deemed given:

(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;

(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;

(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

(iv) if by any other form of electronic transmission, when directed to the stockholder.

An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

8.2 DEFINITION OF ELECTRONIC TRANSMISSION.

An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

8.3 INAPPLICABILITY.

Notice by a form of electronic transmission shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.

ARTICLE IX - AMENDMENTS

These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.

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BARRCUDA NETWORKS, INC.

CERTIFICATE OF ADOPTION OF BYLAWS

The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Secretary or Assistant Secretary of Barracuda Networks, Inc., a Delaware corporation and that the foregoing bylaws, comprising sixteen (16) pages, were adopted as the corporation’s bylaws on November 17, 2004 by the corporation’s board of directors.

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 17th day of November, 2004.

            /s/ Dean Drako

Secretary

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EX-4.1

Exhibit 4.1

BARRACUDA NETWORKS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

October 3, 2012

TABLE OF CONTENTS

		Page
Section 1 Definitions			1
1.1	Certain Definitions		1
Section 2 Registration Rights			4
2.1	Requested Registration		4
2.2	Company Registration		6
2.3	Registration on Form S-3		7
2.4	Expenses of Registration		8
2.5	Registration Procedures		8
2.6	Indemnification		10
2.7	Information by Holder		12
2.8	Restrictions on Transfer		12
2.9	Rule 144 Reporting		14
2.10	Market Stand-Off Agreement		14
2.11	Delay of Registration		14
2.12	Transfer or Assignment of Registration Rights		14
2.13	Limitations on Subsequent Registration Rights		15
2.14	Termination of Registration Rights		15
Section 3 Covenants of the Company			15
3.1	Basic Financial Information		15
3.2	Operating Plan and Budget		16
3.3	Inspection Rights		16
3.4	Confidentiality		16
3.5	Accounts and Records		16
3.6	Independent Accountants		16
3.7	Transactions with Affiliates		17
3.8	Restrictions on Transfer		17
3.9	Publicity		17
3.10	Compensation Committee; Executive Compensation		17
3.11	Termination of Covenants		17
Section 4 Right of First Refusal			18
4.1	Right of First Refusal to Significant Holders		18
4.2	Termination of Right of First Refusal		19
Section 5 Miscellaneous			20
5.1	Amendment		20
5.2	Notices		20
5.3	Governing Law		21
5.4	Successors and Assigns		21
5.5	Entire Agreement		21
5.6	Delays or Omissions		21
5.7	Severability		21

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TABLE OF CONTENTS

(continued)

		Page
5.8	Title and Subtitles		22
5.9	Counterparts		22
5.10	Telecopy Execution and Delivery		22
5.11	Further Assurances		22
5.12	Termination Upon Change of Control		22
5.13	Conflict		22
5.14	Aggregation of Stock		22

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BARRACUDA NETWORKS, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

This Amended and Restated Investors’ Rights Agreement (this “Agreement”) is made as of October 3, 2012, by and among Barracuda Networks, Inc., a Delaware corporation (the “Company”), the persons and entities listed on Exhibit A hereto (each, an “Investor” and collectively, the “Investors”) and the holders of Common Stock listed on Exhibit B hereto (each, a “Common Holder” and collectively, the “Common Holders”). Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in Section 1.

RECITALS

WHEREAS, the Investors are parties to the Recapitalization Agreement of even date herewith, among the Company and the Investors listed on the Schedule of Investors thereto (the “Recapitalization Agreement”), and it is a condition to the consummation of the transactions contemplated by the Recapitalization Agreement that the Investors, the Common Holders and the Company execute and deliver this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and other consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

Section 1

Definitions

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.

(b) “Board” shall mean the board of directors of the Company.

(c) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(d) “Common Stock” shall mean the Common Stock of the Company.

(e) “Conversion Stock” shall mean shares of Common Stock issued upon conversion of the Shares

(f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(g) “Francisco Directors” shall mean the individuals serving on the Board who are designated by Francisco Partners I, L.P. and by Francisco Partners III, L.P.

(h) “Holder” shall mean any Person who holds Registrable Securities and any holder of Registrable Securities to whom the registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 2.12 of this Agreement and any holder of any shares of Common Stock issued or issuable upon conversion of any convertible security for which subsequent registration rights are granted in accordance with Section 2.13 below; provided, however, that the Common Holders shall not be deemed to be Holders for the purposes of Section 3 and 4 hereof

(i) “Indemnified Party” shall have the meaning set forth in Section 2.6(c) hereof.

(j) “Indemnifying Party” shall have the meaning set forth in Section 2.6(c) hereof.

(k) “Initial Closing” shall mean the date of the initial sale of shares of the Company’s Series B Preferred Stock pursuant to the Recapitalization Agreement.

(l) “Initial Public Offering” shall mean the closing of the Company’s first firm commitment underwritten public offering of the Company’s Common Stock registered under the Securities Act.

(m) “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than twenty percent (20%) of the then outstanding Registrable Securities.

(n) “Investors” shall mean the persons and entities listed on Exhibit A hereto.

(o) “New Securities” shall have the meaning set forth in Section 4.1(a) hereof

(p) “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof

(q) “Public Offering” shall have the meaning set forth in the Company’s Third Amended and Restated Certificate of Incorporation, as may be amended from time to time (the “Restated Certificate”).

(r) “Recapitalization Agreement” shall have the meaning set forth in the Recitals hereto.

(s) “Registrable Securities” shall mean: (i) shares of Common Stock issuable or issued pursuant to the conversion of the Shares; (ii) any shares of Common Stock issued or issuable upon conversion or exercise of any convertible security for which subsequent registration rights are granted in accordance with Section 2.13 below; (iii) shares of Common Stock held by the Common Holders; (iv) any shares of Common Stock issued or issuable upon the exercise of any warrants issued pursuant to Section 3.8 (b) hereof; and (v) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described in clause (i), (ii), (iii), (iv) or (v) above which have previously been registered or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement are not validly assigned in accordance with this Agreement.

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(t) The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

(u) “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, accounting fees, escrow fees, fees and disbursements of counsel for the Company and one special counsel for all of the Holders registering securities in any given registration (which special counsel fees shall not exceed $25,000 for any such registration pursuant to Section 2.1 or 2.3), blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, or fees and disbursements of other counsel for the Holders.

(v) “Restricted Securities” shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b) hereof.

(w) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(x) “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(y) “Rule 415” shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(z) “Sale of the Company” means any transaction or series of transactions pursuant to which any Person or a group of related Persons (other than the Investors and their Affiliates) in the aggregate acquires (i) capital stock of the Company or the surviving entity entitled to vote to elect directors with a majority of the voting power of the Company’s or the surviving entity’s board of directors (whether by merger, consolidation, reorganization, combination, sale or transfer of the Company’s capital stock) or (ii) all or substantially all of the Company’s assets determined on a consolidated basis; provided that an Initial Public Offering shall not constitute a Sale of the Company.

(aa) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(bb) “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special counsel for all of the Holders registering securities in any given registration as provided in the definition of “Registration Expenses” above).

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(cc) “Sequoia Director” shall mean the individual serving on the Board who is designated by Sequoia Capital Growth Fund III, L.P.

(dd) “Series A Preferred Stock” shall mean the Series A Preferred Stock of the Company.

(ee) “Series B Preferred Stock” shall mean the Series B Preferred Stock of the Company.

(ff) “Shares” shall mean the Company’s Series A Preferred Stock and Series B Preferred Stock.

(gg) “Significant Holder” shall have the meaning set forth in Section 3.1 hereof.

Section 2

Registration Rights

2.1 Requested Registration.

(a) Request for Registration. Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration with respect to all or a part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of by such Initiating Holders), the Company will:

(i) promptly give written notice of the proposed registration to all other Holders; and

(ii) as soon as practicable, file and use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered.

(b) Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:

(i) prior to the earlier of (A) the fifth (5th) anniversary of the date of hereof or (B) one hundred eighty (180) days following the effective date of the Company’s Initial Public Offering;

(ii) if the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration statement, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $80,000,000;

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(iii) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(iv) if (A) the registration is initiated by Common Holders holding a sufficient number of Registrable Securities and the Company has effected two (2) such registrations pursuant to this Section 2.1 at the request of the Common Holders, or (B) the registration is initiated by the Investors holding a sufficient number of Registrable Securities and the Company has effect two (2) such registrations pursuant to this Section 2.1, at the request of the Investors; or

(v) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a Initial Public Offering; provided that the Company is actively employing in good faith reasonable best efforts to cause such registration statement to become effective, and provided that the Company delivers notice to the Holders of Registrable Securities of its intent to file such registration statement within thirty (30) days of any request for registration by the Initiating Holders.

(c) Deferral. If: (i) in the good faith judgment of the Board, the filing of a registration statement covering the Registrable Securities would be seriously detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such registration statement at such time; and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board, it would be detrimental to the Company or its stockholders for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set forth in Section 2.1(b)(v) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than once in any twelve-month period.

(d) Underwriting. The right of any Holder to include all or any portion of its Registrable Securities in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder’s participation in an underwriting and the inclusion of such Holder’s Registrable Securities to the extent provided herein. If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, or if other Holders shall request inclusion in any registration pursuant to Section 2.1, the Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons in such underwriting and the inclusion of the Company’s and such person’s other securities of the Company and their acceptance of the further applicable provisions of this Section 2 (including Section 2.10). The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company, which underwriters are reasonably acceptable to a majority-ininterest of the Initiating Holders.

Notwithstanding any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities that may be so included shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders. In no event shall Registrable Securities held by Holders be excluded from such registration unless all other stockholders’ securities (including securities for the account of the Company) have been first excluded.

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If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to Section 2.1(d), then the Company shall then offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion, as set forth above.

2.2 Company Registration.

(a) If the Company shall determine to register any of its securities either for its own account or the account of an Investor, other than a registration pursuant to Section 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, a registration on Form S-3 of securities to be offered on a delayed or continuous basis pursuant to Rule 415 of the Securities Act or a registration on any registration form that does not permit secondary sales, the Company will:

(i) promptly give written notice of the proposed registration to all Holders; and

(ii) use its best efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Registrable Securities as are specified in a written request or requests made by any Holder or Holders received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered. Such written request may specify all or a part of a Holder’s Registrable Securities.

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

Notwithstanding any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Registrable Securities to be included in the registration and underwriting. In no event shall any Registrable Securities be excluded from

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such registration and underwriting unless all other stockholders’ securities have been first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such registration and underwriting, then the Registrable Securities that are included in such registration and underwriting shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall the amount of securities of the selling Holders included in the registration and underwriting be reduced below thirty percent (30%) of the total amount of securities included in such registration and underwriting, unless such registration is the Company’s Initial Public Offering, in which case the selling Holders may be excluded entirely if the underwriters make the determination described above and no other stockholders’ securities are included in such registration and underwriting.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter. The securities so excluded shall also be withdrawn from such registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

(c) Right to Terminate Registration. The Board shall have the right to terminate or withdraw any registration initiated by the Company under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

2.3 Registration on Form S-3.

(a) Request for Form S-3 Registration. After its Initial Public Offering, the Company shall use its best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set forth in this Section 2.3, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all such action with respect to such Registrable Securities as required by Section 2.1(a)(i) and (ii).

(b) Limitations on Form S-3 Registration. The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:

(i) in the circumstances described in either Sections 2.1(b)(iii) or 2.1(b)(v);

(ii) if the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public of less than $10,000,000; or

(iii) if, in a given twelve-month period, the Company has effected two (2) such registrations in such period.

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(c) Deferral. The provisions of Section 2.1(c) shall apply to any registration pursuant to this Section 2.3.

2.4 Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 hereof shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of (i) the Initiating Holders if the holders of Shares are the Initiating Holders, and (ii) the holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions set forth in Sections 2.1 and 2.3 are no longer satisfied (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority of the Registrable Securities and the holders of [two-thirds] of the Shares agree to forfeit their right to a demand registration pursuant to Section 2.1; and provided, further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 2.1 or 2.3 (with such registration proceeding not being counted as a requested registration pursuant to Section 2.1 or 2.3). If the Holders bear the Registration Expenses for any registration proceeding begun pursuant to Section 2.1 and subsequently withdrawn by the Holders registering shares therein, such registration proceeding shall not be counted as a requested registration pursuant to Section 2.1. All Selling Expenses relating to securities registered on behalf of the selling Holders shall be borne pro rata by the selling Holders based on the number of Registrable Securities so registered.

2.5 Registration Procedures. In the case of each registration effected by the Company pursuant to Section 2, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof At its expense, the Company will use its best efforts to:

(a) keep such registration effective for a period ending on the earlier of the date which is ninety (90) days from the effective date of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto; provided, however, that such 90-day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of common stock or other securities of the Company.

(b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;

(c) furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

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(d) use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be reasonably requested by the Holders; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(e) notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;

(f) provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(g) cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and

(h) in connection with any underwritten offering pursuant to a registration statement filed pursuant to this Section 2, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions, and provided further, that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement; and

(i) furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter, dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities (to the extent the then-applicable standards of professional conduct permit said letter to be addressed to the Holders).

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2.6 Indemnification.

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, legal counsel, and accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement, prospectus, offering circular, or other document (including any related registration statement, notification, or the like) or any amendment or supplement thereto, incident to any such registration, qualification, or compliance; (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; or (iii) any violation (or alleged violation) by the Company of the Securities Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification, or compliance, and the Company will reimburse each such Holder, each of its officers, directors, partners, legal counsel, and accountants and each person controlling such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing, defending or settling any such claim, loss, damage, liability, or action, as such expenses are incurred, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by such Holder, any of such Holder’s officers, directors, partners, legal counsel or accountants, any person controlling such Holder, such underwriter or any person who controls any such underwriter and stated to be specifically for use therein; and provided further that, the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification, or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors, and partners, and each person controlling such Holder, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any such registration statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, directors, officers, partners, legal counsel, and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is contained in such registration statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed the gross proceeds from the offering received by such Holder.

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(c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; provided, further, however, that an Indemnified Party (together with all other Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

(d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations; provided, however, that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 2.6(b), shall exceed the gross proceeds from the offering received by such Holder. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above.

(e) The indemnification and contribution provided for under this Agreement shall be in addition to any other rights to indemnification or contribution that any indemnified party may have pursuant to law or contract and shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of Registrable Securities and the termination or expiration of this Agreement.

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(f) No indemnifying party shall, except with the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

2.7 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.

2.8 Restrictions on Transfer.

(a) The holder of each certificate representing Registrable Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section 2.8. Each Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Restricted Securities, or any beneficial interest therein, unless and until:

(i) the transferee thereof has executed and delivered to the Company the Adoption Agreement, attached hereto as Exhibit C, agreeing in writing for the benefit of the Company and the other Holders to take and hold such Restricted Securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, Section 2.6, this Section 2.8 and Section 2.10, and such transferee’s name is added to Exhibit A or Exhibit B as the case may be;

(ii) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; and

(iii) such Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, such Holder shall have furnished the Company, at such Holder’s expense, with (1) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Restricted Securities under the Securities Act or (2) a “no action” letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the Holder to the Company. It is agreed that the Company will not require opinions of counsel or “no action” letters for transactions made pursuant to Rule 144.

Notwithstanding the provisions of subsections (a)(ii) and (a)(iii) above, no such registration statement or opinion of counsel or “no action” letter shall be necessary for a transfer by a Holder to any of its Affiliates or by a Holder that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, if the prospective transferee agrees in all such instances in writing to be subject to the terms hereof to the same extent as if he or she were an original Holder hereunder.

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(b) Each certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN AN INVESTOR RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN A VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

The Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 2.8.

(c) The first legend referring to federal and state securities laws identified in Section 2.8(b) hereof stamped on a certificate evidencing the Restricted Securities and the stock transfer instructions and record notations with respect to such Restricted Securities shall be removed and the Company shall issue a certificate without such legend to the holder of such Restricted Securities if: (i) such securities are registered under the Securities Act or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act.

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2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its best efforts to:

(a) make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;

(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

(c) so long as a Holder owns any Restricted Securities, make available to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of any other reporting requirements of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

2.10 Market Stand-Off Agreement. Each Holder hereby agrees that such Holder shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the Company’s Initial Public Offering. The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(b) hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day period. Each Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.10.

2.11 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.12 Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted to a Holder by the Company under this Section 2 may be transferred or assigned by a Holder only to: (a) a transferee or assignee of not less than two percent (2%) of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); (b) an Affiliate of a Holder or a subsidiary, parent, partner, limited partner, retired partner, member or retired member of a Holder; or (c) for individual Holders, such Holder’s family member or trust for the benefit of an individual Holder or Holder’s family member; provided that (i) any such transfer or assignment of Registrable Securities is effected in accordance with the terms of Section 2.8 hereof, and applicable securities laws; (ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying

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the securities with respect to which such registration rights are intended to be transferred or assigned; and (iii) the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement pursuant to the execution and delivery to the Company of the Adoption Agreement, attached hereto as Exhibit C.

2.13 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders holding [two-thirds] of the outstanding shares of the Registrable Securities held the holders of Shares, or any shares of Common Stock issued upon conversion thereof, enter into any agreement with any holder or prospective holder of any securities of the Company granting such holder or prospective holder any registration rights.

2.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 shall terminate with respect to such Holder on the earlier of (a) such date, on or after the closing of the Company’s Initial Public Offering, on which all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any ninety (90)-day period; and (b) five (5) years after the closing of the Company’s Public Offering.

Section 3

Covenants of the Company

The Company hereby covenants and agrees, as follows:

3.1 Basic Financial Information.

(a) Basic Financial Information. Upon request, the Company will furnish the following reports to each Investor and Common Holder who owns at least three million (3,000,000) shares of the Company’s Common Stock on an as-converted, fully-diluted basis (a “Significant Holder”):

(i) as soon as practicable after the end of each fiscal year of the Company, and in any event within ninety (90) days after the end of each fiscal year of the Company, an audited consolidated balance sheet of the Company and its subsidiaries as at the end of such fiscal year, and audited consolidated statements of income and cash flows of the Company and its subsidiaries, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, certified by independent public accountants of recognized national standing selected by the Company; and

(ii) as soon as practicable, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal yearend audit adjustments, with the exception that no notes need be attached to such statements and yearend audit adjustments may not have been made.

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3.2 Operating Plan and Budget. The Company shall prepare an annual operating plan and budget (including projected balance sheets and profit and loss and cash flow statements) for this and each upcoming fiscal year presented in a manner consistent with the information provided pursuant to Section 3.1 hereof, and as soon as practicable upon approval or adoption by the Board, the Company will furnish each Significant Holder with the Company’s budget and operating plan for such fiscal year

3.3 Inspection Rights. The Company will afford to each Significant Holder reasonable access during normal business hours (i) to all of the Company’s properties, books and records. Significant Holders may exercise their rights under this Section 3.2 only for purposes reasonably related to their interests under this Agreement and related agreements (including the ability to make copies and take extracts therefrom), and (ii) to discuss the Company’s affairs, finances and accounts with its officers. The rights granted pursuant to this Section 3.2 may not be assigned or otherwise conveyed by any Significant Holder or by any subsequent transferee of any such rights without the prior written consent of the Company.

3.4 Confidentiality. An ything in this Agreement to the contrary notwithstanding, no Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company. The Company shall not be required to comply with any information rights or inspection rights of Section 3 in respect of any Holder whom the Board reasonably determines to be a competitor or an officer, employee, director or holder of more than ten percent (10%) of a competitor, nor shall the Company be obligated to disclose any information which the Board determines in good faith is attorney-client privileged and should not, therefore, be disclosed. The Company shall not be obligated to disclose details of contracts with, or work performed for, specific customers and other business partners where to do so would violate confidentiality obligations to those parties. Each Holder agrees that it will not use any information received by it pursuant to this Agreement in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees, agents or partners having a need to know the contents of such information, and its attorneys), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally.

3.5 Accounts and Records. The Company will keep true records and books of account in which full, true, and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles applied on a consistent basis.

3.6 Independent Accountants. The Company will retain independent public accountants of recognized national standing (i.e. PricewaterhouseCoopers, KMPG, Deloitte & Touche, Ernst & Young, or their successors, each a “Nationally Recognized Firm”) who shall certify the Company’s financial statements at the end of each fiscal year. In the event the services of the Nationally Recognized Firm so selected, or any Nationally Recognized Firm hereafter employed by the Company, are terminated, the Company will promptly notify the Significant Holders and will request the Nationally Recognized Firm whose services are terminated to deliver to the

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Significant Holders a letter from such Nationally Recognized Firm setting forth the reasons for the termination of its services. In its notice to the Significant Holders, the Company shall state whether the change of accountants was recommended or approved by the Board or any committee thereof In the event of such termination, the Company will promptly thereafter engage another Nationally Recognized Firm.

3.7 Transactions with Affiliates. The Company shall not, without the approval of the disinterested members of the Board, engage in any loans, leases, contracts or other transactions with any officer, director, or key employee of the Company, or any member of any such person’s immediate family, including the parents, spouse, children, or other relatives of any such person, on terms less favorable than the Company would obtain in a transaction with an unrelated party, as determined in good faith by the Board, except pursuant to the Restated Certificate or the ROFR Agreement.

3.8 Restrictions on Transfer. Unless otherwise approved by the Board, all purchases of shares of Common Stock of the Company after the date of this Agreement shall be pursuant to a form of agreement which provides: (a) for a right of first refusal in favor of the Company (terminable upon the Company’s Initial Public Offering); (b) that any shares of unvested Common Stock may not be transferred by such holder (except for certain estate planning transactions); (c) that no shares of Common Stock may be transferred by such holder during the one hundred eighty (180) day period following the effective date of the Company’s Initial Public Offering; and (d) for no acceleration of vesting of shares of Common Stock unless both (i) control of the Company is transferred and (ii) any repurchase option that relates to the shares of Common Stock is not assumed by the acquiror in such change of control.

3.9 Publicity. The Company or any Investor shall not use any the other party’s name in any manner, context or format (including reference on or links to websites, press releases, etc.) without the prior approval of such party.

3.10 Compensation Committee; Executive Compensation. The Company shall maintain a Compensation Committee (the “Committee”) of the Board of Directors, which shall be composed of any independent directors serving on the Board of Directors, the Sequoia Director, the Francisco Directors and such other directors designated by the Sequoia Director and the Francisco Directors. The Committee shall be responsible for determining all compensation, including stock options and other stock based awards, for all executives, officers and employees of the Company, excluding newly hired executives, officers and employees. The existence, composition, and responsibilities of the Committee may not be changed without the consent of the then current members of the Committee.

3.11 Termination of Covenants. Unless otherwise set forth herein, the covenants set forth in this Section 3 shall terminate and be of no further force and effect after the closing of the Company’s Public Offering.

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Section 4

Right of First Refusal

4.1 Right of First Refusal to Significant Holders. The Company hereby grants to each Significant Holder the right of first refusal to purchase its pro rata share of New Securities (as defined in Section 4.1(a)) which the Company may, from time to time, propose to sell and issue after the date of this Agreement if (A) such New Securities are being offered to the Investors or any of their Affiliates or (B) such New Securities are being sold to one or more third parties not including the Investors or any of their Affiliates for cash at a pre-money equity valuation that values the common stock (on a fully-diluted basis) at less than $5.61178 (as adjusted for any stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event). A Significant Holder’s pro rata share, for purposes of this right of first refusal, is equal to the ratio of: (x) the number of shares of Common Stock owned by such Significant Holder immediately prior to the issuance of New Securities (assuming full conversion of the Shares and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly, into Common Stock held by said Significant Holder) to (y) the total number of shares of Common Stock outstanding immediately prior to the issuance of New Securities (assuming full conversion of the Shares and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly). Each Significant Holder shall have a right of over-allotment such that if any Significant Holder fails to exercise its right hereunder to purchase its pro rata share of New Securities, the other Significant Holders who exercise their purchase rights hereunder may purchase the non-purchasing Significant Holder(s)’ portion on a pro rata basis (the “Over-Allotment Option”).

(a) “New Securities” shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that, the term “New Securities” does not include:

(i) the Shares and the Conversion Stock;

(ii) securities issued or issuable to officers, directors, employees of, or consultants to, the Company pursuant to stock grants, option plans, purchase plans, agreements or other employee stock incentive programs or arrangements approved by the Board, or upon exercise of options or warrants granted to such parties pursuant to any such plan or arrangement;

(iii) securities issued upon the conversion or exercise of any outstanding convertible or exercisable securities as of this date of this Agreement;

(iv) securities issued or issuable as a dividend or distribution on Preferred Stock of the Company or pursuant to any event for which adjustment is made pursuant to paragraphs 4(e), 4(f) or 4(g) of the Certificate of Incorporation of the Company;

(v) securities issued pursuant to a registered public offering under the Securities Act;

(vi) securities issued or issuable pursuant to the bona fide acquisition of another corporation by the Company by merger, purchase of substantially all of the assets or other reorganization whereby the Company will own not less than a majority of the voting power of the surviving or successor corporation, which acquisition is approved by the Board;

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(vii) (vii) securities issued or issuable to banks, equipment lessors, other financial institutions, landlords or other providers of goods or services to the Company pursuant to a debt financing, equipment lease, bank credit arrangement or commercial leasing transaction entered into for primarily non-equity financing purposes, or for a lease or other commercial arrangement, each as approved by the Board;

(viii) securities issued to entities in connection with joint ventures, development projects or other strategic transactions, if such issuance is approved by the Board;

(ix) securities of the Company which are otherwise excluded by the affirmative unanimous vote of the Board and are not offered to any existing stockholder of the Company;

(x) securities issued in connection with Section 3.8 hereto, and securities issued upon the exercise thereof; and

(xi) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i) through (xi) above.

(b) In the event the Company proposes to undertake an issuance of New Securities, it shall give each Significant Holder written notice of its intention, describing the type of New Securities, and their price and the general terms upon which the Company proposes to issue the same. Each Significant Holder shall have twenty (20) days after any such notice is mailed or delivered to agree to purchase such Significant Holder’s pro rata share of such New Securities and to indicate whether such Significant Holder desires to exercise its Over-Allotment Option for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased.

(c) In the event the Significant Holders fail to exercise fully the right of first refusal and Over-Allotment Option, if any, within said twenty (20) day period (the “Election Period”), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within thirty (30) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Significant Holders’ right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to Significant Holders delivered pursuant to Section 4.1(b). In the event the Company has not sold or entered into an agreement within such ninety (90) day period following the Election Period, or sold within such thirty (30)-day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Significant Holders in the manner provided in this Section 4.1.

4.2 Termination of Right of First Refusal. The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the Company’s Public Offering.

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Section 5

Miscellaneous

5.1 Amendment. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by (i) the Company, and (ii) the Holders of at least a majority of the outstanding shares of the Registrable Securities (excluding any of such shares that have been sold to the public or pursuant to Rule 144), provided that (i) no such amendment shall impose or increase any liability or obligation on a Holder without the consent of such Holder, and (ii) no such amendment has a disproportionately adverse effect on any Holder in relation to the other Holder without the consent of such Holder. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities of Holder.¹

5.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:

(a) if to an Investor, at the Investor’s address, facsimile number or electronic mail address as shown in the Company’s records, as may be updated in accordance with the provisions hereof, with a copy to Kirkland & Ellis LLP, 950 Page Mill Road, Palo Alto, CA 94304, Attn: Adam Phillips;

(b) if to any Holder, at such address, facsimile number or electronic mail address as shown in the Company’s records, or, until any such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address of the last holder of such shares for which the Company has contact information in its records; or

(c) if to the Company, one copy should be sent to 3175 Winchester Boulevard Campbell, CA 95008, fax: (408) 342-1061, Attn: President, or at such other address as the Company shall have furnished to the Investors, with a copy to Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304, Attn: Steve Bochner.

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery.

¹  NTD: Deletion of last sentence in this section of the original IRA to be discussed.

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5.3 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of California as applied to agreements entered into among California residents to be performed entirely within California, without regard to principles of conflicts of law.

5.4 Successors and Assigns. Except as otherwise provided herein, and subject to the operation of Section 5.14, this Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Holder without the prior written consent of the Company. Any other attempt by a Holder without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

Notwithstanding the foregoing, the parties hereto acknowledge and agree that each of the Investors may transfer the number of Shares it holds, and assign its rights, duties and obligations hereunder, to an Affiliated fund, and by virtue of this clause the parties hereto shall be deemed to have consented to such transfer and assignment.

5.5 Entire Agreement. This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.

5.6 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

5.7 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

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5.8 Title and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

5.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.

5.10 Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof

5.11 Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

5.12 Termination Upon Change of Control. Notwithstanding anything to the contrary herein, the rights of the Company and the Investors under Sections 3 and 4 of this Agreement (excluding any then-existing obligations) shall terminate upon a Sale of the Company.

5.13 Conflict. In the event of any conflict between the terms of this Agreement and the Restated Certificate or its Bylaws, the terms of the Restated Certificate or its Bylaws, as the case may be, will control.

5.14 Aggregation of Stock. All shares of Common Stock and Preferred Stock held or acquired by Affiliated entities or persons or entities under common investment management or control shall be aggregated together for the purpose of determining the availability of any rights or obligations under this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

BARRACUDA NETWORKS, INC.
a Delaware corporation
By:	/s/ David Faugno
Name:	David Faugno
Title:	CFO

[Signature Page to Investors’ Rights Agreement]

INVESTORS:
SEQUOIA CAPITAL FRANCHISE FUND
SEQUOIA CAPITAL FRANCHISE PARTNERS
By:	SCFF Management, LLC
	a Delaware Limited Liability Company
	General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member
SEQUOIA CAPITAL GROWTH FUND III
SEQUOIA CAPITAL GROWTH PARTNERS III
SEQUOIA CAPITAL GROWTH III
PRINCIPALS FUND
By:	SCFF III Management, LLC
	a Delaware Limited Liability Company
	General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member

[Signature Page to Investors’ Rights Agreement]

INVESTORS:
FRANCISCO PARTNERS, L.P.
By:	Francisco Partners GP, LLC
Its:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS FUND A, L.P.
By:	Francisco Partners GP, LLC
Its:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS PARALLEL FUND III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David Golob
Its:

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
/s/ Dean Drako
Name:	Dean M. Drako

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
Name:	Dean M. Drako Living Trust
By:	/s/ Dean Drako
Its:

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
/s/ Michael Perone
Name:	Michael Perone

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
Name:	The Michael Perone 2010 Four Year Grantor Retained Annuity Trust
By:	/s/ Michael Perone
Its:	CMO

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
Name:	The Michael Perone 2010 Three Year Grantor Retained Annuity Trust
By:	/s/ Michael Perone
Its:	CMO

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.
COMMON HOLDER
By:	/s/ Zachary Levow
Name:	Zachary Levow

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
By:	/s/ Zachary Levow
Name:	The Zachary Levow 2010 Grantor Retained Annuity Trust
By:	/s/ Zachary Levow
Its:

[Signature Page to Investors’ Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Investors’ Rights Agreement effective as of the day and year first above written.

COMMON HOLDER
By:	/s/ Holly Levow
Name:	The Holly Levow 2010 Grantor Retained Annuity Trust
By:	Holly Levow
Its:

[Signature Page to Investors’ Rights Agreement]

EXHIBIT A

INVESTORS

Sequoia Capital Growth Fund III

Sequoia Capital Franchise Fund

Sequoia Capital Franchise Partners

Sequoia Capital Growth III Principals Fund

Sequoia Capital Growth Partners III

Francisco Partners, L.P.

Francisco Partners Fund A, L.P.

Francisco Partners III, L. P.

Francisco Partners Parallel Fund III, L.P.

EXHIBIT B

COMMON HOLDERS

Dean M. Drako

Dean M. Drako Living Trust

Michael Perone

The Michael Perone 2010 Four Year Grantor Retained Annuity Trust

The Michael Perone 2010 Three Year Grantor Retained Annuity Trust

Zachary Levow

The Zach Levow 2010 Grantor Retained Annuity Trust

The Holly Levow 2010 Grantor Retained Annuity Trust

EXHIBIT C

ADOPTION AGREEMENT

This Adoption Agreement (“Adoption Agreement”) is executed by the undersigned (the “Transferee”) pursuant to the terms of that certain Amended and Restated Investors Rights Agreement dated as of             , 2012 (the “Agreement”) by and among Barracuda Networks, Inc. (the “Company”), the Investors (as defined therein) and the Common Holders (as defined therein). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Agreement. By the execution of this Adoption Agreement, the Transferee agrees as follows:

Acknowledgment. Transferee acknowledges that Transferee is acquiring shares of the [Series A Preferred Stock/Series B Preferred Stock/Common Stock] of the Company (the “Stock”), subject to the terms and conditions of the Agreement.

Agreement. Transferee: (i) agrees that the Stock acquired by Transferee shall be bound by and subject to the terms of the Agreement as a [Series A Investor/Series B Investor/Common Holder]; and (ii) hereby adopts the Agreement with the same force and effect as if Transferee were originally a Party thereto.

Notice. Any notice required or permitted by the Agreement shall be given to Transferee at the address listed beneath Transferee’s signature below.

EXECUTED AND DATED this      day of         ,         .

TRANSFEREE:
By:
	Name and Title
Address:
Fax:

Accepted and Agreed:

COMPANY:

BARRACUDA NETWORKS, INC.

By:

Name:

Title:

EX-10.1

Exhibit 10.1

BARRACUDA NETWORKS, INC.

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”) is dated as of [            ], 2013, and is between Barracuda Networks, Inc., a Delaware corporation (the “Company”), and [insert name of indemnitee] (“Indemnitee”).

RECITALS

A. Indemnitee’s service to the Company substantially benefits the Company.

B. Individuals are reluctant to serve as directors or officers of corporations or in certain other capacities unless they are provided with adequate protection through insurance or indemnification against the risks of claims and actions against them arising out of such service.

C. Indemnitee does not regard the protection currently provided by applicable law, the Company’s governing documents and any insurance as adequate under the present circumstances, and Indemnitee may not be willing to serve as a director or officer without additional protection.

D. In order to induce Indemnitee to continue to provide services to the Company, it is reasonable, prudent and necessary for the Company to contractually obligate itself to indemnify, and to advance expenses on behalf of, Indemnitee as permitted by applicable law.

E. This Agreement is a supplement to and in furtherance of the indemnification provided in the Company’s certificate of incorporation and bylaws, and any resolutions adopted pursuant thereto, and this Agreement shall not be deemed a substitute therefor, nor shall this Agreement be deemed to limit, diminish or abrogate any rights of Indemnitee thereunder.

The parties therefore agree as follows:

1. Definitions.

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities;

(ii) Change in Board Composition. During any period of two consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Company’s board of directors, and any new directors (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 1(a)(i), 1(a)(iii) or 1(a)(iv)) whose election by the board of directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Company’s board of directors;

(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

(v) Other Events. Any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended, whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 1(a), the following terms shall have the following meanings:

(1) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended; provided, however, that “Person” shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(2) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended; provided, however, that “Beneficial Owner” shall exclude any Person otherwise becoming a Beneficial Owner by reason of (i) the stockholders of the Company approving a merger of the Company with another entity or (ii) the Company’s board of directors approving a sale of securities by the Company to such Person.

(b) “Corporate Status” describes the status of a person who is or was a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company or any other Enterprise.

(c) “DGCL” means the General Corporation Law of the State of Delaware.

(d) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e) “Enterprise” means the Company and any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary.

(f) “Expenses” include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees and costs of experts, witness fees, travel expenses, duplicating costs, printing and binding costs,

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telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond or other appeal bond or their equivalent, and (ii) for purposes of Section 12(d), Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(g) “Independent Counsel” means a law firm, or a partner or member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than as Independent Counsel with respect to matters concerning Indemnitee under this Agreement, or other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(h) “Proceeding” means any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, including any appeal therefrom and including without limitation any such Proceeding pending as of the date of this Agreement, in which Indemnitee was, is or will be involved as a party, a potential party, a non-party witness or otherwise by reason of (i) the fact that Indemnitee is or was a director or officer of the Company, (ii) any action taken by Indemnitee or any action or inaction on Indemnitee’s part while acting as a director or officer of the Company, or (iii) the fact that he or she is or was serving at the request of the Company as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of the Company or any other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification or advancement of expenses can be provided under this Agreement.

(i) Reference to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

2. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 2 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 2, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

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3. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged by a court of competent jurisdiction to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court of Chancery or such other court shall deem proper.

4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. To the extent that Indemnitee is a party to or a participant in and is successful (on the merits or otherwise) in defense of any Proceeding or any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. To the extent permitted by applicable law, if Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, in defense of one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with (a) each successfully resolved claim, issue or matter and (b) any claim, issue or matter related to any such successfully resolved claim, issue or matter. For purposes of this section, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

5. Indemnification for Expenses of a Witness. To the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified to the extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

6. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 2, 3 or 4, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection with the Proceeding or any claim, issue or matter therein.

(b) For purposes of Section 6(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

(i) the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

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(ii) the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

7. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any Proceeding (or any part of any Proceeding):

(a) for which payment has actually been made to or on behalf of Indemnitee under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;

(b) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of federal, state or local statutory law or common law, if Indemnitee is held liable therefor (including pursuant to any settlement arrangements);

(c) for any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Securities Exchange Act of 1934, as amended (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), if Indemnitee is held liable therefor (including pursuant to any settlement arrangements);

(d) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees, agents or other indemnitees, unless (i) the Company’s board of directors authorized the Proceeding (or the relevant part of the Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (iii) otherwise authorized in Section 12(d) or (iv) otherwise required by applicable law; or

(e) if prohibited by applicable law.

8. Advances of Expenses. The Company shall advance the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made as soon as reasonably practicable, but in any event no later than 60 days, after the receipt by the Company of a written statement or statements requesting such advances from time to time (which shall include invoices received by Indemnitee in connection with such Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditure made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice). Advances shall be unsecured and interest free and made without regard to Indemnitee’s ability to repay such advances. Indemnitee hereby undertakes to repay any advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. This Section 8 shall not apply to the extent advancement is prohibited by law and shall not apply to any Proceeding for which indemnity is not permitted under this Agreement, but shall apply to any Proceeding referenced in Section 7(b) or 7(c) prior to a determination that Indemnitee is not entitled to be indemnified by the Company.

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9. Procedures for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses as soon as reasonably practicable following the receipt by Indemnitee of notice thereof. The written notification to the Company shall include, in reasonable detail, a description of the nature of the Proceeding and the facts underlying the Proceeding. The failure by Indemnitee to notify the Company will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights, except to the extent that such failure or delay materially prejudices the Company.

(b) If, at the time of the receipt of a notice of a Proceeding pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of the Proceeding to the insurers in accordance with the procedures set forth in the applicable policies. The Company shall thereafter take all commercially-reasonable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(c) In the event the Company may be obligated to make any indemnity in connection with a Proceeding, the Company shall be entitled to assume the defense of such Proceeding with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee for any fees or expenses of counsel subsequently incurred by Indemnitee with respect to the same Proceeding. Notwithstanding the Company’s assumption of the defense of any such Proceeding, the Company shall be obligated to pay the fees and expenses of Indemnitee’s counsel to the extent (i) the employment of counsel by Indemnitee is authorized by the Company, (ii) counsel for the Company or Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and Indemnitee in the conduct of any such defense such that Indemnitee needs to be separately represented, (iii) the fees and expenses are non-duplicative and reasonably incurred in connection with Indemnitee’s role in the Proceeding despite the Company’s assumption of the defense, (iv) the Company is not financially or legally able to perform its indemnification obligations or (v) the Company shall not have retained, or shall not continue to retain, such counsel to defend such Proceeding. The Company shall have the right to conduct such defense as it sees fit in its sole discretion. Regardless of any provision in this Agreement, Indemnitee shall have the right to employ counsel in any Proceeding at Indemnitee’s personal expense. The Company shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company.

(d) Indemnitee shall give the Company such information and cooperation in connection with the Proceeding as may be reasonably appropriate.

(e) The Company shall not be liable to indemnify Indemnitee for any settlement of any Proceeding (or any part thereof) without the Company’s prior written consent, which shall not be unreasonably withheld.

(f) The Company shall have the right to settle any Proceeding (or any part thereof) without the consent of Indemnitee.

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10. Procedures upon Application for Indemnification.

(a) To obtain indemnification, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and as is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Proceeding. The Company shall, as soon as reasonably practicable after receipt of such a request for indemnification, advise the board of directors that Indemnitee has requested indemnification. Any delay in providing the request will not relieve the Company from its obligations under this Agreement, except to the extent such failure is prejudicial.

(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Company’s board of directors, a copy of which shall be delivered to Indemnitee or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Company’s board of directors, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Company’s board of directors, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Company’s board of directors, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Company’s board of directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) reasonably incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company, to the extent permitted by applicable law.

(c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(b), the Independent Counsel shall be selected as provided in this Section 10(c). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Company’s board of directors, and the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Company’s board of directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 10(a) hereof and (ii) the final disposition of the Proceeding, the parties have not agreed upon an Independent Counsel, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and for the appointment as Independent Counsel of

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a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 10(b) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(d) The Company agrees to pay the reasonable fees and expenses of any Independent Counsel and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

11. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by such person, persons or entity of any determination contrary to that presumption.

(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

(c) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith to the extent Indemnitee relied in good faith on (i) the records or books of account of the Enterprise, including financial statements, (ii) information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, (iii) the advice of legal counsel for the Enterprise or its board of directors or counsel selected by any committee of the board of directors or (iv) information or records given or reports made to the Enterprise by an independent certified public accountant, an appraiser, investment banker or other expert selected with reasonable care by the Enterprise or its board of directors or any committee of the board of directors. The provisions of this Section 11(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(d) Neither the knowledge, actions nor failure to act of any other director, officer, agent or employee of the Enterprise shall be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

12. Remedies of Indemnitee.

(a) Subject to Section 12(e), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 or 12(d) of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10 of this Agreement within 90 days after the later of the receipt by the Company of the request for indemnification or the final disposition of the Proceeding, (iv) payment of indemnification pursuant to this Agreement is not made (A) within ten days after a determination has been made that Indemnitee is entitled to indemnification or

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(B) with respect to indemnification pursuant to Sections 4, 5 and 12(d) of this Agreement, within 30 days after receipt by the Company of a written request therefor, or (v) the Company or any other person or entity takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration with respect to his or her entitlement to such indemnification or advancement of Expenses, to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under Section 4 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration in accordance with this Agreement.

(b) Neither (i) the failure of the Company, its board of directors, any committee or subgroup of the board of directors, Independent Counsel or stockholders to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor (ii) an actual determination by the Company, its board of directors, any committee or subgroup of the board of directors, Independent Counsel or stockholders that Indemnitee has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not met the applicable standard of conduct. In the event that a determination shall have been made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall, to the fullest extent not prohibited by law, have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) To the fullest extent not prohibited by law, the Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. If a determination shall have been made pursuant to Section 10 of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statements not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) To the extent not prohibited by law, the Company shall indemnify Indemnitee against all Expenses that are incurred by Indemnitee in connection with any action for indemnification or advancement of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company to the extent Indemnitee is successful in such action, and, if requested by Indemnitee, shall (as soon as reasonably practicable, but in any event no later than 60 days, after receipt by the Company of a written request therefor) advance such Expenses to Indemnitee, subject to the provisions of Section 8.

(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification shall be required to be made prior to the final disposition of the Proceeding.

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13. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amounts incurred by Indemnitee, whether for Expenses, judgments, fines or amounts paid or to be paid in settlement, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the events and transactions giving rise to such Proceeding; and (ii) the relative fault of Indemnitee and the Company (and its other directors, officers, employees and agents) in connection with such events and transactions.

14. Non-exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s certificate of incorporation or bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company’s certificate of incorporation and bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change, subject to the restrictions expressly set forth herein or therein. Except as expressly set forth herein, no right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. Except as expressly set forth herein, the assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

15. Reserved.

16. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received payment for such amounts under any insurance policy, contract, agreement or otherwise.

17. Insurance. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, trustees, general partners, managing members, officers, employees, agents or fiduciaries of the Company or any other Enterprise, Indemnitee shall be covered by such policy or policies to the same extent as the most favorably-insured persons under such policy or policies in a comparable position.

18. Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

19. Services to the Company. Indemnitee agrees to serve as a director or officer of the Company or, at the request of the Company, as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of another Enterprise, for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders his or her resignation or is removed from such position. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges

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that any employment with the Company (or any of its subsidiaries or any Enterprise) is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, with or without notice, except as may be otherwise expressly provided in any executed, written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), any existing formal severance policies adopted by the Company’s board of directors or, with respect to service as a director or officer of the Company, the Company’s certificate of incorporation or bylaws or the DGCL. No such document shall be subject to any oral modification thereof.

20. Duration. This Agreement shall continue until and terminate upon the later of (a) ten years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or as a director, trustee, general partner, managing member, officer, employee, agent or fiduciary of any other Enterprise, as applicable; or (b) one year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto.

21. Successors. This Agreement shall be binding upon the Company and its successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

22. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order or other applicable law, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

23. Enforcement. The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

24. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Company’s certificate of incorporation and bylaws and applicable law.

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25. Modification and Waiver. No supplement, modification or amendment to this Agreement shall be binding unless executed in writing by the parties hereto. No amendment, alteration or repeal of this Agreement shall adversely affect any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. No waiver of any of the provisions of this Agreement shall constitute or be deemed a waiver of any other provision of this Agreement nor shall any waiver constitute a continuing waiver.

26. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand, messenger or courier service addressed:

(a) if to Indemnitee, to Indemnitee’s address, facsimile number or electronic mail address as shown on the signature page of this Agreement or in the Company’s records, as may be updated in accordance with the provisions hereof; or

(b) if to the Company, to the attention of the Chief Executive Officer or Chief Financial Officer of the Company at 3175 Winchester Blvd, Campbell, California 95008, or at such other current address as the Company shall have furnished to Indemnitee, with a copy (which shall not constitute notice) to Jeffrey D. Saper, Esq., Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304.

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next business day.

27. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court of Chancery, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, The Corporation Trust Company, Wilmington, Delaware as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court of Chancery, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court of Chancery has been brought in an improper or inconvenient forum.

28. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in counterparts,

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each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

29. Captions. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

(signature page follows)

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The parties are signing this Indemnification Agreement as of the date stated in the introductory sentence.

BARRACUDA NETWORKS, INC.

(Signature)

(Print name)

(Title)

[INSERT INDEMNITEE NAME]

(Signature)

(Print name)

(Street address)

(City, State and ZIP)

EX-10.2

Exhibit 10.2

BARRACUDA NETWORKS, INC.

2004 STOCK PLAN

Adopted: November 17, 2004

Approved By Stockholders: November 17, 2004

Termination Date: May 18, 2012

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

(b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan.

(c) “Board” means the Board of Directors of the Company.

(d) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities, except that any change in the beneficial ownership of the securities of the Company as a result of a private financing of the Company that is approved by the Board, shall not be deemed to be a Change in Control; or

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or

(iii) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

(e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.

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(f) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(g) “Common Stock” means the Common Stock of the Company.

(h) “Company” means Barracuda Networks, Inc., a California corporation.

(i) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity.

(j) “Director” means a member of the Board.

(k) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

(l) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n) “Exchange Program” means a program under which (a) outstanding Options are surrendered or cancelled in exchange for Options of the same type (which may have lower exercise prices and different terms), Options of a different type, and/or cash, and/or (b) the exercise price of an outstanding Option is reduced. The terms and conditions of any Exchange Program will be determined by the Administrator in its sole discretion.

(o) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

(p) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(q) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(r) “Option” means a stock option granted pursuant to the Plan.

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(s) “Option Agreement” means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.

(t) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

(u) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

(v) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(w) “Plan” means this 2004 Stock Plan.

(x) “Restricted Stock” means Shares issued pursuant to a Stock Purchase Right or Shares of restricted stock issued pursuant to an Option.

(y) “Restricted Stock Purchase Agreement” means a written or electronic agreement between the Company and the Optionee evidencing the terms and restrictions applying to Shares purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the notice of grant.

(z) “Securities Act” means the Securities Act of 1933, as amended.

(aa) “Service Provider” means an Employee, Director or Consultant.

(bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 below.

(cc) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 11 below.

(dd) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Options or Stock Purchase Rights and sold under the Plan is 11,400,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Exchange Program, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.

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4. Administration of the Plan.

(a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder;

(iii) to determine the number of Shares to be covered by each such award granted hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions of any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(vi) to institute an Exchange Program;

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

(viii) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and

(ix) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan.

(c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees.

5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

6. Limitations.

(a) Incentive Stock Option Limit. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding

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such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

(b) At-Will Employment. Neither the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to terminate such relationship at any time, with or without cause, and with or without notice.

7. Term of Plan. Subject to stockholder approval in accordance with Section 19, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 15, it shall continue in effect for a term of ten (10) years from the later of (i) the effective date of the Plan, or (ii) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan.

8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.

9. Option Exercise Price and Consideration.

(a) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

(i) In the case of an Incentive Stock Option

(1) granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

(2) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option

(1) granted to a Service Provider who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

(2) granted to any other Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant.

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(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above in accordance with and pursuant to a transaction described in Section 424 of the Code.

(b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the Optionee, and not subject to a substantial risk of forfeiture, for more than six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, (6) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws or (7) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

10. Exercise of Option.

(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. Except in the case of Options granted to officers, Directors and Consultants, Options shall become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted.

An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to

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the Plan on the date that is one (1) month following the Optionee’s termination. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). Unless the Administrator provides otherwise, if on the date of termination the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan on the date that is one (1) month following the Optionee’s termination. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months following Optionee’s death, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. Unless the Administrator provides otherwise, if, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan on the date that is one (1) month following the Optionee’s termination. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(e) Leaves of Absence.

(i) Unless the Administrator provides otherwise, vesting of Options granted hereunder to officers and Directors shall be suspended during any unpaid leave of absence.

(ii) A Service Provider shall not cease to be an Employee in the case of (A) any leave of absence approved by the Company or (B) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.

(iii) For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave, any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option.

11. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such

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person must accept such offer. The terms of the offer shall comply in all respects with Section 260.140.42 of Title 10 of the California Code of Regulations. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within 90 days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or disability). Unless the Administrator provides otherwise, the purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine. Except with respect to Shares purchased by officers, Directors and Consultants, the repurchase option shall in no case lapse at a rate of less than 20% per year over five (5) years from the date of purchase.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion.

(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a stockholder and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.

12. Limited Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only by the Optionee. If the Administrator in its sole discretion makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) to family members (within the meaning of Rule 701 of the Securities Act) through gifts or domestic relations orders, as permitted by Rule 701 of the Securities Act.

13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Option or Stock Purchase Right; provided, however, that the Administrator shall make such adjustments to the extent required by Section 25102(o) of the California Corporations Code.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action.

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(c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option or Stock Purchase Right, then the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully exercisable for a period of time as determined by the Administrator, and the Option or Stock Purchase Right shall terminate upon expiration of such period for no consideration, unless otherwise determined by the Administrator. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option or Stock Purchase Right immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control.

14. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

15. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

(b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.

16. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

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(b) Investment Representations. As a condition to the exercise of an Option or Stock Purchase Right, the Administrator may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

17. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

18. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

19. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

20. Information to Optionees. The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee has one or more Options or Stock Purchase Rights outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information.

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BARRACUDA NETWORKS, INC.

2004 STOCK PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2004 Stock Plan shall have the same defined meanings in this Stock Option Agreement.

21. NOTICE OF STOCK OPTION GRANT

Name:

Address:

The undersigned Optionee has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

Date of Grant
Vesting Commencement Date
Exercise Price per Share	$
Total Number of Shares Granted
Total Exercise Price	$
Type of Option:		Incentive Stock Option
		Nonstatutory Stock Option
Term/Expiration Date:
Vesting Schedule:

This Option shall be exercisable, in whole or in part, according to the following vesting schedule:

[Twenty-five percent (25%) of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date, subject to Optionee continuing to be a Service Provider through each such date.]

Termination Period:

This Option shall be exercisable for [three (3) months] after Optionee ceases to be a Service Provider. Upon Optionee’s death or Disability, this Option may be exercised for [one (1) year] after Optionee ceases to be a Service Provider. In no event may Optionee exercise this Option after the Term/Expiration Date as provided above.

22. AGREEMENT

(a) Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference. By accepting this Option, the Optionee acknowledges and agrees that the Optionee currently is not entitled to any option other than this Option, including any option described in the Optionee’s offer letter or otherwise, whether orally or in writing, and the Optionee waives any and all claims regarding any such options.

Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”).

(b) Exercise of Option.

(i) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement.

(ii) Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

(c) Optionee’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B.

(d) Lock-Up Period. Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Optionee (other than those included in the registration) for a period

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specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act.

Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Optionee shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period. Optionee agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section.

(e) Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:

(i) cash or check;

(ii) consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or

(iii) surrender of other Shares which, (i) in the case of Shares acquired from the Company, either directly or indirectly, have been owned by the Optionee, and not subject to a substantial risk of forfeiture, for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares.

(f) Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law.

(g) Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

(h) Term of Option. This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option.

(i) Tax Obligations.

(i) Withholding Taxes. Optionee agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

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(ii) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee.

(j) Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws but not the choice of law rules of California.

(k) No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below.

OPTIONEE	BARRACUDA NETWORKS, INC.
Signature	By
Print Name	Title
Residence Address

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EXHIBIT A

BARRACUDA NETWORKS, INC.

2004 STOCK PLAN

EXERCISE NOTICE

BARRACUDA NETWORKS, INC.

Address:                                         

Attention:                                         

1. Exercise of Option. Effective as of today,             ,             , the undersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase              shares of the Common Stock (the “Shares”) of Barracuda Networks, Inc. (the “Company”) under and pursuant to the 2004 Stock Plan (the “Plan”) and the Stock Option Agreement dated             ,              (the “Option Agreement”).

2. Delivery of Payment. Optionee herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.

3. Representations of Optionee. Optionee acknowledges that Optionee has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

4. Rights as Shareholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares shall be issued to the Optionee as soon as practicable after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 13 of the Plan.

5. Company’s Right of First Refusal. Before any Shares held by Optionee or any transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section (the “Right of First Refusal”).

(a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s).

(b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.

(c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 120 days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(f) Exception for Certain Family Transfers. Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the Shares during the Optionee’s lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a trust for the benefit of the Optionee’s immediate family shall be exempt from the provisions of this Section. “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section.

(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.

6. Tax Consultation. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

7. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. Optionee understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,

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IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.

(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

8. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns.

9. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties.

10. Governing Law; Severability. This Exercise Notice is governed by the internal substantive laws but not the choice of law rules, of California. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice will continue in full force and effect.

11. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.

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Submitted by:	Accepted by:
OPTIONEE	BARRACUDA NETWORKS, INC.
Signature	By
Print Name	Title
Address:	Address:
	Date Received

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EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

OPTIONEE:

COMPANY:                      BARRACUDA NETWORKS, INC.

SECURITY:                      COMMON STOCK

NUMBER OF

SHARES:

DATE:

In connection with the purchase of the above-listed Securities, the undersigned Optionee represents to the Company the following:

1. Optionee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Optionee is acquiring these Securities for investment for Optionee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

2. Optionee acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee’s investment intent as expressed herein. In this connection, Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee’s representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with any legend required under applicable state securities laws.

3. Optionee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to the Optionee, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about the Company, (3) the amount of Securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than one year after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than two years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above.

4. Optionee further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event.

Signature of Optionee:
Date:	,

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EX-10.4

Exhibit 10.4

SIGNNOW, INC.

2011 EQUITY INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this 2011 Equity Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants, and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an Option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Restricted Stock may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or a Committee.

(b) “Affiliate” means (i) an entity other than a Subsidiary which, together with the Company, is under common control of a third person or entity and (ii) an entity other than a Subsidiary in which the Company and /or one or more Subsidiaries own a controlling interest.

(c) “Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not limited to, all applicable U.S. federal or state laws, any Stock Exchange rules or regulations, and the applicable laws, rules or regulations of any other country or jurisdiction where Options or Restricted Stock are granted under the Plan or Participants reside or provide services, as such laws, rules, and regulations shall be in effect from time to time.

(d) “Award” means any award of an Option or Restricted Stock under the Plan.

(e) “Board” means the Board of Directors of the Company.

(f) “California Participant” means a Participant whose Award is issued in reliance on Section 25102(o) of the California Corporations Code.

(g) “Cashless Exercise” means a program approved by the Administrator in which payment of the Option exercise price or tax withholding obligations or other required deductions may be satisfied, in whole or in part, with Shares subject to the Option, including by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Company) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of such amount.

(h) “Cause” for termination of a Participant’s Continuous Service Status will exist (unless another definition is provided in an applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) if the Participant’s Continuous Service Status is terminated for any of the following reasons: (i) any material breach by Participant of any material written agreement between Participant and the

Company and Participant’s failure to cure such breach within 30 days after receiving written notice thereof; (ii) any failure by Participant to comply with the Company’s material written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of Participant’s duties and Participant’s failure to cure such condition within 30 days after receiving written notice thereof; (iv) Participant’s repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer and Participant’s failure to cure such condition within 30 days after receiving written notice thereof; (v) Participant’s conviction of, or plea of guilty or nolo contendre to, any felony or crime that results in, or is reasonably expected to result in, a material adverse effect on the business or reputation of the Company; (vi) Participant’s commission of or participation in an act of fraud against the Company; (vii) Participant’s intentional material damage to the Company’s business, property or reputation; or (viii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company. For purposes of clarity, a termination without “Cause” does not include any termination that occurs as a result of Participant’s death or Disability. The determination as to whether a Participant’s Continuous Service Status has been terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate.

(i) “Change of Control” means (i) a sale of all or substantially all of the Company’s assets other than to an Excluded Entity (as defined below), (ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, limited liability company or other entity other than an Excluded Entity, or (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of all of the Company’s then outstanding voting securities.

Notwithstanding the foregoing, a transaction shall not constitute a Change of Control if its purpose is to (A) change the jurisdiction of the Company’s incorporation, (B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Company’s securities immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Company’s Board. An “Excluded Entity” means a corporation or other entity of which the holders of voting capital stock of the Company outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing at least a majority of the votes entitled to be cast by all of such corporation’s or other entity’s voting securities outstanding immediately after such transaction.

(j) “Code” means the Internal Revenue Code of 1986, as amended.

(k) “Committee” means one or more committees or subcommittees of the Board consisting of two (2) or more Directors (or such lesser or greater number of Directors as shall constitute the minimum number permitted by Applicable Laws to establish a committee or sub-committee of the Board) appointed by the Board to administer the Plan in accordance with Section 4 below.

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(l) “Common Stock” means the Company’s common stock, par value $0.0001 per share, as adjusted in accordance with Section 11 below.

(m) “Company” means SignNow, Inc., a Delaware corporation.

(n) “Consultant” means any person or entity, including an advisor but not an Employee, that renders, or has rendered, services to the Company, or any Parent, Subsidiary or Affiliate and is compensated for such services, and any Director whether compensated for such services or not.

(o) “Continuous Service Status” means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted or terminated in the case of: (i) Company approved sick leave; (ii) military leave; (iii) any other bona fide leave of absence approved by the Company, provided that, if an Employee is holding an Incentive Stock Option and such leave exceeds 3 months, such Employee’s service as an Employee shall be deemed terminated on the 1st day following such 3-month period and the Incentive Stock Option shall thereafter automatically become a Nonstatutory Stock Option in accordance with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy. Also, Continuous Service Status as an Employee or Consultant shall not be considered interrupted or terminated in the case of a transfer between locations of the Company or between the Company, its Parents, Subsidiaries or Affiliates, or their respective successors, or a change in status from an Employee to a Consultant or from a Consultant to an Employee.

(p) “Director” means a member of the Board.

(q) “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code.

(r) “Employee” means any person employed by the Company, or any Parent, Subsidiary or Affiliate, with the status of employment determined pursuant to such factors as are deemed appropriate by the Company in its sole discretion, subject to any requirements of Applicable Laws, including the Code. The payment by the Company of a director’s fee shall not be sufficient to constitute “employment” of such director by the Company or any Parent, Subsidiary or Affiliate.

(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(t) “Fair Market Value” means, as of any date, the per share fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the per share closing price for the Shares as reported in The Wall Street Journal for the applicable date.

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(u) “Family Members” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships) of the Participant, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons (or the Participant) have more than 50% of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests.

(v) “Incentive Stock Option” means an Option intended to, and which does, in fact, qualify as an incentive stock option within the meaning of Section 422 of the Code.

(w) “Involuntary Termination” means (unless another definition is provided in the applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) the termination of a Participant’s Continuous Service Status other than for (i) death, (ii) Disability or (iii) for Cause by the Company or a Parent, Subsidiary, Affiliate or successor thereto, as appropriate.

(x) “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the Financial Industry Regulatory Authority (or any successor thereto).

(y) “Nonstatutory Stock Option” means an Option that is not intended to, or does not, in fact, qualify as an Incentive Stock Option.

(z) “Option” means a stock option granted pursuant to the Plan.

(aa) “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

(bb) “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options (i) are exchanged for Options with a lower exercise price, Restricted Stock, cash or other property or (ii) are amended to decrease the exercise price as a result of a decline in the Fair Market Value.

(cc) “Optioned Stock” means Shares that are subject to an Option or that were issued pursuant to the exercise of an Option.

(dd) “Optionee” means an Employee or Consultant who receives an Option.

(ee) “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of grant of the Award, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

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(ff) “Participant” means any holder of one or more Awards or Shares issued pursuant to an Award.

(gg) “Plan” means this 2011 Equity Incentive Plan.

(hh) “Restricted Stock” means Shares acquired pursuant to a right to purchase or receive Common Stock granted pursuant to Section 8 below.

(ii) “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of Restricted Stock granted under the Plan and includes any documents attached to such agreement.

(jj) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

(kk) “Share” means a share of Common Stock, as adjusted in accordance with Section 11 below.

(ll) “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

(mm) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of grant of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

(nn) “Ten Percent Holder” means a person who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary measured as of an Award’s date of grant.

3. Stock Subject to the Plan. Subject to the provisions of Section 11 below, the maximum aggregate number of Shares that may be issued under the Plan is 2,976,744 Shares, all of which Shares may be issued under the Plan pursuant to Incentive Stock Options. The Shares issued under the Plan may be authorized, but unissued, or reacquired Shares. If an Award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares which are retained by the Company upon exercise of an Award in order to satisfy the exercise or purchase price for such Award or any withholding taxes due with respect to such Award shall be treated as not issued and shall continue to be available under the Plan and Shares issued under the Plan and later forfeited to the Company due to the failure to vest or repurchased by the Company at the original purchase price paid to the Company for the Shares

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(including, without limitation, upon forfeiture to or repurchase by the Company in connection with the termination of a Participant’s Continuous Service Status) shall again be available for future grant under the Plan.

4. Administration of the Plan.

(a) General. The Plan shall be administered by the Board, a Committee appointed by the Board, or any combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by Applicable Laws, the Board may authorize one or more officers of the Company to make Awards under the Plan to Employees and Consultants (who are not subject to Section 16 of the Exchange Act) within parameters specified by the Board.

(b) Committee Composition. If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and dissolve a Committee and thereafter directly administer the Plan, all to the extent permitted by Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions.

(c) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its sole discretion:

(i) to determine the Fair Market Value in accordance with Section 2(t) above, provided that such determination shall be applied consistently with respect to Participants under the Plan;

(ii) to select the Employees and Consultants to whom Awards may from time to time be granted;

(iii) to determine the number of Shares to be covered by each Award;

(iv) to approve the form(s) of agreement(s) and other related documents used under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when Awards may vest and/or be exercised (which may be based on performance criteria), the circumstances (if any) when vesting will be accelerated or forfeiture restrictions will be waived, and any restriction or limitation regarding any Award, Optioned Stock, or Restricted Stock;

(vi) to amend any outstanding Award or agreement related to any Optioned Stock or Restricted Stock, including any amendment adjusting vesting (e.g., in connection with a

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change in the terms or conditions under which such person is providing services to the Company), provided that no amendment shall be made that would materially and adversely affect the rights of any Participant without his or her consent;

(vii) to determine whether and under what circumstances an Option may be settled in cash under Section 7(c)(iii) below instead of Common Stock;

(viii) subject to Applicable Laws, to implement an Option Exchange Program and establish the terms and conditions of such Option Exchange Program without consent of the holders of capital stock of the Company, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Participant shall be made without his or her consent;

(ix) to approve addenda pursuant to Section 14 below or to grant Awards to, or to modify the terms of, any outstanding Option Agreement or Restricted Stock Purchase Agreement or any agreement related to any Optioned Stock or Restricted Stock held by Participants who are foreign nationals or employed outside of the United States with such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom which deviate from the terms and conditions set forth in this Plan to the extent necessary or appropriate to accommodate such differences; and

(x) to construe and interpret the terms of the Plan, any Option Agreement or Restricted Stock Purchase Agreement, and any agreement related to any Optioned Stock or Restricted Stock, which constructions, interpretations and decisions shall be final and binding on all Participants.

(d) Indemnification. To the maximum extent permitted by Applicable Laws, each member of the Committee (including officers of the Company, if applicable), or of the Board, as applicable, shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or pursuant to the terms and conditions of any Award except for actions taken in bad faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided that such member shall give the Company an opportunity, at its own expense, to handle and defend any such claim, action, suit or proceeding before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation, Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any other power that the Company may have to indemnify or hold harmless each such person.

5. Eligibility.

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(a) Recipients of Grants. Nonstatutory Stock Options and Restricted Stock may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

(b) Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

(c) ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b) above, to the extent that the aggregate Fair Market Value of Shares with respect to which options designated as incentive stock options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options shall be treated as nonstatutory stock options. For purposes of this Section 5(c), incentive stock options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an incentive stock option shall be determined as of the date of the grant of such option.

(d) No Employment Rights. Neither the Plan nor any Award shall confer upon any Employee or Consultant any right with respect to continuation of an employment or consulting relationship with the Company (any Parent, Subsidiary or Affiliate), nor shall it interfere in any way with such Employee’s or Consultant’s right or the Company’s (Parent’s, Subsidiary’s or Affiliate’s) right to terminate his or her employment or consulting relationship at any time, with or without cause.

6. Term of Plan. The Plan shall become effective upon its adoption by the Board and shall continue in effect for a term of 10 years unless sooner terminated under Section 13 below.

7. Options.

(a) Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than 10 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be 5 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

(b) Option Exercise Price and Consideration.

(i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

(1) In the case of an Incentive Stock Option

a. granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value on the date of grant;

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b. granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value on the date of grant;

(2) Except as provided in subsection (3) below, in the case of a Nonstatutory Stock Option the per Share exercise price shall be such price as is determined by the Administrator, provided that, if the per Share exercise price is less than 100% of the Fair Market Value on the date of grant, it shall otherwise comply with all Applicable Laws, including Section 409A of the Code; and

(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

(ii) Permissible Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option and to the extent required by Applicable Laws, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) to the extent permitted under, and in accordance with, Applicable Laws, delivery of a promissory note with such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate (subject to the provisions of Section 152 of the General Corporation Law); (4) cancellation of indebtedness; (5) other previously owned Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised; (6) a Cashless Exercise; (7) such other consideration and method of payment permitted under Applicable Laws; or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

(c) Exercise of Option.

(i) General.

(1) Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the terms of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company, and Parent, Subsidiary or Affiliate, and/or the Optionee.

(2) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any leave (unless otherwise required by Applicable Laws). Notwithstanding the foregoing, in the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon an Optionee’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and

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Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Optionee continued to provide services to the Company (or any Parent, Subsidiary or Affiliate, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(3) Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

(4) Procedures for and Results of Exercise. An Option shall be deemed exercised when written notice of such exercise has been received by the Company in accordance with the terms of the Option Agreement by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised and has paid, or made arrangements to satisfy, any applicable taxes, withholding, required deductions or other required payments in accordance with Section 9 below. The exercise of an Option shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(5) Rights as Holder of Capital Stock. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a holder of capital stock shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 below.

(ii) Termination of Continuous Service Status. The Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. To the extent that an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, the following provisions shall apply:

(1) General Provisions. If the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified below, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to this Section 7).

(2) Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s Continuous Service Status other than under the circumstances set forth in the subsections (3) through (5) below, such Optionee may exercise any outstanding Option at any time within 3 months following such termination to the extent the Optionee is vested in the Optioned Stock.

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(3) Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his or her Disability, such Optionee may exercise any outstanding Option at any time within 12 months following such termination to the extent the Optionee is vested in the Optioned Stock.

(4) Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of any outstanding Option, or within 3 months following termination of the Optionee’s Continuous Service Status, the Option may be exercised by any beneficiaries designated in accordance with Section 15 below, or if there are no such beneficiaries, by the Optionee’s estate, or by a person who acquired the right to exercise the Option by bequest or inheritance, at any time within 12 months following the date the Optionee’s Continuous Service Status terminated, but only to the extent the Optionee is vested in the Optioned Stock.

(5) Termination for Cause. In the event of termination of an Optionee’s Continuous Service Status for Cause, any outstanding Option (including any vested portion thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status for Cause. If an Optionee’s Continuous Service Status is suspended pending an investigation of whether the Optionee’s Continuous Service Status will be terminated for Cause, all the Optionee’s rights under any Option, including the right to exercise the Option, shall be suspended during the investigation period. Nothing in this Section 7(c)(ii)(5) shall in any way limit the Company’s right to purchase unvested Shares issued upon exercise of an Option as set forth in the applicable Option Agreement.

(iii) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

8. Restricted Stock.

(a) Rights to Purchase. When a right to purchase or receive Restricted Stock is granted under the Plan, the Company shall advise the recipient in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, if any (which shall be as determined by the Administrator, subject to Applicable Laws, including any applicable securities laws), and the time within which such person must accept such offer. The permissible consideration for Restricted Stock shall be determined by the Administrator and shall be the same as is set forth in Section 7(b)(ii) above with respect to exercise of Options. The offer to purchase Shares shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

(b) Repurchase Option.

(i) General. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the Participant’s Continuous Service Status for any

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reason (including death or Disability) at a purchase price for Shares equal to the original purchase price paid by the purchaser to the Company for such Shares and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine.

(ii) Leave of Absence. The Administrator shall have the discretion to determine whether and to what extent the lapsing of Company repurchase rights shall be tolled during any leave of absence; provided, however, that in the absence of such determination, such lapsing shall be tolled during any leave (unless otherwise required by Applicable Laws). Notwithstanding the foregoing, in the event of military leave, the lapsing of Company repurchase rights shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would have applied had the Participant continued to provide services to the Company (or any Parent, Subsidiary or Affiliate, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each Participant.

(d) Rights as a Holder of Capital Stock. Once the Restricted Stock is purchased, the Participant shall have the rights equivalent to those of a holder of capital stock, and shall be a record holder when his or her purchase and the issuance of the Shares is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Restricted Stock is purchased, except as provided in Section 11 below.

9. Taxes.

(a) As a condition of the grant, vesting and exercise of an Award, the Participant (or in the case of the Participant’s death or a permitted transferee, the person holding or exercising the Award) shall make such arrangements as the Administrator may require for the satisfaction of any applicable U.S. federal, state, local or foreign tax, withholding, and any other required deductions or payments that may arise in connection with such Award. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied.

(b) The Administrator may, to the extent permitted under Applicable Laws, permit a Participant (or in the case of the Participant’s death or a permitted transferee, the person holding or exercising the Award) to satisfy all or part of his or her tax, withholding, or any other required deductions or payments by Cashless Exercise or by surrendering Shares (either directly or by stock attestation) that he or she previously acquired; provided that, unless specifically permitted by the Company, any such Cashless Exercise must be an approved broker-assisted Cashless Exercise or the Shares withheld in the Cashless Exercise must be limited to avoid financial accounting

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charges under applicable accounting guidance and any such surrendered Shares must have been previously held for any minimum duration required to avoid financial accounting charges under applicable accounting guidance. Any payment of taxes by surrendering Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions required by rules of the Securities and Exchange Commission.

10. Non-Transferability of Awards.

(a) General. Except as set forth in this Section 10, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary by a Participant will not constitute a transfer. An Option may be exercised, during the lifetime of the holder of the Option, only by such holder or a transferee permitted by this Section 10.

(b) Limited Transferability Rights. Notwithstanding anything else in this Section 10, the Administrator may in its sole discretion grant Nonstatutory Stock Options that may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to Family Members. Further, beginning with (i) the period when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) promulgated under the Exchange Act, as determined by the Board in its sole discretion, and (ii) ending on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Board in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, an Option, or prior to exercise, the Shares subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than to (i) persons who are Family Members through gifts or domestic relations orders, or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing sentence, the Board, in its sole discretion, may permit transfers of Nonstatutory Stock Options to the Company or in connection with a Change of Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).

11. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

(a) Changes in Capitalization. Subject to any action required under Applicable Laws by the holders of capital stock of the Company, (i) the numbers and class of Shares or other stock or securities: (x) available for future Awards under Section 3 above and (y) covered by each outstanding Award, (ii) the exercise price per Share of each such outstanding Option, and (iii) any repurchase price per Share applicable to Shares issued pursuant to any Award, shall be automatically proportionately adjusted in the event of a stock split, reverse stock split, stock dividend, combination, consolidation, reclassification of the Shares or subdivision of the Shares. In the event of any increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, a declaration of an extraordinary dividend with respect to the Shares payable in a form other than Shares in an amount that has a material effect on the Fair Market Value, a

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recapitalization (including a recapitalization through a large nonrecurring cash dividend), a rights offering, a reorganization, merger, a spin-off, split-up, change in corporate structure or a similar occurrence, the Administrator shall make appropriate adjustments, in its discretion, in one or more of (i) the numbers and class of Shares or other stock or securities: (x) available for future Awards under Section 3 above and (y) covered by each outstanding Award, (ii) the exercise price per Share of each outstanding Option and (iii) any repurchase price per Share applicable to Shares issued pursuant to any Award, and any such adjustment by the Administrator shall be made in the Administrator’s sole and absolute discretion and shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. If, by reason of a transaction described in this Section 11(a) or an adjustment pursuant to this Section 11(a), a Participant’s Award agreement or agreement related to any Optioned Stock or Restricted Stock covers additional or different shares of stock or securities, then such additional or different shares, and the Award agreement or agreement related to the Optioned Stock or Restricted Stock in respect thereof, shall be subject to all of the terms, conditions and restrictions which were applicable to the Award, Optioned Stock and Restricted Stock prior to such adjustment.

(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

(c) Corporate Transactions. In the event of (i) a transfer of all or substantially all of the Company’s assets, (ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the Company’s then outstanding capital stock (a “Corporate Transaction”), each outstanding Award (vested or unvested) will be treated as the Administrator determines (subject to the last sentence of this paragraph), which determination may be made without the consent of any Participant and need not treat all outstanding Awards (or portion thereof) in an identical manner. Such determination, without the consent of any Participant, may dispose of Awards that are not vested as of the effective date of such Corporate Transaction in any manner permitted by Applicable Laws, including (without limitation) the cancellation of such Awards without the payment of any consideration. Without limiting the foregoing, such determination, without the consent of any Participant, may provide for one or more of the following with respect to Awards that are vested and exercisable as of the effective date of such Corporate Transaction: (A) the continuation of such outstanding Awards by the Company (if the Company is the surviving corporation); (B) the assumption of such outstanding Awards by the surviving corporation or its parent; (C) the substitution by the surviving corporation or its parent of new options or equity awards for such Awards; (D) the cancellation of such Awards and a payment to the Participants equal to the excess of (1) the Fair Market Value of the Shares subject to such Awards as of the closing date of such Corporate Transaction over (2) the exercise price or purchase price for the Shares to be issued pursuant to the exercise of such Awards (such payment shall be made in the form of cash, cash equivalents and/or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount; if the exercise price

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or purchase price per Share of the Shares to be issued pursuant to the exercise of such Awards exceeds the Fair Market Value per Share of such Shares, as of the closing date of the Corporate Transaction, then such Awards may be cancelled without making a payment to the Participants); or (E) the cancellation of such Awards for no consideration. Notwithstanding anything stated herein or in any other agreement to the contrary, whether such agreement was entered into before or after the date this Plan is effective, if any Award, or any agreement applicable to any Award, provides for accelerated vesting in connection with any termination of service that occurs on or after a Corporate Transaction, and the successor does not agree to assume the Award, or to substitute an equivalent award or right for the Award, then any acceleration of vesting that would otherwise occur upon such termination of service shall occur immediately prior to, and contingent upon, the consummation of such Corporate Transaction.

12. Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such other date as is determined by the Administrator.

13. Amendment and Termination of the Plan. The Board may at any time amend or terminate the Plan, but no amendment or termination shall be made that would materially and adversely affect the rights of any Participant under any outstanding Award, without his or her consent. In addition, to the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain the approval of holders of capital stock with respect to any Plan amendment in such a manner and to such a degree as required.

14. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. As a condition to the exercise of any Option or purchase of any Restricted Stock, the Company may require the person exercising the Option or purchasing the Restricted Stock to represent and warrant at the time of any such exercise or purchase that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is advisable or required by Applicable Laws. Shares issued upon exercise of Options or purchase of Restricted Stock prior to the date, if ever, on which the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such terms and subject to such conditions as is reflected in the applicable Option Agreement or Restricted Stock Purchase Agreement.

15. Beneficiaries. If permitted by the Company, a Participant may designate one or more beneficiaries with respect to an Award by timely filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Participant’s death. Except as otherwise provided in an Award Agreement, if no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death any vested Award(s) shall be transferred or distributed to the Participant’s estate or to any person who has the right to acquire the Award by bequest or inheritance.

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16. Approval of Holders of Capital Stock. If required by Applicable Laws, continuance of the Plan shall be subject to approval by the holders of capital stock of the Company within 12 months before or after the date the Plan is adopted or, to the extent required by Applicable Laws, any date the Plan is amended. Such approval shall be obtained in the manner and to the degree required under Applicable Laws.

17. Addenda. The Administrator may approve such addenda to the Plan as it may consider necessary or appropriate for the purpose of granting Awards to Employees or Consultants, which Awards may contain such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which may deviate from the terms and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose.

18. Information to Holders of Options. In the event the Company is relying on the exemption provided by Rule 12h-1(f) under the Exchange Act, the Company shall provide the information described in Rule 701(e)(3), (4) and (5) of the Securities Act of 1933, as amended, to all holders of Options in accordance with the requirements thereunder until such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company may request that holders of Options agree to keep the information to be provided pursuant to this Section confidential. If the holder does not agree to keep the information to be provided pursuant to this Section confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1) of the Exchange Act.

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ADDENDUM A

2011 Equity Incentive Plan

(California Participants)

Prior to the date, if ever, on which the Common Stock becomes a Listed Security and/or the Company is subject to the reporting requirements of the Exchange Act, the terms set forth herein shall apply to Awards issued to California Participants. All capitalized terms used herein but not otherwise defined shall have the respective meanings set forth in the Plan.

1. The following rules shall apply to any Option in the event of termination of the Participant’s Continuous Service Status:

(a) If such termination was for reasons other than death, “Permanent Disability” (as defined below), or Cause, the Participant shall have at least 30 days after the date of such termination to exercise his or her Option to the extent the Participant is entitled to exercise on his or her termination date, provided that in no event shall the Option be exercisable after the expiration of the term as set forth in the Option Agreement.

(b) If such termination was due to death or Permanent Disability, the Participant shall have at least 6 months after the date of such termination to exercise his or her Option to the extent the Participant is entitled to exercise on his or her termination date, provided that in no event shall the Option be exercisable after the expiration of the term as set forth in the Option Agreement.

“Permanent Disability” for purposes of this Addendum shall mean the inability of the Participant, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the Participant’s position with the Company or any Parent or Subsidiary because of the sickness or injury of the Participant.

2. Notwithstanding anything to the contrary in Section 11(a) of the Plan, the Administrator shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.

3. Notwithstanding anything stated herein to the contrary, no Option shall be exercisable on or after the 10th anniversary of the date of grant and any Award agreement shall terminate on or before the 10th anniversary of the date of grant.

4. The Company shall furnish summary financial information (audited or unaudited) of the Company’s financial condition and results of operations, consistent with the requirements of Applicable Laws, at least annually to each California Participant during the period such Participant has one or more Awards outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such Participant owns such Shares; provided, however, the Company shall not be required to provide such information if (i) the issuance is limited to key persons whose duties in connection with the Company assure their access to equivalent information or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the Securities Act of 1933, as amended; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701.

SIGNNOW, INC.

2011 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

«Optionee»

(address)

You have been granted an option to purchase Common Stock of SignNow, Inc., a Delaware corporation (the “Company”), as follows:

Date of Grant:	«GrantDate»
Exercise Price Per Share:	$«ExercisePrice»
Total Number of Shares:	«NoofShares»
Total Exercise Price:	$«TotalExercisePrice»
Type of Option:	«ISO» Shares Incentive Stock Option «NSO» Shares Nonstatutory Stock Option
Expiration Date:	«ExpirDate»
Vesting Commencement Date:	«VestingCommencementDate»
Vesting/Exercise Schedule:	So long as your Continuous Service Status does not terminate, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: «Vesting»

Termination Period:

You may exercise this Option for 3 months after termination of your Continuous Service Status except as set out in Section 5 of the Stock Option Agreement (but in no event later than the Expiration Date). You are responsible for keeping track of these exercise periods following the termination of your Continuous Service Status for any reason. The Company will not provide further notice of such periods.

Transferability:

You may not transfer this Option.

By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of this Notice and the SignNow, Inc. 2011 Equity Incentive Plan and Option Agreement, both of which are attached to and made a part of this Notice.

In addition, you agree and acknowledge that your rights to any Shares underlying this Option will be earned only as you provide services to the Company over time, that the grant of this Option is not as consideration for services you rendered to the Company prior to your date of hire, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause. Also, to the extent applicable, the Exercise Price Per Share has been set in good faith compliance with the applicable guidance issued by the IRS under Section 409A of the Code. However, there is no guarantee that the IRS will agree with the valuation, and by signing below, you agree and acknowledge that the Company, its Board, officers, employees and agents shall not be held liable for any applicable costs, taxes, or penalties associated with this Option if, in fact, the IRS or any other person (including, without limitation, a successor corporation or an acquirer in a Change of Control) were to determine that this Option constitutes deferred compensation under Section 409A of the Code. You should consult with your own tax advisor concerning the tax consequences of such a determination by the IRS. For purposes of this paragraph, the term “Company” will be interpreted to include any Parent, Subsidiary or Affiliate.

THE COMPANY:
SIGNNOW, INC.
By:
	(Signature)
Name:
Title:
OPTIONEE:
«OPTIONEE»
(Signature)
Address:

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SIGNNOW, INC.

2011 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. SignNow, Inc., a Delaware corporation (the “Company”), hereby grants to «Optionee» (“Optionee”), an option (the “Option”) to purchase the total number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and provisions of the SignNow, Inc. 2011 Equity Incentive Plan (the “Plan”) adopted by the Company, which is incorporated in this Stock Option Agreement (this “Agreement”) by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement or the Notice shall have the meanings defined in the Plan.

2. Designation of Option. This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent this Option does not qualify as an Incentive Stock Option, it is intended to be a Nonstatutory Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other incentive stock options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a nonstatutory stock option, in accordance with Section 5(c) of the Plan.

3. Exercise of Option. This Option shall be exercisable during its term in accordance with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 7(c) of the Plan as follows:

(a) Right to Exercise.

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, Disability or other termination of Continuous Service Status, the exercisability of this Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date set forth in the Notice.

(b) Method of Exercise.

(i) This Option shall be exercisable by execution and delivery of the Exercise Agreement attached hereto as Exhibit A or of any other form of written notice approved

for such purpose by the Company which shall state Optionee’s election to exercise this Option, the number of Shares in respect of which this Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Company in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the aggregate Exercise Price for the purchased Shares.

(ii) As a condition to the exercise of this Option and as further set forth in Section 9 of the Plan, Optionee agrees to make adequate provision for federal, state or other applicable tax, withholding, required deductions or other payments, if any, which arise upon the grant, vesting or exercise of this Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise, as determined by the Company in its sole discretion.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of this Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised until such time as the Plan has been approved by the holders of capital stock of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any Applicable Laws, including any applicable U.S. federal or state securities laws or any other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which this Option is exercised with respect to such Shares.

(iv) Subject to compliance with Applicable Laws, this Option shall be deemed to be exercised upon receipt by the Company of the appropriate written notice of exercise accompanied by the Exercise Price and the satisfaction of any applicable obligations described in Section 3(b)(ii) above.

4. Method of Payment. Payment of the Exercise Price shall be by cash or check or, following the initial public offering of the Company’s Common Stock, by Cashless Exercise pursuant to which the Optionee delivers an irrevocable direction to a securities broker (on a form prescribed by the Company and according to a procedure established by the Company).

5. Termination of Relationship. Following the date of termination of Optionee’s Continuous Service Status for any reason (the “Termination Date”), Optionee may exercise this Option only as set forth in the Notice and this Section 5. If Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, this Option shall terminate in its entirety. In no event, may any Option be exercised after the Expiration Date of this Option as set forth in the Notice.

(a) General Termination. In the event of termination of Optionee’s Continuous Service Status other than as a result of Optionee’s Disability or death or Optionee’s

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termination for Cause, Optionee may, to the extent Optionee is vested in the Optioned Stock at the date of such termination, exercise this Option during the Termination Period set forth in the Notice.

(b) Termination upon Disability of Optionee. In the event of termination of Optionee’s Continuous Service Status as a result of Optionee’s Disability, Optionee may, but only within 12 months following the Termination Date, exercise this Option to the extent Optionee is vested in the Optioned Stock.

(c) Death of Optionee. In the event of termination of Optionee’s Continuous Service Status as a result of Optionee’s death, or in the event of Optionee’s death within 3 months following Optionee’s Termination Date, this Option may be exercised at any time within 12 months following the Termination Date, or if later, 12 months following the date of death by any beneficiaries designated in accordance with Section 15 of the Plan or, if there are no such beneficiaries, by the Optionee’s estate, or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent Optionee is vested in this Option.

(d) Termination for Cause. In the event of termination of Optionee’s Continuous Service Status for Cause, this Option (including any vested portion thereof) shall immediately terminate in its entirety upon first notification to Optionee of such termination for Cause. If Optionee’s Continuous Service Status is suspended pending an investigation of whether Optionee’s Continuous Service Status will be terminated for Cause, all Optionee’s rights under this Option, including the right to exercise this Option, shall be suspended during the investigation period.

6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee. Further, beginning with (i) the period when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) promulgated under the Exchange Act, as determined by the Board in its sole discretion, and (ii) ending on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Board in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, an Option, or prior to exercise, the Shares subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than to (i) persons who are Family Members through gifts or domestic relations orders, or (ii) to an executor or guardian of Optionee upon the death or disability of Optionee. Notwithstanding the foregoing sentence, the Board, in its sole discretion, may permit transfers of Nonstatutory Stock Options to the Company or in connection with a Change of Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of,

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loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering. Notwithstanding the foregoing, the Company shall use its best efforts to cause any such agreement to contain a phased release from the lock-up period contained in the agreement based on the Company’s achievement of certain performance milestones. Any waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all securityholders subject to such agreements pro rata based on the number of shares subject to such agreements. In addition, upon request of the Company or the underwriters managing a public offering of the Company’s securities (other than the initial public offering), Optionee hereby agrees to be bound by similar restrictions, and to sign a similar agreement, in connection with no more than one additional registration statement filed within 12 months after the closing date of the initial public offering, provided that the duration of the lock-up period with respect to such additional registration shall not exceed 90 days from the effective date of such additional registration statement. Notwithstanding the foregoing, if during the last 17 days of the restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this subsection shall continue to apply until the end of the third trading day following the expiration of the 15-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond 216 days after the effective date of the registration statement.

8. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Administrator regarding any questions relating to this Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail.

9. Imposition of Other Requirements. The Company reserves the right to impose other requirements on Optionee’s participation in the Plan, on the Option and on any Award or Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan. Optionee agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. Furthermore, Optionee acknowledges that the laws of the country in which Optionee is working at the time of grant, vesting and exercise of the Option or the sale of Shares received pursuant to this Agreement (including any rules or regulations governing securities, foreign exchange, tax, labor, or other matters) may subject Optionee to additional procedural or regulatory requirements that Optionee is and will be solely responsible for and must fulfill.

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10. Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Optionee’s current or future participation in the Plan by electronic means or to request Optionee’s consent to participate in the Plan by electronic means. Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

11. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California and agree that any such litigation shall be conducted only in the courts of California or the federal courts of the United States located in California and no other courts.

(b) Entire Agreement; Enforcement of Rights. This Agreement, together with the Notice to which this Agreement is attached and the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and therein and merges all prior or contemporaneous discussions between the parties. Except as contemplated under the Plan, no modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of this Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this Agreement shall be enforceable in accordance with its terms.

(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax (upon customary confirmation of receipt), or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address or fax number as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Company’s books and records.

(e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

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(f) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Optionee under this Agreement may not be assigned without the prior written consent of the Company.

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EXHIBIT A

SIGNNOW, INC.

2011 EQUITY INCENTIVE PLAN

EXERCISE AGREEMENT

This Exercise Agreement (this “Agreement”) is made as of                     , by and between SignNow, Inc., a Delaware corporation (the “Company”), and «Optionee» (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Company’s 2011 Equity Incentive Plan (the “Plan”) and the Option Agreement (as defined below).

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his or her option to purchase              shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Plan, the Notice of Stock Option Grant and the Stock Option Agreement granted              (the “Option Agreement”). The purchase price for the Shares shall be $             per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in connection with the Shares pursuant to stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement, the payment of the aggregate exercise price by any method listed in Section 4 of the Option Agreement, and the satisfaction of any applicable tax, withholding, required deductions or other payments, all in accordance with the provisions of Section 3(b) of the Option Agreement. The Company shall issue the Shares to Purchaser by entering such Shares in Purchaser’s name as of such date in the books and records of the Company or, if applicable, a duly authorized transfer agent of the Company, against payment of the exercise price therefor by Purchaser. If applicable, the Company will deliver to Purchaser a certificate representing the Shares as soon as practicable following such date.

3. Limitations on Transfer. In addition to any other limitation on transfer created by Applicable Laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and Applicable Laws.

(a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “Right of First Refusal”).

(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (A) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (B) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (C) the number of Shares to be transferred to each Proposed Transferee; and (D) the terms and conditions of each proposed sale or transfer, including (without limitation) the purchase price for such Shares (the “Purchase Price”). The Holder shall offer the Shares at the Purchase Price and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal. At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase any or all of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the Purchase Price. If the Purchase Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board in good faith.

(iii) Payment. Payment of the Purchase Price shall be made, at the election of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 60 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(iv) Holder’s Right to Transfer. If any of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer any unpurchased Shares to that Proposed Transferee at the Purchase Price or at a higher price, provided that such sale or other transfer is consummated within 120 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any Applicable Laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 and the waiver of statutory information rights in Section 8 shall continue to apply to the Shares in the hands of such Proposed Transferee. The Company, in consultation with its legal counsel, may require the Holder to provide an opinion of counsel evidencing compliance with Applicable Laws. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(v) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Holder’s lifetime or on Holder’s death by will or intestacy to Holder’s Immediate Family or a trust for the benefit of Holder’s Immediate Family shall be exempt from the provisions of this Section 3(a). “Immediate Family” as used herein shall mean lineal descendant or antecedent, spouse (or spouse’s antecedents), father, mother, brother or sister (or their descendants), stepchild (or their antecedents or descendants), aunt or uncle (or their antecedents or descendants), brother-in-law or sister-in-law (or their antecedents or descendants) and shall include adoptive relationships. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 3, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

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(b) Company’s Right to Purchase upon Involuntary Transfer. In the event of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(v) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase any or all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the Shares on the date of transfer (as determined by the Company). Upon such a transfer, the Holder shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of 30 days following receipt by the Company of written notice from the Holder.

(c) Assignment. The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any holder or holders of capital stock of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement and the terms of the Option Agreement, including, without limitation, Section 7 of the Option Agreement. Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Termination of Rights. The Right of First Refusal granted the Company by Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act. Upon termination of such transfer restrictions, the Company will remove any stop-transfer notices referred to in Section 5(b) below and related to the restrictions in this Section 3 and, if certificates are issued, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 5(a)(ii) below and delivered to Holder.

4. Investment and Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing the Shares for investment for Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any other person or entity.

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(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities.

(d) Purchaser is familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144, which rule requires, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this Section 4(d), Purchaser acknowledges and agrees to the restrictions set forth in Section 4(e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. Any certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by the Company or applicable state and federal corporate and securities laws):

(i) “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR

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DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(ii) “THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH AND MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY AT NO CHARGE.”

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent, subsidiary or affiliate of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement. The lock-up provisions set forth in Section 7 of the Option Agreement shall apply to the Shares issued upon exercise of the Option hereunder and Purchaser reaffirms Purchaser’s obligations set forth therein.

8. Waiver of Statutory Information Rights. Purchaser acknowledges and understands that, but for the waiver made herein, Purchaser would be entitled, upon written demand under oath stating the purpose thereof, to inspect for any proper purpose, and to make copies and extracts from, the Company’s stock ledger, a list of its stockholders, and its other books and records, and the books and records of subsidiaries of the Company, if any, under the circumstances and in the manner provided in Section 220 of the General Corporation Law of Delaware (any and all such rights, and any and all such other rights of Purchaser as may be provided for in Section 220, the “Inspection Rights”). In light of the foregoing, until the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, Purchaser hereby unconditionally and irrevocably waives the Inspection Rights, whether such Inspection Rights would be exercised or pursued directly or indirectly pursuant to Section 220 or otherwise, and covenants and agrees never to directly or indirectly commence, voluntarily aid in any way, prosecute, assign, transfer, or cause to be

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commenced any claim, action, cause of action, or other proceeding to pursue or exercise the Inspection Rights. The foregoing waiver applies to the Inspection Rights of Purchaser in Purchaser’s capacity as a stockholder and shall not affect any rights of a director, in his or her capacity as such, under Section 220. The foregoing waiver shall not apply to any contractual inspection rights of Purchaser under any written agreement with the Company.

9. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California and agree that any such litigation shall be conducted only in the courts of California or the federal courts of the United States located in California and no other courts.

(b) Entire Agreement; Enforcement of Rights. This Agreement , together with the Option Agreement and the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior or contemporaneous discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax (upon customary confirmation of receipt), or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address or fax number as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Company’s books and records.

(e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(f) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

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(g) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

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The parties have executed this Exercise Agreement as of the date first set forth above.

THE COMPANY:
SIGNNOW, INC.
By:
	(Signature)
Name:
Title:
Address:
United States
Fax:
PURCHASER:
«OPTIONEE»
(Signature)
Address:
Fax:
email:

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I,                                         , spouse of «Optionee» (“Purchaser”), have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be bound irrevocably by the Agreement and further agree that any community property or other such interest that I may have in the Shares shall hereby be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of Purchaser (if applicable)

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EX-10.5

Exhibit 10.5

PUREWIRE, INC.

2008 STOCK INCENTIVE PLAN

1. Establishment, Purpose and Types of Awards

Purewire, Inc., a Delaware corporation (the “Company”), hereby establishes the Purewire, Inc. 2008 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best-available persons.

The Plan permits the granting of stock options (including incentive stock options qualifying under Code section 422 and nonstatutory stock options), stock appreciation rights, or other stock-based awards, or any combination of the foregoing.

2. Definitions

Under this Plan, except where the context otherwise indicates, the following definitions apply:

(a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan as provided in Section 3 hereof.

(b) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, “control” shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity.

(c) “Award” means any stock option, stock appreciation right, or other stock award.

(d) “Board” means the Board of Directors of the Company.

(e) “Change in Control” means: (i) the acquisition (other than from the Company) in one or more transactions by any Person, as defined in this Section 2(e), of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of 50% or more of (A) the then outstanding shares of the securities of the Company, or (B) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Company Voting Stock”); (ii) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or (iii) the effective time of any merger, share exchange, consolidation, or other business combination involving the Company if immediately after such transaction persons who hold a majority of the

outstanding voting securities entitled to vote generally in the election of directors of the surviving entity (or the entity owning 100% of such surviving entity) are not persons who, immediately prior to such transaction, held the Company Voting Stock; provided, however, that a Change in Control shall not include any transaction primarily for equity financing purposes or a public offering of capital stock of the Company; and provided, further, that for purposes of any Award or subplan that constitutes a “nonqualified deferred compensation plan,” within the meaning of Code section 409A, the Administrator, in its discretion, may specify a different definition of Change in Control in order to comply with the provisions of Code section 409A. For purposes of this Section 2(e), a “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than: employee benefit plans sponsored or maintained by the Company and by entities controlled by the Company or an underwriter of the Common Stock in a registered public offering.

(f) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

(g) “Common Stock” means shares of the Common Stock of the Company, par value of $0.001 per share.

(h) “Fair Market Value” means, with respect to a share of the Company’s Common Stock for any purpose on a particular date, the value determined by the Administrator in good faith. However, if the Common Stock is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and listed for trading on a national exchange or market, “Fair Market Value” means, as applicable, (i) the closing price quoted on the New York Stock Exchange, the American Stock Exchange, or the Nasdaq Global Market; (ii) the last sale price on the relevant date quoted on the Nasdaq Capital Market; (iii) the average of the high bid and low asked prices on the relevant date quoted on the Nasdaq OTC Bulletin Board Service or by the National Quotation Bureau, Inc. or a comparable service as determined in the Administrator’s discretion; or (iv) if the Common Stock is not quoted by any of the above, the average of the closing bid and asked prices on the relevant date furnished by a professional market maker for the Common Stock, or by such other source, selected by the Administrator. If no public trading of the Common Stock occurs on the relevant date but the shares are so listed, then Fair Market Value shall be determined as of the next preceding date on which trading of the Common Stock does occur. For all purposes under this Plan, the term “relevant date” as used in this Section 2(h) means either the date as of which Fair Market Value is to be determined or the next preceding date on which public trading of the Common Stock occurs, as determined in the Administrator’s discretion.

(i) “Grant Agreement” means a written document memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.

3. Administration

(a) Administration of the Plan. The Plan shall be administered by the Board or by such committee or committees as may be appointed by the Board from time to time. To the extent allowed by applicable state law, the Board by resolution may authorize an officer or officers to grant Awards (other than Stock Awards) to any person eligible to participate in the Plan, and, to the extent of such authorization, such officer or officers shall be the Administrator.

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(b) Powers of the Administrator. The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards.

The Administrator shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to: (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to be covered by or used for reference purposes for each Award; (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards (provided however, that, except as provided in Section 6 or 7(d) of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder); (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any grantee’s employment or other relationship with the Company; (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid with respect to a performance period; and (viii) for any purpose, including but not limited to, qualifying for preferred tax treatment under foreign tax laws or otherwise complying with the regulatory requirements of local or foreign jurisdictions, to establish, amend, modify, administer or terminate sub-plans, and prescribe, amend and rescind rules and regulations relating to such sub-plans.

The Administrator shall have full power and authority, in its sole and absolute discretion, to administer, construe and interpret the Plan, Grant Agreements and all other documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable, and to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Administrator shall deem it desirable to carry it into effect.

(c) Non-Uniform Determinations. The Administrator’s determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards) need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

(d) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.

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(e) Indemnification. To the maximum extent permitted by law and by the Company’s charter and by-laws, the members of the Administrator shall be indemnified by the Company in respect of all their activities under the Plan.

(f) Effect of Administrators Decision. All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any participants in the Plan and any other employee, consultant, or director of the Company, and their respective successors in interest.

4. Shares Available for the Plan

Subject to adjustments as provided in Section 7(d) of the Plan, the shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 8,000,000 shares of Common Stock. The Company shall reserve such number of shares for Awards under the Plan, subject to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable, is settled in cash without delivery of shares of Common Stock, or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are repurchased by or surrendered to the Company in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), or if any shares are withheld by the Company, the shares subject to such Award and the repurchased, surrendered and withheld shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to or repurchased or withheld by the Company in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422.

5. Participation

Participation in the Plan shall be open to all employees, officers, and directors of, and other individuals (including consultants and advisors) providing bona fide services to or for, the Company, or to any Affiliate of the Company, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to individuals in connection with hiring, retention or otherwise, prior to the date the individual first performs services for the Company or an Affiliate, provided that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.

6. Awards

The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement. The Administrator may permit or require a recipient of an Award to defer such individual’s receipt of the payment of cash or the delivery of Common Stock that would otherwise be due to such individual by virtue of the issuance of, exercise of, payment of,

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or lapse or waiver of restrictions respecting, any Award. If any such payment deferral is required or permitted, the Administrator shall, in its sole discretion, establish rules and procedures for such payment deferrals.

(a) Stock Options. The Administrator may from time to time grant to eligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonstatutory stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Company or of any current or hereafter existing “parent corporation” or “subsidiary corporation,” as defined in Code sections 424(e) and (f), respectively, of the Company and any other individuals who are eligible to receive incentive stock options under the provisions of Code section 422. Options intended to qualify as incentive stock options under Code section 422 must have an exercise price at least equal to Fair Market Value as of the date of grant, but nonstatutory stock options may be granted with an exercise price less than Fair Market Value. The exercise price of all stock options granted under the Plan shall be set in good faith by the Administrator in compliance with Code section 409A. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option.

(b) Stock Appreciation Rights. The Administrator may from time to time grant to eligible participants Awards of Stock Appreciation Rights (“SAR”). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. The base price per share specified in the Grant Agreement shall not be less than the lower of the Fair Market Value on the grant date or the exercise price of any tandem stock option Award to which the SAR is related. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.

(c) Stock Awards. The Administrator may from time to time grant stock Awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock Award may be denominated in Common Stock or other securities, stock-equivalent units, securities or debentures convertible into Common Stock, or any combination of the foregoing and may be paid in Common Stock or other securities, in cash, or in a combination of Common Stock or other securities and cash, all as determined in the sole discretion of the Administrator.

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7. Miscellaneous

(a) Withholding of Taxes. Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes and shall not exceed in amount the minimum statutory tax withholding obligation.

(b) Loans. To the extent otherwise permitted by law, the Company or its Affiliate may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding tax obligations.

(c) Transferability. Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the grantee, only by the grantee or, during the period the grantee is under a legal disability, by the grantee’s guardian or legal representative.

(d) Adjustments for Corporate Transactions and Other Events.

(i) Stock Dividend, Stock Split and Reverse Stock Split. In the event of a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, (A) the maximum number of shares of such Common Stock as to which Awards may be granted under this Plan, as provided in Section 4 of the Plan, and (B) the number of shares covered by and the exercise price and other terms of outstanding Awards, shall, without further action of the Board, be adjusted to reflect such event unless the Board determines, at the time it approves such stock dividend, stock split or reverse stock split, that no such adjustment shall be made. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares and fractional cents that arise with respect to outstanding Awards as a result of the stock dividend, stock split or reverse stock split.

(ii) Non-Change in Control Transactions. Except with respect to the transactions set forth in Section 7(d)(i), in the event of any change affecting the Common Stock, the Company or its capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger, consolidation or share exchange, other than any such change that is part of a transaction resulting in a Change in Control of the Company, the Administrator, in its discretion and without the consent of the holders of the Awards, may make (A) appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan, as provided in Section 4 of the Plan; and (B) any adjustments in outstanding Awards, including but not limited to modifying the number, kind and price of securities subject to Awards.

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(iii) Change in Control Transactions. In the event of any transaction resulting in a Change in Control of the Company, outstanding stock options and other Awards that are payable in or convertible into Common Stock under this Plan will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the substitution of the equivalent awards of, the surviving or successor entity or a parent thereof. In the event of such termination, the Administrator, in its sole discretion, may take any or all of the following actions to be effective as of the date of the Change in Control (or as of some other date prior to the Change in Control, but contingent upon the consummation of the Change in Control):

(A) accelerate (in part or in whole) the vesting and/or exercisability of such option or other Award;

(B) unilaterally cancel any such option which has not vested and/or which has not become exercisable as of the Effective Time;

(C) unilaterally cancel such option or other Award in exchange for: (1) whole and/or fractional shares of Common Stock (or for whole shares and cash in lieu of any fractional share) that, in the aggregate, are equal in value to the excess of the Fair Market Value of the shares of Common Stock that could be purchased subject to such option or other Award determined as of the Effective Time (taking into account vesting and/or exercisability) over the aggregate exercise price for such shares of Common Stock; or (2) cash or other property equal in value to the excess of the Fair Market Value of the shares of Common Stock that could be purchased subject to such option or other Award determined as of the Effective Time (taking into account vesting and/or exercisability) over the aggregate exercise price for such shares of Common Stock;

(D) unilaterally cancel such option or other Award after providing the holder of such option or other Award with (y) an opportunity to exercise such option or other Award to the extent vested and/or exercisable within a specified period prior to the Effective Time, and (z) notice of such opportunity to exercise prior to the commencement of such specified period; and/or

(E) unilaterally cancel such option or other Award and notify the holder of such option of such action, but only if the Fair Market Value of the shares of Common Stock that could be purchased subject to such option determined as of the Effective Time (taking into account vesting and/or exercisability) does not exceed the aggregate exercise price for such shares.

(iv) Unusual or Nonrecurring Events. The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

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(e) Substitution of Awards in Mergers and Acquisitions. Awards may be granted under the Plan from time to time in substitution for awards held by employees, officers, consultants or directors of entities who become or are about to become employees, officers, consultants or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity. The terms and conditions of any substitute Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the substitute Awards to the provisions of the awards for which they are substituted.

(f) Other Agreements. As a condition precedent to the grant of any Award under the Plan, the exercise pursuant to such an Award, or to the delivery of certificates for shares issued pursuant to any Award, the Administrator may require the grantee or the grantee’s successor or permitted transferee, as the case may be, to become a party to a stock restriction agreement, shareholders’ agreement, voting agreement, right of first refusal and co-sale agreement or other agreements regarding the Common Stock of the Company in such form(s) as the Administrator may determine from time to time.

(g) Termination, Amendment and Modification of the Plan. The Board may terminate, amend or modify the Plan or any portion thereof at any time. Except as otherwise determined by the Board, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

(h) Non-Guarantee of Employment or Service. Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under the Plan.

(i) Compliance with Securities Laws; Listing and Registration. If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. The Company shall have no obligation to effect any registration or qualification of the Common Stock under Federal, state or foreign laws. The Company may require that a grantee, as a condition to exercise of an Award, and as a condition to the delivery of any share certificate, make such written representations (including representations to the effect that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable Federal, state or foreign securities laws. The stock certificates for any shares of Common Stock issued pursuant to this Plan may bear a legend restricting transferability of the shares of Common Stock unless such shares are registered or an exemption from registration is available under the Securities Act of 1933, as amended, and applicable state or foreign securities laws.

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(j) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

(k) Governing Law. The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.

(l) Prior Plans. This Plan is the only plan or agreement of the Company with respect to the subject matter hereof and supercedes and replaces all prior plans, agreements and undertakings, both written and oral, with respect to such subject matter.

(m) Effective Date; Termination Date. The Plan is effective as of the date on which the Plan is adopted by the Board, subject to approval of the stockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth anniversary of the effective date of the Plan, or if earlier, the tenth anniversary of the date this Plan is approved by the stockholders. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.

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PLAN APPROVAL

Date Approved by the Board: June     , 2008

Date Approved by the Stockholders: June     , 2008

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RESTRICTED STOCK AGREEMENT

PUREWIRE, INC.

2008 STOCK INCENTIVE PLAN

GRANTEE:                     

NO. OF SHARES:                     

This Agreement (the “Agreement”) evidences the Company’s grant to you of              restricted shares (each, an “Award Share,” and collectively, the “Award Shares”) of the Common Stock of Purewire, Inc., a Delaware corporation (the “Company”) as of             , 2009 (the “Grant Date”) each currently valued at $0.10 per share, pursuant to the Purewire, Inc. 2008 Stock Incentive Plan (the “Plan”) and conditioned upon your agreement to the terms described below. All of the provisions of the Plan are expressly incorporated into this Agreement.

1. Terminology. Capitalized words used in this Agreement not defined above are defined in the Glossary at the end of the Agreement.

2. Vesting.

(a) As of             , 2009 (the “Vesting Measurement Date”), zero (0) Award Shares shall be vested and              Award Shares shall be unvested. So long as your Service with the Company is continuous from the Grant Date through the applicable date upon which forfeiture lapses with respect to such Award Shares, (i) 11.111% of the Award Shares will become vested on the date one month after the Vesting Measurement Date and on such date every month thereafter, through the date that is nine months following the Vesting Measurement Date; and (ii) 100% of the Award Shares will be vested on the date nine months after the Vesting Measurement Date.

(b) Notwithstanding anything herein to the contrary, any unvested portion of the Award Shares shall become vested upon the consummation of a Change in Control.

3. Termination of Employment or Service. If your Service with the Company ceases for any reason, all Award Shares that are not then vested will be immediately and automatically forfeited to the Company upon such cessation.

4. Restrictions on Transfer.

(a) Until an Award Share becomes vested, it may not be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

(b) You hereby represent and warrant to the Company as follows:

(i) You will hold the Award Shares for your own account for investment only and not with a view to, or for resale in connection with, any “distribution” of the Award Shares within the meaning of the Securities Act.

(ii) You understand that the Award Shares have not been registered under the Securities Act by reason of a specific exemption and that the Award Shares must be held indefinitely, unless they are subsequently registered under the Securities Act or you obtain an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required. You further acknowledge and understand that the Company is under no obligation to register the Award Shares. However, the Company acknowledges and agrees that for purposes of registration under the Securities Act, it will not treat the Award Shares granted hereunder differently (in an adverse manner to you) as any other shares of Common Stock granted under the Plan.

(iii) You understand that the Company may, in its discretion, impose restrictions on the sale, pledge or other transfer of the Award Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Company, such restrictions are necessary or desirable to comply with the Securities Act, the securities laws of any State or any other law.

(iv) You are aware that your investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.

(c) The Company shall not be required to (i) transfer on its books any Award Shares that have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Award Shares, or otherwise accord voting, dividend or liquidation rights to, any transferee to whom Award Shares have been transferred in contravention of this Agreement.

(d) If you propose to Transfer any Award Shares, then you shall promptly give written notice (the “Notice”) to the Company at least thirty (30) days prior to the closing of such Transfer. The Notice shall describe in reasonable detail the proposed Transfer including the number of Award Shares to be transferred, the nature of such Transfer, the consideration to be paid, and the name and address of each prospective purchaser or transferee. For a period of twenty (20) days following receipt of any Notice, the Company shall have the right to purchase all or a portion of the Award Shares subject to such Notice on the same terms and conditions as set forth therein. The Company’s purchase right shall be exercised by written notice signed by an officer of the Company (the “Company Notice”) and delivered to you within such twenty (20) day period. The Company shall effect the purchase of the Award Shares, including payment of the purchase price, not more than five (5) business days after delivery of the Company’s Notice, and at such time you shall deliver to the Company the certificate(s) representing the Award Shares to be purchased by the Company, each certificate to be properly endorsed for transfer. The Company’s rights under this Section 4(d) shall expire upon the Company’s initial public offering.

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(e) The limitations on transfer contained in this Section 4 are in addition to and shall not in any way limit any right of first refusal in favor of the Company pursuant to a shareholders’ agreement, right of first refusal agreement or otherwise; provided, that in the event of a conflict between such agreement and Section 4(d), such agreement shall control.

5. Stock Certificates. You will be reflected as the owner of record of the Award Shares as of the Grant Date on the Company’s books. The Company or its counsel will hold the share certificates for safekeeping, or otherwise retain the Award Shares in uncertificated book entry form, until the Award Shares become vested. Until the Award Shares become vested, any share certificates representing such shares will include a legend to the effect that you may not sell, assign, transfer, pledge, or hypothecate the Award Shares pursuant to this Agreement. All regular cash dividends on the Award Shares held by the Company will be paid directly to you. At the execution of this Agreement, you shall deliver to the Company a stock power, endorsed in blank, with respect to any Award Shares that have been forfeited pursuant to this Agreement.

6. Tax Election and Tax Withholding.

(a) You hereby agree to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the grant or vesting of the Award Shares. The Company shall have the right to deduct from any compensation or any other payment of any kind (including withholding the issuance of shares of Common Stock) due you the amount of any federal, state, local or foreign taxes required by law to be withheld as a result of the grant or vesting of the Award Shares in whole or in part; provided, however, that the value of the shares of Common Stock withheld may not exceed the statutory minimum withholding amount required by law. In lieu of such deduction, the Company may require you to make a cash payment to the Company equal to the amount required to be withheld. If you do not make such payment when requested, the Company may refuse to issue any Common Stock certificate under this Agreement until arrangements satisfactory to the Administrator for such payment have been made.

(b) You hereby acknowledge that you have been advised by the Company to seek independent tax advice from your own advisors regarding the availability and advisability of making an election under Section 83(b) of the Code, and that any such election, if made, must be made within 30 days of the Grant Date. You expressly acknowledge that you are solely responsible for filing any such Section 83(b) election with the appropriate governmental authorities, irrespective of the fact that such election is also delivered to the Company. You may not rely on the Company or any of its officers, directors or employees for tax or legal advice regarding this award.

7. Adjustments for Corporate Transactions and Other Events.

(a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, the number of Award Shares and the number of such Award Shares that are forfeitable shall, without further action of the Administrator, be adjusted to reflect such event. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares with respect to the Award Shares as a result of the stock dividend, stock split or reverse stock split. Adjustments under this Section 7 will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. No fractional Award Shares will result from any such adjustments.

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(b) Binding Nature of Agreement. The terms and conditions of this Agreement shall apply with equal force to any additional and/or substitute securities received by you in exchange for, or by virtue of your ownership of, the Award Shares, whether as a result of any spin-off, stock split-up, stock dividend, stock distribution, other reclassification of the Common Stock of the Company, or similar event, except as otherwise determined by the Administrator. If the Award Shares are converted into or exchanged for, or stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, securities of another entity, or other property (including cash), then the rights of the Company under this Agreement shall inure to the benefit of the Company’s successor, and this Agreement shall apply to the securities or other property received upon such conversion, exchange or distribution in the same manner and to the same extent as the Award Shares.

8. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement shall alter your at-will or other employment status or other service relationship with the Company, nor be construed as a contract of employment or service relationship between the Company and you, or as a contractual right of you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without cause or notice and whether or not such discharge results in the forfeiture of any Award Shares or any other adverse effect on your interests under the Plan.

9. Rights as Stockholder. Except as otherwise provided in this Agreement with respect to the forfeitable Award Shares, you are entitled to all rights of a stockholder of the Company, including the right to vote the Award Shares and receive dividends and/or other distributions declared on the Award Shares.

10. The Company’s Rights. The existence of the Award Shares shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11. Agreement to Execute Other Agreements. You agree to execute, upon the request of the Company at any time, any and all agreements as may be reasonably requested by the Administrator (including, without limitation, a shareholders’ agreement, voting agreement, right of first refusal and co-sale agreement, and any other agreements that may be in effect among and between the Company’s shareholders).

12. Notices. All notices and other communications made or given pursuant to this Agreement shall be in writing and shall be sufficiently made or given if hand delivered, mailed by

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certified mail or transmitted by facsimile, addressed to you at the address contained in the records of the Company, or addressed to the Administrator, care of the Company for the attention of its Corporate Secretary at its principal executive office.

13. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the Award Shares granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Award Shares granted hereunder shall be void and ineffective for all purposes.

14. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

15. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have an adverse effect on the Award Shares as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by each of the parties hereto.

16. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of this Agreement. A copy of the Plan has been provided to you.

17. Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Georgia, without regard to its provisions concerning the applicability of laws of other jurisdictions. Any suit with respect hereto will be brought in the federal or state courts in the districts which include Atlanta, Georgia, and you hereby agree and submit to the personal jurisdiction and venue thereof.

18. Attorneys’ Fees; Specific Performance. The nonprevailing party shall reimburse the prevailing party for all costs incurred by the prevailing party in enforcing the performance of, or protecting his, her or its rights under, any part of this Agreement, including reasonable costs of investigation and attorneys’ fees. It is the intention of the parties that upon forfeiture of any Award Shares hereunder, the Company, pursuant to the terms of this Agreement, shall be entitled to receive such Award Shares, in specie, in order to have such Common Stock available for future issuance without dilution of the holdings of other stockholders. Furthermore, it is expressly agreed between the parties that money damages are inadequate to compensate the Company for such forfeited Award Shares and that the Company shall be entitled to specific performance.

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19. Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

20. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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GLOSSARY

(a) “Administrator” has the meaning given to such term in the Plan.

(b) “Affiliate” has the meaning given to such term in the Plan.

(c) “Change in Control” has the meaning given to such term in the Plan.

(d) “Company” means Purewire, Inc. and its Affiliates, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Purewire, Inc.

(e) “Securities Act” means the Securities Act of 1933, as amended.

(f) “Service” means your employment or other service relationship with the Company and its Affiliates. Your Service will be considered to have ceased with the Company and its Affiliates if, immediately after a sale, merger or other corporate transaction, the trade, business or entity with which you are employed or otherwise have a service relationship is not the Company or an Affiliate of the Company.

(g) “Transfer” shall include any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or descent, or other transfer or disposition of any kind, including transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any of the Award Shares.

(h) “You”; “Your”. You means the recipient of the Award Shares as reflected in the first paragraph of this Agreement. Whenever the word “you” or “your” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative, or beneficiary to whom the Award Shares may be transferred by will or by the laws of descent and distribution, the words “you” and “your” shall be deemed to include such person.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer.

PUREWIRE, INC.
By:
	Name:
	Title:

Date:

The undersigned hereby acknowledges that he/she has carefully read this Agreement and agrees to be bound by all of the provisions set forth herein.

GRANTEE

Name:

Date:

Address:

Facsimile:

Enclosure: Purewire, Inc. 2008 Stock Incentive Plan

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{This Stock Power should be signed in blank and deposited with the Company if share certificates are issued and/or delivered to the Grantee for Award Shares that are forfeitable.}

STOCK POWER

FOR VALUE RECEIVED, the undersigned,                     , hereby sells, assigns and transfers unto Purewire, Inc., a Delaware corporation (the “Company”), or its successor,              shares of restricted common stock, par value $0.001 per share, of the Company standing in my name on the books of the Company, represented by Certificate No.     , which is attached hereto, and hereby irrevocably constitutes and appoints                                                           as my attorney-in-fact to transfer the said stock on the books of the Company with full power of substitution in the premises.

This Stock Power may only be used in connection with the forfeiture of Award Shares pursuant to that certain Restricted Stock Agreement between                      and the Company, dated                     .

Name:

Dated:

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PUREWIRE, INC.

INCENTIVE STOCK OPTION NOTICE

This notice evidences the award of stock options (each, an “Option” and collectively, the “Options”) that have been granted to you, <<GRANTEE>>, subject to and conditioned upon your agreement to the terms of the attached Incentive Stock Option Agreement (the “Agreement”). The Options entitle you to purchase shares of Common Stock, par value $0.001 per share (“Common Stock”), of Purewire, Inc., a Delaware corporation (the “Company”), under the Purewire, Inc. 2008 Stock Incentive Plan (the “Plan”). The number of shares you may purchase and the exercise price at which you may purchase them are specified below. This Notice constitutes part of and is subject to the terms and provision of the Agreement and the Plan, which are incorporated by reference herein.

Grant Date:
Vesting Measurement Date:
Number of Shares:
Exercise Price:
Expiration Date:	The Options expire at 5:00 p.m. Eastern Time on the last business day coincident with or prior to the 10th anniversary of the Grant Date (the “Expiration Date”), unless fully exercised or terminated earlier.
Exercisability Schedule:	Subject to the terms and conditions described in the Agreement, the Options become exercisable in accordance with the schedule below:

(a) 25% of the Options become exercisable on the first anniversary of the Vesting Measurement Date (the “Initial Vesting Date”), and

(b) 2.083% of the Options become exercisable on the date one month after the Initial Vesting Date and on such date every month thereafter, through the fourth anniversary of the Vesting Measurement Date.

The extent to which the Options are exercisable as of a particular date is rounded down to the nearest whole share. However, exercisability is rounded up to 100% on the fourth anniversary of the Vesting Measurement Date.

PUREWIRE, INC.

By:

Date:

I acknowledge and I have carefully read the attached Agreement and the Plan and agree to be bound by all of the provisions set forth in these documents.

OPTIONEE

Date:

Enclosures:	Incentive Stock Option Agreement
	Purewire, Inc. 2008 Stock Incentive Plan
	Exercise Form

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INCENTIVE STOCK OPTION AGREEMENT

UNDER THE

PUREWIRE, INC. 2008 STOCK INCENTIVE PLAN

1. Terminology. Capitalized terms used in this Agreement are defined in the correlating Stock Option Notice and/or the Glossary at the end of the Agreement. Capitalized terms used in this Agreement and not otherwise defined shall have the definitions attributed to them in the Plan.

2. Exercise of Options.

(a) Exercisability. The Options will become exercisable in accordance with the Exercisability Schedule set forth in the Stock Option Notice, so long as you are in the Service of the Company from the Grant Date through the applicable exercisability dates. None of the Options will become exercisable after your Service with the Company ceases, unless the Stock Option Notice provides otherwise with respect to exercisability that arises as a result of your cessation of Service.

(b) Right to Exercise. You may exercise the Options, to the extent exercisable, at any time on or before 5:00 p.m. Eastern Time on the Expiration Date or the earlier termination of the Options, unless otherwise provided under applicable law. Section 3 below describes certain limitations on exercise of the Options that apply in the event of your death, Total and Permanent Disability, or termination of Service. The Options may be exercised only in multiples of whole Shares. No fractional Shares will be issued under the Options.

(c) Exercise Procedure. In order to exercise the Options, you must provide the following items to the Secretary of the Company or his or her delegate before the expiration or termination of the Options:

(i) notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options; and

(ii) full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement; and

(iii) an executed copy of any other agreements requested by the Administrator pursuant to Section 2(e) of this Agreement.

(iv) An exercise will not be effective until the Secretary of the Company or his or her delegate receives all of the foregoing items, and such exercise otherwise is permitted under and complies with all applicable federal, state and foreign securities laws.

(d) Method of Payment. You may pay the Exercise Price by:

(i) delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion;

(ii) a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm approved by the Administrator;

(iii) subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price, provided that tender of such shares will not result in the Company having to record a charge to earnings under United States generally accepted accounting principles then applicable to the Company;

(iv) any other method approved by the Administrator; or

(v) any combination of the foregoing.

(e) Agreement to Execute Other Agreements. You agree to execute, as a condition precedent to the exercise of the Options, and at any time thereafter, any and all agreements as may be requested by the Administrator, including, without limitation, a stock restriction agreement, shareholders’ agreement, voting agreement, and right of first refusal and co-sale agreement.

(f) Issuance of Shares upon Exercise. As soon as practicable after exercise of the Options, the Company will deliver a share certificate to you, or deliver Shares electronically or in certificate form to your designated broker on your behalf, for the Shares issued upon exercise. Any share certificates delivered will, unless the Shares are registered or an exemption from registration is available under applicable federal and state law, bear a legend restricting transferability of such Shares and referencing any applicable agreement described in Section 2(e).

3. Termination of Service.

(a) Termination of Unexercisable Options. If your Service with the Company ceases for any reason, the Options that are then unexercisable, after giving effect to the exercise acceleration provisions set forth on the Stock Option Notice, if any, will terminate immediately upon such cessation.

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(b) Exercise Period Following Termination of Service. If your Service with the Company ceases for any reason other than discharge for Cause, the Options that are then exercisable, after giving effect to the exercise acceleration provisions set forth on the Stock Option Notice, if any, will terminate upon the earliest of:

(i) the expiration of 90 days following such cessation, if your Service ceases on account of (1) your termination by the Company other than a discharge for Cause, or (2) your voluntary termination other than for Total and Permanent Disability or death;

(ii) the expiration of 12 months following such cessation, if your Service ceases on account of your Total and Permanent Disability or death;

(iii) the expiration of 12 months following your death, if your death occurs during the periods described in clauses (i) or (ii) of this Section 3(b), as applicable; or

(iv) the Expiration Date.

In the event of your death, the exercisable Options may be exercised by your executor, personal representative, or the person(s) to whom the Options are transferred by will or the laws of descent and distribution.

(c) Misconduct. The Options will terminate in their entirety, regardless of whether the Options are then exercisable, immediately upon your discharge from Service for Cause, or upon your commission of any of the following acts during the exercise period following your termination of Service: (i) fraud on or misappropriation of any funds or property of the Company, or (ii) your breach of any provision of any employment, non-disclosure, non-competition, non-solicitation, assignment of inventions, or other similar agreement executed by you for the benefit of the Company, as determined by the Administrator, which determination will be conclusive.

(d) Changes in Status. If you cease to be a “common law employee” of the Company but you continue to provide bona fide services to the Company following such cessation in a different capacity, including without limitation as a director, consultant or independent contractor, then a termination of Service shall not be deemed to have occurred for purposes of this Section 3 upon such change in capacity. Notwithstanding the foregoing, the Options shall not be treated as incentive stock options within the meaning of Code section 422 with respect to any exercise that occurs more than three months after such cessation of the common law employee relationship (except as otherwise permitted under Code section 421 or 422). In the event that your Service is with a business, trade or entity that, after the Grant Date, ceases for any reason to be part or an Affiliate of the Company, your Service will be deemed to have terminated for purposes of this Section 3 upon such cessation if your Service does not continue uninterrupted immediately thereafter with the Company or an Affiliate of the Company.

4. Market Stand-Off Agreement. You agree that following the effective date of a registration statement of the Company filed under the Securities Act of 1933, you, for the duration specified by and to the extent requested by the Company and an underwriter of Common Stock or other securities of the Company, shall not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such securities, whether any such aforementioned transaction is to be settled by delivery of such securities or other securities, in cash or otherwise, or

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publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, in each case during the seven days prior to and the 180 days after the effectiveness of any underwritten offering of the Company’s equity securities (or such longer or shorter period as may be requested in writing by the managing underwriter and agreed to in writing by the Company) (the “Market Stand-Off Period”), except as part of such underwritten registration if otherwise permitted. In addition, you agree to execute any further letters, agreements and/or other documents requested by the Company or its underwriters that are consistent with the terms of this Section 4. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Stand-Off Period.

5. Nontransferability of Options. These Options are nontransferable otherwise than by will or the laws of descent and distribution and during your lifetime, the Options may be exercised only by you or, during the period you are under a legal disability, by your guardian or legal representative. Except as provided above, the Options may not be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

6. Qualified Nature of the Options.

(a) General Status. The Options are intended to qualify as incentive stock option within the meaning of Code section 422 (“Incentive Stock Option”), to the fullest extent permitted by Code section 422, and this Agreement shall be so construed. The Company, however, does not warrant any particular tax consequences of the Options. Code section 422 provides limitations, not set forth in this Agreement, respecting the treatment of the Options as Incentive Stock Options. You should consult with your personal tax advisors in this regard.

(b) Code Section 422(d) Limitation. Pursuant to Code section 422(d), the aggregate fair market value (determined as of the Grant Date) of shares of Common Stock with respect to which all Incentive Stock Options first become exercisable by you in any calendar year under the Plan or any other plan of the Company (and its parent and subsidiary corporations, within the meaning of Code section 424(e) and (f), as may exist from time to time) may not exceed $100,000 or such other amount as may be permitted from time to time under Code section 422. To the extent that such aggregate fair market value exceeds $100,000 or other applicable amount in any calendar year, such stock options will be treated as nonstatutory stock options with respect to the amount of aggregate fair market value thereof that exceeds the Code section 422(d) limit. For this purpose, the Incentive Stock Options will be taken into account in the order in which they were granted. In such case, the Company may designate the shares of Common Stock that are to be treated as stock acquired pursuant to the exercise of Incentive Stock Options and the shares of Common Stock that are to be treated as stock acquired pursuant to nonstatutory stock options by issuing separate certificates for such shares and identifying the certificates as such in the stock transfer records of the Company.

(c) Significant Stockholders. Notwithstanding anything in this Agreement or the Stock Option Notice to the contrary, if you own, directly or indirectly through attribution, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its subsidiaries (within the meaning of Code section 424(f)) on the Grant Date, then the

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Exercise Price is the greater of (a) the Exercise Price stated on the Stock Option Notice or (b) 110% of the Fair Market Value of the Common Stock on the Grant Date, and the Expiration Date is the last business day prior to the fifth anniversary of the Grant Date.

7. Withholding of Taxes. At the time the Options are exercised, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll or any other payment of any kind due to you and otherwise agree to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the Options (including upon a disqualifying disposition within the meaning of Code section 421(b)). The Company may require you to make a cash payment to cover any withholding tax obligation as a condition of exercise of the Options or issuance of share certificates representing Shares.

The Administrator may, in its sole discretion, permit you to satisfy, in whole or in part, any withholding tax obligation which may arise in connection with the Options either by electing to have the Company withhold from the Shares to be issued upon exercise that number of Shares, or by electing to deliver to the Company already-owned shares, in either case having a Fair Market Value equal to the amount necessary to satisfy the statutory minimum withholding amount due.

8. Adjustments. The Administrator may make various adjustments to your Options, including adjustments to the number and type of securities subject to the Options and the Exercise Price, in accordance with the terms of the Plan. In the event of any transaction resulting in a Change in Control of the Company, the outstanding Options will terminate upon the effective-time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Options by, or for the substitution of the equivalent awards of, the surviving or successor entity or a parent thereof. In the event of such termination, you will be permitted, immediately before the Change in Control, to exercise or convert all portions of such Options that are then exercisable or which become exercisable upon or prior to the effective time of the Change in Control or you will receive Fair Market Value for any such Options as provided in the Plan.

9. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement will alter your at-will or other employment status or other service relationship with the Company, nor be construed as a contract of employment or service relationship between you and the Company, or as a contractual right for you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without Cause or notice and whether or not such discharge results in the failure of any of the Options to become exercisable or any other adverse effect on your interests under the Plan.

10. No Rights as a Stockholder. You shall not have any of the rights of a stockholder with respect to the Shares until such Shares have been issued to you upon the due exercise of the Options. No adjustment will be made for dividends or distributions or other rights for which the record date is prior to the date such Shares are issued.

11. The Company’s Rights. The existence of the Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments,

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recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

12. Right of First Refusal. If you propose to Transfer any Shares, then you shall promptly give written notice (the “Notice”) to the Company at least thirty (30) days prior to the closing of such Transfer. The Notice shall describe in reasonable detail the proposed Transfer including the number of Shares to be transferred, the nature of such Transfer, the consideration to be paid, and the name and address of each prospective purchaser or transferee. For a period of twenty (20) days following receipt of any Notice, the Company shall have the right to purchase all or a portion of the Shares subject to such Notice on the same terms and conditions as set forth therein. The Company’s purchase right shall be exercised by written notice signed by an officer of the Company (the “Company Notice”) and delivered to you within such twenty (20) day period. The Company shall effect the purchase of the Shares, including payment of the purchase price, not more than five (5) business days after delivery of the Company’s Notice, and at such time you shall deliver to the Company the certificate(s) representing the Shares to be purchased by the Company, each certificate to be properly endorsed for transfer. The Company’s rights under this Section 12 shall expire upon the Company’s initial public offering.

13. Entire Agreement. This Agreement, together with the correlating Stock Option Notice and the Plan, contain the entire agreement between you and the Company with respect to the Option. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Options shall be void and ineffective for all purposes.

14. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the Options or Shares as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by you and the Company.

15. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Any conflict between the terms of this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is provided to you with this Agreement.

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GLOSSARY

(a) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, Purewire, Inc. For this purpose, “control” means ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity.

(b) “Cause” has the meaning ascribed to such term or words of similar import in your written employment or service contract with the Company as in effect at the time at issue and, in the absence of such agreement or definition, means your (i) conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud on or misappropriation of any funds or property of the Company, any affiliate, customer or vendor; (iii) personal dishonesty, incompetence, willful misconduct, willful violation of any law, rule or regulation (other than minor traffic violations or similar offenses) or breach of fiduciary duty which involves personal profit; (iv) willful misconduct in connection with your duties or willful failure to perform your responsibilities in the best interests of the Company; (v) illegal use or distribution of drugs; (vi) violation of any Company rule, regulation, procedure or policy; or (vii) breach of any provision of any employment, non-disclosure, non-competition, non-solicitation or other similar agreement executed by you for the benefit of the Company, all as determined by the Administrator, which determination will be conclusive.

(c) “Company” means Purewire, Inc. and its Affiliates, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Purewire, Inc.

(d) “Service” means your employment or other service relationship with the Company.

(e) “Shares” mean the shares of Common Stock underlying the Options.

(f) “Stock Option Notice” means the written notice evidencing the award of the Options that correlates with and makes up a part of this Agreement

(g) “Total and Permanent Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The Administrator may require such proof of Total and Permanent Disability as the Administrator in its sole discretion deems appropriate and the Administrators good faith determination as to whether you are totally and permanently disabled will be final and binding on all parties concerned.

(h) “Transfer”, shall include any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or descent, or other transfer or disposition of any kind, including transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any of the Shares.

(i) “You”; “Your” means the recipient of the award of Options as reflected on the Stock Option Notice. Whenever the Agreement refers to “you” under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to your estate, personal representative, or beneficiary to whom the Options may be transferred by will or by the laws of descent and distribution, the word “you” shall be deemed to include such person.

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EX-10.6

Exhibit 10.6

June 7, 2013

William. “BJ” Jenkins

Dear BJ:

The purpose of this letter agreement is to confirm the current terms and conditions of your employment with Barracuda Networks, Inc. (the “Company”) as its Chief Executive Officer reporting to the. Company’s board of directors (the “Board”).

You will receive an annual salary of $350,000 (the “Base Salary”), subject to the usual, required withholdings, and payable semi-monthly in accordance with the Company’s normal payroll procedures. As a Company employee, you are also eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other executives of the Company, and will receive four (4) weeks of paid vacation each year. You should note that the Company may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual executive bonus program, and be eligible for a target bonus of up to 100% of your Base Salary, subject to the usual, required withholdings, upon achievement of performance objectives to be determined by the Board in its sole discretion (the “Bonus”). The Bonus, or any portion thereof, will be paid as soon as practicable after the Board determines that the Bonus has been earned, but in no event shall the Bonus be paid after the later of the fifteenth (15th) day of the third (3rd) month, following the close of the Company’s fiscal year in which the Bonus is earned. The Board will establish bonus achievement criteria for you for the fiscal year ending February 2014 and for fiscal years going forward.

You will be eligible to receive awards of stock options, restricted stock or other equity awards pursuant to any plans or arrangements the Company may have in effect from time to time. The Board or its committee will determine in its discretion whether you will be granted any such equity awards and the terms of any such award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.

It was recommended at the first meeting of the Board following your start date that the Company grant you an option to purchase 2,760,000 shares of the Company’s common, stock at a price per share equal to the fair market value on the date of grant (the “Option”). Subject to the accelerated vesting provisions set forth herein, the Option would vest as to 1/16th of the shares subject to the Option on each three (3) month anniversary of your start date (and if there is no corresponding day, the last day of the month), so that the Option would be fully vested and exercisable four (4) years from your start date, subject to you continuing to provide services to the Company through the relevant vesting dates. The Option would be subject to the terms and conditions of the Company’s 2012 Equity Incentive Plan (the “Stock Plan”) and the stock option agreement by and between you and the Company.

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In addition, it was recommended at the first meeting of the Board following your start date that the Company grant you a restricted stock award of 2,760,000 shares of the Company’s common stock (the “Restricted Stock Award”). Subject to the accelerated vesting provisions set forth herein, the Restricted Stock Award would vest as to 1/16th of the shares subject to the Restricted Stock Award on each three (3) month anniversary of your start date (and if there is no corresponding day, the last day of the month), so that the Restricted Stock Award would be fully vested four (4) years from your start date, subject to you continuing to provide services to the Company through the relevant vesting dates. The Restricted Stock Award would be subject to the terms and conditions of the Company’s Stock Plan and the restricted stock agreement by and between you and the Company.

A “Change in Control” means the occurrence of any of the following events:

(i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or

(ii) Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of a Change in Control, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event -within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

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Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if (i) its sole purpose is to change the jurisdiction of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

Should a Change in Control occur, you will be entitled to the following, provided you remain, an employee of the Company through the date of such Change in Control: (i) the Company will pay you an amount equal to the Base Salary and Bonus paid to you over the twelve (12) months immediately preceding the date of the Change in Control (the “Change in Control Bonus”), and such Change in Control Bonus will be paid in accordance with the Company’s regular payroll procedures and the terms of this letter, but no later than the sixty-first (61st) day after the payment trigger; and (ii) any then-outstanding unvested shares subject to your options and the Restricted Stock Award will accelerate and fully vest as of the date of the Change in Control.

If the Company terminates your employment other than for Cause (as defined below), death or disability, then, provided you sign and do not revoke a general release of claims (a “Release”) in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerated vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional six (6) months.

If your employment with the Company is terminated voluntarily by you for any reason, for Cause by the Company, or due to your death or disability, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; and (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned).

In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance or other benefits pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the

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“Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or any other benefits under this letter. If the Release becomes effective by the Release Deadline, payment of severance or other benefits under this letter will commence on the Company’s next regular payroll period following the 60-day anniversary of the date of your termination, subject to Appendix A. Except as required by Appendix A, any payments delayed from the date you terminate employment through the Release Deadline will be payable in a lump sum without interest on the Company’s next regular payroll period following the 60-day anniversary of the date of your termination, and all other amounts will be payable in accordance with the payment schedule applicable to each payment or benefit for the remainder of the 12-month period following the date of your termination.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (5) your willful breach of any obligations under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such non-performance to the Company’s satisfaction within ten (10) business days after receiving such notice.

In the event that EMC Corporation (“EMC”) requires you to repay the relocation loan it previously extended to you (the “Relocation Loan”), the Company will pay you a lump sum bonus equal to your cash costs associated with your repayment of the Relocation Loan (the “Relocation Bonus”), provided that you remain an employee of the Company through the date that EMC requests repayment of the Relocation Loan and you submit a request to the Company within one hundred twenty (120) days of the date EMC requests repayment (along with supporting documentation). The Relocation Bonus will be paid as soon as practicable after the Board determines that EMC has requested the repayment of the Relocation Loan, but in no event shall the Relocation Bonus be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year in which the Board determines the Relocation Bonus is earned.

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice.

The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your employment, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any.

For purposes of federal immigration law, you were required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must have been provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

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You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. You agree to consult with the Board before accepting any membership in another organization’s board of directors.

As a Company employee, you will be expected to abide by company rules and regulations. You have signed an acknowledgment that you have read and understand the company rules of conduct included in the Company’s handbook. You have also signed and agree to continue to comply with the Company’s proprietary rights and confidentiality agreement which, among other provisions, provides for the assignment of patent rights to any invention made during your employment at the Company and non-disclosure of proprietary information.

You and the Company agree that any dispute regarding this employment letter will be resolved by binding arbitration. This employment letter replaces and supersedes, in its entirely, any prior agreement between you and the Company related to your employment.

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

We look forward to working with you at Barracuda Networks, Inc.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ David R. Golob

David R. Golob

Member of Board of Directors

ACCEPTED AND AGREED TO this      day of May, 2013.
/s/ William Jenkins
William Jenkins
Enclosures:	Duplicate Original Letter
	Proprietary Rights Agreement
	Non-disclosure Agreement

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Appendix A

Section 409A

ii. Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

iii. Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

iv. Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

v. Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above, “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

vi. The foregoing provisions are intended to comply with the requirements. of Section 409A so that none of the severance payments and benefits to be provided hereunder will be

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subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

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Enclosure 1

Duplicate Original Letter

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William “BJ” Jenkins

CONFIDENTIAL OFFER OF EMPLOYMENT

Mr. William “BJ” Jenkins

Dear BJ,

On behalf of the board of directors of Barracuda Networks, I am pleased to hereby formally document below the board’s offer to you to join Barracuda Networks as its Chief Executive Officer, reporting to the Board of Directors. We are eager for you to start work at your earliest convenience and are standing by ready to clarify any element of this offer.

To indicate your acceptance of our offer, please sign and date this letter in the space provided below and return it to us. A duplicate original is enclosed for your records. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you.

We look forward to working with you.

Base Salary	$350,000
Performance Bonus	100% Target Bonus ($350,000). The company will pay 100% of your prorated (for duration of employment) target bonus for the fiscal year ending February 2013. The compensation committee of the board will establish more detailed bonus achievement criteria for you for the fiscal year ending February 2014. Your expectation should be that you will receive 100% of your target bonus if Barracuda is performing consistently with its financial plan and if the board is generally satisfied with your performance as CEO.
Total Cash Compensation	$700,000 target total annual cash compensation
Indemnity	Barracuda wll fully indemnify you against any litigation initiated by EMC in connection with your acceptance of employment by Barracuda.
Stock Options	Option grant to purchase 2,760,000 Barracuda Networks’ common stock, at a strike price of $5.62 per share. This represents 1.75% o the company’s fully diluted shares outstanding. These options will vest based on time in position, over four years, in equal quarterly installments for each o the first four years of your employment. In the event of a chane in control, all options will immediately vest.
Restricted Stock Grant	Restricted stock grant award of 2,760,000 shares of Barracuda Networks’ common stock. This represents 1.75% of the company’s

	fully diluted shares outstanding. This grant will vest based on time in position, over four years, in equal quarterly installments for each of the first four years of your employment. In the event of a change in control, this grant will immediately vest.
Benefits	Standard executive benefits
Vacation	4 weeks per year or as otherwise agreed
Special Bonus	In the event that EMC forces repayment of the relocation loan which it has extended to you, Barracuda will pay you a special bonus which will compensate you for the cash costs incurred by you in conjunction with repayment of this loan. This bonus will be subject to a claw back provision which will expire after one year of employment and which will not apply should the company terminate your employment without cause during that first year of employment
Proprietary Invention Agreement; etc.	We will expect you to execute Barracuda’s customary documentation regarding intellectual property, etc.
Severance Benefits	If Barracuda Networks terminates your employment without cause, you will receive: •      Continuation of salary and benefits for 12 months •      6 months’ forward vesting of all options and restricted stock A change in control event will result in a lump sum payment equal to the last 12 months’ actual salary and bonus paid.
Board Directorships	You agree to consult with the board of directors of Barracuda before accepting any outside board memberships.
Acceptance & Start Date	Start date TBD, but expected to be no later than October, 31, 2012.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ David R. Golob

David R. Golob

Member of the Board of Directors

ACCEPTED AND AGREED TO this 5th day of October, 2012.
/w/ William Jenkins
William Jenkins
Enclosures:	Duplicate Original Letter

Enclosure 2

Barracuda Networks, Inc.

PROPRIETARY INFORMATION AGREEMENT

As a condition of my employment or contract with Barracuda Networks, Inc., its subsidiaries, affiliates, successors or assigns (together the “Company”), and in consideration of my employment or contract with the Company and my receipt of the compensation now and hereafter paid to me by Company, I agree to the following:

1. At-Will Employment. I understand and acknowledge that my employment or contract with the Company is for an unspecified duration and constitutes “at-will” employment. I acknowledge that this employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice.

2. Confidential Information.

a. Company Information. I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation any Confidential Information of the Company. I understand that “Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, development, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), markets, software, inventions, processes, formulas, structures, technology, materials, designs, drawings, engineering, hardware configuration information, marketing, finances, other business information, and information about the Company’s employees and/or consultants (including without limitation, the compensation, job responsibility and job performance of such employees and/or consultants) disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of components, equipment, or experiments, or learned by me in the course of my employment. Without limiting the generality of the foregoing, I understand that Confidential Information shall include any materials or information stamped with the words “CONFIDENTIAL INFORMATION OF BARRACUDA NETWORKS, INC.” I further understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

b. Former Employer Information. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence confidential or proprietary information, knowledge, or data acquired by me in confidence or in trust prior to my employment with the Company, and I will not disclose to the Company, or induce the Company to use, any confidential or proprietary information or trade secrets or material belonging to any previous or concurrent employers or others. I will not bring onto the premises of the Company any unpublished document or proprietary information

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belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity. I agree not to enter into any agreement either written or oral in conflict herewith. I agree to indemnify and hold harmless the Company with respect to any claim or loss attributable to any violation by me of any provision of this Section 2(b).

c. Third Party Information. I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree that I owe the Company and such third parties, during the term of my employment and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation (except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party) or to use it for the benefit of anyone other than for the Company or such third party (consistent with the Company’s agreement with such third party).

3. Inventions.

a. Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. I agree to notify the Company in writing before I make any disclosure or perform any work on behalf of the Company that appears to threaten or conflict with proprietary rights I claim in any Invention or idea. In the event of my failure to give such notice, I agree that I will make no claim against the Company with respect to any such Invention or idea. If in the course of my employment with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine.

b. Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly make, conceive, develop or reduce to practice, or cause to be made, conceived, developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in Section 3(f) below. I shall promptly disclose such Invention in writing to my immediate supervisor at the Company on the Invention Notification attached hereto as Exhibit B (which shall be received in confidence by the Company), with a copy to the President, in order to permit the Company to claim rights to which it may be entitled under this Agreement. I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectible by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 USCA, Section 101).

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c. Inventions Assigned to the United States. I agree to assign to the United States government all my right, title, and interest in and to any and all inventions, original works of authorship, developments, improvements or trade secrets whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

d. Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

e. Patent and Copyright Registrations. I agree to promptly notify the Company, in order to permit it to exercise its rights hereunder, of the occurrence of any application for, office action in connection with or grant of any patent, trademark, service mark, copyright or mask work registration in connection with any Invention or any license, sale or other disposition of any rights whatsoever to any Invention, including without limitation any manufacturing, distribution or other rights. Any such license, sale or disposition in contravention of this Agreement or effected without written notice as provided hereunder shall be void. I further agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree to execute, acknowledge and deliver to the Company or its nominee upon request and at the Company’s expense all such documents, including applications for patents, copyrights and other intellectual property rights (and registrations thereof) and assignments of inventions, patents, copyrights and other intellectual property rights with respect thereto, as the Company may determine necessary or desirable to apply for and obtain patents, copyrights and other intellectual property rights on such Assignable Inventions in any and all countries and/or to protect the interest of the Company or its nominee in such inventions, patents, copyrights and other intellectual property rights and to vest title thereto in the Company or its nominee. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me. I hereby waive and quitclaim to

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the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any patents or copyrights, resulting from any such application for letters patent or copyright registration assigned hereunder to the Company.

f. Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit C). In the event that I believe that I am entitled to ownership of an Invention not disclosed on Exhibit A pursuant to this Section 3(f), I shall notify the Company of such belief on the Invention Notification attached hereto as Exhibit B. If the Company agrees that I am entitled to such ownership, the President of the Company shall sign the Invention Notification in the space provided. Except in such cases as the President of the Company signs the Invention Notification as provided above, I agree that all Inventions are the sole property of the Company.

4. Returning Company Documents. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to the Company, its successors or assigns. In the event of the termination of my employment, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit D. I also agree that I will not remove any Confidential Information or aforementioned materials and items from the premises where the work of the Company is being carried on without the Company’s prior written consent. I further agree that I will in all events return these materials and items to the Company promptly following the Company’s request for their return.

5. Non-Competition.

a. Non-Competition. I agree that, during the term of my employment with the Company, I shall not, without the Company’s prior written consent, directly or indirectly, as a principal, employee, consultant, partner, or stockholder of, or in any other capacity with, any business enterprise (other than in my capacity as a holder of not more than 5% of the combined voting power of the outstanding stock of a publicly held company) (a) engage in direct or indirect competition with the Company, (b) conduct a business related to that of the Company (the “Business”) or (c) develop products or services competitive with those of the Company. However, the Company agrees that I may accept employment in an academic position, government laboratory or other non-profit organization under this Agreement

b. General non-solicitation. I agree that during my employment with the Company and for a period of twelve months after the termination or cessation of such employment for any reason, I shall not solicit, divert or take away, or attempt to divert or take away, the business or patronage of any of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company which were contacted, solicited or served by me while employed by the Company. The Company agrees that I may approach existing clients or customers with respect to technology unrelated to the Company’s Business as defined in Section 5(a) above.

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c. Non-solicitation of Employees. I agree that during my employment and for a period of twelve months after the termination or cessation of my employment for any reason, I shall not directly or indirectly recruit or solicit any employee of the Company, or induce or attempt to induce any employee of the Company to discontinue his or her employment relationship with the Company.

6. Subsequent Employment.

a. Notification to New Employer. In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

b. Notice of Subsequent Employment. I shall, for a period of twelve months after the termination or cessation of my employment with the Company, notify the Company of any change of address, and of any subsequent employment (stating the name and address of the employer and the nature of the position) or any other business activity, provided that the Company has not terminated this Agreement prior to such time.

7. Conflict of Interest Guidelines. I agree to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit E hereto.

8. Representations. I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith.

9. Arbitration and Equitable Relief.

a. Arbitration. In the event of any dispute or claim relating to or arising out of the relationship between the Company and me that cannot be settled amicably by agreement of the parties, the Company and I agree that all such disputes or claims shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association (AAAA@) in Santa Clara, California. Arbitration shall be conducted by three (3) arbitrators, one of whom shall be selected by each party, and the third by the other two (2) arbitrators, all within the time limits established by the then existing rules of the AAA. The provisions of California Code of Civil Procedure Section 1283.05 (Right to Discovery) shall be applicable in any such arbitration. It is agreed that in any such arbitration, the duly appointed arbitrators may consider and award relief on any and all remedies available at law to either of the parties thereto. The decision of the arbitrators shall be final and without appeal, and may be enforced in any court having jurisdiction over the parties or their current assets. Any dispute arising out of or in connection with this Agreement shall be finally settled without recourse to the courts.

b. Equitable Relief. I agree that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach of the covenants set forth in Sections 2, 3, and 4 herein. Accordingly, I agree that if I breach any of such Sections, the Company will have

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available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement. I further agree that no bond or other security shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and to the ordering of specific performance.

c. Attorneys’ Fees. In the event either party shall bring any action or legal proceeding of an alleged breach of any provision of this Agreement or to enforce, protect or establish any term or covenant of this Agreement or right of either party under this Agreement, the prevailing party shall be entitled to recover as part of such action or proceeding, or in a separate action brought for that purpose, reasonable attorneys’ fees and costs as may be fixed by the AAA.

10. General Provisions.

a. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of California. The federal (Northern District of California) and state (Santa Clara County) courts within the State of California shall have exclusive jurisdiction to adjudicate any dispute arising out of this Agreement. I hereby expressly consent to the personal jurisdiction of these state and federal courts located in the State of California for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

b. Entire Agreement. I acknowledge receipt of this Agreement, and agree that, with respect to the subject matter thereof, it is my entire agreement with the Company, superseding any previous oral or written communications, representations, understandings, or agreements with the Company or any officer or representative thereof; provided, however, that this Agreement will not be deemed to release me from the provisions of any prior written agreement between me and the Company pursuant to which I entered into covenants not to compete with the Company.

c. Modification. This Agreement may not be changed, modified, released, discharged, abandoned, or otherwise amended, in whole or in part, except by an instrument in writing, signed by me and the Company. I agree that any subsequent change or changes in my duties, salary or compensation shall not affect the validity or scope of this Agreement.

d. Severability. In the event that any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and all other provisions shall remain in full force and effect. If any of the provisions of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law.

e. Waiver. No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by the Company on any occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

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f. Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

11. No Employment Agreement.

I understand that nothing in this Agreement or any other agreement or communication, written or oral, shall constitute an employment agreement, and my employment may be terminated by the Company or me at any time, with or without cause and for any or no reason, without liability of either party by reason of such termination, unless there shall be a written agreement signed by the Company and by me explicitly providing otherwise.

I HAVE READ ALL OF THE PROVISIONS OF THIS AGREEMENT AND I UNDERSTAND, AND AGREE TO, EACH OF SUCH PROVISIONS. I UNDERSTAND THAT THIS AGREEMENT MAY AFFECT MY RIGHT TO ACCEPT EMPLOYMENT WITH OTHER COMPANIES SUBSEQUENT TO MY EMPLOYMENT WITH THE COMPANY.

Dated             ,         .

By:
	(Signature)
	(Print Name)

Witness:

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EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

Title Date Identifying Number or
Brief Description

             No inventions or improvements

             Additional Sheets Attached

Signature of Employee:

Print Name of Employee:

Date:

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EXHIBIT B

INVENTION NOTIFICATION

This is to notify you that I have made or conceived an Invention (as defined in my Proprietary Information Agreement between Barracuda Networks, Inc., together with all of its subsidiaries (collectively, the “Company”) and me (the “Agreement”)). A brief description of the Invention is attached.

¨ If I believe that I am entitled to ownership of the Invention or any part thereof, I have checked the box at the beginning of this paragraph and have attached a brief description of the development of the Invention, specifically including information with respect to whether and to what extent the Invention (i) relates in any manner to the demonstrably anticipated business, work or research and development of the Company and its subsidiaries, (ii) was developed in whole or in part on the Company’s time or using the Company’s equipment, supplies, facilities or Confidential Information (as defined in the Agreement), or (iii) results from or was suggested by any task assigned to me or work performed by me for or on behalf of the Company or its subsidiaries.

I understand that, if the President of the Company countersigns this letter to indicate his agreement that the Company does not own the Invention, he does so on the basis of, and conditioned upon the accuracy and completeness of both the above-mentioned brief description of the Invention and the above-mentioned brief description of the development of the Invention.

Date:

(Employee’s Signature)

(Type/Print Employee’s Name)

By my signature, I agree on behalf of the Company that, subject to the conditions described above, the Company does not claim ownership of the Invention to which this Invention Notification relates.

SIGN ONLY IF THE COMPANY DOES NOT CLAIM

OWNERSHIP OF THE INVENTION

Date:

, President*

* Valid only if signed by the President of the Company.

EXHIBIT C

CALIFORNIA LABOR CODE SECTION 2870

EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS

(A) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer.

(2) Result from any work performed by the employee for the employer.

(B) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision {a), the provision is against the public policy of this state and is unenforceable.

EXHIBIT D

BARRACUDA NETWORKS, INC.

TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to Barracuda Networks, Inc., its subsidiaries, affiliates, successors or assigns (together, the “Company”).

I further certify that I have complied with all the terms of the Company’s Proprietary Information Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Proprietary Information. Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, databases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly: (i) solicit, induce, recruit or encourage any of the Company’s employees or exclusive consultants to leave their employment or attempt to solicit, induce, recruit, encourage employees or exclusive consultants of the Company to leave their employment, either for myself or for any other person or entity; or (ii) solicit, induce, recruit, or encourage any customer of the Company or potential customer who the Company has identified during the term of my employment of the Company to terminate its business relationship with the Company, or solicit, induce, recruit, divert or take away any such customer’s business or patronage with the Company, either for myself or for any other person or entity.

Date:

(Employee’s Signature)

(Type/Print Employee’s Name)

EXHIBIT E

BARRACUDA NETWORKS, INC.

CONFLICT OF INTEREST GUIDELINES

It is the policy of Barracuda Networks, Inc. to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company. The following are potentially compromising situations which must be avoided. Any exceptions must be reported to the President and written approval for continuation must be obtained.

1. Revealing confidential information to outsiders or misusing confidential information. Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended. (The Employment, Confidential Information and Invention Assignment Agreement elaborates on this principle and is a binding agreement.)

2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company.

3. Participating in civic or professional organizations that might involve divulging confidential information of the Company.

4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement.

5. Initiating or approving any form of personal or social harassment of employees.

6. Investing or holding outside directorships in suppliers, customers or competing companies, including financial speculation, where such investment or directorship might influence in any manner a decision or course of action of the Company.

7. Borrowing from or lending to employees, customers or suppliers.

8. Acquiring real estate of interest to the Company.

9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their employees.

11. Making any unlawful agreements with distributors with respect to prices.

12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity.

13. Engaging in any conduct which is not in the best interest of the Company.

Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review. Violations of this conflict of interest policy may result in discharge without warning.

Enclosure 2

Barracuda Networks, Inc.

NONDISCLOSURE AGREEMENT

THIS AGREEMENT is made on                      (“Effective Date”) by and between Barracuda Networks, Inc., (“Discloser”) having its principal place of business at 3175 South Winchester Blvd, Campbell, CA 95008 and                                          (“Employee”).

1. Purpose. The Discloser has agreed to make available to the Employee certain Confidential Information (as defined below) of the Discloser as part of an interview process or employment relationship with the Discloser.

2. Definition. “Confidential Information” means any information, technical data, or know-how, whether tangible or intangible, including, but not limited to, that which relates to techniques, discoveries, research, product plans, products, services, customers, markets, software, developments, inventions, processes, designs, drawings, engineering, hardware configuration information, marketing or finances, which Confidential Information is either designated in writing to be confidential or proprietary, or should reasonably be understood by the Employee to be confidential or proprietary. Confidential Information does not include information which: (i) is in the possession of the Employee at the time of disclosure as shown by the Employee’s files and records immediately prior to the time of disclosure; (ii) prior or after the time of disclosure becomes part of the public knowledge or literature, not as a result of any inaction or action of the Employee; (iii) is approved for release by the Discloser in writing.

3. Non-Use and Non-Disclosure of Confidential Information. The Employee agrees not to use the Confidential Information for any purpose other than that set forth in Section 1 of this Agreement. The Employee will not disclose any Confidential Information to third parties. Employee agrees that it will take all reasonable measures to protect the secrecy of and avoid disclosure or use of Confidential Information in order to prevent it from falling into the public domain or the possession of persons other than those persons authorized hereunder to have any such information. Employee agrees to notify the Discloser in writing of any misuse, misappropriation or disclosure of such Confidential Information which may come to its attention. Employee shall reproduce and include in all copies of Confidential Information prepared by Employee any copyright notices and proprietary legends of the Company, and shall not remove any such notice or legend from any Confidential Information.

4. Mandatory Disclosure. In the event that the Employee or its directors, officers, employees, consultants or agents are required by a valid order issued by a court or governmental agency of competent jurisdiction to disclose any of the Confidential Information, the Employee shall give (a) prompt notice to Discloser so that Discloser may seek a protective order or other appropriate relief; and (b) reasonable assistance, at the Discloser’s sole cost and expense, in opposing such disclosure or seeking a protective order or other limitations on disclosure. In the event that such protective order is not obtained, the Employee shall disclose only that portion of the Confidential

Information which its counsel advises it is legally required to disclose and, upon the Discloser’s request, shall use commercially reasonable efforts to obtain assurances from the applicable court or agency that such Confidential Information will be afforded confidential treatment. Any Confidential Information disclosed pursuant to this Section 4 shall otherwise remain confidential and subject to the protections and obligations of this Agreement.

5. Return of Materials. Any materials or documents which have been furnished by the Discloser to the Employee will be promptly returned, accompanied by all copies of such documentation, after the purpose set forth in Section 1 of this Agreement has been concluded and Employee shall destroy all internal materials that in any manner embody the Confidential Information. Upon the Discloser’s request, Employee shall certify such destruction.

6. No License Granted. Discloser hereby retains its entire right, title and interest, including all intellectual property rights, in and to all of its Confidential Information and nothing in this Agreement is intended to grant any rights, whether express or implied, to Employee under any patent, copyright, trade secret or other intellectual property right nor shall this Agreement grant Employee any rights in or to Discloser’s Confidential Information, except the limited right to review such Confidential Information solely for the purpose set forth in Section 1 of this Agreement. None of the Confidential Information or the disclosure thereof shall constitute any representation, warranty, assurance, guarantee or inducement by Discloser to Employee of any kind, and, in particular, with respect to the non-infringement of trademarks, patents, copyrights, mask work protection rights or any other intellectual property rights, or other rights of third persons or of Discloser.

7. Term. The term of this Agreement shall commence on the Effective Date, and shall continue until either party’s provision of written notice of termination to the other party. Employee’s obligations with respect to the Confidential Information shall survive any termination of this Agreement.

8. Governing Law and Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California, and shall be binding upon the parties hereto in the United States and worldwide. The federal and state courts within the State of California shall have exclusive jurisdiction to adjudicate any dispute arising out of this Agreement, and the parties hereby agree to venue in the Northern District of California for all matters concerning this Agreement and arising therefrom.

9. Remedies. Employee agrees that its obligations hereunder are necessary and reasonable in order to protect the Discloser and its business, and expressly agrees that monetary damages would be inadequate to compensate the Discloser for any breach of any covenants and agreements set forth herein. Accordingly, Employee agrees and acknowledges that any such violation or threatened violation will cause irreparable injury to the Discloser and that, in addition to any other remedies that may be available, in law, in equity or otherwise, the Discloser shall be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of posting a bond or proving actual damages.

10. Export Regulation. Employee acknowledges that any materials and any technical information provided under this Agreement are subject to the export regulations of the United States, and any use of such materials and technical information must be authorized under those regulations. Employee agrees that it shall not use or transmit the materials or technical information, or any products utilizing any such materials or technical information, to any country in violation of any applicable export laws or regulations. If requested by the Discloser, Employee shall sign written assurances and other export-related documents as may be required under the U.S. export regulations. Employee agrees to indemnify and hold the Discloser harmless from and against all claim, loss, liability or damage suffered or incurred by the Discloser resulting from or related to Employee’s failure to comply with all export or import regulations.

11. No Warranty. CONFIDENTIAL INFORMATION IS PROVIDED SOLELY ON AN “AS IS” BASIS, AND NEITHER DISCLOSER NOR ANY OF ITS REPRESENTATIVES MAKE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF THE CONFIDENTIAL INFORMATION DISCLOSED TO EMPLOYEE HEREUNDER. NEITHER DISCLOSER NOR ANY OF ITS REPRESENTATIVES SHALL BE LIABLE TO EMPLOYEE OR ANY OF ITS REPRESENTATIVES RELATING TO OR RESULTING FROM THE EMPLOYEE’S USE OF ANY OF THE CONFIDENTIAL INFORMATION OR ANY ERRORS THEREIN OR OMISSIONS THEREFROM.

12. Miscellaneous. This Agreement shall be binding upon and for the benefit of the undersigned parties, their successors and assigns, provided that this Agreement nor any rights or obligations under this Agreement, in whole or in part, shall be assignable or otherwise transferable by Employee without the prior written consent of the Discloser. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile (with confirmation of transmission) if sent during normal business hours, and on the next business day if sent after normal business hours; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term hereof nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, such provisions shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and such invalidity, illegality or unenforceability shall not invalidate Or render unenforceable such term or provision in any other jurisdiction. This Agreement constitutes the sole and entire understanding between the Parties hereto regarding the Confidential Information and supersedes all prior and contemporaneous discussions, understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. No amendment or modification of this Agreement shall be valid or binding on the parties unless made in writing and signed on behalf of each of the parties by the respective duly authorized officers or representatives.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

Barracuda Networks, Inc.

Signed:

Name:

Title:

EMPLOYEE

Signed:

Name:

Title:

EX-10.7

Exhibit 10.7

June 30, 2012

David Faugno

Dear David:

I am pleased to document your position with Barracuda Networks, Inc. (the “Company”) as Executive Vice President and Chief Financial Officer, effective immediately. You will report to the Company’s Chief Executive Officer (“CEO”) or to its Board of Directors (the “Board”) during any interim period where the Company is operating without a CEO. You will receive an annual salary of $250,000 (the “Base Salary”), subject to the usual required withholdings and payable semi-monthly in accordance with the Company’s normal payroll procedures. As an executive officer of the Company, you are also eligible to participate in the employee benefit plans, vacation/PTO policies and other fringe benefits and perquisites currently and hereafter maintained by the Company on behalf of the senior executives of the Company. You should note that the Board may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual bonus program, and be eligible for a target bonus of up 100% of your Base Salary, subject to the usual required withholdings, upon achievement of performance objectives to be determined by the Compensation Committee of the Board (the “Comp Committee”) in its sole discretion after consultation with you and the CEO (the “Bonus”). The Bonus, or any portion thereof, will be paid semi-annually as soon as practicable after the Company’s Compensation Committee determines that the Bonus has been earned, but in no event shall the Bonus be paid after the fifteenth (15^th) day of the seventh (7^th) month of the Company’s fiscal year and first (1^st) month following the end of the Company’s fiscal of the year in which the Bonus is earned.

If the Company terminates your employment other than for Cause (as defined below), or due to your death or disability, or if you terminate your employment for Good Reason (as defined below), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If the Company terminates your employment other than for Cause or you terminate your employment for Good Reason within 18 months after a Change in Control (as defined in the Company’s 2012 Equity Incentive Plan), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under COBRA for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting equal to the greater of (i) fifty percent (50%) of the number of unvested shares subject to your then outstanding equity awards as of the date you terminate your employment with the Company or (ii) an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If your employment with the Company is terminated voluntarily by you without Good Reason, or if the Company terminates your employment for Cause,, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned); and (3) you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.

In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the “Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or similar payment under the letter subject to you executing and not revoking a Release. In the event your termination of employment occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination of employment occurs, then any severance that would be considered Deferred Payments (as defined in Appendix A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination of employment occurs, or such later time as required by (1) the payment schedule applicable to each payment or benefit, (2) the date the Release becomes effective, or (3) clause (ii) of Appendix A.

For purposes of this letter, “Good Reason” is defined as: your termination of employment within thirty (30) days following the end of the Cure Period (as defined below) as a result of the

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occurrence of any of the following events without your written consent: (1) a material diminution by the Company in your Base Salary or target Bonus as in effect immediately prior to such reduction; provided, however, that, a reduction of Base Salary that (combined with all prior reductions) totals ten percent (10%) or less and also applies to substantially all other senior executives of the Company will not constitute “Good Reason”; (2) the relocation of your principal work location to a facility or a location more than twenty-five (25) miles from your prior work location; or (3) the Company’s material breach of this letter, which is not remedied in a reasonable period of time (not to exceed thirty (30) days) after receipt of your written notice. You must provide written notice to the Company of the condition that could constitute a “Good Reason” event within sixty (60) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days (the “Cure Period”) of such written notice.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (5) your willful breach of any material obligation under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such nonperformance to the Company’s satisfaction within thirty (30) business days after receiving such notice.

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for Good Reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without Cause, and with or without notice except as provided herein.

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

You agree that, during the term of your employment with the Company, unless you receive prior consent from the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.

As a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct that will be included in a handbook that the Company will soon complete and distribute. You will be expected to sign and comply with an At-Will Employee Agreement that

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requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company and non-disclosure of proprietary information. The At-Will Employee Agreement also provides that in the event of any dispute or claim relating to or arising out of our working relationship, you and the Company agree that all such disputes shall be resolved by binding arbitration.

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

We look forward to working with you at Barracuda Networks, Inc.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ Michael Perone

Michael Perone

Office of the CEO

ACCEPTED AND AGREED TO this

     day of July, 2012.

/s/ David Faugno
David Faugno
Enclosures:	Duplicate Original Letter
	At-Will Employee Agreement

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Appendix A

Section 409A

i. Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

ii. Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

iii. Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

iv. Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

v. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the

additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

EX-10.8

Exhibit 10.8

July 24, 2013

Michael Perone

Dear Michael:

I am pleased to document your position with Barracuda Networks, Inc. (the “Company”) as Executive Vice President and Chief Marketing Officer, effective immediately. You will report to the Company’s Chief Executive Officer (“CEO”) or to its Board of Directors (the “Board”) during any interim period where the Company is operating without a CEO.

The terms of this letter agreement become effective on the first day the Company’s stock begins trading on a national exchange (the “Effective Date”).

You will receive an annual salary of $250,000 (the “Base Salary”), subject to the usual required withholdings and payable semi-monthly in accordance with the Company’s normal payroll procedures. As an executive officer of the Company, you are also eligible to participate in the employee benefit plans, vacation/PTO policies and other fringe benefits and perquisites currently and hereafter maintained by the Company on behalf of the senior executives of the Company. You should note that the Board may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual bonus program, and be eligible for a target bonus of up 100% of your Base Salary, subject to the usual required withholdings, upon achievement of performance objectives to be determined by the Compensation Committee of the Board (the “Comp Committee”) in its sole discretion after consultation with you and the CEO (the “Bonus”). The Bonus, or any portion thereof, will be paid semi-annually as soon as practicable after the Company’s Compensation Committee determines that the Bonus has been earned, but in no event shall the Bonus be paid after the fifteenth (15^th) day of the seventh (7th) month of the Company’s fiscal year and first (1^st) month following the end of the Company’s fiscal of the year in which the Bonus is earned.

If the Company terminates your employment other than for Cause (as defined below), or due to your death or disability, or if you terminate your employment for Good Reason (as defined

below), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If the Company terminates your employment other than for Cause or you terminate your employment for Good Reason within 18 months after a Change in Control (as defined in the Company’s 2012 Equity Incentive Plan), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under COBRA for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting equal to the greater of (i) fifty percent (50%) of the number of unvested shares subject to your then outstanding equity awards as of the date you terminate your employment with the Company or (ii) an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If your employment with the Company is terminated voluntarily by you without Good Reason, or if the Company terminates your employment for Cause,, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned); and (3) you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.

In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the “Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or similar payment under the letter subject to you executing and not revoking a Release. In the event your termination of employment occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination of employment occurs, then any severance that would be considered Deferred Payments (as defined in Appendix A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination of employment occurs, or such later time as required by (1) the payment schedule applicable to each payment or benefit, (2) the date the Release becomes effective, or (3) clause (ii) of Appendix A.

For purposes of this letter, “Good Reason” is defined as: your termination of employment within thirty (30) days following the end of the Cure Period (as defined below) as a result of the occurrence of any of the following events without your written consent: (1) a material diminution by the Company in your Base Salary or target Bonus as in effect immediately prior to such reduction; provided, however, that, a reduction of Base Salary that (combined with all prior reductions) totals ten percent (10%) or less and also applies to substantially all other senior executives of the Company will not constitute “Good Reason”; (2) the relocation of your principal work location to a facility or a location more than twenty-five (25) miles from your prior work location; or (3) the Company’s material breach of this letter, which is not remedied in a reasonable period of time (not to exceed thirty (30) days) after receipt of your written notice. You must provide written notice to the Company of the condition that could constitute a “Good Reason” event within sixty (60) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days (the “Cure Period”) of such written notice.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of

nondisclosure as a result of your relationship with the Company; (5) your willful breach of any material obligation under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such nonperformance to the Company’s satisfaction within thirty (30) business days after receiving such notice.

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for Good Reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without Cause, and with or without notice except as provided herein.

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.

You agree that, during the term of your employment with the Company, unless you receive prior consent from the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.

As a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct that will be included in a handbook that the Company will soon complete and distribute. You will be expected to sign and comply with an At-Will Employee Agreement that requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, to and only to the fullest extent allowed by California Labor Code Section 2870, and non-disclosure of proprietary information. The At-Will Employee Agreement also provides that in the event of any dispute or claim relating to or arising out of our working relationship, you and the Company agree that all such disputes shall be resolved by binding arbitration.

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

We look forward to working with you at Barracuda Networks, Inc.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ William D. Jenkins

William Jenkins

CEO

ACCEPTED AND AGREED TO this

24^th day of July, 2013.

/s/ Michael Perone

Michael Perone

Enclosures: Confidentiality & Proprietary Rights Agreement

Appendix A

Section 409A

i. Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

ii. Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

iii. Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

iv. Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

v. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

EX-10.9

Exhibit 10.9

September 11, 2012

Diane Honda

CONFIDENTIAL

Dear Diane,

It is with great pleasure that I offer you an exempt, full-time position with Barracuda Networks, Inc. (the “Company”), as VP and General Counsel, reporting to David Faugno. You will receive an annual salary of $215,000.00 (the “Base Salary”), subject to the usual, required withholdings, and payable semi-monthly in accordance with the Company’s normal payroll procedures. As a Company employee, you are also eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other employees of the Company. You should note that the Company may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual bonus program, and be eligible for a pro-rata target bonus for the Company’s Fiscal 2013 plan of $96,000.00 (although, depending on performance and your contribution to Barracuda Networks, you may be eligible to earn a greater amount, details are outlined in attachment: 2013 Executive Incentive Plan), subject to the usual, required withholdings, upon achievement of performance objectives to be determined by the Board in its sole discretion (the “Bonus”). The Bonus, or any portion thereof, will be paid as soon as practicable after the Company’s board of directors (the “Board”) determines that the Bonus has been earned, but in no event shall the Bonus be paid after the later of (i) the fifteenth (15^th) day of the third (3^rd) month following the close of the Company’s fiscal year in which the Bonus is earned or (ii) March 15 following the calendar year in which the Bonus is earned.

I will recommend to the Board of Directors that you be offered the opportunity to purchase 150,000 shares of stock, in accordance with our employee incentive stock option plan (ISO). The vesting of these shares will be subject to terms and conditions as established by the Board of Directors.

Barracuda Networks, Inc. offers health insurance plans and pays a portion of the cost of these plans. You will be eligible for these plans on the first day of the month following employment.

If the Company terminates your employment other than for Cause (as defined below), death or disability, then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary, as then in effect, for six (6) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to six (6) months following the termination of your employment with

the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting, including any cliff vesting provision, as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional six (6) months.

If the Company terminates your employment other than for Cause (as defined below) within 12 months after a Change in Control (as defined in the Company’s 2012 Equity Incentive Plan), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under COBRA for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months.

If your employment with the Company is terminated voluntarily by you for any reason, for Cause by the Company, or due to your death or disability, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned); and (3) you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect. In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the “Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or similar payment under the letter subject to you executing and not revoking a Release. In the event your termination of employment occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination of employment occurs, then any severance that would be considered Deferred Payments (as defined in Appendix A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination of employment occurs, or such later time as required by (1) the payment schedule applicable to each payment or benefit, (2) the date the Release becomes effective, or (3) clause (ii) of Appendix A.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo

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contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (5) your willful breach of any obligations under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such non-performance to the Company’s satisfaction within ten (10) business days after receiving such notice.

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice. The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any. For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated. You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.

As a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct that will be included in a handbook that the Company will soon complete and distribute. You will be expected to sign and comply with an At-Will Employee Agreement that requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company and non-disclosure of proprietary information. The At-Will Employee Agreement also provides that in the event of any dispute or claim relating to or arising out of our working relationship, you and the Company agree that all such disputes shall be resolved by binding arbitration.

This offer assumes that you will complete a standard Barracuda Networks, Inc. employment application, you will sign a standard Barracuda Networks, Inc. Proprietary Information Agreement, and you have the legal right to work in the United States and will submit appropriate proof at the time of your orientation. If you accept this offer, please fill in the start date, sign the letter where indicated, and return it to me. Please remember that all compensation information is considered strictly confidential and is to be discussed only with your direct manager or a representative of the Human Resource department. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you.

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Our mission is to be the leading provider of security, storage and networking equipment that simplify IT for all types of organizations. This presents us with an exciting challenge, and I look forward to pursuing this vision with you as part of the team.

This offer is valid until September 18, 2012.

Sincerely,
/s/ David Faugno
David Faugno
CFO
Accepted:	/s/ Diane Honda	Date:	September 13, 2012
	Diane Honda
Start Date:

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Appendix A

Section 409A

Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

EX-10.10

Exhibit 10.10

August 23, 2012

Michael Hughes

Dear Michael,

I am pleased to document your position with Barracuda Networks, Inc. (the “Company”) as Senior Vice President of World Wide Sales, effective immediately. You will receive an annual on-target earning of $420,000.00, $220,000.00 of which is considered the base component of your compensation (the “Base Salary”), subject to the usual, required withholdings, and payable semi-monthly in accordance with the Company’s normal payroll procedures. As a Company employee, you are also eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other employees of the Company. You should note that the Company may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual bonus program, and be eligible for a target bonus of $180,000.00 (although, depending on performance and contribution to Barracuda Networks, you may be eligible to earn a greater amount, details are outlined in attachment: 2013 Executive Incentive Plan), subject to the usual, required withholdings, upon achievement of performance objectives to be determined by the Board in its sole discretion (the “Bonus”). The Bonus, or any portion thereof, will be paid as soon as practicable after the Company’s board of directors (the “Board”) determines that the Bonus has been earned, but in no event shall the Bonus be paid after the later of (i) the fifteenth (15^th) day of the third (3^rd) month following the close of the Company’s fiscal year in which the Bonus is earned or (ii) March 15 following the calendar year in which the Bonus is earned.

If the Company terminates your employment other than for Cause (as defined below), death or disability, then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary, as then in effect, for six (6) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to six (6) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional six (6) months.

If the Company terminates your employment other than for Cause (as defined below) within 12 months after a Change in Control (as defined in the Company’s 2012 Equity Incentive Plan), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary, as

then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under COBRA for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months.

If your employment with the Company is terminated voluntarily by you for any reason, for Cause by the Company, or due to your death or disability, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned); and (3) you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.

In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the “Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or similar payment under the letter subject to you executing and not revoking a Release. In the event your termination of employment occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination of employment occurs, then any severance that would be considered Deferred Payments (as defined in Appendix A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination of employment occurs, or such later time as required by (1) the payment schedule applicable to each payment or benefit, (2) the date the Release becomes effective, or (3) clause (ii) of Appendix A.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (5) your willful breach of any obligations under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such non-performance to the Company’s satisfaction within ten (10) business days after receiving such notice.

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You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice.

The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any.

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

You agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.

As a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct that will be included in a handbook that the Company will soon complete and distribute. You will be expected to sign and comply with an At-Will Employee Agreement that requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company and non-disclosure of proprietary information. The At-Will Employee Agreement also provides that in the event of any dispute or claim relating to or arising out of our working relationship, you and the Company agree that all such disputes shall be resolved by binding arbitration.

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

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We look forward to working with you at Barracuda Networks, Inc.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ David Faugno

David Faugno

CFO

ACCEPTED AND AGREED TO this
25th day of August, 2012.
/s/ Michael Hughes
Michael Hughes
Enclosures:	Duplicate Original Letter
	At-Will Employee Agreement

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Appendix A

Section 409A

i. Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

ii. Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

iii. Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

iv. Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

v. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so

comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

EX-10.11

Exhibit 10.11

July 24, 2013

Zachary Levow

Dear Zach:

I am pleased to document your position with Barracuda Networks, Inc. (the “Company”) as Executive Vice President and Chief Technology Officer, effective immediately. You will report to the Company’s Chief Executive Officer (“CEO”) or to its Board of Directors (the “Board”) during any interim period where the Company is operating without a CEO.

The terms of this letter agreement become effective on the first day the Company’s stock begins trading on a national exchange (the “Effective Date”).

You will receive an annual salary of $250,000 (the “Base Salary”), subject to the usual required withholdings and payable semi-monthly in accordance with the Company’s normal payroll procedures. As an executive officer of the Company, you are also eligible to participate in the employee benefit plans, vacation/PTO policies and other fringe benefits and perquisites currently and hereafter maintained by the Company on behalf of the senior executives of the Company. You should note that the Board may modify salaries and benefits from time to time as it deems necessary.

You also will be eligible to participate in the Company’s annual bonus program, and be eligible for a target bonus of up 100% of your Base Salary, subject to the usual required withholdings, upon achievement of performance objectives to be determined by the Compensation Committee of the Board (the “Comp Committee”) in its sole discretion after consultation with you and the CEO (the “Bonus”). The Bonus, or any portion thereof, will be paid semi-annually as soon as practicable after the Company’s Compensation Committee determines that the Bonus has been earned, but in no event shall the Bonus be paid after the fifteenth (15^th) day of the seventh (7th) month of the Company’s fiscal year and first (1^st) month following the end of the Company’s fiscal of the year in which the Bonus is earned.

If the Company terminates your employment other than for Cause (as defined below), or due to your death or disability, or if you terminate your employment for Good Reason (as defined

below), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting as of the date you terminate your employment with the Company in an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If the Company terminates your employment other than for Cause or you terminate your employment for Good Reason within 18 months after a Change in Control (as defined in the Company’s 2012 Equity Incentive Plan), then, provided you sign and not revoke a general release of claims in a form reasonably acceptable to the Company and in a manner that is otherwise consistent with the terms of this letter, you will be entitled to (1) receive continuing payments of severance pay at a rate equal to your Base Salary and target Bonus, as then in effect, for twelve (12) months from the date of such termination, which will be paid in accordance with the Company’s regular payroll procedures; (2) receive continuing payments of the premiums required under COBRA for a period of up to twelve (12) months following the termination of your employment with the Company, if you and/or your covered dependents elect to continue the group health insurance coverage under the Company’s group health insurance plan(s); and (3) accelerate vesting equal to the greater of (i) fifty percent (50%) of the number of unvested shares subject to your then outstanding equity awards as of the date you terminate your employment with the Company or (ii) an amount equal to the number of shares subject to your then outstanding equity awards that you would have vested in had you remained employed with the Company for an additional twelve (12) months following such termination.

If your employment with the Company is terminated voluntarily by you without Good Reason, or if the Company terminates your employment for Cause,, then (1) all vesting will terminate immediately with respect to your then outstanding equity awards; (2) all payments of compensation by the Company to you hereunder will terminate immediately (except as to amounts already earned); and (3) you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect.

In the event of your termination of employment with the Company, the preceding paragraphs are intended to be and are exclusive and in lieu of any other rights or remedies to which you or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this letter.

The receipt of any severance pursuant to this letter will be subject to you signing and not revoking a Release; provided that such Release is effective within sixty (60) days following your termination of employment or such shorter period specified in the Release (the “Release Deadline”). No severance will be paid or provided until the Release becomes effective. If the Release is not effective by the Release Deadline, you forfeit your right to any severance or similar payment under the letter subject to you executing and not revoking a Release. In the event your termination of employment occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which your termination of employment occurs, then any severance that would be considered Deferred Payments (as defined in Appendix A) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination of employment occurs, or such later time as required by (1) the payment schedule applicable to each payment or benefit, (2) the date the Release becomes effective, or (3) clause (ii) of Appendix A.

For purposes of this letter, “Good Reason” is defined as: your termination of employment within thirty (30) days following the end of the Cure Period (as defined below) as a result of the occurrence of any of the following events without your written consent: (1) a material diminution by the Company in your Base Salary or target Bonus as in effect immediately prior to such reduction; provided, however, that, a reduction of Base Salary that (combined with all prior reductions) totals ten percent (10%) or less and also applies to substantially all other senior executives of the Company will not constitute “Good Reason”; (2) the relocation of your principal work location to a facility or a location more than twenty-five (25) miles from your prior work location; or (3) the Company’s material breach of this letter, which is not remedied in a reasonable period of time (not to exceed thirty (30) days) after receipt of your written notice. You must provide written notice to the Company of the condition that could constitute a “Good Reason” event within sixty (60) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days (the “Cure Period”) of such written notice.

For purposes of this letter, “Cause” is defined as: (1) an act of dishonesty made by you in connection with your responsibilities as an employee, (2) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (3) your gross misconduct, (4) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of

nondisclosure as a result of your relationship with the Company; (5) your willful breach of any material obligation under any written agreement or covenant with the Company; or (6) your continued failure to perform your employment duties after you have received a written demand of performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties and have failed to cure such nonperformance to the Company’s satisfaction within thirty (30) business days after receiving such notice.

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment. As a result, you are free to resign at any time, for Good Reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without Cause, and with or without notice except as provided herein.

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.

You agree that, during the term of your employment with the Company, unless you receive prior consent from the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company.

As a Company employee, you will be expected to abide by company rules and regulations. You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct that will be included in a handbook that the Company will soon complete and distribute. You will be expected to sign and comply with an At-Will Employee Agreement that requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, to and only to the fullest extent allowed by California Labor Code Section 2870, and non-disclosure of proprietary information. The At-Will Employee Agreement also provides that in the event of any dispute or claim relating to or arising out of our working relationship, you and the Company agree that all such disputes shall be resolved by binding arbitration.

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

We look forward to working with you at Barracuda Networks, Inc.

Sincerely,

BARRACUDA NETWORKS, INC.

/s/ William D. Jenkins

William Jenkins

CEO

ACCEPTED AND AGREED TO this

24^th day of July, 2013.

/s/ Zachary Levow

Zachary Levow

Enclosures: Confidentiality & Proprietary Rights Agreement

Appendix A

Section 409A

i. Notwithstanding anything to the contrary in this letter, no severance pay or benefits to be paid or provided to you, if any, pursuant to this letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder (“Section 409A”) (together, the “Deferred Payments”) will be paid or otherwise provided until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you haves a “separation from service” within the meaning of Section 409A.

ii. Notwithstanding anything to the contrary in this letter, if you are a “specified employee” within the meaning of Section 409A at the time of your termination (other than due to death), then the Deferred Payments that are payable within the first six (6) months following your separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of your separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following your separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

iii. Any amount paid under this letter that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

iv. Any amount paid under this letter that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean two (2) times the lesser of: (a) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your separation from service occurred.

v. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and you agree to work together in good faith to consider amendments to this letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

EX-10.12

Exhibit 10.12

PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS

THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (“Agreement”) is made as of July 31, 2011 (“Agreement Date”), by and between BRYAN FAMILY PARTNERSHIP II, LTD., a California limited partnership (“Seller”), and BARRACUDA NETWORKS, INC., a Delaware corporation, or assignee (“Buyer”), collectively referred to herein as the “Parties,” with reference to the following:

RECITALS

A. Seller is the owner of the Real Property (hereinafter defined) consisting of approximately 3.33 acres, including improvements thereon consisting of and including, among many things, an approximately sixty-one thousand four hundred and twenty-four (61,424) square foot building (the “Building”) and parking spaces located at 3165 and 3175 Winchester Boulevard, City of Campbell, County of Santa Clara, State of California, which is commonly identified by APNs 406-21-016, 406-21-017 and 406-21¬019 and more particularly described in Exhibit A to this Agreement and hereby incorporated by this reference.

B. Seller and Buyer previously entered into an agreement to lease the Building on January 19, 2007 (the “Lease Agreement”). The Patios modified the Lease Agreement by entering into a first amendment to the Lease Agreement on October 4, 2010.

C. Seller entered into a Real Estate Note with Symetra Life Insurance Company, a Washington corporation (“Symetra”), on June 20, 2007, Loan No. 1673, for the original principal sum of Six Million Seven Hundred Fifty Thousand and no/100 Dollars ($6,750,000.00) and a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the “Existing Debt Obligation”). The Real Estate Note and the Deed of Trust, Assignment of Rents, Security Agreement and Fixture are attached as Exhibit B and Exhibit C to this Agreement respectively.

D. Buyer desires to purchase and Seller desires to sell the Property (hereinafter defined) only upon the following terms and conditions, which includes the assumption of the Existing Debt Obligation.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the Parties hereto agree as follows:

Seller’s Initial: /s/ RB, JF & DZ            

Buyer’s Initials: /s/ DD            

ARTICLE 1

DEFINITIONS AND EXHIBITS

1.1 Definitions. In addition to the terms defined above and throughout this Agreement, for purposes of this Agreement, each of the following terms, when used, herein with an initial capital letter, shall have the meaning ascribed to it as follows:

(A) “Closing Date” shall be the date upon which the Deed (hereinafter defined) is, recorded in the Official Records of Santa Clara County where the Property is located, which shall occur on the date selected by Buyer that is no later than five (5) days after delivery of the Approval Notice (hereinafter defined) or Buyer notifies Seller in writing that all of the conditions described in Article 4 have been satisfied or waived, whichever is later, but in any event no later than October 31, 2011, the outside closing date.

(B) “Escrow Agent” and “Title Company” refer to First American Insurance Company, 1737 North First Street, Suite 500, San Jose, CA 95112, attention Linda Tugade, Escrow Agent, Phone 408-579-8340.

(C) “Property” includes all of the following items, in addition to the items described above in Paragraph A:

(1) Real Property. All that certain real property located at 3165 and 3175 Winchester Boulevard, City of Campbell, County of Santa Clara, State of California, as more particularly shown in Exhibit A attached hereto (the “Real Property”);

(2) Appurtenances. All rights, privileges and easements appurtenant to the Real Property, including, without limitation, (a) all minerals, oil, gas and other hydrocarbon substances on and under the Real Property, (b) all development rights, air rights, water, water rights and water stock relating to the Real Property, (c) all other easements, rights-of-ways or appurtenances used in connection with the beneficial use and enjoyment of the Real Property, (d) all right, title and interest of Seller in. and to any streets, alley, passages, or other appurtenances included in, adjacent to or used in connection with the Real Property, before or after the vacation thereof (all of which are collectively referred to as the “Appurtenances”);

(3) Personal Property. All personal property and personal property rights, if any, of Seller used in the ownership, use and operation of the Real Property, including furniture, fixtures and equipment as well as the generator and other like items (the “Personal Property”); and

(4) Intangible Property. All of the interest of Seller in any intangible personal property now or hereafter owned by Seller and used in the ownership, use and operation of the Real Property and Personal Property, including, without limitation, (a) all entitlements and approvals, building permits, zoning approvals, conditional use permits and any and all documents and work products relating thereto in which Seller has an interest, and (b) all warranties or guaranties (all of which are collectively referred to as the “Intangible Property”).

(D) “Purchase Price” is Eleven Million Eight Hundred Fifty Thousand and no/100 Dollars ($11,850,000.00), which includes the outstanding principal balance on the Existing Debt Obligation of Six Million Two Hundred Fifty Thousand and no/100 Dollars ($6,250,000.00) and the balance of Five Million Six Hundred Thousand and no/100 Dollars (5,600,000.00) (“Balance of the Purchase Price”) payable, all cash, at Close of Escrow, which is defined below.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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1.2 Exhibits: Attached hereto and forming an integral part of this Agreement are the following exhibits, all of which are incorporated into this Agreement as though fully set forth:

Exhibit A         Legal Description of Real Property

Exhibit B         Real Estate Note

Exhibit C         Deed of Trust, Assignment of Rents, Security Agreement and Fixture

ARTICLE 2

PURCHASE AND SALE

2.1 Purchase and Sale. Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon all of the terms, covenants and conditions herein set forth.

2.2 Purchase Price and Method of Payment(s). Buyer shall pay Seller the Purchase Price for the Property. The Purchase Price shall be subject to the prorations and adjustments required below, and shall be payable as follows:

(A) Deposit and Release of Deposit:

(1) Deposit. Upon Buyer’s execution of the Agreement, Buyer shall place Six Hundred Thousand One Hundred and no/100 Dollars ($600,100.00) as a deposit (“Deposit”) with the Title Company to be held in trust pursuant to the terms of this Agreement: Title Company shall place the Deposit in an interest-bearing account. Any interest earned on the Deposit shall be part of the Deposit. If the Approval Notice (defined below) is not provided, the Deposit and interest shall be refunded to Buyer during the period commencing on the Agreement Date and ending at 5:00 p.m. (local time) on the date that is forty-five (45) days after the Agreement Date (“Feasibility Period”). The last day of the Feasibility Period is referred to as the “Approval Date”. If Buyer decides to proceed with the transaction contemplated herein, Buyer shall deliver written notice thereof to Seller prior to the expiration of the Feasibility Period (the “Approval Notice”). If Buyer fails to timely deliver the Approval Notice, this Agreement shall be deemed automatically terminated and of no further force or effect (except for the Parties’ Surviving Obligations [defined below]), and Escrow Agent shall retain the Deposit, less reasonable and customary escrow termination fees charged by Escrow Agent, if any (the “Escrow Fees”), to Buyer without further instruction or written approval from Seller. The Deposit includes the amount of One Hundred Dollars ($100.00) (the “Independent Consideration”) as independent consideration for Seller’s performance under this Agreement and shall be retained by Seller in all instances. The Independent Consideration shall be non-refundable to Buyer as independent consideration for rights and options extended to Buyer under this Agreement, including, without limitation the right and option to terminate the Agreement as provided therein. The Independent Consideration shall be released to Seller immediately following Buyer’s deposit of such funds with the Title Company. In all instances

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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under this Agreement in which Buyer elects to terminate or is deemed to have terminated the Agreement and the Deposit is returned to Buyer, Seller shall retain the Independent Consideration. The Independent Consideration shall not be applicable towards the Purchase Price or treated as consideration given by Buyer for any purpose other than stated in this Section 2.2(A)(1). Buyer and Seller expressly acknowledge and agree that (i) the Independent Consideration, plus Buyer’s agreement to pay the costs provided in this Agreement has been bargained for as consideration for Seller’s execution and delivery of this Agreement and for Buyer’s review, inspection and termination rights during the Feasibility Period, and (ii) such consideration is adequate for all purposes under any applicable law or judicial decision.

(2) Release of Deposit. Following Buyer’s delivery of the Approval Notice and written confirmation that all of the conditions described in Article 4 have been satisfied or waived, the balance of the Deposit shall be released to Seller. Upon release and subject to the terms of this Agreement, the Deposit shall be non-refundable but applicable toward the Purchase Price.

(B) Payment of Purchase Price. At least one (1) business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Agent, in cash, by certified or bank cashier’s check made payable to Escrow Agent, or by confirmed Federal Reserve wire transfer of funds (“Immediately Available Funds”), the Balance of the Purchase Price plus Escrow Agent’s estimate of Buyer’s share of closing costs, prorations and charges payable pursuant to this Agreement.

2.3 Closing and Escrow. The Close of Escrow shall occur on the Closing Date and shall take place at the offices of Escrow Agent or such other location mutually agreeable to the parties (the “Closing”).

(A) Escrow. Upon the complete execution and delivery of this Agreement by Buyer and Seller, Buyer shall deliver a fully executed copy of this Agreement to Escrow Agent. This Agreement shall constitute the joint escrow instructions of Buyer and Seller to Escrow Agent. Escrow Agent is authorized to act in accordance with the terms of this Agreement. Upon Escrow Agent’s request, the Parties shall execute such additional and supplementary escrow instructions as may be appropriate or required by Escrow Agent to enable the Escrow Agent to comply with the terms of Agreement; provided, however, that if there is any conflict or inconsistency between such additional and supplementary escrow instructions and this Agreement, this Agreement shall control.

(B) Seller Deliveries in Escrow. Prior to the Closing, Seller shall deliver to Escrow Agent for delivery to Buyer the following:

(1) Grant Deed. The Grant Deed in the form customarily used by the Title Company (the “Deed”), duly executed and acknowledged, including a statement of transfer taxes.

(2) FIRPTA Certificate. A certificate from Seller, in form, scope and substance reasonably satisfactory to Buyer and Escrow Agent, reaffirming Seller’s representation and warranty that it is not a “foreign person” under section 1445(f)(3) of the Internal Revenue Code.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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(3) State Withholding Certificate. The California Form 597W, duly executed by Seller, certifying that no withholding of proceeds of the Purchase Price is required under California law. in connection with the sale of real estate and any personal property in connection therewith.

(4) Owner’s Affidavit. Such affidavits, other evidence of title, tenancy-in-common or entity documents and the like from Seller and/or other third parties as may be required by the Title Company, on or in forms required by the Title Company in Order to issue the Title Policy (hereinafter defined) as specified in this Agreement.

(5) Assumption of Existing Debt Obligation. Documents from Seller and/or other third parties as may be required by Symetra or other third parties evidencing Buyer’s assumption of the Existing Debt Obligation.

(C) Buyer Deliveries in Escrow. At or prior to the Closing, Buyer shall deliver to Escrow Agent for delivery to Seller the following:

(1) Funds. The Immediately Available Funds required of Buyer under the terms of this Agreement.

(2) Assumption of Existing Debt Obligation. Documents from Buyer and/or other third parties as may be required by Symetra or other third parties evidencing Buyer’s assumption of the Existing Debt Obligation AS SUCH EXISTING DEBT OBLIGATION IS TO BE MODIFIED AS SET FORTH BELOW IN ARTICLE 4.

(D) Other Documents. Seller and Buyer shall, prior to the Closing Date, execute any and all documents and perform any and all acts reasonably necessary or appropriate to consummate the purchase and sale pursuant to the terms of the transaction set forth in this Agreement, including, without limitation, a closing statement reflecting all prorations, adjustments and closing costs, and escrow instructions for Closing, and such other documentation as the Title Company may reasonably require for the issuance of the Title Policy, including any quitclaim and spousal consent for any individual. Buyer and Seller shall execute all documents reasonably required by Symetra to effect the assumption by Buyer of the Existing Debt Obligation.

2.4 Title and Survey.

(A) Title Commitment. Within two (2) days after the Agreement Date, Seller shall arrange for delivery to Buyer, for its review and approval in its discretion, a commitment for a American Land Title Association (“ALTA”) owner’s policy of title insurance covering the Property, issued by the Title Company, together with legible copies of all exceptions and matters referred to therein (said commitment, together with the copies of the materials referred to above shall be referred to as the “Title Commitment”). The Title Commitment shall show that Seller has marketable and insurable fee simple title to the Property.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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(B) Survey. Seller shall provide Buyer with any existing survey of the Property it possesses. At its own expense, Buyer may have obtained a survey of the Property, prepared by a surveyor or civil engineer licensed in the State where the Property is located (“Survey”).

(C) Title and Survey Review. Buyer shall have fourteen (14) days from receipt of the Title Commitment to review and approve the Title Commitment or to notify Seller in writing of any exceptions, qualifications, conditions, or matters shown in the Survey, disclosed in the Title Commitment or discovered by the inspection of the Property that are not acceptable to Buyer in its discretion (all such items and all monetary liens, deeds of trust or encumbrances shall be referred to as “Title Objections”). Buyer waives any claims resulting from or based on title issues that could have been discovered by Buyer’s review of the Title Commitment, a Survey or inspection of the Property and become a Title Objection, including but not limited to easements or encumbrances.

(D) Seller’s Right to Cure. Seller shall have the right, upon written notice to Buyer• within five (5) days after receipt of Buyer’s notice of Title Objections, to (1) elect by written notice to Buyer and Escrow Agent to cause the Title Objections to be removed of record or otherwise cured to the satisfaction of Buyer in its discretion by the Closing Date (“Approved Title Objections”), or (2) elect not to cure. Seller must remove all exceptions relating to tax liens (other than non-delinquent real estate taxes and assessments), judgment liens and mechanics’ and materialman’s liens, other than any mechanics’ or materialman’s liens resulting from Buyer’s due diligence investigations of or on. the Property (“Monetary Liens”). If Seller elects not to cure such Title Objections as provided in clause (2) above, Buyer shall have the right, upon written notice to Seller, to acquire the Property subject to such Title Objections without any abatement in the Purchase Price. If Seller elects to cure and does not remove all Approved Title Objections or Monetary Liens by the Closing Date, Seller shall be in default under this Agreement, in which case, Buyer, in addition to all other rights and remedies available under this Agreement, at law or in equity, shall have the right, but not obligation, upon written notice to Seller, to cancel this Agreement and receive a refund of any funds deposited in escrow, together with all interest thereon, except the Independent Consideration.

(E) Permitted Exceptions. The exceptions and Survey matters Buyer has agreed to in writing to accept shall be referred to herein as the “Permitted Exceptions.”

(F) Owner’s Policy. As a condition to Closing, the Title Company shall issue to Buyer an ALTA Owner’s Policy of Title Insurance in the amount of the Purchase Price, insuring fee simple title to the Real Property, and the Appurtenances in Buyer, subject only to the Permitted Exceptions (“Title Policy”).

2.5 Closing Costs. All closing costs or expenses of escrow shall be paid as follows:

(A) Title Insurance. Buyer and Seller shall pay the premium for the policy of title insurance, in accordance with custom in Santa Clara County, in the amount of the Purchase Price for the Property. If the premium for the ALTA Owner’s Policy of Title Insurance is greater than the premium for a CLTA Owner’s Policy of Title Insurance, Buyer shall pay the difference in the premium amounts.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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(B) Recording Fees. The cost of recording the Deed and any other documents shall be paid by the Parties as is customary in Santa Clara County.

(C) Transfer Taxes. All county transfer taxes and any applicable city transfer taxes shall be paid by the Parties as is customary in Santa Clara County.

(D) Other. The Parties shall, pay for the escrow fees charged by the Escrow Agent as is customary in Santa Clara County. Each party shall be responsible for their own attorneys’ fees. If this Agreement is terminated, the Parties shall pay equally for any title and escrow cancellation fees of Escrow Agent, unless such termination is due to a default by either party, in which case the defaulting party shall pay such escrow cancellation fees.

2.6 Prorations. All prorations and adjustments for the Property shall be made as of midnight of the day preceding the Closing Date, unless otherwise mutually agreed in writing by the Parties (the “Adjustment Date”). If the prorations and adjustments are found to be incorrect within six (6) months after the Closing Date, Seller and Buyer agree to re-prorate or readjust the same accordingly. All prorations and adjustments shall be in cash, as a cash credit or debit as follows:

(A) Taxes. General real estate taxes and assessments for all fiscal years prior to the Closing Date shall be paid by Seller, including, without limitation, all supplemental taxes levied as a result of any changes in ownership or improvements to the Property occurring prior to the Closing Date. General real estate taxes and assessments payable for the current year shall be prorated between Seller and Buyer as of the Adjustment Date.

(B) Other Items. Seller will be responsible for payment of all other expenses affecting the Property that are incurred, or relate to services provided, prior to the Closing Date.

(C) Post-Closing Reconciliation. If any of the aforesaid prorations cannot be calculated accurately on the Closing Date, then they shall be calculated as soon after the Closing Date as feasible, but in any event within six (6) months after the Closing Date.

2.7 Brokerage Commission. Seller shall pay a brokerage commission to Jay Phillips at Cornish & Carey Commercial Newmark Knight Frank (“Seller’s Broker”) pursuant to a separate written agreement between Seller and Seller’s Broker. The Parties represent and warrant to each other that Seller’s Broker is the only real estate brokers that represented the Parties in connection with the sale of the Property. With the exception of the commission described above, Seller and Buyer each represent and warrant that no other broker’s commission or finder’s fee is payable with respect to this transaction. Buyer and Seller each agree to indemnify, defend, and hold the other party harmless from and against any and all claims to a commission or finder’s fee resulting from the erroneous representation of the indemnifying party in this Section 2.7.

2.8 Assumption of Existing Debt Obligation. Subject to Buyer’s acceptance of any conditions to assumption imposed by Symetra and the receipt of those certain conditions precedent specified in Article 4, Buyer shall assume and agrees to perform each and every obligation for the Existing Debt Obligation on the Property. The Existing Debt Obligation currently includes: (a) the

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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outstanding principal balance of approximately Six Million Two Hundred Fifty Thousand and no/100 Dollars ($6,250,000.00); (b) an interest rate of 6.23%; (c) the monthly payment of approximately Forty Four Thousand Four Hundred Forty Five and no/100 Dollars ($44,445.00); (d) due date of July 1, 2017; and (e) a balance due at expiration of approximately Five Million One Hundred Ninety Thousand and no/100 Dollars ($5,190,000.00), in addition to the additional terms and conditions contained in the Real Estate Loan and Deed of Trust described in paragraph C of the Recitals above. Seller shall be relieved of personal liability for acts or occurrences arising out of matters relating to the Existing Debt Obligation occurring after the Closing. Seller shall pay the assumption fee equal to one percent (1%) of the unpaid principal balance of the Real Estate Note that exists at the time of Closing. Seller shall pay all of Seller’s and Lender’s cost related to Buyer assuming the Existing Debt Obligation. Buyer shall pay all of Buyer’s costs related to Buyer assuming the Existing Debt Obligation. Buyer’s assumption of the Existing Debt Obligation is conditioned upon Buyer receiving, among other things, a one-time only right to convey the Property to an un-affiliated transferee as set forth in Exhibit B.

ARTICLE 3

COVENANTS OF SELLER

3.1 Operation of Property. Prior to the Closing Date, Seller and Buyer will operate the Property subject to the following provisions and limitations:

(A) Requirements. Seller and Buyer shall continue to operate the Property consistent with the terms of the lease agreement between Seller and Buyer, Seller, at its expense and prior to the Closing Date, shall terminate all service, maintenance and similar agreements affecting the Property, if required.

(B) Compliance with Law. Seller shall comply with all governmental laws, ordinances and regulations pertaining to the Property or any portion thereof; provided, however, that Seller shall not be required to make any capital improvements to the Property unless Seller is expressly directed by governmental authority to do so.

(C) Notices. Seller shall give immediate notice to Buyer if Seller receives notice or obtains actual knowledge of (1) the violation of any law, ordinance or regulation relating to the Property, (2) any casualty relating to the Property, or (3) the filing or threat to file an action, claim or proceeding in any court or administrative agency against Seller which may affect the Property.

(D) Cooperation with Processing. Seller hereby grants Buyer permission and authority to prepare and submit applications, plans and drawings, and to obtain the approvals of the City and other governmental agencies reasonably necessary for any new tenant improvements or other developments for the Property. Seller agrees to cooperate fully with Buyer’s development of the Property at no cost to Seller by executing upon Buyer’s reasonable demand all necessary and reasonable documents confirming Buyer’s authority to submit applications for development, but not any agreements or documents that would create a dedication or recorded title encumbrance with respect to the Property. Such development may include, but is not limited to conditional use applications, rezoning, construction permits or any other document reasonably necessary to complete the development process.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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3.2 Access. Seller will permit Buyer and its agents and consultants the following access and provide Buyer the following information:

(A) Access to Information and Property. Seller shall allow Buyer and its agents and consultants, from and after the Agreement Date, continuing access to the Property. However, Buyer and its agents and consultants shall only have forty-five (45) days from and after the Agreement Date for the right to inspect the Property, and the right to drill test wells and take soil borings, and geological, seismic, environmental tests and other invasive tests. Soil and ground water environmental tests shall be subject to the reasonable approval of Seller as to the scope and methods for such testing. Seller shall provide its written notice to Buyer of approval, or the grounds for disapproval of such tests within three (3) business days after receipt of notice from Buyer describing the type and scope of the soil and ground water environmental tests that Buyer want to perform at the Property. The failure of Seller to provide its written notice of approval or disapproval within said three (3) business day period shall be deemed a disapproval. Seller may have a representative present during such tests. Such access shall be exercised by Buyer at such times as deemed reasonably necessary to Buyer. Buyer will conduct its activities on the Property in a reasonable manner that causes the least practicable interference with Seller’s ownership of the Property. Buyer shall restore the Property to its condition prior to Buyer’s entry on the Property for the testing. Buyer shall provide Seller with copies any third party test results and/or reports obtained by Buyer as a result of Buyer’s investigations. Buyer agrees to indemnify, defend and hold Seller harmless from any damage, claim, liability, including attorney’s fees and costs, or injury to persons or property caused by Buyer or its authorized representatives during their entry and investigations prior to Closing. This indemnity shall survive the termination of this Agreement or the Closing Date for four years. Buyer acknowledges that it has been afforded the required access to the Property.

(B) Due Diligence Materials. Upon execution of the Agreement, Seller shall deliver or make available to Buyer true and correct copies of the documents in Seller’s possession related to the physical structure of the Building and the condition of the Property (collectively, “Due Diligence Materials”).

3.3 Title Covenants. To the best of Seller’s knowledge and ability, Seller shall maintain the legal title to the Property free from (1) any and all defects, and (2) any and all liens, encumbrances, and other recorded exceptions, other than the utility and access easements and the Agreed to Exceptions of record as of the end of the title review period defined above.

ARTICLE 4

BUYER’S CONDITIONS PRECEDENT

Anything in this Agreement to the contrary notwithstanding, Buyer’s obligation to acquire the Property and to perform other covenants and obligations prior to Closing shall be subject to and contingent upon the satisfaction of the following conditions precedent:

4.1 Approval of Documents. Review and approval by Buyer of the Due Diligence Materials and such other documents Buyer may have reasonably requested in writing from Seller.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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4.2 Condition of the Property. Review and approval by Buyer of the condition of the Property, including soils, topography, geology, utilities, environmental, hazardous materials that shall be completed during the Feasibility Period. If Buyer disapproves of any of the physical aspects of the Property as a result of any reports or inspections made or received by Buyer, Buyer shall notify Seller immediately of the items disapproved before the expiration of the Feasibility Period. Seller shall then either inform Buyer that Seller will repair and correct such disapproved items prior to the Close of Escrow or will not address the items. At that time, Buyer may either terminate the Agreement, and receive a refund of all monies deposited, or proceed with the purchase of the Property.

4.3 Title Policy. Review and approval by Buyer of title as described above in Section 2.4 and the Title Company must unconditionally commit to issue a Title Policy as described herein.

4.4 Lender’s Approval of Buyer’s Assumption of Existing Debt Obligation. Symetra shall have approved in writing, upon terms acceptable to Buyer and accepted by Buyer in writing, Buyer’s assumption of the Existing Debt Obligation.

4.5 Amendment of Transfer and Assumption Rights. Buyer’s obligations hereunder are expressly conditioned upon an agreement in writing from Symetra (i) evidencing Buyer’s right to transfer the Property to any related or unrelated third party subject to the Existing Debt Obligation at least one-time following Buyer’s acquisition of the Property from Seller without allowing Symetra or any other holder of the Existing Debt Obligation to accelerate the maturity of the Existing Debt Obligation and without requiring the payment of any pre-payment fees or other penalties thereunder, except for customary and commercially reasonable fees or expenses charged for approval of the transfer and (ii) evidencing Buyer’s right to transfer the Property to any related party(ies) an unlimited number of times following Buyer’s acquisition of the Property from Seller subject to the Existing Debt Obligation without allowing Symetra or any other holder of the Existing Debt Obligation to accelerate the maturity of the Existing Debt Obligation and without requiring the payment of any pre-payment fees or other penalties thereunder except for customary and commercially reasonable fees or expenses charged for approval of the transfer.

4.6 Assignment. Buyer’s obligations hereunder are expressly conditioned upon a reasonably acceptable document in writing from Symetra or other holders of the Existing Debt Obligation evidencing Buyer’s right to assign this Agreement, without restriction, to any party related to Buyer (including, but not limited to, a buying group comprising individual employees of Buyer).

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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ARTICLE 5

REPRESENTATIONS & WARRANTIES

5.1 Seller Warranties. Seller hereby represents and warrants to Buyer as follows:

(A) Entity. With respect to Seller and its business:

(1) Organization. Seller is a duly formed and validly existing limited partnership and is qualified to do business in the State of California.

(2) Approvals. Seller is duly authorized to execute and deliver and perform this Agreement and all documents and instruments and the transaction contemplated hereby or incidental hereto without any other approval or consent from any other party or governing body; and this Agreement and the other documents required of Seller hereunder shall be binding on and enforceable against Seller.

(3) FIRPTA. Seller is not a foreign person or entity under section 1445 of the Internal Revenue Code, nor is any withholding required under California law in connection with the sale of the Property.

(B) Title. Seller is the owner of fee simple title to the Property. There are no options to purchase or rights of first offer or first refusal or similar agreements with any other party to acquire the Property or any interest therein. Seller makes no other representations or warranties as to title, other than those set forth herein.

(C) Occupancy Agreements. There is no lease, license, concession or other occupancy or use agreement or arrangement that affects any portion of the Property which cannot be cancelled or terminated by Seller prior to the Closing Date, other than the Lease Agreement.

(D) Service Contracts. There are no service, supply, maintenance, security, cable, management or other agreements affecting the Property, or the operation of any part thereof, which cannot be cancelled by Seller prior to the Closing Date.

(E) Due Diligence Materials. Copies of the Due Diligence Materials, which shall be delivered to Buyer by Seller as provided in this Agreement, are to the best of Seller’s actual knowledge, true, accurate and complete copies of all documents comprising the Due Diligence Materials; and there are no modifications or other agreements, written or oral, affecting the Due Diligence Materials other than as expressly set forth in the copies thereof so delivered to Buyer. To the best of Seller’s knowledge, no other documents exist that should be a part of the Due Diligence Materials.

(F) Litigation. There is no litigation, claim, audit, action, or proceeding pending or to the best of Seller’s actual knowledge, threatened before or by any court, public board or body or governmental or administrative agency or instrumentality affecting Seller or in any manner affecting title or the Property.

(G) Condemnation. There is no pending, or to the best of, Seller’s actual knowledge, threatened, condemnation, environmental, zoning or other land-use regulation proceeding against the Property or any portion thereof, nor does Seller or its agents have any actual knowledge or written notice of any public request, plans or proposals for changes in road grade,

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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access or other municipal improvements that may affect the Property or result in a tax, levy or assessment against the Property or otherwise detrimentally affect the use, operation or value of the Property.

(H) Environmental. With respect to environmental matters affecting the Property;

(1) To the best of Seller’s actual knowledge, the Property is not in violation of any of the Environmental Laws (hereinafter defined). Neither Seller nor to the best of Seller’s actual knowledge any third party, including, without limitation, any occupant at the Property, has engaged in any operations or activities upon, or any use or occupancy of the Property, or any portion thereof, for the purpose of or in any way involving the handling, manufacture, treatment, storage, use, generation, release, discharge, refining, dumping or disposal of any Hazardous Materials (whether legal or illegal, accidental or intentional) on, under or in the Property, or transported any Hazardous Materials to, from or across the Property, nor has Seller provided written notice to any tenant regarding any such activity.

(2) Seller has not received written notice nor does Seller have actual knowledge that any Hazardous Materials have migrated from other properties upon or beneath the Property to be acquired by the Buyer under this Agreement;

(3) The term “Environmental Laws” shall mean any federal, state, local or administrative agency ordinance, law, rule, regulation, order or requirement relating to environmental conditions or Hazardous Materials. The term “Hazardous Materials” shall mean any substance, chemical, waste or other material which is listed, defined or otherwise identified as “hazardous” or “toxic” under any of the Environmental Laws, including, without limitation, formaldehyde, urea, polychlorinated biphenyls, petroleum, petroleum product or by-product, crude oil, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture thereof, radon, mold, asbestos and any by-product of same.

As used herein, the phrase “to the best of Seller’s knowledge” or “to the best of Seller’s actual knowledge” means the actual (not constructive or imputed) personal knowledge of Dan Amend, Seller’s property management agent.

5.2 Buyer Warranties. Buyer hereby represents and warrants to Seller as follows:

(A) Organization. Buyer is a duly formed and validly existing Delaware corporation and is qualified to do business in the State of California.

(B) Approvals. Buyer is duly authorized to execute and deliver and perform this Agreement and all documents and instruments and the transaction contemplated hereby or incidental hereto without any other approval or consent from any other party.

(C) Satisfied Buyer. Buyer has satisfied itself in its investigation as to all aspects of the Property, including but not limited to title issues and the AS IS, WHERE IS and WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN condition of the Property, and Buyer is only relying on Seller’s warranties stated herein.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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5.3 Warranties Applicable at Close of Escrow. The Parties hereby represent and warrant that their warranties stated herein shall be true and correct as of the Close of Escrow and Seller shall assign to Buyer all transferable warranties.

ARTICLE 6

“AS IS” CONDITION

6.1 “AS IS WITH ALL FAULTS” Condition. Buyer represents and warrants that Buyer has satisfied itself during the Feasibility Period, or prior to the Closing Date will satisfy itself, as to the physical, environmental, legal and economic condition of the Property and its suitability for the purposes intended by Buyer. Buyer acknowledges and agrees that Buyer is acquiring the Property on an “AS IS, WHERE IS” and “WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN” basis subject to all existing laws, ordinances, rules and regulations, and that neither Seller nor any of Seller’s officers, directors, employees, agents, representatives or attorneys have made any warranties, representations or statements regarding the availability of any approvals, or the laws, ordinances, rules or regulations of any governmental or quasi-governmental body, entity, district or agency having authority with respect to the ownership, possession, development, occupancy, condition and/or use of the Property. Except for those representations and warranties expressly set forth in this Agreement, Seller disclaims the making of any representations or warranties, express or implied, regarding the Property, the condition of the Property or matters-affecting the Property, including, without limitation, the physical condition of the Property, title to or boundaries of the Property, soil condition, the presence of hazardous waste, hazardous materials, toxic waste or other environmental matters, compliance with building, health, safety, land use or zoning laws, regulations and orders, structural or other engineering characteristics, traffic patterns and all other information pertaining to the Property. Buyer further acknowledges and agrees that no patent or latent physical condition, including, without limitation, any condition or contamination related to hazardous materials or waste materials, of the Property, whether known or unknown or discovered at a later date, shall affect the Purchase Price to be paid for the Property, be it through a right of set-off or reduction in the Purchase Price, and Buyer shall be obligated to close Escrow notwithstanding the condition of the Property after the Feasibility Period. Buyer moreover acknowledges that (a) Buyer has entered into this Agreement with the intention of making and relying upon its own or its expert’s investigation of the physical, environmental, economic and legal condition of the Property, including, without limitation, the compliance of the Property with laws and governmental regulations and the operation of the Property, and (b) that, except for those representations and warranties expressly set forth in this Agreement, Buyer is not relying on any representations or warranties made by Seller or anyone acting or claiming to act on Seller’s behalf. Buyer shall purchase the Property in its “AS IS, WHERE IS” and “WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN” condition on the Closing Date and assumes the risk that adverse physical, environmental, economic or legal conditions may not have been revealed by

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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its investigations. Seller shall have no liability for any subsequently discovered defects, whether latent or patent, except if such defect is caused by Seller or any of its employees or agents, or if such defect or discovery thereof is the subject of any breach of a representation or warranty made by Seller under section 5.1 of this Agreement. Except as otherwise set forth in this Agreement, Buyer hereby waives, releases, acquits and forever discharges Seller, Seller’s officers, directors, employees, agents, partners, and any other person acting on or in behalf of Seller, and the heirs, successors and assigns of each of the foregoing, of and from any and all claims, liabilities, obligations, demands actions, causes of action, rights, damages, costs, expenses or compensation whatsoever (collectively “Claims”), direct or indirect, known or unknown, foreseen or unforeseen, that Buyer now has, or which may arise in the future, on account of or in any way growing out of or connected with the conditions of the Property. Notwithstanding anything in this section or in this Agreement to the contrary, nothing herein shall relieve Seller of any fraud.

6.2 Survival. Buyer represents and warrants that the provisions of this Section 6 shall survive the Close of Escrow,

ARTICLE 7

RELEASE OR RETURN OF DEPOSIT AND DEFAULT

7.1 Release or Return of Deposit. If Buyer gives the Approval Notice and notifies Seller in writing that all of the conditions described in Article 4 have been satisfied or waived, the Deposit and the interest accrued thereon shall be nonrefundable and be immediately released to Seller by Escrow Agent on the day after Buyer gives the Approval Notice or the day after Buyer gives Seller the second notice described previously in this sentence, whichever occurs later, and without the requirement of any further instruction from the parties; provided, however, the amounts of the Deposit, except for the Independent Consideration, and the interest accrued thereon shall be applicable to the Purchase Price. If, on or before the expiration of the Feasibility Period, Buyer gives notice of its election not to proceed with purchasing the Property, the Deposit, except for the Independent Consideration, and the interest accrued thereon as of such date shall be immediately released to Buyer by Escrow Agent without the requirement of any further instruction from the Parties, whereupon this Agreement shall terminate. The Deposit shall be non-refundable unless the Closing does not occur due to a third-party’s inability to satisfy the Condition Precedents listed in Article 4 or perform as required by this Agreement, at which point the Deposit shall be returned to Buyer whether or not the Approval Notice or any other notice may have been given.

7.2 Seller’s Default. If the sale of the Property is not consummated because of a default under this Agreement on the part of Seller, Buyer shall have all remedies afforded by law and in equity, including the right of specific performance, and recovery of the Deposit, if previously released to Seller, all additional costs and expenses including, without limitation, reasonable attorneys’ fees incurred in connection therewith and in the delay in acquiring title to the Property as a result.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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ARTICLE 8

GENERAL PROVISIONS

8.1 Notice. Any and all notices, elections, or demands permitted or required to be made under this Agreement shall be in writing and shall be sent by overnight courier service by a company regularly engaged in the business of delivering business packages or sent by registered or certified mail or by facsimile transmission (so long as confirmed by the appropriate automatic confirmation page), by electronic mail (so long as receipt is acknowledged or otherwise confirmed) or by courier to the other party at the address set forth below, or at such other address as may be supplied hi writing from time to time by either party to the other. The date of delivery or refusal thereof as evidenced by the courier’s or carrier’s receipt, shall be the effective date of such notice, election, or demand.

To Seller:

Bryan Family Partnership II, Ltd.

C/O Toeniskoetter Development

1960 The Alameda, Suite 20

San Jose, California 95126

Attention: Dan Amend

Telephone: 408-246-7500

Facsimile: 408-241-9983

E-mail: Dan@Toeniskoetter.com

With a Copy to:

Hoge, Fenton, Jones & Appel

60 S. Market St., Suite 1400

San Jose, CA 95113-2396

Attention: Sean A. Cottle

Telephone: 408-947-2404

Facsimile: 408-287-2583

E-mail: sac@hogefenton.com

To Buyer:

Barracuda Networks, Inc.

3175 Winchester Boulevard

Campbell, CA 95008

Attention: David Faugno

Telephone: 408-342-5357

Facsimile:                                 

E-mail: dfaugno@baifacuda.com

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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Notice of change of address shall be given by written notice in the manner detailed in this Section 8.1. Rejection or other refusal to accept shall be deemed to constitute receipt of the notice, demand, request or communication sent.

8.2 Headings. The titles and headings of the various Articles and sections hereof are intended solely for means of reference and are not intended for any purpose whatsoever to modify, explain or place any construction on any of the provisions of this Agreement.

8.3 Severability. If any of the provisions of the Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement by the application of such provision or provisions to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and every remaining provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

8.4 Attorneys’ Fees. If either party hereto fails to perform any of their obligations under this Agreement or if a dispute arises between the Parties concerning the meaning or interpretation of any provision of this Agreement, the defaulting party or the party not prevailing in such dispute shall pay reasonable costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing the rights hereunder, including, without limitation, ADR costs and reasonable attorneys’ fees and disbursements. Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in their favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such obligation is intended to be severable from the other provision of this Agreement and to survive and not be merged into any such judgment.

8.5 Integration. This Agreement constitutes the entire agreement between the Parties hereto with respect to the subject matter hereof and may not be modified, amended or otherwise changed in any manner except by a writing executed by the party against whom enforcement is sought. All exhibits attached hereto are incorporated herein by reference. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

8.6 Successors and Assigns. This Agreement and all covenants, terms and provisions contained herein shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assignees.

8.7 Tax Deferred Exchange. Buyer and Seller each agree to cooperate with the other and any escrow agent or exchange facilitator selected by the other in facilitating an exchange under Section 1031 of the Internal Revenue Code of 1986, as most recently amended, undertaken by the other with respect to the Property, provided that: (A) consummation or accomplishment of such an exchange shall not be a condition precedent or a condition subsequent to either party’s obligations under this Agreement and shall not delay the Closing Date; (B) the party undertaking the exchange shall effect the exchange through an assignment of this Agreement, or their rights under this Agreement, to a qualified intermediary without release of the assigning party from any liability hereunder; (C) the party undertaking the exchange shall pay any additional out-of-pocket costs that

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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would not otherwise have been incurred by such party or the cooperating party had such party not undertaken such exchange; and (D) the cooperating party shall not be required to take an assignment of the purchase agreement for any exchange property or be required to acquire or hold title to any real property for purposes of consummating the exchange. Neither party by this Agreement or acquiescence to an exchange shall their rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted to the other party that the exchange in fact complies with Section 1031 of the Internal Revenue Code, Exchanging party shall indemnify and hold the cooperating party harmless from any claims, costs or liabilities against the cooperating party, including attorney’s fees, arising out of or in connection with the exchange transaction.

8.8 Time of the Essence. Time is of the essence of every provision herein contained.

8.9 Construction. The Parties acknowledge that with respect to the transactions contemplated herein (A) each party and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits thereto; (B) neither party has received from the other any accounting, tax, legal or other advice, and (C) each party has relied solely upon the advise of their own accounting, tax, legal and other advisor.

8.10 Survival. All representations and warranties by the respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall remain true and correct as of the time of Closing, shall be deemed to be material, and shall survive the Closing Date for period of one year from the Closing Date.

8.11 Counterparts. This Agreement may be executed in two or more counterparts, including any facsimile of same, each of which is deemed an original, but all of which when taken together shall constitute one agreement. Any facsimile signature shall constitute a valid and binding method for executing this document.

8.12 Day. The reference to “day” shall mean a calendar day, unless modified to be a business day. If the day upon which a certain event or time period (such as the Closing Date, or time to respond) falls or expires is a weekend or holiday, then the time period shall be automatically extended to the next business day. A holiday shall be deemed a day which is a legal holiday for national banks in Santa Clara County or a day when the recorder’s office in Santa Clara County is closed,

8.13 Assignment. Buyer may not assign its rights, obligations and interest in this Agreement to any other person or entity (“Assignee”) without first obtaining Seller’s prior written consent, which consent may be given or withheld in Seller’s sole discretion; provided, however, that such consent shall not be unreasonably withheld ‘so long as Symetra has approved the assumption of the Existing Debt Obligation by Assignee. Buyer may assign its interest in this Agreement so long as (i) Assignee is an affiliated entity of Buyer, (ii) Assignee assumes all of Buyer’s obligations under this Agreement and agrees to timely perform same pursuant to an assignment agreement in form

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

-17-

reasonably acceptable to Seller, (iii) Buyer delivers to Seller at least seven (7) business days prior to Closing (a) written notice of said proposed assignment and (b) a copy of the draft assignment agreement for Seller’s reasonable approval, and (iv) Assignee unconditionally ratifies and remakes all applicable covenants, indemnities, representations and warranties of Buyer made in or in connection with this Agreement, all of the foregoing for the express benefit and reliance of Seller. No assignment shall relieve Buyer from any liability or its obligations under this Agreement. Any attempted assignment not in compliance with the provisions of this Section shall be null and void. This Agreement shall inure to the benefit of and be binding upon the Parties to this Agreement and their respective successors and permitted assigns.

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.

SELLER:

BRYAN FAMILY PARTNERSHIP II, LTD.

a California limited partnership

By:	BFZ, LLC, a California limited liability Company, General Partner
	By:	/s/ Ross E. Bryan
		Ross E. Bryan, Managing Manager
	By:	/s/ John D. Frazer
		John D. Frazer, Jr., Manager
	By:	/s/ Diana B. Zinser
		Diana B. Zinser, Manager

BUYER:

BARRACUDA NETWORKS, INC.

a Delaware corporation

/s/ Dean Drako
By:	Dean Drako
Its:	CEO

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

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EXHIBIT A

LEGAL DESCRIPTION OF THE REAL PROPERTY

Land and improvements situated in the City of Campbell, County of Santa Clara, State or California, described as follows:

PARCEL ONE, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON OCTOBER 11, 1984 IN BOOK 535 OF MAPS, PAGES 24 AND 25.

EXCEPTING THEREFROM THAT THE INTEREST THEREOF AS CONVEYED TO THE CITY OF CAMPBELL, FOR STREET PURPOSES BY DEED RECORDED DECEMBER 10, 1984 IN BOOK J101, PAGE 321, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST EASTERLY CORNER OF PARCEL ONE AS SAID PARCEL IS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN BOOK 535 OF MAPS AT PAGES 24 AND 25 IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA. THENCE SOUTHWESTERLY FROM SAID CORNER SOUTH 31° 31’ 00” WEST 490.81 FEET ALONG THE SOUTHEASTERLY LINE OF SAID “PARCEL ONE” TO ITS MOST SOUTHERLY CORNER. THENCE NORTHWESTERLY FROM LAST SAID CORNER 67° 52’ 58” WEST 4.05 FEET ALONG THE SOUTHWESTERLY LINE OF SAID “PARCEL ONE” TO A POINT LYING DISTANT 4.00 FEET NORTHWESTERLY BY PERPENDICULAR. MEASUREMENT FROM SOUTHEASTERLY LINE OF SAID “PARCEL ONE.” THENCE NORTHEASTERLY FROM LAST SAID POINT AND ALONG LAST SAID PARALLEL LINE NORTH 31° 31’ 00” EAST 491.47 FEET TO A POINT LYING ON THE NORTHEASTERLY LINE OF SAID “PARCEL ONE.” THENCE SOUTHEASTERLY FROM LAST SAID POINT AND ALONG LAST SAID LINE SOUTH 58° 29’ 00” EAST 4.00 FEET RETURNING TO THE POINT OF BEGINNING.

APN: 406-21-019 and 406-21-016 and 406-21-017

Seller’s Initial: /s/ RB, JF & DZ        

Buyer’s Initials: /s/ DD        

EXHIBIT B

REAL ESTATE NOTE

(To be attached)

SYMETRA

Financial

Loan No. 1673

REAL ESTATE NOTE

$6,750,000.00 June 20, 2007

FOR VALUE RECEIVED, the undersigned (hereinafter called “Maker”) promises to pay to the order of Symetra Life Insurance Company, a Washington corporation, its successors and assigns, (hereinafter called “Holder”) at Mortgage Loan Dept., PO Box 84066, Seattle, WA 98124-8466, or at such other place as Holder may designate in writing, the principal sum of SIX MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100 U.S. DOLLARS ($6,750,000.00), or so much thereof as may be advanced, together with interest on the unpaid principal balance from the date funds are first disbursed by Holder at the rate of 6.23% per annum. Principal and Interest shall be due and payable in one hundred nineteen (119) consecutive monthly payments of $44,445.00 each, commencing on the 1st day of August, 2007 and continuing on the same day of each month thereafter; plus a final payment in the amount of all unpaid principal and interest which shall be due and payable in full on July 1, 2017. Interest accrued from the date of first disbursement until July 1, 2007 shall be due at closing. All payments made on this Note shall be paid by a pre-authorized debit from Maker’s account using electronic funds transfer through the Automated Clearing House (“ACH”). The interest rate specified above assumes that monthly payments will be paid by Maker to Holder through ACH until this Note has been fully paid. If Maker at any time for any reason discontinues making payments through ACH, the interest rate specified above will be increased automatically by 1/16^th of one percent (.0625%) for the remainder of the term to offset any additional expense to Holder. All payments made on this Note shall be applied at the option of Holder to any prepayment premium or late charges due hereunder, then no Interest, and then to the reduction of unpaid principal.

If any payment provided for herein is not paid on its due date or within five (5) days thereafter, Maker hereby agrees to pay to Holder a late charge equal to ten percent (10%) of the payment to defray the expenses incident to handling such delinquent payment. Payment of a late charge shall not relieve Maker of its obligation to pay all sums promptly when due, or cure any default, or in any way affect the exercise of Holder’s remedies.

This Note may be prepaid in full (and not in part) on any scheduled payment date, upon giving Holder ninety (90) days prior written notice, by paying, in addition to the outstanding-principal balance at the date of prepayment (plus all accrued interest and other sums due under the terms of the Security Documents, us defined herein), a “Prepayment Fee.” The Prepayment Fee is equal to the greater of:

(i) 1% of the principal prepaid (principal outstanding after application of payment due on date of prepayment) at the date of prepayment, or

(ii) the present value computed on a monthly basis as of the date of prepayment of all future principal and interest payments due under this Note (starting with the first monthly payment due after the prepayment date and including any balloon payments) using the Discount Rate (as defined below) less the principal prepaid. The Discount Rate (“DR”) is the rate which when compounded monthly, is equivalent to the Reinvestment Rate (as defined below) when compounded semi-annually. The DR shall be rounded to the nearest one hundredth of one percent. The Reinvestment Rate (“RR”) is the yield in percent per annum of the Treasury Constant Maturity (“TCM”) that equals the remaining Weighted Average Life (as defined below) of the Note as published 5 business days prior to the date of prepayment in the Federal Reserve Statistical Release H.15 Selected Interest Rates. The Weighted Average Life (“WAL”) of the Note is the average number of years that each dollar of unpaid principal due on the Note remains outstanding. WAL is computed as the weighted-averaged time to the receipt of all future cash flows, using as the weights the dollar amounts of the principal pay downs. The WAL shall be rounded to the second decimal place. If the remaining WAL of this Note does not equal any of the published TCM’s then the RR will be determined by interpolating linearly between two TCM’s, one having a maturity as close as possible to, but greater than the remaining WAL of this Note and one having a maturity as close as possible to, but less than the remaining WAL of this Note. The RR shall be rounded to the nearest one hundredth of one percent. If the Federal Reserve Statistical Release H.15 Selected Interest Rates is discontinued or no longer published, the Holder shall, in its sole discretion, designate some other daily financial or governmental publication national circulation to determine the RR which most nearly corresponds to the yield of the TCM Holder shall notify Maker of the amount and the basis of determination of the Prepayment Fee, which absent manifest error, shall be conclusive and binding upon Holder and Maker. No Prepayment Fee, shall be due if this Note is prepaid (a) during the 90 days prior to the maturity-date or (b) solely in connection with the application of Insurance proceeds or any condemnation award Maker waives any right of prepayment except as expressly provided herein.

This Note is secured by a Deed of Trust and an Assignment of Leases and Rents, each of even date herewith, encumbering certain real property located in the County of Santa Clara, State of California, (the “Premises”) and by any other Instruments, now or hereafter executed by Maker in favor of Holder, which in any manner constitute additional security for this Note (all of which are hereinafter called the “Security Documents”).

Time is of the essence in the performance by Maker of all obligations of this Note and the Security Documents. If Maker fails to make any payment within ten days of its due date, or defaults in the performance or observance of any of the terms, agreements, covenants or conditions contained in the Security Documents and fails to cure such default within the applicable cure period, if any, specified in the Security Documents, then, or at any time thereafter, the entire principal balance of this Note, irrespective of the maturity date specified herein, together with accrued interest thereon, and any applicable prepayment premium, shall, at the election of the Holder, without notice, become immediately due and payable. The principal balance of this Note shall thereafter bear interest at a default rate equal to six percent (6%) per annum above the interest rate then applicable hereunder until all defaults are cured.

Maker waives diligence, demand, presentment, protest and notice of dishonor. All endorsers and guarantors consent to any renewals, extensions or modifications of this Note, including the terms or times for payment; and further agree that any such renewal, extension or modification of this Note or the Security Documents or the release or substitution of any security for this Note or any other indulgences may be made without notice to any of said parties and shall not otherwise affect the liability of any party.

Holder has examined and relied upon the creditworthiness, financial strength, reputation, experience and managerial ability of Maker (and its owners and managers) with respect to owning, leasing and operating properties such as the Premises in agreeing to make the Loan to Maker, and will continue to rely on Maker as a means of preserving the value of the Premises as security. Except as provided below, if (i) the Premises or any pert thereof or interest therein he sold, transferred, leased (other than space lease without option to purchase), conveyed, traded, assigned, or otherwise alienated, or n contract of sale of other conveyance is entered into with respect thereto (each a “Conveyance”), or (ii) there is a change in the form of organization of, or transfer of a controlling interest in, Maker (each a “Change of Control”) without the prior written consent of Holder, then, upon the occurrence of any one or more of the foregoing events, and regardless of whether or not an event of default shall have occurred and be continuing under this Note or any Security Document, Holder may, at its option, declare the then outstanding principal balance evidenced by the Note plus accrued interest thereon, and any applicable delinquency charge. or prepayment premium, immediately due and payable or, at its sole option, it may consent to the Conveyance or Change of Control in writing and may increase the interest rate on the Note to the interest rate on which Holder would then commit to make a first mortgage loan with like terms and security, as determined by Holder in its sole discretion, and impose whatever other terms and conditions it may deem necessary to compensate it for the increased risk resulting from the Conveyance or Change of Control. Any increase in interest rate shall entitle Holder to increase monthly payments under this Note so that the increased monthly payments will fully amortize the unpaid principal balance of this Note over the unexpired amortization term of this Note. Any joint venture agreement, partnership agreement, declaration or revocation of trust, option agreement or other agreement whereby any other person or entity may become entitled, directly or indirectly, to the possession or enjoyment of the Premises (other than a space lease with no option to purchase), or the income or other benefits of the Premises, shall, in each case, be deemed to be a Conveyance or Change of Control for the purposes of this paragraph, and shall require prior written consent from the Holder. Any transfer of a partnership interest or interests in Maker which in tine aggregate over the term of this Note comprise less than 50% of the total partnership interests in Maker will not constitute a Conveyance or Change of Control, so long as no default has occurred and is continuing under this Note or the Security Documents, and the controlling interest in Maker does not change. Such transfers of partnership interests in Maker will not require approval of Holder but will acquire prior written notice to Holder.

Notwithstanding the foregoing, and provided Maker is not then in default under this Note, or any of the Security Documents, Maker shall have a one-time only right upon prior written notice to Holder, and payment of all expenses of Holder plus an assumption fee equal to one percent (1%) of the unpaid principal balance of the Note to convey the Premises to a transferee whose creditworthiness, financial strength, reputation, experience and property management ability with respect to the ownership, operation and leasing of properties similar to tine Premises are equal to or greater than Maker in the Judgment of Holder, which approval shall not be unreasonably withheld or delayed. If Holder withholds its approval because of the proposed transferee’s lack of creditworthiness, reputation, experience, property management ability or financial strength or other reasonable basis which Leads Holder to reasonably believe the Loan or the security would be impaired, Holder shall not be deemed to have unreasonably withheld its approval. As a condition of any consent by Holder, the transferee must fully assume in writing Maker’s obligations under this

Note and the Security Documents and Maker and any guarantors of the Indebtedness, except as set forth below, must agree in writing to remain fully bound. Any consent given by Holder shall not constitute consent to any other such transaction. If title to the Premises or any part thereof or interest therein becomes vested in a person or an entity other then Maker, whether or not Holder has given written consent, Holder may deal with such-successor or successors in interest with reference to the Note and Security Documents in the same manner as dealing with Maker, without in any way diminishing or discharging Maker’s obligations. Upon satisfaction of the other terms and conditions of this paragraph, Holder will release Maker and each guarantor of Maker’s obligations of personal liability under the Note and Security Documents upon a conveyance of the Premises to a transferee approved by Holder, as set forth herein, provided the loan-to-value ratio with respect to the Premises at such time is less than 50%. Calculation of the loan-to-value ratio shall be based on Holder’s reasonable business judgment. The transferee and its principals shall be liable for standard industry “carve-outs” with respect to the obligations of the Note and Security Documents and each must execute appropriate written Instruments incorporating those terms

In no event whatsoever shall the amount of interest received, charged or contracted for by Holder for the use, forbearance or detention of money exceed the highest lawful rate permissible under applicable law, it being the intent of Holder and Maker in the execution of this Note to contract in strict accordance with applicable usury laws. If Holder or any other holder of this Note shall ever receive as interest on the Indebtedness an amount which exceeds the maximum amount of interest permitted by applicable law, such excess amount shall be applied to reduction of the principal amount owing on the indebtedness so as to fully comply with such law. Without limiting the foregoing, all calculations of Interest shall be made, to the extent permitted by law, by prorating, allocating and spreading all Interest in equal parts over the full stated term of the Note. Any provision of this Note, or of any other agreement between Holder and Maker, that operates to bind, obligate, or compel the Maker to pay interest in excess of such maximum rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any contrary provision contained herein or in any other agreement between Holder and Maker.

No exercise by Holder, or delay or omission in the exercise by Holder, of any right or remedy hereunder or under the Security Documents, or otherwise afforded by applicable law, shall preclude, waive or limit the exercise of any right or remedy. Neither the acceptance by Holder of any partial payment, nor acceptance of a payment after the due date of such payment, shall be a waiver of Holder’s right to require prompt payment in full when due of all other sums payable hereunder or declare a default for failure to make prompt payment in full.

This Note shall be governed by the laws of the State of California and shall be the joint and several obligation of all markets, endorsers and guarantors binding upon them and their successors and assigns.

If an attorney is retained for collection or enforcement of this Note or the Security Documents, or defense of Holder’s interest in the Premises or Rents, Maker agrees to pay, in addition to the sums stated herein, all costs of collection and of suit and foreclosure, including reasonable attorney’s fees incurred by Holder in instituting, prosecuting or defending any such notion (including attorneys’ fees for (i) any appeal, (ii) relief from stay motions, cash collateral disputes, assumption/rejection motions and disputes regarding proposed disclosure statements and plans in any bankruptcy proceeding and (iii) any other judicial or nonjudicial proceeding or arbitration).

MAKER ACKNOWLEDGES RECEIPT Or A COPY OF THIS REAL ESTATE NOTE.

MAKER:

BRYAN FAMILY PARTNERSHIP II, LTD, a California limited partnership

By:	BFZ, LLC, a Californialimited liability company, its General Partner
	By:	/s/ Robert A. Frazer
		Robert A. Frazer, Manager
	By:	/s/ John D. Frazer Jr.
		John D. Frazer, Jr., Manager

MAILING ADDRESS:

BRYAN FAMILY PARTNERSHIP II, LTD

c/o Toeniskoetter & Breeding, Inc. – Attn: Dan Amend

1960 The Alameda

San Jose, CA 95126

EXHIBIT C

DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND

FIXTURE

(To be attached)

Seller’s Initial: /s/ RB, JF & DZ

Buyer’s Initials: /s/ DD

First American Title Company
Escrow No. NCS-296567-SC	FIRST AMERICAN TITLE COMPANY
Recorded at the Request of	HEREBY CERTIFIES THAT THIS IS A
And After Recording Return To:	TRUE AND CORRECT COPY OF THE ORIGINAL DOCUMENT
Symetra Life Insurance Company
Mortgage Loan Department
PO Box 84066	BY:
Seattle, WA 98124-8466	RECORDED:
Loan No.1673	SERIES NO:

APN: 406-21-019, 406-21-016 & 406-21-017

DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEIVIENT AND FIXTURE FILING, (“Deed of Trust”) is made as of June 20, 2007, by BRYAN FAMILY PARTNERSHIP II, LTD., a California limited partnership, (“Trustor”), whose address is c/o Toeniskoetter & Breeding, Inc., 1960 The Alameda, San Jose, CA 95126, Attn: Dan Amend, to FIRST AMERICAN TITLE INSURANCE COMPANY, a corporation, (“Trustee”), whose address is 1737 North First Street, Suite 500, San Jose, CA 95112, for the benefit of Symetra Life insurance Company, a Washington corporation, (“Beneficiary”), whose mailing address is Mortgage Loan Department, PO Box 84066, Seattle, WA 98124-8466.

WITNESSETH: Trustor irrevocably grants, bargains, sells, warrants and transfers to Trustee in trust in fee simple, WITH POWER OF SALE, all right, title and interest of Trustor in, to, under and derived from the following described real property and rights, including any after acquired interest therein, situated in Santa Clara County, State of California:

SEE ATTACHED EXHIBIT “A” WHICH IS INCORPORATED HEREIN BY THIS REFERENCE FOR A FULL LEGAL DESCRIPTION OF THE PROPERTY (the “Premises”).

together with all buildings, structures, fixtures and improvements now or hereafter erected or placed thereon, and all water rights, rights of way, casements, rents, issues, profits, income, tenements, hereditaments, privileges, and appurtenances thereunto belonging now or hereafter used or enjoyed with said Premises, or any part thereof, and the reversion and reversions, remainder and remainders thereof, and all other estate, property and rights hereinafter described, including without limitation, (a) all land lying in streets, ways, alleys, water courses and roads adjoining the Premises, and all access rights and easements pertaining to the Premises; (b) all the lands, privileges, reversions, remainders, and water rights and stock, oil and gas rights, royalties, minerals and mineral rights belonging or in any way pertaining to the Premises; (c) all fixtures, materials, machinery, fittings and other property now or hereafter attached to or used in the operation of the Premises which shall be

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deemed part of the Premises and not severable wholly or in part without material injury to the property (including, but not limited to, heating and incinerating apparatus and equipment, boilers, generating equipment, piping and plumbing fixtures, cooling, ventilating, sprinkling and vacuum cleaning systems, fire extinguishing apparatus, carpeting, elevators, escalators, partitions, window shades, blinds, screens, furnishings or public spaces, halls and lobbies, and shrubbery and plants); (d) all existing and future leases of the Premises (including extensions, renewals and subleases), all agreements for use and occupancy of the Premises (all such leases and agreements whether written or oral, are hereafter referred to as the “Leases”); (e) all rents, issues, revenues and profits of the Premises, and all proceeds payable as a result of a tenant’s exercise of an option to purchase the property, all proceeds derived from the sale, conveyance or transfer of the Premises or any part thereof, all proceeds derived from the termination or rejection of any Lease in a bankruptcy or other insolvency proceeding, and all proceeds from any rights and claims of any kind which Trustor may have against any tenant under the Leases or any occupants of the property (all of the above are hereafter collectively referred to as the “Rents”); (f) all compensation, awards, damages, causes of action and proceeds (including insurance proceeds) arising out of or relating to a taking or damaging of the Premises by reason of any public. or private improvement, condemnation proceeding, fire, earthquake or other casualty, injury or decrease in the value of the Premises, and any claims, causes of action and rights arising from damage to the Property, including without limitation, claims for construction defects; and (g) all contracts and agreements pertaining to or affecting the Premises including management and operating agreements; and all additions, accessions, replacements, substitutions, and proceeds of any of the foregoing (all of the foregoing interests and rights together with the Premises are hereinafter collectively referred to as the “Property”).

For the Purpose of Securing:

(a) the payment of the indebtedness evidenced by a Real Estate Note of even date hereof in the principal amount of $6,750,000.00 made by Trustor (the “Note”), payable to the order of Beneficiary at the times, in the manner and with interest as therein set forth, and any extensions, renewals, modifications or substitutions of the Note; (b) the performance of each agreement of Trustor herein or in the Loan Documents contained; (c) the payment of such additional loans or advances as hereafter may be made to Trustor, or its successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust; and (d) the payment of all sums expended or advanced by Beneficiary under or pursuant to the terms hereof, together with interest as herein provided.

As used in this Deed of Trust, the “Loan Documents” shall mean the Note, this Deed of Trust, the Assignment of Leases and Rents (the “Assignment of Leases and Rents”), and the other documents and instruments executed and delivered in connection therewith. The principal amount of the Note, interest thereon, and all other sums advanced or clue hereunder and thereunder are collectively referred to herein as the “Loan”.

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TO MAINTAIN AND PROTECT THE SECURITY OF THIS DEED OF TRUST, TO SECURE THE FULL AND TIMELY PERFORMANCE BY TRUSTOR OF ALL OBLIGATIONS, COVENANTS AND AGREEMENTS OE THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS, TRUSTOR REPRESENTS, WARRANTS AND COVENANTS AS FOLLOWS:

1. Personal Property Security. Trustor hereby grants to Beneficiary a security interest in that portion of the Property not deemed to be real property for the purpose of seeming performance of all of Trustor’s obligations under the Loan Documents.

2. Security Agreement. This Deed of Trust shall also constitute a Security Agreement as that term is used in the California Commercial Code (“UCC”) or other law applicable to the creation of’ liens or security interests in personal property with respect to any Property not deemed to be real property which is described herein, or in any way connected with the use and enjoyment of the Property, and the remedies for any violation of the covenants, terms and conditions of’ the agreements herein contained shall be as specified in the UCC or at law. Trustor authorizes Beneficiary to file one or more financing statements under the UCC with Trustor as Debtor and Beneficiary as Secured Party to perfect or give public notice of the security interest granted herein. Trustor and Beneficiary agree that the filing of a financing statement in the records normally having to do with personal property shall not be construed as in anywise derogating from or impairing the lien of this Deed of Trust.

3. Performance of Obligations. Trustor agrees to timely pay all sums when due pursuant to the Note and the Loan Documents without deduction or credit for taxes, insurance and other charges paid by Trustor, and strictly comply with all the terms and conditions of the Loan Documents.

4. Warranty of Title. Trustor warrants to Beneficiary that Trustor has good and marketable title to an indefeasible fee simple estate in the Premises, subject to no liens, encumbrances, easements, assessments, security interests, claims or defects of any kind except easements of record, recorded declarations, restrictions, reservations and covenants, if any, approved by Beneficiary in writing as specific exceptions in Beneficiary’s title insurance policy, and real estate taxes for the current year, a lien not yet payable (the “Permitted Exceptions”). Neither the real estate taxes nor any Permitted Exceptions are delinquent or in default. Trustor has the right to convey the Premises to Trustee for the benefit of Beneficiary, and the right to grant a security interest in the personal property security. Trustor will warrant and defend title to the Property and will defend the validity and priority of the lien of this Deed of Trust and the security interest granted herein against any claims or demands.

5. Prohibited Liens. Trustor shall not permit any governmental or statutory liens (including tax and mechanic’s and materialmen’s liens) to be filed against the Property except for real estate taxes and assessments not yet due and liens permitted by the Loan Documents or approved by Beneficiary in writing.

6. Payment of Fees and Taxes and Other Liens and Assessments; Contest. Trustor shall pay all filing, registration and recording fees, stamp and documentation taxes, and other fees, taxes, duties, imposts, and other charges incident to, arising from, or in connection with the preparation, execution, delivery or recording of any Loan Document. Trustor shall pay the real estate taxes and any assessments with respect to the Property at least ten (10) days prior to delinquency unless otherwise agreed to in writing by Beneficiary. After timely notice to Beneficiary, Trustor shall have the right to contest any real property tax or special assessment on the Property by appropriate proceedings so long as (a) no default has occurred and is continuing under the Note, this Deed or any

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of the other Loan Documents; (b) Trustor makes any payment or deposit or posts any bond as and when required as a condition of pursuing such contest; (c) Trustor commences such contest prior to such tax or assessment becoming delinquent, and continuously pursues same in good faith with due diligence; (d) such contest or any bond furnished by Trustor stays the foreclosure and enforcement of any lien securing the payment of any such tax or assessment; and (e) Trustor pays any tax or assessment within ten (10) days following the resolution of such contest. All other encumbrance charges, fees, and liens affecting the Property, including mortgages and deeds of trust, whether prior to or subordinate to the lien of this Deed of Trust, shall be paid when due and shall not be in default. On request Trustor shall furnish receipts or other evidence of payment of these items.

7. Maintenance; No Waste. Trustor shall protect and preserve the Property and maintain it in good condition and repair. Trustor shall do all acts and take all precautions which, from the character and use of the Property, are reasonable, proper or necessary to preserve and maintain the Property in the state in which it exists on the date hereof, reasonable wear and tear from ordinary use alone excepted. Trustor shall not commit or permit any waste of the Property, or suffer or permit any condition to exist which will (i) increase the risk of fire or other hazard to the Property, or (ii) invalidate or allow cancellation of any insurance policy covering the Property.

8. Alterations, Removal and Demolition. Trustor shall not, nor permit others to, structurally alter, remove or demolish any building or improvement on the Property without Beneficiary’s prior written consent. Trustor shall not remove any fixture or other item or property which is part of the Property without Beneficiary’s prior written consent unless the fixture or item of property is immediately replaced by an article of equal value and utility owned by Trustor free and clear of any lien or security interest.

9. Completion, Repair and Restoration. Trustor shall promptly complete or repair and restore in good workmanlike manner any building or improvement on the Property which may be constructed or damaged or destroyed and shall pay all costs incurred therefor.

10. Compliance with Laws. The Premises are zoned for its existing or contemplated use, and are in present compliance with all zoning and subdivision laws, regulations, and ordinances applicable thereto. Trustor shall comply with all laws, ordinances, regulations, covenants, conditions, declarations, and restrictions affecting the Premises and shall not commit or permit any act upon or concerning the Premises in violation of any such laws, ordinances, regulations, covenants, declarations, and restrictions. Without limiting the foregoing, Trustor represents and covenants that the Property is in present compliance with, and in the future shall fully comply with, as applicable, the Americans With Disabilities Act of 1990 (42 USC 12101, et seq.), as amended from time to time, and the rules and regulations adopted pursuant thereto.

11. Impairment of Property. Trustor shall not, without Beneficiary’s prior written consent, change the general nature of the use of the Property, initiate, acquire or permit any change in any public or private restrictions (including a zoning reclassification) limiting the uses which may be made of the Property, or take or permit any notion which would impair the value of the Property or Beneficiary’s lien or security interest in the Property.

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12. Inspection of Property. Beneficiary or its authorized representative may inspect the Property at reasonable times after reasonable notice.

13. Trustor’s Defense of Property. Trustor shall appear in and defend any action or proceeding which may affect the Property or the rights or powers of Beneficiary or Trustee.

14. Beneficiary’s Right to Protect Property. Beneficiary may commence, appear in, and defend any action or proceeding which may affect the Property or the rights or powers of Beneficiary or Trustee if Trustor fails to undertake such actions after reasonable notice from Beneficiary. Beneficiary may pay, purchase, contest or compromise any encumbrance, charge or lien which in its judgment appears to be prior or superior to the lien of this Deed of Trust and Trustor shall promptly reimburse Beneficiary therefor. If Trustor fails to make any payment or do any act required under the Loan Documents, including without limitation, payment of taxes and assessments and maintenance of insurance on the Property, Beneficiary, without any obligation to do so, but without releasing Trustor from any obligations under the Loan Documents, may make the payment or cause the act to be performed in such manner and to such extent as Beneficiary may deem necessary to protect Beneficiary’s interest in the Property. Beneficiary is authorized to enter upon the Property for such purposes. In exercising any of these powers Beneficiary may incur such expenses, in its absolute discretion, it deems necessary.

15. Repayment of Beneficiary’s Expenditures. Trustor shall pay within 10 days after written notice from Beneficiary all sums expended by and all costs and expenses incurred by Beneficiary in taking any actions or exercising any remedies pursuant to the Loan Documents including attorneys’ fees, appraisal and inspection fees, and the costs for title reports. Expenditures by Beneficiary shall bear interest from the date of such advance or expenditure at the default rate specified in the Note, shall constitute advances made under this Deed of Trust and shall be secured by and have the same priority as the lien of this Deed of Trust. If Trustor falls to pay any such expenditures, costs and expenses and interest thereon, Beneficiary may, at its option, without foreclosing the lien of this Deed of Trust, commence an independent action against Trustor for the recovery of the expenditures and advance any undisbursed loan proceeds to pay the expenditures.

16. Due On Sale or Transfer Change of Control. Beneficiary has examined and relied upon the creditworthiness, financial strength, reputation, experience and managerial ability of Trustor (and its owners and managers) with respect to owning, leasing and operating properties such as the Property in agreeing to make the Loan to Trustor, and will continue to rely on Trustor as a means of preserving the value of the Property as security. If (i) the Property or any part thereof or interest therein is sold, transferred, leased (other than space lease without option to purchase), conveyed, traded, assigned, or otherwise alienated whether voluntarily or involuntarily, or a contract of sale or other conveyance is entered into with respect thereto (each a “Conveyance”), or (ii) there is a change in the form of organization of, or transfer of a controlling interest in, Trustor (each a “Change of Control”), without the prior written consent of Beneficiary, then, upon the occurrence of any one or more of the foregoing events, and regardless of whether or not an event of default shall have occurred and be continuing under the Note or this Deed of Trust or any other Loan Document, Beneficiary may, at its option, declare the then outstanding principal balance evidenced by the Note plus accrued interest thereon, and any applicable delinquency charge or prepayment premium, immediately due and payable or at its sole option, it may consent to the Conveyance or Change of

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Control in writing and may increase the interest rate on the Note to the interest rate on which Beneficiary would then commit to make a first mortgage loan of similar character with like terms and security, as determined by Beneficiary in its sole discretion, and impose whatever other terms and conditions it may deem necessary to compensate or protect it for the increased risk resulting from the Conveyance or Change of Control. Such increase in interest rate shall entitle Beneficiary to increase monthly payments under the Note so that the increased monthly payments will fully amortize the unpaid principal balance of the Note over the unexpired amortization term. Any joint venture agreement, partnership agreement, declaration or revocation of trust, option agreement or other agreement whereby any other person or entity may become entitled, directly or indirectly, to the possession or enjoyment of the Property (other than a space lease without option to purchase), or the income or other benefits of the Property, shall, in each case, be deemed to be a Conveyance for the purposes of this paragraph, and shall require prior written consent from the Beneficiary. Any transfer of a partnership interest or interests in Trustor which in the aggregate over the term of the Note comprise less than 50% of the total partnership interests in Trustor will not constitute a Conveyance or Change of Control, so long as no default under this Note or the other Loan Documents has occurred and is controlling, and the controlling interest in Trustor does not change. Such transfers of partnership interests will not require approval of Beneficiary but will require prior written notice to Beneficiary. Notwithstanding the foregoing, and provided Trustor is not then in default under the Note, this Deed of Trust or any of the other Loan Documents, Trustor shall have a one-time only right upon prior written notice to Beneficiary and payment of all expenses of Beneficiary plus an assumption fee equal to one percent (1%) of the unpaid principal balance of the Note to convey the Premises to a transferee whose creditworthiness, financial strength, reputation, experience and property management ability with respect to the ownership, operation and leasing of properties similar to the Property are equal to or greater than Trustor in the judgment of Beneficiary, which approval shall not be unreasonably withheld or delayed. If Beneficiary withholds its approval because of the proposed transferee’s lack of creditworthiness, reputation, experience, property management ability or financial strength or other reasonable basis which leads Beneficiary to reasonably believe the Loan or the security would be impaired, Beneficiary shall not be deemed to have unreasonably withheld its acceptance. Any transferee must fully assume in writing Trustor’s obligations under the Note and the Loan Documents in a form satisfactory to Beneficiary and Trustor and any guarantors must agree in writing to remain fully bound. Any approval given by Beneficiary shall not constitute an approval of any future such transaction. If ownership of the Property or any part thereof or interest therein becomes vested in a person or an entity other than Trustor, whether or not Beneficiary has given written consent, Beneficiary may deal with such successor or successors in interest with reference to this Deed of Trust and the Loan, in the same manner as with Trustor, without in any way diminishing or discharging Trustor’s obligations. Upon satisfaction of the other terms and conditions of this Section 16, Beneficiary will release Trustor and each guarantor of Trustor’s obligations of personal liability under the Loan Documents upon a sale of the Property to an assuming buyer approved by Beneficiary, provided that the loan-to-value ratio with respect to the Property at such time is less than 50%. Calculation of the loan-to-value ratio shall be based on Beneficiary’s reasonable business judgment. The assuming buyer and its principals shall be liable for standard industry “carve-outs” with respect to the Loan and each must execute appropriate written instruments incorporating those terms.

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17. No Other Encumbrances; Due On Encumbrance. At no time while the Loan remains unpaid, shall Trustor create, assume, or suffer to exist on the Property, or any part thereof, any mortgage, trust deed or other security instrument (other than this Deed of Trust) without first obtaining the prior written consent of Beneficiary. Trustor agrees that should the Property or any part thereof at any time be or become subject to the lien of any other mortgage or deed of trust or subject to any other encumbrance, pledge, or security interest (except with the prior written consent of Beneficiary), the whole of the principal and interest secured hereby and any applicable delinquency charge or prepayment premium shall, at the option of the Beneficiary, become immediately due and payable. Whether or not the consent of Beneficiary has been obtained, Trustor, for itself and for all future owners of the Property, agrees that this Deed of Trust may be modified, varied, extended, renewed, or reinstated at any time by agreement between the holder of this Deed of Trust and Trustor, or the then owner of the Property, without notice to, or the consent of, any subordinate mortgagee, beneficiary or lienor, and any such modification, variance, extension, renewal, or reinstatement shall be binding upon such subordinate mortgagee, beneficiary or lienor with the same force and effect as if such subordinate mortgagee, beneficiary or lienor had consented thereto

18. Insurance. Without limiting the generality of any other provision contained in this Deed of Trust, Trustor shall procure and continuously maintain “All Risk” property insurance on the Property with premiums prepaid providing 100% replacement cost coverage and insuring against loss by fire, smoke, explosion, riot, lightning, hail, windstorm, vandalism and other risks covered by the broadest form of extended coverage available from time to time, loss of rents/income or business interruption (if owner occupied) coverage for a minimum of one year, and earthquake coverage to the extent required by Beneficiary in the exercise of its business judgment in light of commercial real estate practices by institutional lenders existing in the general vicinity where the Property is located at the time the insurance is issued, and coverage for such other perils and risks as may be reasonably required by Beneficiary from time to time. If the Property is over designated as having special flood hazards or any other designation which would make the Property subject to the National Flood Insurance Act of 1968 or the Federal flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time, or any similar law, Trustor agrees to do everything reasonably necessary to comply with the requirements of said law and related regulations in order that flood insurance will be available to Trustor, and to obtain and maintain for the benefit of Beneficiary such an insurance policy in form, amount and content satisfactory to Beneficiary. Trustor shall also procure and maintain occurrence form commercial general liability insurance against bodily injury or death or property damage occurring in, upon or about, or resulting from, the Property with limits in such amounts as are acceptable to Beneficiary, but in no event less than $2,000,000 combined single limit per occurrence and $2,000,000 general aggregate, naming Beneficiary as an additional insured on a non-contributory basis. All insurance shall be with companies licensed to do business in California satisfactory to Beneficiary having an A.M. Best rating of B+VI or better and in such amounts and with deductibles acceptable to Beneficiary with lender’s loss payable clauses (438 BFU or equivalent) in favor of and in form satisfactory to Beneficiary. Each policy must provide no less than thirty (30) days prior written notice to Beneficiary of any cancellation, non-renewal or material change. No approval by Beneficiary of the amount, type or form of any insurance may be construed to be a representation or warranty by Beneficiary of its sufficiency. At least 30 days prior to the expiration of the term of any insurance policy, Trustor shall furnish Beneficiary with written evidence of renewal or issuance of a

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satisfactory replacement policy. If requested, Trustor shall deliver copies of all policies to Beneficiary. In the event of foreclosure of this Deed of Trust all interest of Trustor in any insurance policies pertaining to the Property and in any claims against the policies and in any proceeds due under the policies shall pass to Beneficiary.

19. Condemnation and Insurance Proceeds. All insurance proceeds and condemnation awards with respect to the Property are assigned to Beneficiary as additional security. Trustor shall give immediate notice to Beneficiary of any condemnation proceeding, or material loss or damage to the Property in excess of $50,000 (“Material Loss”). Trustor shall have the right to settle and receive the proceeds payable with respect to a condemnation, loss or damage except for a Material Loss. With respect to a Material Loss, all proceeds payable as a result of a condemnation, or material loss or damage shall be paid to Beneficiary and applied to repair or restore the Property, provided no event of default has occurred and is continuing under this Deed of Trust, and such repair or restoration is economically feasible and the security of this Deed of Trust is not impaired. Upon a Material Loss to such an extent as would make repair uneconomical, or if a default under this Deed of Trust shall have occurred and be continuing at the time of such condemnation or loss, or if less than two years remains on the unexpired term of the Note, Beneficiary shall, at its option, after deducting its expenses including attorney’s fees, (a) apply all or part of the proceeds against the sums owed under the Loan Documents including the Note whether or not (i) the sums are actually due or (ii) the security is impaired, and without affecting the due dates or amount of payments thereafter due under the Note, or (b) release all or any part of the proceeds to Trustor, or (c) permit all or any part of the proceeds to be used for repair and restoration of the Property on such conditions as Beneficiary may impose including evidence of sufficient funds to complete the work, approval of the plans and specifications and periodic disbursement of the proceeds during the course of repair and restoration.

20. Leases. The terms of all now Leases of the Property must be acceptable to Beneficiary. Trustor shall fully comply with all of the terms, conditions and provision of the Leases so that no breach shall occur and do all that is necessary to preserve all the Leases in force. With respect to any Lease involving an initial term of three years or more, Trustor shall not without the prior written consent of Beneficiary, modify or amend the Lease for a lesser rental or term, accelerate the payment of rent, change the terms of any renewal option, or accept surrender of the Lease or terminate the Lease except in accordance with the terms of the lease providing for termination in the event of default. Any proceeds or damages resulting from a tenant’s default under any such Lease, at Beneficiary’s option, shall be paid to Beneficiary and applied against sums owed under the Loan Documents even though such sums may not be due and payable. Except for the lien of real estate taxes and assessments, Trustor shall not permit any lien to be created against the Property which may be or may become prior to any Lease. If the Property is partially condemned or suffers a casualty, Trustor shall promptly repair and restore the Property in order to comply with the Leases.

21. Assignment of Leases and Rents; Trustor’s Right to Collect. Trustor hereby absolutely and irrevocably assigns to Beneficiary all Trustor’s interest in the Rents and Leases. This assignment shall be subject to the terms and conditions of any separate Assignment of Leases and Rents, whenever executed, in favor of Beneficiary and covering the Premises. Unless otherwise provided in any separate Assignment of Leases and Rents, and so long as Trustor is not in default

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under the Loan Documents, Trustor may collect the Rents as they become due. Trustor shall use the Rents to pay normal operating expenses for the Property and sums due and payments required under the Loan Documents. No Rents shall be collected more than two months in advance of the due date. Trustor warrants that it has made no prior assignment of the Rents or Leases and will make no subsequent assignment without the prior written consent of Beneficiary. Trustor’s right to collect the Rents shall not constitute Beneficiary’s consent to the use of cash collateral in any bankruptcy proceeding.

22. Beneficiary’s Right to Collect Rents. If a default has occurred under the Loan Documents and has not been cured after any applicable notice and cure period specified in the Loan Documents, Beneficiary shall have all the rights set forth in California Civil Code Section 2938, and Beneficiary or its agents, or a court appointed receiver, may collect the Rents without further notice to Trustor. In doing so, Beneficiary may (a) evict tenants for nonpayment of rent, (b) terminate in any lawful manner any tenancy or occupancy, (c) lease the Premises in the name of the then owner on such terms as it may deem best and (d) institute proceedings against any tenant for past due rent. The Rents received shall be applied to payment of the costs and expenses of collecting the Rents, including a reasonable fee to Beneficiary, a receiver or an agent, operating expenses for the Property and any sums due or payments required under the Loan Documents, in such amounts as Beneficiary may determine. Any excess shall be paid to Trustor, however, Beneficiary may withhold from any excess a reasonable amount to pay sums anticipated to become due which exceed the anticipated future Rents. Beneficiary’s failure to collect or discontinuing collection at any time shall not in any manner affect the subsequent enforcement by Beneficiary of its rights to collect the Rents. The collection or application of the Rents shall not cure or waive any default under the Loan Documents. Beneficiary or a receiver shall have no obligation in perform any of Trustor’s obligations under the Leases. In exercising its rights under this section Beneficiary shall be liable only for the proper application of and accounting for the Rents collected by Beneficiary or its agents. Any Rents paid to Beneficiary or a receiver shall be credited against the amount due from the tenant under the Lease. In the event any tenant under the Lease becomes the subject of any proceeding under the Bankruptcy Code or any other federal, state or local statute which provides for the possible termination or rejection of the leases assigned hereby, Trustor covenants and agrees that in the event any of the Leases are so rejected, no damages settlement shall be made without the prior written consent of Beneficiary; any check in payment of damages for rejection or termination of any such Lease will be made payable to both the Trustor and Beneficiary; and Trustor hereby assigns any such payment to Beneficiary and further covenants and agrees that upon request of Beneficiary, it will duly endorse to the order of Beneficiary any such check, the proceeds of which will be applied to the Loan in such manner as Beneficiary may elect.

23. Fixture Filling. This Deed of Trust shall also serve as a financing statement filed for record in the real estate records as a fixture filing pursuant to the UCC with Trustor being named as the Debtor and the Beneficiary being named as the Secured Party and the Property being the collateral.

24. Late Charge. In the event that any payment or portion thereof is not paid within five (5) days commencing with the date it is due, Beneficiary may collect, and Trustor agrees to pay a “late charge” of 10% of the delinquent payment, but not to exceed the highest such charge permitted by applicable law. This late charge shall apply individually to each payment past due. Payment of a

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late charge shall not relieve the Trustor of the obligation to make payments on or before the date on which they are due, or cure any default, or in any way affect Beneficiary’s remedies pursuant to the terms of the Note secured hereby or this Deed of Trust.

25. Default; Remedies. TIME IS OF THE ESSENCE HEREOF. If Trustor fails to pay any installment of principal or interest on the Note within ten (10) days of the date the same is due and payable, or fails to pay when due any taxes, assessments or insurance premiums or any lien or charge upon the Property, or if Trustor fails to perform or observe any other, covenant or agreement of Trustor contained in this Deed of Trust or in the Loan Documents for more than thirty (30) days after receipt of written notice specifying such default, or if any representation or warranty made by Trustor or any guarantor of the Note was materially false or misleading at the time it was made, or if Trustor or any guarantor fails to disclose any material fact, or if Trustor falls to provide or maintain the insurance required by this Deed of Trust, or fails to perform or observe any other obligation of Trustor to Beneficiary when due, or makes an assignment for the benefit of creditors, or if a petition in bankruptcy is filed by or against Trustor and is not dismissed within sixty (60) days, or if Trustor is dissolved, changes its form of legal entity or ceases doing business as a going concern, or if any guarantor of the Loan revokes, or attempts to revoke, its guaranty, or is the subject of a petition in bankruptcy or other insolvency proceeding, or if a Conveyance has occurred without the prior written consent of Beneficiary, or a Change of Control has occurred with respect to Trustor or any guarantor without the prior written consent of Beneficiary, then and in any such event (each of such events being a default by Trustor under this Deed of Trust for all purposes of this Deed of Trust, including the acceleration previsions contained in the Note), the entire unpaid principal balance of the Loan with interest thereon, at the option of the Beneficiary or the holder of the Note, shall become immediately due and payable and Beneficiary may exercise its rights and remedies under the Loan Documents and applicable law. Without limiting the foregoing, Beneficiary may enter upon the Property, exclude Trustor and its employees therefrom, and having and holding same, may use, operate, manage and control the Property and conduct the business thereof. Upon entry, Beneficiary may maintain and restore the Property, and make repairs and improvements as Beneficiary may deem necessary. Beneficiary may cause Trustee to execute a written notice of default and of election to cause the Property to be sold to satisfy the indebtedness and obligations hereof, and Trustee shall file such notice of record in each county wherein the Property or some part or parcel thereof is situated. Beneficiary shall deposit with Trustee the Note and all other documents evidencing expenditures secured hereby. After lapse of such time as may then be required by law following the recordation of said notice of default, and notice of default and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property on the date and at the time and place designated in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine (but subject to any statutory right of Trustor to direct the order in which the Property, if consisting of several lots or parcels, shall be sold), at public auction to the highest bidder, the purchase price payable in lawful money of the United States at the time of sale. The person conducting the sale may, for any cause he deems expedient, postpone the sale from time to time until it shall be completed, and in every such case, notice of postponement shall be given by public declaration thereof by such person at the time and place last appointed for the sale; provided, if the sale is postponed for longer than seventy-two (72) hours beyond the day designated in the notice of sale, notice thereof shall be given in the same manner as the original notice of sale. Trustee shall execute and deliver to the purchaser its deed conveying the Property so sold, but without any

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covenant or warranty, expressed or implied. The recitals in this deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Beneficiary, may bid at the sale. Trustee shall apply the proceeds of the sale to the payment of (1) the costs and expenses of retaking the Property and exercising the power of sale, and of the sale, including the payment of the Trustee’s and attorneys fees; (2) cost of any evidence of title procured in connection with such sale; (3) all sums expended under the terms hereof, not then repaid, with accrued interest thereon at 10% per annum from the date of the expenditure; (4) all sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto, or to the Trustee, in its discretion, may deposit the balance of such proceeds with the County Clerk of the county in which the sale took place. Trustor agrees to surrender possession of the Property to the purchaser at the aforesaid sale, immediately after such sale, in the event such possession has not previously been surrendered by Trustor. Alternatively, Beneficiary shall have the option to declare all sums secured hereby immediately due and payable and foreclose this Deed of Trust in the manner provided by law for the foreclosure of mortgages on real property and Beneficiary shall be entitled to recover in such proceedings all costs and expenses incident thereto, including a reasonable attorneys fee in such amount as may be fixed by the court. Beneficiary may bid for and acquire the Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Loan the net sales price after deducting therefrom the expenses of the sale and the cost of the action and any other sums which Beneficiary is authorized to deduct under this Deed of Trust. Beneficiary’s exercise of any of its rights and remedies shall not constitute a waiver or cure of a default. Beneficiary’s failure to enforce any default shall not constitute a waiver of the default or any subsequent default. In the event the Loan Documents are referred to an attorney for enforcement or defense of Beneficiary’s rights or remedies, whether or not suit is filed or any proceedings are commenced, Trustor shall pay all Beneficiary’s costs and expenses including Trustee’s and reasonable attorneys’ fees (including attorneys’ fees for (i) any appeal, (ii) relief from stay motions, cash collateral disputes, assumption/rejection motions and disputes regarding proposed disclosure statements and plans in any bankruptcy proceeding or (iii) for any other judicial or nonjudicial proceeding or arbitration), appraisal and inspection fees and cost of a title report.) To the extent permitted by applicable law, Trustor waives the benefit of any statute regulating the entry of a deficiency judgment or requiring that the value of the Property be set off against any part of the indebtedness secured hereby. If Beneficiary has initiated any action or proceeding to enforce any right or remedy under this Deed of Trust by foreclosure, entry or otherwise, and such action or proceedings has been discontinued or abandoned for any reason, or has been determined adversely to Beneficiary, then, Trustor and Beneficiary shall be restored to their former positions and rights hereunder, and all rights, powers and remedies of Beneficiary shall continue in full force and effect as if no such action or proceeding had been undertaken.

26. Cumulative Remedies. All Beneficiary’s and Trustee’s rights and remedies specified in the Loan Documents are cumulative, not mutually exclusive and not in substitution for any rights or remedies available in law or equity. In order to obtain performance of Trustor’s obligations under the Loan Documents, without waiving its rights in the Property, Beneficiary may proceed against Trustor or may proceed against any other security or guaranty for the Note, in such order and manner as Beneficiary may elect. The commencement of proceedings to enforce a particular remedy shall not preclude the discontinuance of the proceedings and the commencement of proceedings to enforce a different remedy.

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27. Sale of Property After Default. The Property may be sold separately or as a whole, at the option of Beneficiary. In the event of a Trustee’s sale of all the Property, Beneficiary hereby assigns its security interest in any personal property to the Trustee. Beneficiary may also realize on the personal property security in accordance with the remedies available under the UCC at law. In the event of a foreclosure sale, Trustor and the holders of any subordinate liens or security interest waive any equitable, statutory or other right they may have to require marshaling of assets or foreclosure in the inverse order of alienation.

28. Appointment of Receiver. In the event of a default and the expiration of any applicable notice and cure period specified in the Loan Documents, Beneficiary shall be entitled, without notice, without bond, and without regard to the adequacy of the security, to the appointment of a receiver for the Premises to take possession of and operate the Property and collect the rents, profits, issues and revenues thereof. The receiver shall have, in addition to all the rights and powers customarily given to and exercised by a receiver, all the rights and powers granted to Beneficiary by the Loan Documents.

29. Foreclosure of Tenant’s Rights; Subordination. Beneficiary shall have the right, at its option, to foreclose this Deed of Trust subject to the rights of any tenants on the Property. Beneficiary’s failure to foreclose against any tenant shall not be asserted as a claim against Beneficiary or as a defense against any claim by Beneficiary in any action or proceeding. Beneficiary at any time may subordinate this Deed of Trust to any or all of the Leases except that Beneficiary shall retain its priority claim to any condemnation or insurance proceeds.

30. Reconveyance After Payment. Upon written request of Beneficiary stating that all obligations secured by this Deed of Trust have been paid, Trustee shall reconvey, without warranty, the Property then subject to the lien of this Deed of Trust. The recitals in any reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in the reconveyance may be described as “the person or person legally entitled thereto” Trustor shall pay any Trustee’s fees or recording fees.

31. Release of Parties or Poverty. Without affecting the obligations of any party under the Loan Documents (including any guarantor, surety or endorser of Trustor’s obligations) or any subsequent purchaser of the Property, and without affecting the lien of this Deed of Trust and Beneficiary’s security interest in the Property, Beneficiary may, without notice (a) release Trustor and any other party now or hereafter liable for the payment or performance of any obligations under the Loan Documents, including guarantors of the Loan, (b) release all or any part of the Property, (c) subordinate the lien of this Deed of Trust or Beneficiary’s security interest in the Property, (d) take or release any other security or guaranty, (e) grant an extension of time or accelerate the time for performance of the obligations owed under the Loan Documents, (f) modify, waive, forbear, delay or fail to enforce any obligations owed under the Loan Documents, (g) sell or otherwise realize on any other security or guaranty prior to, contemporaneously with or subsequent to a sale of all or any part of the Property, (h) make advances pursuant to the Loan Documents including advances in excess of the Note amount, (i) consent to the making of any map or plot of the Property, and (j) join in the grant of any easement on the Property. Any subordinate lienholder shall be subject to all such releases, extensions or modifications without notice to or consent from the subordinate lienholder. Trustor shall pay any Trustee’s or attorneys fees, title insurance premiums or recording fees in connection with any of the foregoing.

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32. Nonwaiver of Terms and Conditions. Time is of the essence with respect to performance of the obligations due under the Loan Documents. Beneficiary’s failure to require prompt enforcement of any required obligations shall not constitute a waiver of the obligations due or any subsequent required performance of the obligation. No term or condition of the Loan Documents may be waived, modified or amended except by a written agreement signed by Trustor and Beneficiary. Any waiver of any term or condition of the Loan Documents shall apply only to the time and occasion specified in the waiver and shall not constitute a waiver of the term or condition at any subsequent time or occasion.

33. Business Use. The Property shall be used for business or commercial purposes and does not include agricultural or residential use property.

34. Joint and Several Liability. If there is more than one Trustor of this Deed of Trust, their obligations shall be joint and several.

35. Operating and Financial Statements. Trustor will deliver to Beneficiary upon Beneficiary’s request, operating statements and occupancy reports (including a rent roll) for the Property in a form and for periods satisfactory to Beneficiary certified as correct by Trustor. Trustor shall permit Beneficiary to examine all books and records of Trustor pertaining to the Property and deliver to Beneficiary upon request all financial statements, credit reports and other documents in the possession of Trustor relating to the financial condition of Trustor, any tenant of the Property and any guarantor of the Loan, including rental, income and expense statements pertaining to the Property and tax returns and audits.

36. Maximum Interest Rate. No person shall be obligated to pay the amount of any interest to the extent it is in excess of the maximum amount of interest permitted by applicable law. The Loan Documents are expressly limited so that in no contingency or event whatsoever shall the amount paid, or agreed to be paid, to Beneficiary for the use, forbearance or detention of the money loaned under the Note or otherwise, or for the performance or payment of any indebtedness, exceed the maximum amount permitted under applicable law. Trustor and Beneficiary intend to comply strictly with the applicable usury laws of the State of California. If Beneficiary or any other holder of this Deed of Trust shall over receive as interest on the Loan an amount which exceeds the maximum amount of interest permitted by applicable law, such excess amount shall be applied to reduction of the principal amount owing on the loan so as to fully and strictly comply with such law. Without limiting the foregoing, all calculations of interest shall be made, to the extent permitted by law, by amortizing, prorating, allocating and spreading all interest in equal parts over the full stated term of the Note.

37. Evasion of the Prepayment Penalty. 1f Trustor is in default under the Loan Documents, any tender of payment sufficient to satisfy all sums due under the Loan Documents made at any time prior to foreclosure sale shall constitute an evasion of the prepayment terms contained in the Note, if any, and shall be deemed a voluntary prepayment and subject to payment of any applicable prepayment premium.

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38. Payment of New Taxes. If any federal, state or local law is passed subsequent to the date of this Deed of Trust which requires Beneficiary to pay any tax because of this Deed of Trust or the sums due under the Loan Documents, then Trustor shall pay to Beneficiary on demand any such taxes if it is lawful for Trustor to pay them. If it is not lawful for Trustor to pay such taxes, then at its option Beneficiary may declare the entire unpaid balance of the indebtedness to be immediately due and payable under the Loan Documents and exercise any remedies permitted under this Deed of Trust.

39. Acceptance By Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of any pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party, unless brought by the Trustee.

40. Substitution of Trustee. Beneficiary may at any time discharge the Trustee and appoint a successor Trustee who shall have all of the powers, duties, authority and title of the original Trustee. Appointment of a successor Trustee shall become effective upon filing for record in the office of the County Recorder of each county in which said Premises is situated a Substitution of Trustee. Each such substitution shall be executed and acknowledged, and notice thereof shall be given and proof thereof made, in the manner provided by law.

41. Reserves. Upon (i) occurrence of an Event of Default, and (ii) written notice to Trustor from Beneficiary, Trustor shall thereafter pay to Beneficiary, together with and in addition to the monthly payments of principal and interest payable on the Note, on the date set forth in the Note for the making of monthly payments, until the Note is fully paid, a sum, as estimated by Beneficiary, equal to the taxes and special assessments next due on the Premises, plus the premiums that will next become due and payable on insurance policies required by this Deed of Trust, divided by the number of months to elapse before the premiums, taxes and special assessments are due, such sums to be held by Beneficiary to pay said premiums, taxes and special assessments. Such payments (“Reserves”) are to be held without allowance of interest to Trustor (except as required by applicable law) and need not be kept separate and apart from other funds of Beneficiary. Such Reserves shall be applied by Beneficiary to real estate taxes, special assessments and insurance premiums on the Premises as the same become due and payable. Collection of the reserves are solely for the added protection of Beneficiary and entails no responsibility on the part of Beneficiary beyond allowance of due credit for sums actually received by Beneficiary and the payment by Beneficiary of such taxes, special assessments and insurance premiums to the extent of the Reserves when statements therefor are actually presented to Beneficiary by Trustor. If the total of the Reserves shall exceed the amount of payments actually applied by Beneficiary, such excess may be credited by Beneficiary on subsequent payments to be made by Trustor, or at the option of Beneficiary, refunded to Trustors.

42. Property Management. Trustor agrees that Beneficiary shall have, and reserves the right to install, professional management of the Premises at any time following the occurrence of default under this Deed of Trust, if such default remains uncured following the expiration of any applicable cure period. Such professional management shall be at the sole discretion of Beneficiary and nothing herein shall obligate Beneficiary to exercise its right to install professional management. The cost of such management shall be borne by Trustor, shall be secured by this Deed of Trust and shall be treated as an additional advance under the Loan Documents.

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43. Environmental Compliance and Indemnification. Trustor represents and warrants to Beneficiary that to the best of Trustees knowledge after due and diligent inquiry, neither the Property nor any improvements thereon presently contain asbestos, or signs of water damage or mold in any form, and except as disclosed by the Environmental Site Assessment provided by Trustor to Beneficiary in writing prior to closing the Loan, no hazardous or toxic waste or substances are being stored on (or located in the soil, groundwater, surface water or waterways) at or under the Property or any adjacent properly in quantities or concentrations sufficient to require investigation, removal or remediation under the Environmental Laws (as hereinafter defined) nor have any such quantities or concentrations of waste or substances been stored or used on the Property or any adjacent property prior to Trustees ownership, possession or control of the Property, nor are any underground storage tanks (whether or not in use located in, on or under any part of the Property. Trustor agrees to provide written notice to Beneficiary immediately upon Trustor becoming aware of any underground storage tanks on the Property, or that the Property or any adjacent property is being or has been contaminated with hazardous or toxic waste or substances. Trustor will not cause nor permit any activities on the Property which directly or indirectly could result in the Property or any adjoining property becoming contaminated with hazardous or toxic waste or substances. For purposes of this Deed of Trust, the term “hazardous or toxic waste or substances” means asbestos, urea formaldehyde foam insulation, flammable explosives, radioactive materials, hazardous materials and petroleum and its refined products, and any substance or material defined, regulated, controlled, limited, prohibited or classified as hazardous or toxic wastes, hazardous or toxic material, a hazardous, toxic or radioactive substance, or other similar term in the Comprehensive Environmental Response Compensation Act of 1980 (“CIRCLA”), as amended (42 USC 9601, et seq.), the Hazardous Materials Transportation Act, as amended, (49 USC 1801, at seq.), the Resource Conservation and Recovery Act (“RCRA”), as amended, (42 USC 6901, et seq.) the Clean Water Act, as amended, (33 USC 1251, et seq.), the Clean Air Act, as amended, (42 USC 7401, at seq.), the Toxic Substances Control Act, as amended, (15 USC 2601, et seq.) or in any other applicable federal, state or local environmental statute, regulation or ordinance now or hereafter in effect governing the Property, its businesses, products or assets, with respect to discharges into the ground and surface water, emissions into ambient air and generation, control, accumulation, storage, treatment, transportation, removal, labeling, or disposal of waste materials or process by-products, the existence, cleanup, and/or remedy of contamination on property, the protection of the environment from soil; air or water pollution, or from spilled, deposited or otherwise emplaced contamination (the “Environmental Laws”) Trustor shall promptly comply with all statutes, regulations and ordinances which apply to Trustor or the Property and with all orders, decrees or judgments of governmental authorities or courts having jurisdiction or by which Trustor is bound, relating to the use, collection, storage, treatment, control, removal or cleanup of hazardous or toxic substances in, on or under the Property or in, on or under any adjacent property that becomes contaminated with hazardous or toxic substances as a result of construction, operations or other activities on, or the contamination of, the Property, at Trustor’s expense. Beneficiary may, but is not obligated to, enter upon the Property and take such actions and incur such costs and expenses to effect such compliance as it deems advisable to protect its interest as Beneficiary; and whether or not Trustor has actual knowledge of the existence of hazardous or toxic substances in, on or under the Property or any adjacent property as of the date of this instrument, Trustor shall reimburse Beneficiary on demand for the full amount of all costs and expenses incurred by Beneficiary in connection with such compliance activities. Trustor agrees to indemnify and hold harmless Beneficiary, its officers, agents and employees from and

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against any and all loss, damage, expense (including without limitation reasonable attorneys’ fees and the cost of environmental consultants), liability, claims, suits, judgments, fines and penalties or liability associated with or related to the presence, use, manufacture, storage, dumping, disposal, discharge, cleanup or removal of hazardous materials or toxic waste affecting the Property, except for any of the foregoing caused by the willful misconduct or gross negligence of Beneficiary, or its employees, agents and representatives while in possession of the Property. These covenants and agreements shall survive any foreclosure, release, discharge or satisfaction of this Deed of Trust or the indebtedness secured thereby.

44. Trustor Not a Foreign Person. Trustor is not a “foreign person” as that term is defined by Section 1445(f)(3) of the U.S. Internal Revenue Code.

45. Representations of Trustor. Trustor represents and warrants to Beneficiary that Trustor (a) is (1) an individual of legal age and capacity, or (2) a corporation, general partnership, limited partnership, limited liability company, trust or other legal entity, duly organized, validly existing and in good standing under the laws of its creation, and is authorized to do business in each other jurisdiction wherein its ownership of property or conduct of business legally requires such authorization; (b) has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated; and (c) has the power and authority to execute, deliver and perform, and by all necessary action has authorized the execution, delivery and performance of all of its obligations under this Deed of Trust and the other Loan Documents.

46. Waiver of Right of Offset. No portion of the indebtedness secured by this Deed of Trust shall be offset or compensated by any claim, cause of action, counterclaim, or cross-claim, whether liquidated or unliquidated, that Trustor may have against Beneficiary. Trustor waives to the fullest extent permitted by applicable law, the benefits of California Code of Civil Procedure Section 431.70.

47. Notices. Except for any notice required by law to be given in another manner, (a) any notice to Trustor provided in-this Deed of Trust shall be in writing and shall be given and be effective upon (1) delivery to Trustor or (2) mailing such notice by certified mail, return receipt requested, addressed to Trustor at Trustor’s address stated herein or at such other address as Trustor may designate in writing by notice to Beneficiary as provided herein and (b) any notice to Beneficiary shall be in writing and shall be given and be effective upon (1) delivery to Beneficiary or (2) mailing such notice by certified mail, return receipt requested, addressed to Beneficiary stated herein or to such other address as Beneficiary may designate by notice to Trustor as provided herein. Any notice provided for in this Deed of Trust shall be deemed to have been given to Trustor or Beneficiary when given in the manner designated herein.

48. Successors and Assigns. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto and their successors and the terms “Trustor,” “Trustee” and “Beneficiary” include their successors and assigns.

49. Controlling Document. In the event of a conflict or inconsistency between the terms and conditions of this Deed of Trust and the terms and conditions of any other of the Loan Documents (except for any separate Assignment of Leases and Rents which shall prevail over this Deed of Trust), the terms and conditions of this Deed of Trust shall prevail.

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50. Invalidity of Terms and Conditions. If any term or condition of this Deed of Trust is found to be invalid, the invalidity shall not affect any other term or condition of this Deed of Trust and this Deed of Trust shall be construed as if not containing the invalid term or condition.

51. Rules of Construction. This Deed of Trust shall be construed so that whenever applicable, the use of the singular shall include the plural, the plural shall include the singular, and the use of any gender shall be applicable to all genders and shall include corporations, partnerships, limited liability companies, trusts and limited partnerships.

52. Section Headings. The heading to the various sections have been inserted for convenience of reference only and shall not be used to construe this Deed of Trust.

53. Applicable Law. This Deed of Trust shall be construed, interpreted, enforced and governed by and in accordance with the Laws of the State of California, including the laws governing the creation, perfection, enforceability and priority of the liens and security interests created by this Deed of Trust and the procedures for foreclosure and for enforcement of the rights and remedies of Beneficiary under this Deed of Trust. In the event that any provision of this Deed of Trust shall be inconsistent with any provision of the laws of California, the laws of California shall govern over the provisions of this Deed of Trust, but shall not invalidate or render unenforceable any other provision of this Deed of Trust that can be construed in a manner consistent with California law.

54. Request For Notice. Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to it at the address hereinabove set forth.

TRUSTOR:

BRYAN FAMILY PARTNERSHIP II LTD., a California limited partnership

By:	BFZ, LLC, a California limited liability company, Its General Partner
	By:	/s/ Robert A. Frazer
		Robert A. Frazer, Manager
	By:	/s/ John D. Frazer
		John D. Frazer, Manager

(Signatures must be acknowledged)

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STATE OF California

COUNTY OF Santa Clara

On 6/28/07, before me, L. Tugade, the undersigned Notary Public, personally appeared Robert A. Frazer [    ] personally known to me -OR- [    ] proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) are/is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacities, and that by his/her/their signature(s) on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal

/s/ L. Tugade

SIGNATURE OF NOTARY PUBLIC

STATE OF California

COUNTY OF Santa Clara

On 6/22/07, before me, Lisa W. Lemoin, the undersigned Notary Public, personally appeared John D. Frazer [    ] personally known to me -OR- [    ] proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) are/is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacities, and that by his/her/their signature(s) on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

/s/ Lisa W. Lemoin

SIGNATURE OF NOTARY PUBLIC

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EXHIBIT “A” TO DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

This Exhibit “A” is attached to and made a part of the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated June 20, 2007, between BRYAN FAMILY PARTNERSHIP II, LTD., a California limited partnership, (“’Trustor”), FIRST AMERICAN TITLE INSURANCE COMPANY, a corporation, (“Trustee”) and Symetra Life Insurance Company, a Washington corporation, (“Beneficiary”), for the purpose of securing a note in the principal amount of $6,750,000.00.

(Legal Description of Real Property)

Land and improvements situated in the City of Campbell, County of Santa Clara, State of California, described as follows;

PARCEL ONE, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON OCTOBER 11, 1984 IN BOOK 535 OF MAPS, PAGES 24 AND 25.

EXCEPTING THEREFROM THAT THE INTEREST THEREOF AS CONVEYED TO THE CITY OF CAMPBELL, FOR STREET PURPOSES BY DEED RECORDED DECEMBER 10, 1984 IN BOOK J101, PAGE 321, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST EASTERLY CORNER OF PARCEL ONE AS SAID PARCEL IS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN BOOK 535 OF MAPS AT PAGES 24 AND 25 IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA. THENCE SOUTHWESTERLY FROM SAID CORNER SOUTH 31° 31’ 00” WEST 490.81 FEET ALONG THE SOUTHEASTERLY LINE OF SAID “PARCEL ONE” TO ITS MOST SOUTHERLY CORNER. THENCE NORTHWESTERLY FROM LAST SAID CORNER 67° 52’ 58” WEST 4.05 FEET ALONG THE SOUTHWESTERLY LINE OF SAID “PARCEL ONE” TO A POINT LYING DISTANT 4.00 FEET NORTHWESTERLY BY PERPENDICULAR MEASUREMENT FROM SOUTHEASTERLY LINE OF SAID “PARCEL ONE.” THENCE NORTHEASTERLY FROM LAST SAID POINT AND ALONG LAST SAID PARALLEL LINE NORTH 31° 31’ 00” EAST 491.47 FEET TO A POINT LYING ON THE NORTHEASTERLY LINE OF SAID “PARCEL ONE.” THENCE SOUTHEASTERLY FROM LAST SAID POINT AND ALONG LAST SAID LINE SOUTH 58° 29’ 00” EAST 4.00 FEET RETURNING-TO THE POINT OF BEGINNING.

APN: 406-21-019 and 406-21-016 and 406-21-017

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FIRST AMENDMENT TO PRUCHASE AND SALE AGREEMENT

THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (“First Amendment”) is made and entered into effective as of October 28, 2011, by and between BRYAN FAMILY PARTNERSHIP II, LTD., a California limited partnership (“Seller”), and BARRACUDA NETWORKS, INC., a Delaware corporation, or assignee (“Buyer”).

RECITALS

A, Seller and Buyer entered into that certain Purchase and Sale Agreement, dated as of July 31, 2011 (the “Agreement”), for the purchase of certain improved real property located at 3165 and 3175 Winchester Boulevard, City of Campbell, County of Santa Clara, State of California, which is commonly identified by APNs 406-21-016, 406-21-017 and 406-21-019 and more particularly described in Exhibit A to the Agreement.

B. Seller and Buyer desire to amend the Agreement as described below.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements in this First Amendment and the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as follows:

AMENDMENT

1. Capitalized Terms. Capitalized terms not otherwise defined herein, shall have the meanings given them in the Agreement.

2. Closing Date. The Closing Date shall be no later than November 15, 2011, the new outside closing date.

3. Effect of Amendment. Except as expressly modified by this First Amendment, the. Agreement shall continue in full force and effect according to its terms, and Buyer and Seller hereby. ratify and affirm all their respective rights and obligations under the Agreement. In the event of any conflict between this First Amendment and the Agreement, this First Amendment shall govern.

4. Counterparts. This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Furthermore, this First Amendment may be executed and delivered by the exchange of electronic facsimile or PDF (or similar) copies or counterparts of the signed documents, which facsimile or PDF (or similar) copies or counterparts shall be binding on the parties.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, Seller and Buyer have executed this First Amendment effective as of the date set forth above.

SELLER:

BRYAN FAMILY PARTNERSHIP II, LTD.

a California limited partnership

/s/ Ross E. Bryan
By:	Ross E. Bryan
Its:	Managing Partner

BUYER:

BARRACUDA NETWORKS, INC.

a Delaware corporation

/s/ David Faugno
By:	David Faugno
Its:

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THIRD AMENDMENT TO PRUCHASE AND SALE AGREEMENT

THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (“Third Amendment”) is made and entered into effective as of November 30, 2011, by and between BRYAN FAMILY PARTNERSHIP II, LTD., a California limited partnership (“Seller”), BARRACUDA NETWORKS, INC., a Delaware corporation, or assignee (“Buyer”).

RECITALS

A. Seller and Buyer entered into that certain Purchase and Sale Agreement, dated as of July 31, 2011, as amended by that certain First Amendment to Purchase and Sale Agreement dated October 28, 2011 and as amended by that certain Second Amendment to Purchase and Sale Agreement November 15, 2011 (collectively, the “Agreement”), for the purchase of certain improved real property located at 3165 and 3175 Winchester Boulevard, City of Campbell, County of Santa Clara, State California, which is commonly identified by APNs 406-21-016, 406-21-017 and 406-21-019 and more particularly described in Exhibit A to the Agreement.

B. Seller and Buyer desire to amend the Agreement as described below.

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements in Third Amendment and the Agreement, and for other good and valuable consideration, the receipt sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as follows:

AMENDMENT

1. Capitalized Terms. Capitalized terms not otherwise defined herein shall have the meanings given them in the Agreement.

2. Closing Date. The Closing Date shall be no later than December 21, 2011, the new outside closing date.

3. Effect of Amendment. Except as expressly modified by this Third Amendment, the Agreement shall continue in full force and effect according to its terms, and Buyer and Seller hereby ratify and affirm all their respective rights and obligations under the Agreement. In the event of any conflict between this Third Amendment and the Agreement, this Third Amendment shall govern.

4. Counterparts. This Third Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument. Furthermore, this Third Amendment may be executed and delivered by the exchange of electronic facsimile or PDF (or similar) copies or counterparts of the signed documents, which facsimile or PDF (or similar) copies or counterparts shall be binding on the Parties.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, Seller and Buyer have executed this Third Amendment effective as of the date set forth above.

SELLER:

BRYAN FAMILY PARTNERSHIP II, LTD.

a California limited partnership

By:

Its:

BUYER:

BARRACUDA NETWORKS, INC.

a Delaware corporation

By:

Its:

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EX-10.13

Exhibit 10.13

EXECUTION VERSION

$40,000,000 SENIOR SECURED REVOLVING CREDIT FACILITY

CREDIT AGREEMENT

AMONG

BARRACUDA NETWORKS, INC.,

AS THE BORROWER,

THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO,

AND

SILICON VALLEY BANK,

AS ADMINISTRATIVE AGENT, ISSUING LENDER, SWINGLINE LENDER,

SOLE LEAD ARRANGER AND SOLE BOOKRUNNER

DATED AS OF OCTOBER 3, 2012

TABLE OF CONTENTS

		Page
SECTION 1 DEFINITIONS			1
1.1	Defined Terms		1
1.2	Other Definitional Provisions		31
SECTION 2 AMOUNT AND TERMS OF REVOLVING COMMITMENTS			32
2.1	Revolving Commitments		32
2.2	Procedure for Revolving Loan Borrowing		33
2.3	Swingline Commitment		34
2.4	Procedure for Swingline Borrowing; Refunding of Swingline Loans		34
2.5	Commitment Fees, etc		36
2.6	Termination or Reduction of Commitments		36
2.7	Optional Prepayments		37
2.8	Conversion and Continuation Options		37
2.9	Limitations on Eurodollar Tranches		38
2.10	Interest Rates and Payment Dates		38
2.11	Computation of Interest and Fees		39
2.12	Inability to Determine Interest Rate		39
2.13	Pro Rata Treatment and Payments		40
2.14	Illegality; Requirements of Law		43
2.15	Taxes		45
2.16	Indemnity		49
2.17	Change of Lending Office		50
2.18	Substitution of Lenders		50
2.19	Defaulting Lenders		52
SECTION 3 LETTERS OF CREDIT			55
3.1	L/C Commitment		55
3.2	Procedure for Issuance of Letters of Credit		56
3.3	Fees and Other Charges		57
3.4	L/C Participations		57
3.5	Reimbursement		58
3.6	Obligations Absolute		59
3.7	Letter of Credit Payments		59
3.8	Applications		60
3.9	Interim Interest		60
3.10	Cash Collateral		60
3.11	Additional Issuing Lenders		61
3.12	Resignation of the Issuing Lender		61
3.13	Applicability of ISP		62

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TABLE OF CONTENTS

(continued)

		Page
SECTION 4 REPRESENTATIONS AND WARRANTIES			62
4.1	Financial Condition		62
4.2	No Change		63
4.3	Existence; Compliance with Law		63
4.4	Power, Authorization; Enforceable Obligations		63
4.5	No Legal Bar		63
4.6	Litigation		64
4.7	No Default		64
4.8	Ownership of Property; Liens; Investments		64
4.9	Intellectual Property		64
4.10	Taxes		65
4.11	Federal Regulations		65
4.12	Labor Matters		65
4.13	ERISA		65
4.14	Investment Company Act; Other Regulations		66
4.15	Subsidiaries		66
4.16	Use of Proceeds		66
4.17	Environmental Matters		67
4.18	Accuracy of Information, etc		68
4.19	Security Documents		68
4.20	Solvency; Fraudulent Transfer		69
4.21	Regulation H		69
4.22	Designated Senior Indebtedness		69
4.23	Insurance		69
4.24	Patriot Act		70
4.25	Indebtedness		70
4.26	OFAC		70
SECTION 5 CONDITIONS PRECEDENT			70
5.1	Conditions to Initial Extension of Credit		70
5.2	Conditions to Each Extension of Credit		74
SECTION 6 AFFIRMATIVE COVENANTS			75
6.1	Financial Statements		75
6.2	Certificates; Other Information		76
6.3	Payment of Obligations; Taxes		77
6.4	Maintenance of Existence; Compliance		77
6.5	Maintenance of Property; Insurance		77
6.6	Inspection of Property; Books and Records; Discussions		77
6.7	Notices		78
6.8	Environmental Laws		79

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TABLE OF CONTENTS

(continued)

		Page
6.9	Operating Accounts		79
6.10	Audits		79
6.11	Additional Collateral, etc		79
6.12	Use of Proceeds		82
6.13	Designated Senior Indebtedness		82
6.14	Further Assurances		82
6.15	Post-Closing Covenant		82
SECTION 7 NEGATIVE COVENANTS			83
7.1	Financial Condition Covenants		83
7.2	Indebtedness		84
7.3	Liens		86
7.4	Fundamental Changes		89
7.5	Disposition of Property		89
7.6	Restricted Payments		90
7.7	Investments		92
7.8	Modifications of Certain Preferred Stock and Debt Instruments		93
7.9	Transactions with Affiliates		94
7.10	Sale Leaseback Transactions		94
7.11	Swap Agreements		94
7.12	Changes in Fiscal Periods		95
7.13	Negative Pledge Clauses		95
7.14	Clauses Restricting Subsidiary Distributions		95
7.15	Lines of Business		95
7.16	Amendments to Organizational Agreements		95
7.17	Georgia Subsidiary		96
SECTION 8 EVENTS OF DEFAULT			96
8.1	Events of Default		96
8.2	Remedies Upon Event of Default		99
8.3	Application of Funds		100
SECTION 9 THE ADMINISTRATIVE AGENT			101
9.1	Appointment and Authority		101
9.2	Delegation of Duties		102
9.3	Exculpatory Provisions		102
9.4	Reliance by the Administrative Agent		103
9.5	Notice of Default		104
9.6	Non-Reliance on the Administrative Agent and Other Lenders		104
9.7	Indemnification		105
9.8	The Administrative Agent in Its Individual Capacity		105
9.9	Successor Administrative Agent		106

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TABLE OF CONTENTS

(continued)

		Page
9.10	Collateral and Guaranty Matters		107
9.11	Proofs of Claim		108
SECTION 10 MISCELLANEOUS			108
10.1	Amendments and Waivers		108
10.2	Notices		110
10.3	No Waiver; Cumulative Remedies		112
10.4	Survival of Representations and Warranties		112
10.5	Payment of Expenses		112
10.6	Successors and Assigns; Participations and Assignments		114
10.7	Adjustments; Set-off		118
10.8	Interest Rate Limitation		120
10.9	Counterparts		120
10.10	Severability		120
10.11	Integration		121
10.12	GOVERNING LAW		121
10.13	Submission To Jurisdiction; Waivers		121
10.14	Acknowledgements		122
10.15	Releases of Guarantees and Liens		123
10.16	Confidentiality		123
10.17	Patriot Act		124

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Schedules
Schedule 1.1A:	Commitments
Schedule 4.15:	Subsidiaries/Capital Stock
Schedule 4.19(a):	Financing Statements and Other Filings
Schedule 7.2(e):	Existing Indebtedness
Schedule 7.3(f):	Existing Liens
Schedule 7.7(h):	Existing Investments
Exhibits
Exhibit A:	Form of Guarantee and Collateral Agreement
Exhibit B:	Form of Compliance Certificate
Exhibit C:	Form of Secretary’s Certificate
Exhibit D:	Form of Solvency Certificate
Exhibit E:	Form of Assignment and Assumption
Exhibits F-1 through F-4:	Forms of U.S. Tax Compliance Certificates
Exhibit G-1:	Form of Revolving Loan Note
Exhibit G-2:	Form of Swingline Loan Note
Exhibit H:	Form of Notice of Borrowing
Exhibit I:	Form of Notice of Conversion/Continuation

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CREDIT AGREEMENT (this “Agreement”), dated as of October 3, 2012, among BARRACUDA NETWORKS, INC., a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”) and SILICON VALLEY BANK (“SVB”), as administrative agent, issuing lender and swingline lender.

WITNESSETH:

WHEREAS,	the Borrower desires to obtain working capital financing and letter of credit facilities;
WHEREAS,	the Lenders have agreed to extend a revolving loan facility to the Borrower upon the terms and conditions specified in this Agreement, in an aggregate amount not to exceed $40,000,000, including a letter of credit sub-facility in the aggregate availability amount of up to $10,000,000;
WHEREAS,	the Borrower has agreed to secure the Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority Lien on substantially all of its assets; and
WHEREAS,	each of the Guarantors has agreed to guarantee the Obligations of the Borrower and to secure its Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority Lien on substantially all of its assets.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1

DEFINITIONS

1.1 Defined Terms. As used in this Agreement (including the recitals hereof), the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate plus 0.50%, and (c) the Eurodollar Rate for a one-month interest period plus 1.00%. Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate.

“ABR Loans”: Loans, the rate of interest applicable to which is based upon the ABR.

“Accrued DP Interest”: the interest accruing and payable on the portion of the DP Amounts that have not been paid.

“Adjusted Quick Ratio”: the ratio of (i) Qualified Cash plus net billed accounts receivable divided by (ii) Consolidated Current Liabilities plus, without duplication, the amount of all outstanding Revolving Extensions of Credit hereunder (including any Revolving Extensions of Credit requested by the Borrower at the time of testing such Adjusted Quick Ratio under Section 7.1(a) hereof), less the sum of DP Amounts and the current portion of deferred revenues, in each case in clauses (i) and (ii), of the Borrower and its Subsidiaries on a consolidated basis.

“Administrative Agent”: SVB, as the administrative agent under this Agreement and the other Loan Documents, together with any of its successors and permitted assigns in such capacity.

“Affected Lender”: as defined in Section 2.18.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of determining the Affiliates of any Loan Party, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. Notwithstanding anything herein to the contrary, in no event shall the Administrative Agent or any Lender be considered an “Affiliate” of any Loan Party.

“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to the sum of (a) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding, and (b) without duplication of clause (a), the L/C Commitment of such Lender then in effect (as a sublimit of the Revolving Commitment).

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

“Agreement”: as defined in the preamble hereto.

“Applicable Margin”: for each Eurodollar Loan, 1.50% per annum.

“Application”: an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit.

“Approved Fund”: as defined in Section 10.6(b).

“Assignment and Assumption”: an Assignment and Assumption, substantially in the form of Exhibit E.

“Available Revolving Commitment”: at any time, an amount equal to (a) the aggregate Revolving Commitments of all Lenders in effect at such time, minus (b) the aggregate undrawn amount of all

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outstanding Letters of Credit at such time, minus (c) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, minus (d) the aggregate principal balance of any Revolving Loans outstanding at such time.

“Bankruptcy Code”: Title 11 of the United States Code entitled “Bankruptcy.”

“Bank Services”: are any products and/or credit services facilities provided to any Group Member by the Administrative Agent or a Person that, at the time it enters into agreements for Bank Services with any Group Member, is a Lender or any Affiliate of a Lender, including, without limitation, all letters of credit, guidance facilities, bank services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services) and foreign exchange services as any such products or services may be identified in the various agreements related thereto (each, a “Bank Services Agreement”).

“Benefitted Lender”: as defined in Section 10.7(a).

“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

“Borrower”: as defined in the preamble hereto.

“Borrowing Date”: any Business Day specified by the Borrower in a Notice of Borrowing as a date on which the Borrower requests the Lenders to make Loans hereunder.

“Business”: as defined in Section 4.17(b).

“Business Day”: a day other than a Saturday, Sunday or other day on which commercial banks in the States of California, Illinois or New York are authorized or required by law to close; provided that with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

“Capital Lease Obligations”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Capped Amounts” has the meaning specified in the definition of “Consolidated EBITDA”.

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“Cash Collateralize”: to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent or the Issuing Lender (as applicable) and the Lenders, as collateral for L/C Exposure or obligations of Lenders to fund participations in respect thereof, cash or Deposit Account balances pursuant to documentation in form and substance reasonably satisfactory to (i) the Administrative Agent and, (ii) as applicable, the Issuing Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of six months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $250,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within six months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition; (h) money market funds offered by SVB or its Affiliates or other money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and (i) instruments comparable in credit quality and tenor to those referred to in clauses (a) through (h) above and customarily used by corporations for cash management purposes in a jurisdiction outside of the United States, utilized by Foreign Subsidiaries to the extent reasonably required in connection with any business conducted by such Subsidiary in such jurisdiction.

“Certificated Securities”: as defined in Section 4.19(a).

“Change of Control”: whether accomplished through a single transaction or a series of related or unrelated transactions and whether accomplished directly or indirectly, (i) with respect to the Permitted Investors, collectively, (x) 40% or more of the direct or indirect voting or economic interests in the Borrower are held by any person or group of affiliated Persons or Persons acting in

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concert other than the Permitted Investors, (y) any Person or group of Persons other than the Permitted Investors has the power, directly or indirectly, to elect or appoint a majority of the board of directors of the Borrower, or otherwise direct or cause the direction of management or policy of the Borrower, whether through ownership of voting securities, by contract, management agreement or otherwise, or (z) the Permitted Investors shall cease to have the power to elect or appoint a majority of the board of directors of the Borrower or otherwise directly or indirectly, whether through ownership of voting securities, by contract, management agreement or otherwise, to direct or cause the direction of management or policy of the Borrower; or (ii) any Person or group of affiliated Persons or Persons acting in concert other than the Permitted Investors, owns the same amount of or more direct or indirect voting or economic interests in the Borrower as the Permitted Investors.

“Closing Date”: the date on which all of the conditions precedent set forth in Section 5.1 shall have been satisfied, which date is October 3, 2012.

“Closing Date Dividend”: the dividend to be paid by the Borrower to the Sponsor and other equity holders of the Borrower on or about the Closing Date in the amount of $130,000,000 pursuant to the Recapitalization Agreement.

“Closing Date Share Repurchase”: the repurchase by the Borrower pursuant to the Recapitalization Agreement of outstanding Capital Stock of the Borrower from certain equity holders of the Borrower on or about the Closing Date for an aggregate purchase price equal to $127,752,272.86, which repurchase shall be made from proceeds received by the Borrower from the Permitted Investors to purchase certain Series B Preferred Stock under the Recapitalization Agreement.

“Code”: the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as amended from time to time.

“Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

“Collateral Information Certificate”: the Collateral Information Certificate to be executed and delivered by each Loan Party, in form and substance reasonably satisfactory to the Administrative Agent.

“Commitment Fee Rate”: 0.375% per annum.

“Commodity Account”: is any “commodity account” as defined in the UCC with such additions to such term as may hereafter be made.

“Commonly Controlled Entity”: a Person, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

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“Compliance Certificate”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B.

“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated Adjusted EBITDA” means, for any period, the sum of (a) Consolidated EBITDA as of the end of such period, plus or minus (b) change in deferred revenue for such period, plus or minus (c) change in deferred cost of goods sold for such period, plus or minus (d) change in deferred sales commission for such period. “Consolidated Adjusted EBITDA” for the Fiscal Quarters ended November 30, 2011, February 29, 2012 and May 31, 2012 shall be deemed to be $13,839,406, $12,854,758 and $15,779,177, respectively.

“Consolidated Current Liabilities”: at any date, all obligations and liabilities of the Borrower to the Lenders, plus, without duplication, the aggregate amount of the Borrower’s total liabilities that mature within one (1) year of such date of determination.

“Consolidated EBITDA”: for any period,

(a) Consolidated Net Income, plus

(b) Consolidated Interest Expense, plus

(c) provisions for taxes based on income, profits, or capital, including federal, foreign, state, local, franchise, excise, and similar taxes paid or accrued, plus

(d) total depreciation expense, plus

(e) total amortization expense, plus

(f) other non-cash items reducing Consolidated Net Income including, without limitation, goodwill impairment charges and accrued vacation expense, stock compensation or other stock related charges (excluding amortization of a prepaid cash item that was paid in a prior period), plus

(g) extraordinary, non-recurring or restructuring expenses or charges including severance, plus

(h) transition, integration, restructuring and similar fees, charges and expenses in connection with or arising out of, the Transactions incurred or to be incurred prior to the end of the Borrower’s second full fiscal quarter after the Closing Date, plus

(i) management fees paid pursuant to the Management Agreement in an amount not to exceed $2,000,000 in any four consecutive fiscal quarter period, plus

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(j) transaction or similar fees (provided however, transaction fees may only be added back to Consolidated EBITDA to the extent documented and disclosing the sources used to pay such transaction fees) and expenses permitted to be paid or accrued under the Loan Documents in connection with acquisitions, investments, debt offerings and equity offerings permitted hereunder and under the other Loan Documents, plus

(k) fees and expenses (including, without limitation, audit fees), as well as special bonuses payable to the Borrower’s management personnel, in each case related to, or incurred in connection with, the Transactions that are paid by the Borrower and its Subsidiaries (i) prior to or on the Closing Date, as described in more detail on the summary of sources and uses provided to the Administrative Agent on or about the Closing Date, and (ii) no later than 120 days after the Closing Date, and reasonably documented (consistent with the Sponsor’s or the Borrower’s internal policies), plus

(l) any expense deducted in calculating Consolidated Net Income for such period and reimbursed during such period or an earlier period (and not added back to Consolidated EBITDA in any earlier period) by third parties (other than the Borrower and its Subsidiaries), plus

(m) expenses and payments that are covered by indemnification or purchase price adjustment provisions in any agreement entered into by the Borrower or any Subsidiary in connection with the Transaction or any proposed or actual Permitted Acquisition that are actually reimbursed during such period, plus

(n) any foreign currency translation losses (or minus any foreign currency translation gains (including gains or losses related to currency re-measurement of Indebtedness)), plus

(o) one-time fees, costs and expenses associated with the search, hiring and replacement (including severance expenses) of senior executives of the Borrower and its Subsidiaries, plus

(p) fees and expenses associated with the Phion Acquisition, plus

(q) the reasonable and customary fees and expenses of the Borrower and its Subsidiaries incurred in connection with any amendment or modification to this Agreement and the other Loan Documents or any refinancing of the Revolving Facility, plus

(r) costs and expenses (including, without limitation, any fines or other penalties) in connection with OFAC-related investigations, proceedings and remedial measures in an aggregate amount not to exceed $10,000,000, plus

(s) proceeds actually received in cash from business interruption insurance to the extent not already included in Consolidated Net Income, minus

(t) the sum, without duplication of the amounts for such period of: (i) capitalized software development costs, plus (ii) non-cash items increasing Consolidated Net Income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period), plus (iii) interest income,

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in each case with respect to clauses (b) through (s) above to the extent that such items were deducted in arriving at Consolidated Net Income for such period, all of the foregoing as determined on a consolidated basis for the Borrower and its Subsidiaries in conformity with GAAP; provided, that amounts added back pursuant to clauses (g), (h), (j) (but excluding amounts paid or incurred with respect to Permitted Acquisitions), (o) (but excluding all amounts paid or incurred with respect to the replacement of the Borrower’s chief executive officer incurred in connection with the Transaction), (p), and (q) (but excluding amendment fees and all amounts incurred in connection with any refinancing (in whole or in part) of the Revolving Facility in which then then-current Lenders participate) (the “Capped Amounts”) shall not exceed in the aggregate for any period an amount equal to 10.0% of Consolidated Adjusted EBITDA for such period as calculated utilizing a calculation of “Consolidated EBITDA” determined before giving effect to any adjustments pursuant to any of such clauses; provided further that the Capped Amounts must be factually supportable and certified in writing in reasonably detail by the chief financial officer of the Borrower.

“Consolidated Interest Expense”: for any period, total interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including the commitment fee set forth in Section 2.5(a), all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP).

“Consolidated Net Income”: for any period, the net income (or loss) of the Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Subsidiary of the Borrower) in which any other Person (other than the Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries by such Person during such period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries, (iii) any after-tax gains or losses attributable to asset sales (outside the ordinary course of business) or returned surplus assets of any pension plan, (iv) any gain or loss resulting from changes in the Borrower’s balance sheet in respect of any “earnout” or other performance-based or contingent deferred acquisition compensation, and (v) (to the extent not included in clauses (i) through (iii) above) any extraordinary gains or non-cash extraordinary losses or charges, and also excluding the cumulative effect of a change in accounting principles during such period, to the extent included in such net income (loss). There also shall be excluded from Consolidated Net Income for any period (without duplication of the foregoing) the purchase accounting effects of adjustments to property and equipment, other intangible assets, deferred revenue, lease contracts and debt line items required or permitted by

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GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and its Subsidiaries), as a result of any acquisition consummated prior to the Closing Date, any Permitted Acquisitions, or the amortization or write-off of any amounts thereof.

“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control Agreement”: (a) with respect to any Deposit Account, Securities Account or Commodities Account maintained in the United States, any control agreement entered into among the depository institution at which a Loan Party maintains a Deposit Account or the securities intermediary or commodity intermediary at which a Loan Party maintains a Securities Account or a Commodity Account, the applicable Loan Party, and the Administrative Agent pursuant to which the Administrative Agent obtains control (within the meaning of the UCC) over such Deposit Account, Securities Account, or Commodity Account and (b) with respect to any Deposit Account, Securities Account, or Commodity Account maintained in any jurisdiction outside of the United States, one or more agreements customary in such foreign jurisdiction which pledges and, to the extent appropriate for such foreign jurisdiction, perfects, a first priority Lien (subject to Liens permitted under Section 7.3 to the extent not waived by the account bank, depository institution, securities intermediary, or commodity intermediary upon request of the relevant Loan Party and/or the Administrative Agent in accordance with the relevant Security Document customary in such foreign jurisdiction) in such account and the contents of such account in favor of the Administrative Agent, duly executed and delivered by such Loan Party to the account bank, depository institution, securities intermediary, or commodity intermediary, as the case may be, with which such account is maintained, in each case, and, to the extent customary in such jurisdiction, duly executed and delivered by the relevant account bank, depository institution, securities intermediary or commodity intermediary in accordance with Section 5.8 of the Guarantee and Collateral Agreement.

“Control Investment Affiliate”: as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

“Credit Extension”: is any Revolving Loan, Swingline Loan, Letter of Credit, amount utilized for Bank Services, or any other extension of credit by any Lender for the Borrower’s benefit.

“Debtor Relief Laws”: the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

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“Default”: any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Defaulting Lender”: subject to Section 2.19(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after reasonable written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.19(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Lender, the Swingline Lender and each Lender.

“Default Rate”: as defined in Section 2.10(c).

“Deposit Account”: as defined in the UCC and, in any event, including, without limitation, any demand, time, savings, passbook or like account.

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“Disposition”: with respect to any property (including, without limitation, Capital Stock of a Group Member), any sale, lease, Sale Leaseback Transaction, assignment, conveyance, transfer or other disposition thereof and any issuance of Capital Stock of a Group Member. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Disqualified Stock”: any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, or (b) is convertible into or exchangeable for (i) debt securities or (ii) any Capital Stock referred to in clause (a) above; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem such Capital Stock upon the occurrence of a change in control (as such term is defined by the terms of such Capital Stock (or by the terms of any security into which such Capital Stock is convertible or for which it is exchangeable)) shall not constitute Disqualified Stock if such Capital Stock provides that the issuer thereof will not redeem any such Capital Stock pursuant to such provisions prior to the date that is 180 days after repayment in full of the Obligations (other than contingent indemnification obligations) and the termination of the Commitments (or any refinancing thereof).

“Dollars” and “$”: dollars in lawful currency of the United States.

“Domestic Foreign Holding Company”: any Domestic Subsidiary for which substantially all of its assets consist of Capital Stock of Foreign Subsidiaries.

“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

“DP Amounts”: any and all deferred payments, holdbacks or similar deferred consideration in connection with a Permitted Acquisition, to the extent the total amount of such deferred payments, holdbacks and other similar deferred consideration for a particular Permitted Acquisition, together with any Earn-Out Obligations in connection with such Permitted Acquisition, does not exceed 40% of the aggregate consideration paid or to be paid in connection with such Permitted Acquisition, calculated in accordance with GAAP as the estimated amount thereof on the closing date for the applicable Permitted Acquisition, which determination shall be made on the date the definitive documentation for the applicable Permitted Acquisition is entered into. For the avoidance of doubt, Permitted Seller Debt that does not require any cash interest or principal payments while any Obligations remain outstanding shall not be included in the calculation of the DP Amounts.

“Earn-Out Obligations”: all obligations of any Loan Party consisting of earn-outs related to the enhanced performance of an entity acquired in connection with a Permitted Acquisition, calculated in accordance with GAAP as the estimated amount thereof on the closing date for any Permitted Acquisition, which determination shall be made on the date the definitive documentation for the applicable Permitted Acquisition is entered into.

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“Eligible Assignee”: (i) any commercial bank, insurance company, investment or mutual fund or other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which extends credit or buys loans as one of its businesses; (ii) any Lender or Affiliate of a Lender; or (iii) any Approved Fund; provided that neither the Borrower nor any Affiliate of the Borrower shall be an Eligible Assignee.

“Environmental Laws”: any and all foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health (due to exposure to Materials of Environmental Concern) or the environment, as now or may at any time hereafter be in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974 and the regulations promulgated thereunder, as amended from time to time.

“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Base Rate”: with respect to each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined by reference to the British Bankers’ Association Interest Settlement Rates for deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the beginning of such Interest Period (as set forth by Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates). In the event that the rate per annum referenced in the preceding sentence is not available, such rate shall be determined by reference to the rate per annum equal to the offered quotation rate to first class banks in the London interbank market by SVB for deposits (for delivery on the first day of the relevant Interest Period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loan of the Administrative Agent, in its capacity as a Lender, for which the Eurodollar Base Rate is then being determined with maturities comparable to such period as of approximately 11:00 A.M. (London, England time) two (2) Business Days prior to the beginning of such Interest Period.

“Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

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“Eurodollar Rate”: with respect to each Interest Period pertaining to a Eurodollar Loan, a rate per annum equal to the rate determined for such Interest Period in accordance with the following formula:

Eurodollar Rate =	Eurodollar Base Rate
	1.00 - Eurocurrency Reserve Requirements

The Eurodollar Rate shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Requirements.

“Eurodollar Tranche”: the collective reference to Eurodollar Loans, the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“Event of Default”: any of the events specified in Section 8.1; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Exchange Act”: the Securities Exchange Act of 1934, as amended from time to time and any successor statute.

“Excluded Foreign Subsidiary”: (a) any Domestic Foreign Holding Company, and (b) any other Foreign Subsidiary, in each case of clauses (a) and (b), in respect of which either (i) the pledge of all of the Capital Stock of such Subsidiary as Collateral or (ii) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in material adverse tax consequences to the Borrower.

“Excluded Taxes”: any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, doing business in, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.18) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.15, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.15(f) and (d) any U.S. federal withholding Taxes imposed under FATCA. For purposes of this definition, the term “Recipient” includes a Transferee.

“Facility”: each of (a) the L/C Facility (which is a subfacility of the Revolving Facility), (b) the Revolving Facility, and (c) the Swingline Facility.

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“FASB ASC”: the Accounting Standards Codification of the Financial Accounting Standards Board.

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

“Foreign Lender”: a Lender that is not a U.S. Person.

“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

“Fronting Exposure”: at any time there is a Defaulting Lender, such Defaulting Lender’s L/C Percentage of the outstanding L/C Exposure other than L/C Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

“Funding Office”: the office of the Administrative Agent specified in Section 10.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

“GAAP”: generally accepted accounting principles in the United States as in effect from time to time, except that for purposes of Section 7.1, GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 4.1(b). Notwithstanding the foregoing, (i) for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825-10 on financial liabilities (or any financial accounting standard having a similar effect) shall be disregarded, and (ii) no operating lease shall constitute a Capitalized Lease Obligation or Indebtedness by virtue of a change in GAAP occurring after the Closing Date. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the Loan Parties’ financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Loan Parties, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to

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be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.

“Governmental Approval”: any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

“Group Members”: each of the Borrower and its Subsidiaries.

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to be executed and delivered by the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit A.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees, any Indebtedness, leases, dividends or other financial obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business or any product warranties, indemnity obligations, or other similar contingent obligations, in each case incurred in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

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“Guarantors”: each Subsidiary Guarantor.

“Indebtedness”: of any Person at any date, without duplication,

(a) all indebtedness of such Person for borrowed money,

(b) all obligations of such Person for the deferred purchase price of property or services (other than (i) current trade payables incurred in the ordinary course of such Person’s business and (ii) DP Amounts, Earn-Out Obligations, purchase price adjustments and indemnity obligations, in each case with respect to clause (ii) until such time as the amount of the asserted payment is reasonably determined and not contested in good faith),

(c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments,

(d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property),

(e) all Capital Lease Obligations and all Synthetic Lease Obligations of such Person,

(f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements,

(g) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (f) above,

(h) all obligations of the kind referred to in clauses (a) through (g) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and

(i) all obligations of such Person in respect of Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.

The amount of any Indebtedness that is only recourse to specific assets of a Person (and not to the Person generally) shall be deemed to be equal to the lesser of (x) the principal amount of such

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Indebtedness and (y) the fair market value of the assets of such Person to which such Indebtedness has recourse. The amount of any net obligation under any Swap Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. Notwithstanding the foregoing, “Indebtedness” shall not include (A) any Preferred Stock of any Group Member so long as such Preferred Stock does not provide for the payment of any mandatory dividend or for redemption at the option of the holder (whether or not conditioned on the occurrence of an event) and such Preferred Stock cannot be mandatorily redeemed during the term of this Agreement, or (B) for purposes of Section 7.1, Earn-Out Obligations that cannot yet be determined and Permitted Seller Debt for which, by its own terms, no payments are permitted to be paid on account thereof.

“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvency Proceeding”: (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, administration, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of any Person’s creditors generally or any substantial portion of such Person’s creditors, in each case undertaken under Federal or state law or other foreign law, including any Debtor Relief Law.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including business names, copyrights, copyright (including rights in computer software), licenses, patents, patent licenses, databases rights, domain names, trademarks, trademark licenses, rights in confidential information, rights in designs, service marks, technology, know-how and processes.

“Intellectual Property Security Agreement”: each intellectual property security agreement and supplement thereto executed and delivered by a Loan Party, in each case as amended, restated, supplemented or otherwise modified from time to time.

“Intercompany Subordination Agreement”: an intercompany subordination agreement in form and substance reasonably satisfactory to the Administrative Agent executed and delivered by the Borrower, each other Group Member, and the Administrative Agent, and each supplement thereto.

“Interest Payment Date”: (a) as to any ABR Loan (including any Swingline Loan), the first Business Day of each month to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last

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Business Day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months (or, if such date is not a Business Day, the Business Day next succeeding such date) after the first day of such Interest Period and the last Business Day of such Interest Period, and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any Swingline Loan), the date of any repayment or prepayment made in respect thereof.

“Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent in a Notice of Conversion/Continuation not later than 10:00 A.M., Pacific time, on the date that is three (3) Business Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(a) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(b) the Borrower may not select an Interest Period that would extend beyond the Revolving Termination Date;

(c) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and

(d) the Borrower shall select Interest Periods so as not to require a payment or prepayment of any Eurodollar Loan during an Interest Period for such Loan.

“Interest Rate Agreement”: any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (i) for the purpose of hedging the interest rate exposure associated with Borrower’s and its Subsidiaries’ operations, (ii) the terms of which are approved by the Administrative Agent in its Permitted Discretion and (iii) not for speculative purposes.

“Inventory”: all “inventory,” as such term is defined in the Code, now owned or hereafter acquired by any Loan Party, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of any Loan Party for sale or lease or are furnished or are to be furnished under a contract of service, or that constitutes raw materials, work in process, finished goods, returned goods, or materials or supplies of any kind used or consumed or to be used or consumed in such Loan Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

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“Investments”: as defined in Section 7.7.

“IRS”: the Internal Revenue Service, or any successor thereto.

“ISP”: with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

“Issuing Lender”: as the context may require, (a) SVB or any affiliate thereof, in its capacity as issuer of any Letter of Credit, and (b) any other Lender that may become an Issuing Lender pursuant to Section 3.11 or 3.12, with respect to Letters of Credit issued by such Lender. The Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Lender or other financial institutions reasonably acceptable to the Borrower, in which case the term “Issuing Lender” shall include any such Affiliate or other financial institution with respect to Letters of Credit issued by such Affiliate or other financial institution.

“Issuing Lender Fees”: as defined in Section 3.3(a).

“L/C Advance”: each L/C Lender’s funding of its participation in any L/C Disbursement in accordance with its L/C Percentage of the L/C Commitment.

“L/C Commitment”: as to any L/C Lender, the obligation of such L/C Lender, if any, to purchase an undivided interest in the Issuing Lenders’ obligations and rights under and in respect of each Letter of Credit (including to make payments with respect to draws made under any Letter of Credit pursuant to Section 3.5(b)) in an aggregate principal amount not to exceed the amount set forth under the heading “L/C Commitment” opposite such L/C Lender’s name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such L/C Lender becomes a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The L/C Commitment is a sublimit of the Revolving Commitment and the aggregate L/C Commitment shall not exceed the Available Revolving Commitment at any time.

“L/C Disbursements”: a payment or disbursement made by the Issuing Lender pursuant to a Letter of Credit.

“L/C Exposure”: at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time. The L/C Exposure of any L/C Lender at any time shall equal its L/C Percentage of the aggregate L/C Exposure at such time.

“L/C Facility”: the L/C Commitments and the extensions of credit made thereunder.

“L/C Fee Payment Date”: as defined in Section 3.3(a).

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“L/C Fee Rate”: the rate equal to the Applicable Margin for Revolving Loans that are Eurodollar Loans.

“L/C Lender”: a Lender with an L/C Commitment.

“L/C Percentage”: as to any L/C Lender at any time, the percentage of the Total L/C Commitments represented by such L/C Lender’s L/C Commitment, as such percentage may be adjusted as provided in Section 2.19.

“L/C-Related Documents”: collectively, each Letter of Credit, all applications for any Letter of Credit (and applications for the amendment of any Letter of Credit) submitted by the Borrower to the Issuing Lender and any other document, agreement and instrument relating to any Letter of Credit, including any of the Issuing Lender’s standard form documents for letter of credit issuances.

“Lenders”: as defined in the preamble hereto; provided that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include any Issuing Lender.

“Letter of Credit”: as defined in Section 3.1(a).

“Letter of Credit Availability Period”: the period from and including the Closing Date to but excluding the Letter of Credit Maturity Date.

“Letter of Credit Maturity Date”: the date occurring 15 days prior to the Revolving Termination Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“Lien”: any mortgage, deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Liquidity”: at any date of determination, the sum of (a) the Borrower’s and its Wholly Owned Subsidiaries’ unrestricted cash and Cash Equivalents plus (b) the Available Revolving Commitment.

“Loan”: any loan made or maintained by any Lender pursuant to this Agreement.

“Loan Documents”: this Agreement, the Security Documents, each L/C-Related Document, the Bank Services Agreements, the Intercompany Subordination Agreement (if applicable), the Solvency Certificate, the Notes, if any, the Collateral Information Certificates and any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 3.10, and any other agreement entered into, now or in the future, by any Loan Party in connection with the foregoing, and any amendment, waiver, supplement or other modification to any of the foregoing.

“Loan Parties”: each Group Member that is a party to a Loan Document.

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“Management Agreement”: any management agreement entered into between the Borrower and the Sponsors, in form and substance acceptable to the Administrative Agent, without giving effect to any amendment, supplement, or other modification thereto that is adverse to the Administrative Agent or any Lenders (it being understood that any amendment, modification, or change that (x) increases, or has the effect of increasing, any fee, expense, or other payment contained in the Management Agreement, as in effect on the Closing Date, or (y) that adds, or has the effect of adding, any fee, expense, or payment that is not contained in the Management Agreement as in effect on the Closing Date, in the case of each of (x) or (y), shall be deemed to be adverse to the Administrative Agent and the Lenders).

“Management Fees”: as defined in Section 7.9(a).

“Material Adverse Effect”: (a) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent), or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of the Borrower or any Guarantor to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower or any Guarantor of any Loan Document to which it is a party.

“Materials of Environmental Concern”: any substance, material or waste that is defined, regulated, governed or otherwise characterized under any Environmental Law as hazardous or toxic or as a pollutant or contaminant (or by words of similar meaning and regulatory effect), any petroleum or petroleum products, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, toxic molds or fungus, and radioactivity at levels known to be hazardous to human health and safety.

“Minority Lender”: as defined in Section 10.1(b).

“Moody’s”: Moody’s Investors Service, Inc.

“Mortgaged Properties”: the fee-owned real properties as to which, pursuant to Section 6.11(b) or otherwise, the Administrative Agent, for the benefit of the Secured Parties, shall be granted a Lien pursuant to the Mortgages.

“Mortgages”: each of the mortgages, deeds of trust, deeds to secure debt or such equivalent documents hereafter entered into and executed and delivered by one or more of the Loan Parties to the Administrative Agent, in each case, as such documents may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time and in form and substance reasonably acceptable to the Administrative Agent.

“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA and subject to ERISA.

“Net Cash Proceeds”: in connection with any issuance or sale of Capital Stock, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary costs, fees and expenses actually incurred in connection therewith.

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“New York UCC”: the Uniform Commercial Code as in effect from time to time in the State of New York.

“Non-Consenting Lender”: any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all affected Lenders in accordance with the terms of Section 10.1 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender”: at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Loan Party”: each Group Member that is not a Loan Party.

“Note”: a Revolving Loan Note or a Swingline Loan Note.

“Notice of Borrowing”: a notice substantially in the form of Exhibit H.

“Notice of Conversion/Continuation”: means a notice substantially in the form of Exhibit I.

“Obligations”: (a) the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower or any Guarantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower and any other Loan Party to any Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Bank Services Agreements, the Letters of Credit, any Specified Swap Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower or any Guarantor pursuant hereto) or otherwise and (b) any obligations of any Loan Party to any Lender or an Affiliate of a Lender arising in connection with Bank Services provided by such Lender or such Affiliate to such Loan Party.

“OFAC”: The Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

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“Other Taxes”: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes (but excluding Excluded Taxes) that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.18).

“Overadvance”: as defined in Section 2.1(c).

“Participant”: as defined in Section 10.6(c).

“Participant Register”: as defined in Section 10.6(c)(iii).

“Patriot Act”: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Title III of Pub. L. 107-56, signed into law October 26, 2001, as amended.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

“Pension Funding Rules”: the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Protection Act of 2006, Section 412 of the Code and Section 302 of ERISA each as in effect prior to the Pension Protection Act of 2006 and, thereafter, Sections 412 and 430 of the Code and Sections 302 and 303 of ERISA.

“Pension Plan”: any Plan that is an employee pension benefit plan within the meaning of Section 3(2) of ERISA, the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, but that is not a Multiemployer Plan.

“Permitted Acquisition”: any transaction or series of related transactions by the Borrower or any Wholly Owned Subsidiary for (a) the direct or indirect acquisition of all or substantially all of the property of any Person, or of any business or division of any Person; or (b) the acquisition of 100% (including by merger or consolidation on terms permitted by the Loan Documents) of the Capital Stock (other than director qualifying shares) of any Person that becomes a Subsidiary of the Borrower after giving effect such transaction; provided, however, that each of the following conditions shall be met or the Required Lenders have otherwise consented in writing thereto: (i) immediately prior and after giving effect thereto, (A) no Event of Default then exists or would immediately result therefrom, and (B) the Borrower shall have, after giving effect thereto, Liquidity of not less than $20,000,000; (ii) after giving effect to such transaction on a pro forma basis, the Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in Section 7.1 hereof as of the most recent test period (assuming for such purposes, that such transaction, and all other Permitted Acquisitions consummated since the first day of the relevant test period for each of the financial covenants ending on or prior to the date of such transaction, had occurred on the first day of such relevant test period); (iii) the Person or business to be acquired shall

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be, or shall be engaged in, a business of the type that Borrower and its Subsidiaries are permitted to be engaged in and the property acquired in connection with any such transaction shall be made subject to the Lien of the Administrative Agent and shall be free and clear of any Liens, other than Liens permitted under Section 7.3 hereof and any Person so acquired shall become a Guarantor in accordance with Section 6.11 hereof (provided, that notwithstanding the foregoing, the Borrower and its Wholly Owned Subsidiaries may make acquisitions of target entities which become Wholly Owned Subsidiaries but do not become Guarantors, and of assets that do not become assets of the Borrower or a Guarantor, so long as the aggregate amount of all acquisition consideration paid for all such acquisitions during the term hereof shall not exceed $30,000,000); (iv) the acquisition shall not be an Unfriendly Acquisition; and (v) with respect to any transaction involving acquisition consideration of more than $5,000,000, the Borrower shall have provided the Administrative Agent with copies of the applicable acquisition agreement.

“Permitted Discretion”: a determination made by the Administrative Agent in good faith and in the exercise of reasonable business judgment.

“Permitted Intercompany Advances”: loans, guarantees or advances made by (a) a Loan Party to another Loan Party, (b) a Non-Loan Party to another Non-Loan Party, (c) a Non-Loan Party to a Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement, (d) a Loan Party to a Non-Loan Party so long as in the case of this clause (d), (i) any such loans, guarantees, or advances are unsecured (other than security provided by a non-Loan Party to a Loan Party), (ii) the outstanding amount of all such loans, guarantees and advances, together with any investments under Section 7.7(q) do not exceed $5,000,000 in the aggregate at any time and (iii) no Event of Default has occurred and is continuing immediately prior to the making of any such Permitted Intercompany Advance or would result from the making of any such Permitted Intercompany Advance.

“Permitted Investors”: the collective reference to (a) the Sponsors and their respective Control Investment Affiliates, (b) any other Person who from time to time becomes a stockholder in connection with a Permitted Acquisition, and (c) any other Person consented to by the Administrative Agent in its sole discretion; provided that, for the purposes of the definition of “Change of Control”, Permitted Investors shall mean the Sponsors and their Control Investment Affiliates.

“Permitted Seller Debt”: unsecured Indebtedness (other than Earn-Out Obligations) owing to sellers of assets or Capital Stock by a Group Member that is incurred by a Group Member in connection with the consummation of one or more Permitted Acquisitions so long as (i) with respect to any such Indebtedness that requires cash interest or principal payments while any Obligations remain outstanding, the aggregate principal amount for all such unsecured Indebtedness does not exceed $7,500,000 at any one time outstanding and such Indebtedness is otherwise on terms and conditions reasonably acceptable to the Administrative Agent, and (ii) any such Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to the Administrative Agent.

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“Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Phion Acquisition”: The acquisition by the Borrower of approximately 616,801 share of Barracuda Network AG, an entity formed under the laws of Austria, and formerly known as phion AG (“Phion”), in September 2009 through a public tender offer, and all subsequent acquisitions of shares of Phion, including through squeeze out proceedings to acquire minority equity interests in Phion.

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA and which is maintained or contributed to by a Loan Party or a Subsidiary thereof (or, as to which a Loan Party or Subsidiary thereof could reasonably be expected to have liability on account of a Commonly Controlled Entity or under Section 4069 of ERISA if such plan were terminated at such time).

“Preferred Stock”: the preferred Capital Stock of the Borrower or any Guarantor.

“Prime Rate”: the rate of interest per annum published in the money rates section of the Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of the Wall Street Journal, becomes unavailable for any reason as determined by the Administrative Agent, the “Prime Rate” shall mean the rate of interest per annum announced by SVB as its prime rate in effect at its principal office in the State of California (such SVB announced Prime Rate not being intended to be the lowest rate of interest charged by SVB in connection with extensions of credit to debtors) (or if SVB is no longer the Administrative Agent, such rate of interest per annum announced from time to time by the applicable successor Administrative Agent as its prime rate).

“Projections”: as defined in Section 6.2(b).

“Properties”: as defined in Section 4.17(a).

“Qualified Cash”: cash and Cash Equivalents of the Loan Parties held in domestic bank accounts, in which the Administrative Agent has a perfected security interest therein.

“Qualified Capital Stock”: of any Person shall mean any Capital Stock of such Person that is not Disqualified Stock.

“Qualified Counterparty”: with respect to any Specified Swap Agreement, any counterparty thereto that, at the time such Specified Swap Agreement was entered into or as of the Closing Date, was the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender.

“Recapitalization Agreement”: the Recapitalization Agreement dated as of August 23, 2012, by and among the Borrower, the investors named therein and the selling stockholders named therein.

“Recipient”: the Administrative Agent or a Lender, as applicable.

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“Refunded Swingline Loans”: as defined in Section 2.4.

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Related Parties”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Replacement Lender”: as defined in Section 2.18.

“Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under PBGC regulations.

“Required Lenders”: at any time, (a) if only one Lender holds the Revolving Commitments, such Lender; and (b) if more than one Lender that is not a Defaulting Lender holds the Revolving Commitments, then at least two Lenders that are not Defaulting Lenders who hold in the aggregate more than 50% of the Total Revolving Commitments (including, without duplication, the L/C Commitments) then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding; provided that for the purposes of this clause (b), the outstanding principal amount of the Revolving Commitments of, and the portion of the Revolving Loans and participations in L/C Exposure and Swingline Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided further that a Lender and its Affiliates shall be deemed one “Lender” for the purposes of this clause (b).

“Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer”: the director, chief executive officer, president, vice president, chief financial officer, treasurer, controller or comptroller (or equivalent officer or position) of each Loan Party, but in any event, with respect to financial matters, the chief financial officer, treasurer, controller or comptroller (or equivalent officer or position) of the Borrower.

“Restricted Payments”: as defined in Section 7.6.

“Revolving Commitment”: as to any Lender, the obligation of such Lender to make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate principal amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof (including in connection with assignments permitted hereunder). The L/C Commitments are a sublimit of the Revolving Commitments.

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“Revolving Commitment Period”: the period from and including the Closing Date to the Revolving Termination Date.

“Revolving Extensions of Credit”: as to any Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender’s L/C Percentage of the aggregate undrawn amount of all outstanding Letters of Credit at such time, (c) such Lender’s L/C Percentage of the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, and (d) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.

“Revolving Facility”: the Revolving Commitments and the extensions of credit made thereunder.

“Revolving Loan Conversion”: as defined in Section 3.5(b).

“Revolving Loan Note”: a promissory note in the form of Exhibit G-1, as it may be amended, supplemented or otherwise modified from time to time.

“Revolving Loan Register”: as defined in Section 10.6(b).

“Revolving Loans”: as defined in Section 2.1(a).

“Revolving Percentage”: as to any Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate principal amount of all Revolving Loans then outstanding; provided that in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Total Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Lenders on a comparable basis.

“Revolving Termination Date”: October 3, 2014.

“S&P”: Standard & Poor’s Ratings Services.

“Sale Leaseback Transaction”: any arrangement with any Person or Persons, whereby in contemporaneous or substantially contemporaneous transactions a Loan Party sells substantially all of its right, title and interest in any property and, in connection therewith, acquires, leases or licenses back the right to use all or a material portion of such property.

“Sanctioned Entity”: (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.

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“Sanctioned Person”: a Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC.

“SEC”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

“Secured Parties”: the collective reference to the Administrative Agent, the Lenders (including any Issuing Lender in its capacity as Issuing Lender), any Lender or any Affiliate of a Lender in its capacity as a provider of Bank Services, and any Qualified Counterparties.

“Securities Account”: is any “securities account” as defined in the UCC with such additions to such term as may hereafter be made.

“Securities Act”: the Securities Act of 1933, as amended from time to time and any successor statute.

“Security Documents”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages (if any), the Intellectual Property Security Agreements, any Control Agreement, all other pledge agreements, security agreements or other documents hereafter delivered to the Administrative Agent in accordance with applicable law granting a Lien on any property of any Person to secure the Obligations of any Loan Party under any Loan Document, including all financing statements, fixture filings, patent, trademark and copyright filings, assignments, acknowledgments and other filings, documents and agreements made or delivered pursuant thereto.

“Solvency Certificate”: the Solvency Certificate, dated the Closing Date, in substantially the form of Exhibit D.

“Solvent”: when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “fair value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the “present fair saleable value” of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured in the ordinary course, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

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“Specified Swap Agreement”: any Swap Agreement entered into by the Borrower and any Qualified Counterparty (or any Person who was a Qualified Counterparty as of the Closing Date or as of the date such Swap Agreement was entered into) in respect of interest rates to the extent permitted under Section 7.11.

“Sponsors”: Francisco Partners III, L.P. and Sequoia Capital Growth Fund III.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Guarantor”: each Subsidiary of the Borrower other than (i) any Excluded Foreign Subsidiary, (ii) Third Iris, Inc., a Delaware corporation and (iii) Barracuda Networks, Inc., a Georgia corporation.

“Surety Indebtedness”: as of any date of determination, indebtedness (contingent or otherwise) owing to sureties arising from bid, performance, or surety bonds, or letters of credit supporting such bid, performance, or surety obligations, issued on behalf the Group Members as support for, among other things, their contracts with customers, whether such indebtedness is owing directly or indirectly by the Group Members.

“SVB”: as defined in the preamble hereto.

“Swap Agreement”: any agreement with respect to any swap, hedge, forward, future or derivative transaction or option or similar agreement (including without limitation, any Interest Rate Agreement) involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Group Members shall be deemed to be a “Swap Agreement”.

“Swap Termination Value”: in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such

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Swap Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include a Qualified Counterparty).

“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline Loans pursuant to Section 2.3 in an aggregate principal amount at any one time outstanding not to exceed $1,000,000.

“Swingline Lender”: SVB, in its capacity as the lender of Swingline Loans.

“Swingline Loan Note”: a promissory note in the form of Exhibit G-2, as it may be amended, supplemented or otherwise modified from time to time.

“Swingline Loans”: as defined in Section 2.3.

“Swingline Participation Amount”: as defined in Section 2.4(c).

“Synthetic Lease Obligation”: the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total L/C Commitments”: at any time, the sum of all L/C Commitments at such time, as the same may be reduced from time to time pursuant to Section 2.6. The initial amount of the Total L/C Commitments on the Closing Date is $10,000,000.

“Total Revolving Commitments”: at any time, the aggregate amount of the Revolving Commitments then in effect. The original amount of the Total Revolving Commitments is $40,000,000. The Total L/C Commitments are a sublimit of the Total Revolving Commitments.

“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the Revolving Extensions of Credit outstanding at such time.

“Transactions”: collectively, the negotiation and execution of the Recapitalization Agreement, this Agreement and the other Loan Documents and all transactions contemplated by or otherwise entered into pursuant to or in connection with the Recapitalization Agreement, this Agreement or the other Loan Documents.

“Transferee”: any Eligible Assignee or Participant.

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“Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

“Unfriendly Acquisition”: any acquisition that has not, at the time of the first public announcement of an offer relating thereto, been approved by the board of directors (or other legally recognized governing body) of the Person to be acquired.

“Uniform Commercial Code” or “UCC”: the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time to time in the State of New York, or as the context may require, any other applicable jurisdiction.

“United States” and “U.S.”: the United States of America.

“U.S. Person”: any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate”: as defined in Section 2.15(f)(B)(3).

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

1.2 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements (including this Agreement) or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated, amended and

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restated or otherwise modified from time to time. Except as expressly provided to the contrary herein, if any payment, information, certificate, financial statement or other materials shall be required to be delivered on a day that is not a Business Day, then the due date thereof shall be deemed to be the first Business Day after such day. Certifications made by any officer of any Group Member shall be in such officer’s capacity as such and not in any individual capacity.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(e) For the purposes of calculating Consolidated EBITDA for any period of four (4) consecutive fiscal quarters (each, a “Reference Period”), if at any time during such Reference Period (and after the Closing Date) Borrower or any of its Subsidiaries shall have consummated a Permitted Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to such Permitted Acquisition, are factually supportable, and are expected to have a continuing impact, and, in each case, which are (x) recommended by any due diligence financial review conducted by financial advisors retained by the Borrower and which pro forma adjustments are reasonably acceptable to the Administrative Agent, (y) determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the SEC, or (z) otherwise to be mutually and reasonably agreed upon by the Borrower and the Administrative Agent) or in such other manner acceptable to the Administrative Agent; in each case, as if any such Permitted Acquisition occurred on the first day of such Reference Period.

(f) Any Responsible Officer executing any Loan Document or any other certificate or other document made or delivered pursuant hereto or thereto, so executes or certifies in his/her capacity as a Responsible Officer on behalf of the applicable Loan Party and not in an individual capacity.

SECTION 2

AMOUNT AND TERMS OF REVOLVING COMMITMENTS

2.1 Revolving Commitments.

(a) Subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans (each a “Revolving Loan” and collectively the “Revolving Loans”) to the

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Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which, when added to the aggregate outstanding amount of the Swingline Loans and the aggregate undrawn amount of all outstanding Letters of Credit and the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans, incurred on behalf of Borrower and owing to the Lenders, does not exceed the amount of the Lenders’ Revolving Commitments; provided that no Revolving Loans shall be made on the Closing Date. In addition, the aggregate outstanding Revolving Extensions of Credit shall not at any time exceed the Total Revolving Commitments at such time. During the Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.8.

(b) The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date.

(c) If at any time or for any reason the aggregate amount of all Revolving Extensions of Credit of all of the Lenders exceeds the amount of the Total Revolving Commitments then in effect (any such excess, an “Overadvance”), the Borrower shall, without notice or demand, within one (1) Business Day, pay the full amount of such Overadvance to the Administrative Agent for application against the Revolving Extensions of Credit in accordance with the terms hereof. Any prepayment of any Revolving Loan that is a Eurodollar Loan hereunder shall be subject to the Borrower’s obligation to pay any amounts owing pursuant to Section 2.16.

2.2 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day; provided that the Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing (which must be received by the Administrative Agent prior to 10:00 A.M., Pacific time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of ABR Loans (in each case, with originals to follow within 3 Business Days)) (provided that any such Notice of Borrowing of ABR Loans under the Revolving Facility to finance payments under Section 3.5(a) may be given not later than 10:00 A.M., Pacific time, on the date of the proposed borrowing), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date, (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor, and (iv) instructions for remittance of the applicable Loans to be borrowed. Each borrowing under the Revolving Commitments shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less than $500,000, such lesser amount. Upon receipt of any such Notice of Borrowing from the Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount

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of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00 P.M., Pacific time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting such account as is designated in writing to the Administrative Agent by the Borrower with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. No Revolving Loan will be made on the Closing Date. In lieu of delivering a written notice, the Borrower may give the Administrative Agent telephonic notice by the required time of any proposed borrowing under this Section 2.2; provided that such notice shall be promptly confirmed in writing by delivery of a written notice to the Administrative Agent on or before the applicable funding date (but in any case prior to funding).

2.3 Swingline Commitment. Subject to the terms and conditions hereof, the Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under the Revolving Commitments from time to time during the Revolving Commitment Period by making swing line loans (“Swingline Loans”) to the Borrower; provided that (a) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect, (b) the Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if (x) the Swingline Lender has been advised in writing by the Administrative Agent or a Lender at least one Business Day prior to the making of any Swingline Loan that the funding conditions set forth in Section 5.2 cannot be satisfied at such time or (y) after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero and (c) the Borrower shall not use the proceeds of any Swingline Loan to refinance any then outstanding Swingline Loan. During the Revolving Commitment Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only. The Borrower shall repay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Revolving Termination Date. No Swingline Loan will be made on the Closing Date.

2.4 Procedure for Swingline Borrowing; Refunding of Swingline Loans.

(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice (which telephonic notice must be received by the Swingline Lender not later than 12:00 noon, Pacific time, on the proposed Borrowing Date) confirmed promptly in writing by a Notice of Borrowing, specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $100,000 or a whole multiple of $100,000 in excess thereof. Promptly thereafter, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Borrower an amount in

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immediately available funds equal to the amount of the Swingline Loan to be made by depositing such amount in the account designated in writing to the Administrative Agent by the Borrower. Unless a Swingline Loan is sooner refinanced by the advance of a Revolving Loan pursuant to Section 2.4(b), such Swingline Loan shall be repaid by the Borrower no later than five (5) Business Days after the advance of such Swingline Loan.

(b) The Swingline Lender, at least once per week and at any other time and from time to time in its sole and absolute discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day’s telephonic notice given by the Swingline Lender no later than 12:00 noon, Pacific time, and promptly confirmed in writing, request each Lender to make, and each Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Lender’s Revolving Percentage of the aggregate amount of the Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date of such notice, to repay the Swingline Lender for Swingline Loans made by the Swingline Lender. Each Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M., Pacific time, one Business Day after the date of such notice. The proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the Borrower’s accounts with the Administrative Agent (up to the amount available in each such account) to immediately pay the amount of such Refunded Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full such Refunded Swingline Loans.

(c) If prior to the time that the Borrower has repaid the Swingline Loans pursuant to Section 2.4(a) or a Revolving Loan has been made pursuant to Section 2.4(b), one of the events described in Section 8(f) shall have occurred or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.4(b), each Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.4(b) or on the date requested by the Swingline Lender (with at least one Business Day’s notice to the Lenders), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation Amount”) equal to (i) such Lender’s Revolving Percentage times (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro

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rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided that in the event that such payment received by the Swingline Lender is required to be returned, such Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

(e) Each Lender’s obligation to make the Loans referred to in Section 2.4(b) and to purchase participating interests pursuant to Section 2.4(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5.2, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

2.5 Commitment Fees, etc.

(a) As additional compensation for the Revolving Commitment, the Borrower shall pay the Administrative Agent for the benefit of Lenders, in arrears, on the first day of each calendar quarter from and after the Closing Date through the Revolving Termination Date and on the Revolving Termination Date, a fee for Borrower’s non-use of available funds in an amount equal to the Commitment Fee Rate per annum (calculated on the basis of a 360 day year for actual days elapsed) multiplied by the difference between (x) the Revolving Commitment (as it may be reduced from time to time) and (y) the average for the period of the daily closing balance of the Revolving Loan outstanding (including the sum of the aggregate undrawn amount of all outstanding Letters of Credit at such time plus the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans) during the period for which such fee is due.

(b) All fees payable under this Section 2.5 shall be fully earned on the date paid and nonrefundable.

2.6 Termination or Reduction of Commitments. The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $500,000, or a whole multiple of $100,000 in excess thereof (or such lesser

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amounts outstanding), and shall reduce permanently the Revolving Commitments then in effect; provided further, if in connection with any such reduction or termination of the Revolving Commitments a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.16. The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the L/C Commitments or, from time to time, to reduce the amount of the L/C Commitments; provided that no such termination or reduction of L/C Commitments shall be permitted if, after giving effect thereto, the Total L/C Commitments shall be reduced to an amount that would result in the aggregate L/C Exposure exceeding the Total L/C Commitments (as so reduced). Any such reduction shall be in an amount equal to $500,000, or a whole multiple of $100,000 in excess thereof (or such lesser amounts outstanding), and shall reduce permanently the L/C Commitments then in effect.

2.7 Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, upon irrevocable notice delivered to the Administrative Agent no later than 10:00 A.M., Pacific time, three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 10:00 A.M., Pacific time, one Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of prepayment; provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.16; provided further that if such notice of prepayment indicates that such prepayment is to be funded with the proceeds of a refinancing, such notice of prepayment may be revoked if the financing is not consummated. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Revolving Loans shall be in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or such lesser amounts outstanding). Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple of $100,000 in excess thereof (or such lesser amounts outstanding).

2.8 Conversion and Continuation Options.

(a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable notice in a Notice of Conversion/Continuation of such election no later than 10:00 A.M., Pacific time, on the Business Day preceding the proposed conversion date; provided that any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice in a Notice of

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Conversion/Continuation of such election no later than 10:00 A.M., Pacific time, on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor); provided that no ABR Loan may be converted into a Eurodollar Loan when any Event of Default has occurred and while it is continuing. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Subject to Sections 2.12 and 2.14, any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice in a Notice of Conversion/Continuation to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans; provided that no Eurodollar Loan may be continued as such when any Event of Default has occurred and is continuing; provided further that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

2.9 Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $100,000 in excess thereof, and (b) no more than five (5) Eurodollar Tranches shall be outstanding at any one time.

2.10 Interest Rates and Payment Dates.

(a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such Interest Period plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR.

(c) After the occurrence and during the continuance of an Event of Default, and at the request or with the consent of Required Lenders (except that no such request or consent shall be required in the case of an Event of Default under Section 8.1(a) or (f)), all outstanding Loans shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 200 basis points (2.00%) (the “Default Rate”).

(d) Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.10(c) shall be payable from time to time on demand.

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2.11 Computation of Interest and Fees.

(a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.11(a).

2.12 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower in the absence of manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.

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2.13 Pro Rata Treatment and Payments.

(a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of the Commitments shall be made pro rata according to the respective L/C Percentages or Revolving Percentages, as the case may be, of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Lenders.

(c) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff and shall be made prior to 10:00 A.M. (or, if SVB is the sole Lender, 12:00 P.M.) Pacific time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds; provided that receiving any such payment on the due date after such time shall not result in any Default or Event of Default. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. Any payment received by the Administrative Agent after 10:00 A.M., Pacific time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(d) Unless the Administrative Agent shall have been notified in writing by any Lender prior to the date of any borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon, at a rate

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equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrower.

(e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of Administrative Agent or any Lender against the Borrower.

(f) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Section 2, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable extension of credit set forth in Section 5.1 or Section 5.2 are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(g) The obligations of the Lenders hereunder to (i) make Revolving Loans, (ii) to fund its participations in L/C Disbursements in accordance with its respective L/C Percentage, and (iii) make payments pursuant to Section 9.7, as applicable, are several and not joint. The failure of any Lender to make any such Loan, to fund any such participation or to make any such payment under Section 9.7 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.7.

(h) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(i) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be

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applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(j) If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the principal of or interest on any Loan made by it or its participation in the L/C Exposure, as applicable (other than pursuant to a provision hereof providing for non-pro rata treatment), in excess of its Revolving Percentage or L/C Percentage, as applicable, of such payment on account of the Loans or participations obtained by all of the Lenders, upon becoming aware of such excess recovery, such Lender shall forthwith advise the Administrative Agent of the receipt of such payment, and within five (5) Business Days of such receipt purchase (for cash at face value) from the other Lenders or L/C Lenders, as applicable (through the Administrative Agent), without recourse, such participations in the Revolving Loans made by them and/or participations in the L/C Exposure held by them, as applicable, as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them in accordance with their respective Revolving Percentages or L/C Percentages, as applicable; provided, however, that if all or any portion of such excess payment is thereafter recovered by or on behalf of the Borrower from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.13(j) may exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. No documentation other than notices and the like referred to in this Section 2.13(j) shall be required to implement the terms of this Section 2.13(j). The Administrative Agent shall keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased pursuant to this Section 2.13(j) and shall in each case notify the Lenders or the L/C Lenders, as applicable, following any such purchase. The provisions of this Section 2.13(j) shall not be construed to apply to (i) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (ii) the application of Cash Collateral provided for in Section 3.10, or (iii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or sub-participations in any L/C Exposure to any assignee or participant, other than an assignment to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

(k) Notwithstanding anything to the contrary in this Agreement, the Administrative Agent may, in its discretion at any time or from time to time, without the Borrower’s request and even if the conditions set forth in Section 5.2 would not be satisfied, make a Revolving Loan in an amount equal to the portion of the Obligations constituting interest and fees and Swingline Loans from time to time due and payable to itself, any Lender, the Swingline Lender or the Issuing Lender, and apply the proceeds of any such Revolving Loan to those Obligations; provided that after giving effect to any such Revolving Loan, the aggregate outstanding Revolving Loans will not exceed the Total Revolving Commitments.

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(l) If an Event of Default shall have occurred and be continuing, (i) at any time at the Administrative Agent’s or Required Lenders’ election, or (ii) upon the acceleration of the Obligations or other exercise of remedies in accordance with Section 8.2 hereof or the maturity of the Loans, the Administrative Agent shall apply any payments received in respect of the Obligations and all or any part of any Proceeds of Collateral, in payment of the Obligations in accordance with Section 8.3 hereof.

2.14 Illegality; Requirements of Law.

(a) Illegality. If any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender to make, maintain or fund Eurodollar Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

(b) Requirements of Law. If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Connection Income Taxes) on its Loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

(ii) shall impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate); or

(iii) impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

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and the result of any of the foregoing is to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining Loans determined with reference to the Eurodollar Rate or of maintaining its obligation to make such Loans, or to increase the cost to such Lender or such other Recipient of issuing or participating in Letters of Credit, or to reduce any amount receivable or received by such Lender or other Recipient hereunder in respect thereof (whether in respect of principal, interest or any other amount), then, in any such case, upon the request of such Lender or other Recipient, the Borrower shall promptly pay such Lender or other Recipient, as the case may be, any additional amounts necessary to compensate such Lender or other Recipient, as the case may be, for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(c) If any Lender determines that any change in any Requirement of Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such change in such Requirement of Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

(d) For purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, or directives in connection therewith are deemed to have gone into effect and been adopted after the date of this Agreement, and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a change in any Requirement of Law, regardless of the date enacted, adopted or issued.

(e) A certificate as to any additional amounts payable pursuant to paragraphs (b), (c), or (d) of this Section submitted by any Lender to the Borrower (with a copy to the Administrative

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Agent) shall be conclusive in the absence of manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation. Notwithstanding anything to the contrary in this Section 2.14, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.14 for any amounts incurred more than nine months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that if the circumstances giving rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower arising pursuant to this Section 2.14 shall survive the termination of the Commitments, the termination of this Agreement, the repayment of all Obligations and the resignation of the Administrative Agent.

2.15 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law and the Borrower shall, and shall cause each other Loan Party, to comply with the requirements set forth in this Section 2.15. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.15) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) Payment of Other Taxes. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c) Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.15, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

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(d) Indemnification by Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.15) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto (including any recording and filing fees with respect thereto or resulting therefrom and any liabilities with respect to, or resulting from, any delay in paying such Indemnified Taxes); provided that if any of the Loan Parties reasonably believes that such Taxes were not correctly or legally asserted, each Recipient will use reasonable efforts to obtain a refund of such Taxes so long as such efforts would not, in the reasonable determination of such Recipient result in any additional costs, expenses or risks or be otherwise disadvantageous to it. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, setting forth in reasonable detail the manner in which such amount was determined, shall be conclusive absent manifest error. If any Loan Party fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Loan Party shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure.

(e) Indemnification by Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.6 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be

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made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.15(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if the Lender is not legally entitled to complete, execute or deliver such documentation or, in the Lender’s reasonable judgment, such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of duly completed IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of duly completed IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, executed originals of duly completed IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of duly completed IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 871(h) or Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of duly completed IRS Form W-8BEN; or

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(4) to the extent a Foreign Lender is not the beneficial owner, executed originals of duly completed IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iii) Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so. Each Foreign Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Foreign Lender shall not be required to deliver any form pursuant to this paragraph that such Foreign Lender is not legally able to deliver.

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(iv) Each Lender acknowledges and agrees that certain payments made under this Agreement after December 31, 2013, as to extensions of credit made after December 31, 2012, to any Lender that does not comply with the information collection and reporting obligations imposed by the United States with respect to foreign accounts, or that fails to provide adequate certification regarding such compliance, may become subject to withholding taxes imposed under FATCA. Each Lender agrees to undertake commercially reasonable actions to cooperate with the Administrative Agent and the Borrower in establishing that it is in compliance with such requirements and agrees to provide all certifications required by the IRS or determined by the Administrative Agent, in its reasonable discretion, to be necessary for the Administrative Agent to establish its compliance under such provisions on or before June 30, 2013. Nothing in this Agreement shall be interpreted to require any Lender to violate any law or regulation applicable to such Lender in any jurisdiction in which such Lender is formed, managed and controlled or doing business.

(g) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.15 (including by the payment of additional amounts pursuant to this Section 2.15), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.15 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its Taxes that it reasonably deems confidential) to the indemnifying party or any other Person.

(h) Survival. Each party’s obligations under this Section 2.15 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the termination of this Agreement and the repayment, satisfaction or discharge of all obligations under any Loan Document.

2.16 Indemnity. The Borrower hereby agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) a default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of

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this Agreement, (b) a default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) for any reason the making of a prepayment of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such losses and expenses shall be equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, reduced, converted or continued, for the period from the date of such prepayment or of such failure to borrow, reduce, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, reduce, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest or other return for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.17 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.14 or Section 2.15(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate a different lending office for funding or booking its Loans affected by such event or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, in each case, with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal, regulatory or other disadvantage; provided further that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.14 or Section 2.15(a). The Borrower hereby agrees to pay all reasonable out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.

2.18 Substitution of Lenders. Upon the receipt by the Borrower of any of the following (or in the case of clause (a) below, if the Borrower is required to pay any such amount), with respect to any Lender (any such Lender described in clauses (a) through (c) below being referred to as an “Affected Lender” hereunder):

(a) a request from a Lender for payment of Indemnified Taxes or additional amounts under Section 2.15 or of increased costs pursuant to Section 2.14(c) or Section 2.14(d) (and, in any such case, such Lender has declined or is unable to designate a different lending office in accordance with Section 2.17 or is a Non-Consenting Lender);

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(b) a notice from the Administrative Agent under Section 10.1(b) that one or more Minority Lenders are unwilling to agree to an amendment or other modification approved by the Required Lenders and the Administrative Agent; or

(c) notice from the Administrative Agent that a Lender is a Defaulting Lender;

then the Borrower may, at its sole expense and effort, within 15 days after the occurrence of such event or receipt by the Borrower of such notice and demand, upon notice to the Administrative Agent and such Affected Lender: (i) request that one or more of the other Lenders acquire and assume (at the election of such other Lenders in their sole discretion, with no obligation to do the same) all or part of such Affected Lender’s Loans and Commitment; or (ii) designate a replacement lending institution (which shall be an Eligible Assignee) to acquire and assume all or a ratable part of such Affected Lender’s Loans and Commitment (the replacing Lender or lender in (i) or (ii) being a “Replacement Lender”); provided, however, that the Borrower shall be liable for the payment upon demand of all costs and other amounts arising under Section 2.16 that result from the acquisition of any Affected Lender’s Loan and/or Commitment (or any portion thereof) by a Lender or Replacement Lender, as the case may be, on a date other than the last day of the applicable Interest Period with respect to any Eurodollar Loans then outstanding; and provided further, however, that if the Borrower elects to exercise such right with respect to any Affected Lender under clause (a) or (b) of this Section 2.18, then the Borrower shall be obligated to replace all Affected Lenders under such clauses. The Affected Lender replaced pursuant to this Section 2.18 shall be required to assign and delegate, without recourse, all of its interests, rights and obligations under this Agreement and the related Loan Documents to one or more Replacement Lenders that so agree to acquire and assume all or a ratable part of such Affected Lender’s Loans and Commitment upon payment to such Affected Lender of an amount (in the aggregate for all Replacement Lenders) equal to 100% of the outstanding principal of the Affected Lender’s Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents from such Replacement Lenders (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts, including amounts under Section 2.16 hereof). Any such designation of a Replacement Lender shall be effected in accordance with, and subject to the terms and conditions of, the assignment provisions contained in Section 10.6 (with the assignment fee to be paid by the Borrower in such instance), and, if such Replacement Lender is not already a Lender hereunder or an Affiliate of a Lender or an Approved Fund, shall be subject to the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld). Notwithstanding the foregoing, with respect to any assignment pursuant to this Section 2.18, (a) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.15, such assignment shall result in a reduction in such compensation or payments thereafter; (b) such assignment shall not conflict with applicable law and (c) in the case of any assignment resulting from a Lender being a Minority Lender referred to in clause (b) of this Section 2.18, the applicable assignee shall have consented to the applicable amendment, waiver or consent. Notwithstanding the foregoing, an Affected Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Affected Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

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2.19 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.1 and in the definition of Required Lenders.

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise, and including any amounts made available to the Administrative Agent by such Defaulting Lender pursuant to Section 10.7), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lender or to the Swingline Lender hereunder; third, to be held as Cash Collateral for the funding obligations of such Defaulting Lender of any participation in any Letter of Credit; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement, and (y) be held as Cash Collateral for the future funding obligations of such Defaulting Lender of any participation in any future Letter of Credit; sixth, to the payment of any amounts owing to any L/C Lender, Issuing Lender or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any L/C Lender, Issuing Lender or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default has occurred and is continuing, to the payment of any amounts owing to the Borrower as a result of any judgment of a .court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (A) such payment is a payment of the principal amount of any Loans or L/C Advances in respect of which such Defaulting Lender has not fully funded its appropriate share and (B) such Loans or L/C Advances were made at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Advances owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Advances

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owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Advances and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.19(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.19(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees.

(A) No Defaulting Lender shall be entitled to receive any fee pursuant to Section 2.5(a) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender).

(B) Each Defaulting Lender shall be limited in its right to receive letter of credit fees as provided in Section 3.3(d).

(C) With respect to any letter of credit fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letters of Credit or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Issuing Lender and the Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Issuing Lender’s or the Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) Reallocation of Pro Rata Share to Reduce Fronting Exposure. During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit pursuant to Section 3.4 or in Swingline Loans pursuant to Section 2.4(c), the L/C Percentage of each non-Defaulting Lender of any such Letter of Credit and the Revolving Percentage of each non-Defaulting Lender of any such Swingline Loan, as the case may be, shall be computed without giving effect to the Revolving Commitment of such Defaulting Lender; provided that, (A) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Event of Default has occurred and is continuing; (B) the aggregate obligations of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swingline Loans shall not exceed the positive difference, if any, of (1) the Revolving Commitment of that non-Defaulting Lender minus (2) the aggregate outstanding amount of the Revolving Loans of that Lender plus the aggregate amount of that Lender’s L/C Percentage of then outstanding Letters of Credit and (C) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative

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Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time). No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure and (y) second, Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures set forth in Section 3.10.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swingline Lender and the Issuing Lender agree in writing that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lenders in accordance with their respective Revolving Percentages and L/C Percentages, as applicable (without giving effect to Section 2.19(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender having been a Defaulting Lender.

(c) New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

(d) Termination of Defaulting Lender. The Borrower may terminate the unused amount of the Commitment of any Lender that is a Defaulting Lender upon not less than ten Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders thereof), and in such event the provisions of Section 2.19(a)(ii) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts);

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provided that (i) no Event of Default shall have occurred and be continuing, and (ii) such termination shall not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender may have against such Defaulting Lender.

SECTION 3

LETTERS OF CREDIT

3.1 L/C Commitment.

(a) Subject to the terms and conditions hereof, the Issuing Lender agrees to issue letters of credit (“Letters of Credit”) for the account of any Loan Party on any Business Day during the Letter of Credit Availability Period in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall not issue any Letter of Credit if (1) after giving effect to such issuance, the L/C Exposure would exceed the Total L/C Commitments at such time, (2) after giving effect to such issuance, the sum of the L/C Exposure and the outstanding Revolving Loans would exceed the Available Revolving Commitment at such time, or (3) the Issuing Lender has been notified in writing at least one Business Day prior to the issuance thereof by Administrative Agent or a Lender that the funding conditions set forth in Section 5.2 cannot be satisfied at such time. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Letter of Credit Maturity Date; provided that Letters of Credit may have termination dates that occur later than five Business Days prior to the Letter of Credit Maturity Date to the extent the Borrower shall have Cash Collateralized such Letters of Credit; provided further that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

(b) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit if:

(i) such issuance would conflict with, or cause the Issuing Lender or any L/C Lender to exceed any limits imposed by, any applicable Requirement of Law;

(ii) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing, amending or reinstating such Letter of Credit, or any law, rule or regulation applicable to the Issuing Lender or any request, guideline or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance, amendment, renewal or reinstatement of letters of credit generally or such Letter of Credit in particular or shall

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impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated) not in effect on the Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good faith deems material to it;

(iii) the Issuing Lender has received written notice from any Lender, the Administrative Agent or the Borrower, at least one Business Day prior to the requested date of issuance, amendment, renewal or reinstatement of such Letter of Credit, that one or more of the applicable conditions contained in Section 5.2 shall not then be satisfied;

(iv) any requested Letter of Credit is not in form and substance acceptable to the Issuing Lender, or the issuance, amendment or renewal of a Letter of Credit shall violate any applicable laws or regulations or any applicable policies of the Issuing Lender;

(v) such Letter of Credit contains any provisions providing for automatic reinstatement of the stated amount after any drawing thereunder;

(vi) except as otherwise agreed by the Administrative Agent and the Issuing Lender, such Letter of Credit is in an initial face amount less than $100,000; or

(vii) any Lender is at that time a Defaulting Lender, unless reallocated in accordance with Section 2.19(a)(iv) if the Issuing Lender has entered into arrangements satisfactory to the Issuing Lender (in its reasonable discretion) with the Borrower or such Defaulting Lender to eliminate the Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.19(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Exposure as to which the Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion.

3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit for the account of any Loan Party by delivering to the Issuing Lender at its address for notices specified herein an Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may request. Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall issue the Letter of Credit requested thereby by the date requested in the Application (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of

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Credit to the Borrower promptly following the issuance thereof. The Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

3.3 Fees and Other Charges.

(a) The Borrower agrees to pay (i) to the Administrative Agent for the benefit of the L/C Lenders with respect to each outstanding Letter of Credit issued for the account of (or at the request of) the Borrower compensation at the L/C Fee Rate per annum on the drawable amount of such Letter of Credit, payable quarterly in arrears on the last Business Day of March, June, September and December of each year and on the Letter of Credit Maturity Date (each, an “L/C Fee Payment Date”) after the issuance date of such Letter of Credit, and (ii) the Issuing Lender’s standard and reasonable fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit issued for the account of (or at the request of) the Borrower or processing of drawings thereunder (the fees in this clause (ii), collectively, the “Issuing Lender Fees”). All Issuing Lender Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days.

(b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.

(c) The Borrower shall furnish to the Issuing Lender and the Administrative Agent such other documents and information pertaining to any requested Letter of Credit issuance, amendment or renewal, including any L/C-Related Documents, as the Issuing Lender or the Administrative Agent may require. This Agreement shall control in the event of any conflict with any L/C-Related Document (other than any Letter of Credit).

(d) Any letter of credit fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit shall be payable, to the maximum extent permitted by applicable law, to the other L/C Lenders in accordance with the upward adjustments in their respective L/C Percentages allocable to such Letter of Credit pursuant to Section 2.19(a)(iv), with the balance of such fee, if any, payable to the Issuing Lender for its own account.

3.4 L/C Participations. The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Lender, and, to induce the Issuing Lender to issue Letters of Credit, each L/C Lender irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions set forth below, for such L/C Lender’s own account and risk an undivided interest equal to such L/C Lender’s L/C Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by the Issuing Lender thereunder. Each L/C

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Lender agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower pursuant to Section 3.5(a), such L/C Lender shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Lender’s L/C Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Lender’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Lender may have against the Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other L/C Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

3.5 Reimbursement.

(a) If the Issuing Lender shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall pay or cause to be paid to the Issuing Lender an amount equal to the entire amount of such L/C Disbursement not later than the Business Day immediately following notice to the Borrower of such L/C Disbursement. Each such payment shall be made to the Issuing Lender at its address for notices referred to herein in Dollars and in immediately available funds.

(b) If the Issuing Lender shall not have received from the Borrower the payment that it is required to make pursuant to Section 3.5(a) with respect to a Letter of Credit within the time specified in such Section, the Issuing Lender will promptly notify the Administrative Agent of the L/C Disbursement and the Administrative Agent will promptly notify each L/C Lender of such L/C Disbursement and its L/C Percentage thereof, and each L/C Lender shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Lender’s L/C Percentage of such L/C Disbursement (and the Administrative Agent may apply Cash Collateral provided for this purpose); upon such payment pursuant to this paragraph to reimburse the Issuing Lender for any L/C Disbursement, the Borrower shall be required to reimburse the L/C Lenders for such payments (including interest accrued thereon from the date of such payment until the date of such reimbursement at the rate applicable to ABR Loans plus 2% per annum) on demand; provided that if at the time of and after giving effect to such payment by the L/C Lenders, the conditions to borrowings and Revolving Loan Conversions set forth in Section 5.2 are satisfied, the Borrower may, by written notice to the Administrative Agent certifying that such conditions are satisfied and that all interest owing under this paragraph has been paid, request that such payments by the L/C Lenders be converted into Revolving Loans (a “Revolving Loan Conversion”), in which case, if such conditions are in fact satisfied, the L/C Lenders shall be deemed to have extended, and the Borrower shall be deemed to have

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accepted, a Revolving Loan in the aggregate principal amount of such payment without further action on the part of any party; any amount so paid pursuant to this paragraph shall, on and after the payment date thereof, be deemed to be Revolving Loans for all purposes hereunder; provided that the Issuing Lender, at its option, may effectuate a Revolving Loan Conversion regardless of whether the conditions to borrowings and Revolving Loan Conversions set forth in Section 5.2 are satisfied.

3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower’s obligations hereunder shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender. The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.

In addition to amounts payable as elsewhere provided in the Agreement, the Borrower hereby agrees to pay and to protect, indemnify, and save Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees and allocated costs of internal counsel) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of Credit, or (B) the failure of the Issuing Lender or of any L/C Lender to honor a demand for payment under any Letter of Credit thereof as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority, in each case other than to the extent solely as a result of the gross negligence or willful misconduct of the Issuing Lender or such L/C Lender (as finally determined by a court of competent jurisdiction).

3.7 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower and the Administrative Agent of the date and amount thereof. The responsibility of the Issuing Lender to the Borrower in connection with any draft presented for

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payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

3.8 Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

3.9 Interim Interest. If the Issuing Lender shall make any L/C Disbursement in respect of a Letter of Credit, then, unless either the Borrower shall reimburse such L/C Disbursement in full within the time period specified in Section 3.5(a) or the L/C Lenders shall reimburse such L/C Disbursement in full on such date as provided in Section 3.5(b), in each case the unpaid amount thereof shall bear interest for the account of the Issuing Lender, for each day from and including the date of such L/C Disbursement to but excluding the date of payment by the Borrower, at the rate per annum that would apply to such amount if such amount were a Revolving Loan that is an ABR Loan; provided that the provisions of Section 2.10(c) shall be applicable to any such amounts not paid when due.

3.10 Cash Collateral.

(a) Certain Credit Support Events. Upon the request of the Administrative Agent or the Issuing Lender (i) if the Issuing Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Advance by all the L/C Lenders that is not reimbursed by the Borrower or converted into a Revolving Loan pursuant to Section 3.5(b), or (ii) if, as of the Letter of Credit Maturity Date, any L/C Exposure for any reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then effective amount of all L/C Exposure. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or the Issuing Lender, the Borrower shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (unless (x) the Defaulting Lender has been replaced in accordance with the terms hereof, or (y) the Revolving Loan Commitments of the other Lenders have been increased by an amount sufficient to satisfy the Administrative Agent that all Fronting Exposure will be covered by all Lenders that are not Disqualified Lenders or (z) after giving effect to Section 2.19(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b) Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts with the Administrative Agent. The Borrower, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Issuing Lender and the L/C Lenders, and agrees to maintain,

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a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 3.10(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrower or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 3.10, Section 2.19 or otherwise in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Exposure, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the Administrative Agent’s good faith determination that there exists excess Cash Collateral; provided, however, (A) that Cash Collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of an Event of Default, and (B) the Person providing Cash Collateral and the Issuing Lender may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

3.11 Additional Issuing Lenders. The Borrower may, at any time and from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed) and such Lender, designate one or more additional Lenders to act as an issuing bank under the terms of this Agreement. Any Lender designated as an issuing bank pursuant to this paragraph shall be deemed to be an “Issuing Lender” (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply to the other Issuing Lender and such Lender.

3.12 Resignation of the Issuing Lender. The Issuing Lender may resign at any time by giving at least 30 days’ prior written notice to the Administrative Agent, the Lenders and the Borrower. Upon the acceptance of any appointment as the Issuing Lender hereunder by a Lender that shall agree to serve as successor Issuing Lender, such successor shall succeed to and become vested with all the interests, rights and obligations of the retiring Issuing Lender and the retiring Issuing Lender shall be discharged from its

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obligations to issue additional Letters of Credit hereunder without affecting its rights and obligations with respect to Letters of Credit previously issued by it. At the time such resignation shall become effective, the Borrower shall pay all accrued and unpaid fees pursuant to Section 3.3. The acceptance of any appointment as the Issuing Lender hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory to the Borrower and the Administrative Agent, and, from and after the effective date of such agreement, (i) such successor Lender shall have all the rights and obligations of the previous Issuing Lender under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan Documents to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After the resignation of the Issuing Lender hereunder, the retiring Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit.

3.13 Applicability of ISP. Unless otherwise expressly agreed by the Issuing Lender and the Borrower when a Letter of Credit is issued and subject to applicable laws, the Letters of Credit shall be governed by and subject to the rules of the ISP.

SECTION 4

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and issue the Letters of Credit, the Borrower hereby represents and warrants, with respect to itself and each of its Subsidiaries, to the Administrative Agent and each Lender, on each date required under Section 5.2 that:

4.1 Financial Condition.

The audited consolidated balance sheets of the Borrower and its Subsidiaries as of February 29, 2012, and the related consolidated statements of income and of cash flows for the fiscal year ended on such date, present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at such date, and the consolidated results of their operations and consolidated cash flows for the fiscal year then ended. The unaudited statements of income of the Borrower and its Subsidiaries for the fiscal quarter ended May 31, 2012 present fairly in all material respects the financial condition of the Borrower and its Subsidiaries as at such date, and the results of their operations for the three-month period then ended (subject to normal year end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the Borrower’s accounting firm and disclosed therein).

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4.2 No Change. Since February 29, 2012, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

4.3 Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, (b) has the corporate, limited liability company, limited partnership or other entity power and authority, and the legal right, to own and operate its material property, to lease the material property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law where non-compliance could reasonably be expected to have a Material Adverse Effect.

4.4 Power, Authorization; Enforceable Obligations. Each Loan Party has the power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement. No material Governmental Approval or consent or authorization of, filing with, notice to or other act by or in respect of, any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except (i) Governmental Approvals, consents, authorizations, filings and notices which have been obtained or made and are in full force and effect and (ii) the filings referred to in Section 4.19. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any material Requirement of Law or any Contractual Obligation of any

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Group Member which would reasonably be expected to have a Material Adverse Effect and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents and other Liens otherwise permitted pursuant to Section 7.3). No Requirement of Law or Contractual Obligation applicable to the Loan Parties or any of their respective Subsidiaries could reasonably be expected to have a Material Adverse Effect.

4.6 Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of any Loan Party, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to the validity or enforceability any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

4.7 No Default. No Group Member is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing, nor shall either immediately result from the making of a Credit Extension.

4.8 Ownership of Property; Liens; Investments. Each Group Member has title in fee simple to, or a valid leasehold interest in, all of its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 7.3. No Loan Party owns any Investment except as permitted by Section 7.7.

4.9 Intellectual Property. To the knowledge of the Loan Parties, each Group Member owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. No claim has been asserted in writing and is pending by any Person against any Group Member challenging or questioning any Group Member’s use of any Intellectual Property or the validity or effectiveness of any Group Member’s Intellectual Property (other than routine office actions in the course of prosecution of applications to register Intellectual Property), nor does the Borrower know of any valid basis for any such claim, unless such claim could not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Loan Parties, the use of Intellectual Property by each Group Member, and the conduct of such Group Member’s business, as currently conducted, does not infringe on or otherwise violate the rights of any Person, unless such infringement or violation could not reasonably be expected to have a Material Adverse Effect, and there are no claims pending or, to the knowledge of the Borrower, threatened in writing to such effect which could reasonably be expected to result in a Material Adverse Effect.

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4.10 Taxes. Each Group Member has filed or caused to be filed all Federal, state and other tax returns (other than tax returns which in the aggregate involve tax liabilities of less than $100,000) that are required to be filed and has paid all taxes (other than taxes which in the aggregate involve tax liabilities of less than $100,000) shown to be due and payable on said returns or on any assessments (other than assessments which in the aggregate involve tax liabilities of less than $100,000) made against it or any of its property and all other taxes, fees or other charges in excess of $100,000 imposed on it or any of its property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Group Member); no tax Lien has been filed (other than any such Lien permitted by Section 7.3(a)), and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge that is not being contested in good faith and by appropriate proceedings.

4.11 Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used (a) for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect for any purpose that violates the provisions of the Regulations of the Board or (b) for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

4.12 Labor Matters. (a) There are no strikes or other labor disputes against any Group Member pending or, to the knowledge of the Borrower, threatened, in either case, that could reasonably be expected to have a Material Adverse Effect; (b) hours worked by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters, except for any such violations as could not reasonably be expected to have a Material Adverse Effect; and (c) all payments due from any Group Member on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the relevant Group Member, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect.

4.13 ERISA. Except as does not, and could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect: (a) no Reportable Event has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Pension Plan; (b) each Plan (other than any Multiemployer Plan) has been operated in compliance in

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all respects with the applicable provisions of ERISA and the Code; (c) the Borrower and Commonly Controlled Entity has made all required contributions to each Pension Plan subject to the Pension Funding Rules, and no application for a funding waiver or an extension of any amortization period pursuant to the Pension Funding Rules has been made with respect to any Pension Plan; (d) no termination of a Pension Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period; (e) the present value of all accrued benefits under each Pension Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits; (f) neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any such material withdrawal liability under ERISA with respect to a Multiemployer Plan nor is any such withdrawal reasonably anticipated; and (g) to the knowledge of the Loan Parties, (i) each Multiemployer Plan has been operated in all respects with the applicable provisions of ERISA and the Code and (ii) no Multiemployer Plan is in Reorganization or Insolvent.

4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment company” within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the Board) that limits its ability to incur Indebtedness. No Loan Party is subject to regulation under the Public Utility Holding Company Act of 2005 or the Federal Power Act or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.

4.15 Subsidiaries. Except as disclosed to the Administrative Agent by the Borrower from time to time after the Closing Date, (a) Schedule 4.15 sets forth the name and jurisdiction of organization of the Borrower and each Subsidiary of the Borrower and, as to each such Subsidiary, the percentage of each class of Capital Stock owned by any Loan Party, and (b) except as set forth on Schedule 4.15, as of the Closing Date, there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of the Borrower or any Subsidiary, except as created by the Loan Documents. Schedule 4.15 also sets forth the beneficial owners of all Capital Stock of the Borrower and its Subsidiaries, and the amount of Capital Stock held by each such owner, as of the Closing Date.

4.16 Use of Proceeds. The proceeds of the Revolving Loans, the Swingline Loans and the Letters of Credit shall be used for working capital and for other general corporate purposes of the Borrower and its Subsidiaries, including capital expenditures and Permitted Acquisitions.

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4.17 Environmental Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect:

(a) the facilities and properties owned, leased or operated by any Group Member (the “Properties”) do not contain, and have not previously contained, any Materials of Environmental Concern in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could reasonably be expected to give rise to liability of any Group Member under, any Environmental Law;

(b) no Group Member has received or is aware of any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding compliance with or arising under Environmental Laws with regard to any of the Properties or the business operated by any Group Member (the “Business”), nor does the Borrower have knowledge or reason to believe that any such notice will be received or is being threatened;

(c) Materials of Environmental Concern have not been transported or disposed of from the Properties in violation of, or in a manner or to a location that could reasonably be expected to give rise to liability of any Group Member under, any Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could reasonably be expected to give rise to liability of any Group Member under, any applicable Environmental Law;

(d) no judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Borrower, threatened, under any Environmental Law to which any Group Member is or, to the knowledge of the Loan Parties, will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business;

(e) there has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of any Group Member in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could reasonably be expected to give rise to liability of any Group Member under Environmental Laws;

(f) the Properties and all operations at the Properties are in compliance, and have in the last five years been in compliance, with all applicable Environmental Laws, and there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the Business in each case, that could reasonably be expected to give rise to liability of any Group Member under Environmental Laws; and

(g) no Group Member has assumed any liability of any other Person under Environmental Laws.

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4.18 Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document or any other document, certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other documents, certificates and statements furnished to the Administrative Agent and the Lenders for use in connection with the transactions contemplated hereby and by the other Loan Documents.

4.19 Security Documents.

(a) The Guarantee and Collateral Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest under U.S. law in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement that are securities represented by stock certificates or otherwise constituting certificated securities within the meaning of Section 8-102(a)(15) of the New York UCC or the corresponding code or statute of any other applicable jurisdiction (“Certificated Securities”), when certificates representing such Pledged Stock are delivered to the Administrative Agent, and in the case of the other Collateral constituting personal property described in the Guarantee and Collateral Agreement and with respect to which a security interest can be perfected by the filing of a financing statement, when financing statements and other filings specified on Schedule 4.19(a) in appropriate form are filed in the offices specified on Schedule 4.19(a) and the other actions, if any, set forth on Schedule 3 to the Guarantee and Collateral Agreement have been taken, the Administrative Agent, for the benefit of the Secured Parties, shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations, in each case prior and superior in right to any other Person to the extent such Lien can be perfected by such actions and such filings under U.S. law (except, in the case of Collateral other than Pledged Stock, Liens permitted by Section 7.3). As of the Closing Date, none of the Borrower or any Subsidiary Guarantor that is a limited liability company or partnership have any Capital Stock that is a not a Certificated Security.

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(b) Any Mortgages delivered after the Closing Date will be, upon execution, effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds thereof, and when the Mortgages are filed in the offices for the applicable jurisdictions in which the Mortgaged Properties are located, each such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person (subject to the Liens permitted by Section 7.3(a), (e), (g), (h) or (r)).

4.20 Solvency; Fraudulent Transfer. The Loan Parties are, when taken as a whole, and immediately after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be, Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

4.21 Regulation H. No Mortgage encumbers improved real property that is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has not been made available under the National Flood Insurance Act of 1968.

4.22 Designated Senior Indebtedness. The Loan Documents and all of the Obligations shall be deemed “Designated Senior Indebtedness” or a similar concept thereof for purposes of any subordinated Indebtedness of the Loan Parties.

4.23 Insurance. All insurance maintained by the Loan Parties is in full force and effect, all premiums have been duly paid, no Loan Party has received notice of violation or cancellation thereof, and there exists no default under any requirement of such insurance. Each Loan Party maintains insurance with financially sound and reputable insurance companies insurance on all its property (and also with respect to its foreign receivables) in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

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4.24 Patriot Act. Each Loan Party is in compliance, in all material respects with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act or the Bribery Act 2012, and (c) the export control laws of the United States, as applicable, noting, however, the Voluntary Disclosure made to the U.S. Department of State, Directorate of Defense Trade Controls on April 12, 2012, which may indicate violations of the International Traffic in Arms Regulations; provided that such violations described in this clause (c) could not reasonably be expected to have a Material Adverse Effect. No part of the proceeds of the loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. All of the documentation related to the loans will be kept in a manner that complies with the recordkeeping requirements of the FCPA and the anti-money-laundering laws.

4.25 Indebtedness. Set forth on Schedule 7.2(e) is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

4.26 OFAC. No Loan Party nor any of its Subsidiaries is in violation of any of the country or list-based economic and trade sanctions administered and enforced by OFAC. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any Loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

SECTION 5

CONDITIONS PRECEDENT

5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make the initial extension of credit requested to be made by it is subject to the satisfaction, prior to or concurrently with the making of such extension of credit on the Closing Date, of the following conditions precedent:

(a) Loan Documents. The Administrative Agent (or, in the case of the Notes described below, the applicable Lender) shall have received each of the following:

(i) this Agreement, executed and delivered by the Administrative Agent, the Borrower and each Person listed on Schedule 1.1A;

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(ii) the Guarantee and Collateral Agreement, executed and delivered by the Borrower and each Subsidiary Guarantor, if any;

(iii) the Collateral Information Certificate, executed by a Responsible Officer of each Loan Party;

(iv) if required by any Lender, a Revolving Loan Note executed by the Borrower in favor of such Lender;

(v) if required by the Swingline Lender, the Swingline Loan Note executed by the Borrower in favor of such Lender; and

(vi) each Intellectual Property Security Agreement, executed by the applicable Grantor related thereto.

(b) Consistency. The final terms and conditions of each aspect of the transactions contemplated hereby, including, without limitation, all tax aspects thereof, shall be (i) consistent with the description thereof provided to Administrative Agent in writing or (ii) otherwise reasonably satisfactory to Administrative Agent and the Lenders.

(c) Approvals. All Governmental Approvals and consents and approvals of, or notices to, any other Person necessary, or in the opinion of the Administrative Agent, appropriate, in connection with the execution and performance of the Loan Documents, the continuing operations of the Group Members, and the operations of the Group Members as expected to result from the transactions contemplated hereby shall have been obtained and be in full force and effect.

(d) Lien Searches. The Administrative Agent shall have received the results of a recent lien search (to the extent such lien search is available in the relevant jurisdiction) in each of the jurisdictions of organization of the Loan Parties, and such searches shall reveal no Liens on any of the assets of the Loan Parties except for Liens permitted by Section 7.3 or discharged on or prior to the Closing Date pursuant to documentation satisfactory to the Administrative Agent.

(e) Intellectual Property Searches. The Administrative Agent shall have received the results of a recent intellectual property search (including searches with the United States Patent and Trademark Office and Copyright Office) with respect to each of the Loan Parties, with the results of such searches to be satisfactory to the Administrative Agent.

(f) Fees. The Lenders and the Administrative Agent shall, contemporaneously with the funding of the Loans on the Closing Date, have received all fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel required to be paid hereunder or under any other Loan Document), on or before the Closing Date.

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(g) Secretary’s Certificate; Organizational Documents; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments, including the certificate of incorporation or other similar organizational document of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party (to the extent such certification is available in the relevant jurisdiction), the bylaws or other similar organizational document of each Loan Party and the relevant board resolutions or written consents of each Loan Party, and (ii) a good standing certificate, or comparable certificate (to the extent available) for any jurisdiction outside of the US, as applicable, for each Loan Party from its jurisdiction of organization.

(h) Legal Opinions. The Administrative Agent shall have received the executed legal opinion of Kirkland & Ellis LLP, counsel to the Loan Parties in a form reasonably satisfactory to the Administrative Agent. Such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent may reasonably require.

(i) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received original copies of (i) the certificates representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, and (ii) each promissory note pledged to the Administrative Agent pursuant to the Guarantee and Collateral Agreement, endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof; provided that, with respect to any Foreign Subsidiary of the Borrower which has not issued certificates as of the Closing Date, the Borrower shall deliver the certificates representing 65% of the shares of Capital Stock of such Foreign Subsidiaries pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, within 30 days after the Closing Date (or such longer period as Administrative Agent may agree).

(i) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statements, Intellectual Property Security Agreements and Control Agreements) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right and priority to any Lien in the Collateral held by any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall be in proper form for filing, registration or recordation; provided, however, that, to the extent any security interest in the Collateral is not granted or perfected on the Closing Date after the Loan

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Parties’ commercially reasonable efforts to do so (other than (x) grants with respect to the properties of the Borrower and the Guarantors forming part of the Collateral subject to the Uniform Commercial Code and the delivery of Uniform Commercial Code financing statements and (y) the delivery of stock certificates in existence on the Closing Date for stock that is part of the Collateral and intercompany notes that are part of the Collateral), the grant or perfection of such security interest shall not constitute a condition precedent to the availability of the Credit Extensions on the Closing Date, but shall be granted or perfected, as the case may be, within 30 days after the Closing Date (or such longer period as Administrative Agent may agree), but the requirement to perfect such security interest shall not be waived.

(j) Solvency Certificate. The Administrative Agent shall have received a solvency certificate from a Responsible Officer of the Borrower, substantially in the form of Exhibit D, certifying that the Loan Parties, when taken as a whole and after giving effect to the Transactions and the other transactions contemplated hereby, on a consolidated basis, are Solvent.

(k) Minimum Liquidity. After giving effect to (i) the payment of the Closing Date Dividend and (ii) the payment of fees and expenses in connection with the Loan Documents, Liquidity shall be no less than $47,500,000.00 (of which at least $5,000,000 shall be unrestricted cash or Cash Equivalents on deposit at SVB or its affiliates or at another financial institution located in the United States in respect of which a Control Agreement, in form and substance reasonably satisfactory to the Administrative Agent, in favor of the Administrative Agent is in effect).

(l) Patriot Act. The Administrative Agent shall have received, prior to the Closing Date, all documentation and other information required by Governmental Authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act.

(m) Insurance. The Lenders shall be reasonably satisfied with the amount, types and terms and conditions of all insurance maintained by the Borrower and its Subsidiaries, and the Administrative Agent shall have received evidence of insurance satisfying the requirements of Section 5.2(b) of the Guarantee and Collateral Agreement, in a form reasonably satisfactory to the Administrative Agent, including, without limitation, a certificate of liability insurance on form ACORD 25, evidence of commercial property insurance on form ACORD 28, and copies of relevant endorsements specifically required pursuant to Section 5.2(b) of the Guarantee and Collateral Agreement.

(n) No Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of any Group Member, threatened, that calls into question the validity or enforceability of this Agreement and the extensions of credit to be made hereunder.

(o) Management Agreement. The Administrative Agent shall have received a copy of the Management Agreement.

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5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any extension of credit requested to be made by it on any date (including its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent such representations and warranties (A) expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date or (B) are qualified by materiality or “Material Adverse Effect” in the text thereof, in which case they shall be true and correct in all respects.

(b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or immediately after giving effect to the extensions of credit requested to be made on such date.

(c) Availability. With respect to any requests for any Revolving Extensions of Credit, after giving effect to such Revolving Extension of Credit, the availability and borrowing limitations specified in Section 2.1 shall be complied with.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder and each Revolving Loan Conversion shall constitute a representation and warranty by the Borrower as of the date of such extension of credit and each Revolving Loan Conversion that the conditions contained in this Section 5.2 have been satisfied or have been waived in writing by the Administrative Agent.

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SECTION 6

AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document (other than contingent indemnification obligations), including, without limitation, obligations under any Specified Swap Agreement and any Bank Services Agreement unless the obligations under such agreements have been Cash Collateralized or otherwise secured to the satisfaction of the Administrative Agent and Qualified Counterparty or provider of such Bank Services, as applicable, shall have been paid in full and all Letters of Credit have been canceled or Cash Collateralized in accordance with Section 3 hereof or have expired and all amounts drawn thereunder have been reimbursed in full or Cash Collateralized in accordance with Section 3 hereof, the Borrower shall, as to itself and each Subsidiary, and shall cause each of its respective Subsidiaries to:

6.1 Financial Statements. Furnish to the Administrative Agent, for distribution to each Lender:

(a) Annual Financial Statements. Commencing with the fiscal year ending February 29, 2012, within 120 days after the end of each fiscal year of the Borrower (but on or before October 31, 2012 with respect to the fiscal year of the Borrower ending on February 29, 2012), a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, together with an unqualified report (other than a “going concern” or like qualification or exception solely as a result of the final maturity date of any Loan being scheduled to occur within twelve (12) months from the date of such opinion) by an independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent;

(b) Quarterly Financial Statements. Commencing with the fiscal quarter ending August 31, 2012, not later than 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower and not later than 60 days after the end of the fourth fiscal quarter of each fiscal year of the Borrower (but not later than 60 days after the end of the fiscal quarters of the Borrower ending on August 31, 2012 and November 30, 2012), the unaudited consolidated and consolidating balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated and consolidating statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes); and

(c) Monthly Financial Statements. (i) On the first Borrowing Date to occur hereunder, the unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries for the most recent fiscal month ending prior to the Borrowing Date for which financial statements are available (or that would have been required to be delivered under clause (ii) below), and (ii) thereafter, not later than 30 days after the end of each month occurring during each fiscal year of the Borrower, the unaudited consolidated and consolidating balance sheets of the Borrower and its consolidated Subsidiaries as at the end of such month, in each case with respect to clauses (i) and (ii), certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes).

All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied (except as approved by such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods.

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6.2 Certificates; Other Information. Furnish to the Administrative Agent, for further distribution to each Lender (or, in the case of clause (e), to the relevant Lender):

(a) Compliance Certificate. Concurrently with the delivery of any financial statements pursuant to Section 6.1 (including, without limitation, any financial statements delivered on the first Borrowing Date to occur hereunder) (i) a certificate of a Responsible Officer stating that, to the best of each such Responsible Officer’s knowledge, each Loan Party during such period has observed or performed all of its covenants and other agreements, and satisfied every condition contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) (x) a Compliance Certificate containing all information and calculations reasonably necessary for determining compliance by each Group Member with the provisions of this Agreement referred to therein as of the last day of the fiscal month, quarter or year of the Borrower, as the case may be, and (y) to the extent not previously disclosed to the Administrative Agent, a description of any change in the jurisdiction of organization of any Loan Party and a list of any material Intellectual Property acquired by any Loan Party (or previously acquired immaterial Intellectual Property that has become material) since the date of the most recent report delivered pursuant to this clause (y) (or, in the case of the first such report so delivered, since the Closing Date);

(b) Board Projections. No later than 45 days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of the end of each fiscal quarter of such fiscal year, the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a description of the underlying assumptions applicable thereto), and, as soon as available, significant revisions, if any, of such budget and projections with respect to such fiscal year (collectively, the “Projections”), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections are based on reasonable estimates, information and assumptions that were believed by such Responsible Officer to be reasonable at the time made, it being understood and agreed that the Projections are not a guarantee of financial performance and actual results may differ from the Projections and such differences may be material;

(c) Investor Reports; SEC Filings. Within five days after the same are sent, copies of all financial statements and reports that the Borrower sends to the holders of any class of its debt securities or public equity securities and, within five days after the same are filed, copies of all financial statements and reports that the Borrower may make to, or file with, the SEC;

(d) Governmental Filings. Within five days after the same are sent or received, copies of all material correspondence, reports, documents and other filings with any Governmental

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Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals or otherwise on the operations of the Group Members; and

(e) Additional Information. Promptly, such additional financial and other information regarding the operations, business affairs and financial condition of any Group Member(s), the Collateral or compliance with the terms of the Loan Documents, as any Lender may from time to time reasonably request.

6.3 Payment of Obligations; Taxes. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature (other than taxes which in the aggregate involve tax liabilities of less than $100,000), except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the relevant Group Member.

6.4 Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain or obtain all Governmental Approvals and all other rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect; (c) comply with all Governmental Approvals, and any term, condition, rule, filing or fee obligation, or other requirement related thereto, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

6.5 Maintenance of Property; Insurance. (a) To the extent commercially reasonable, keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear and force majeure events excepted and (b) maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives and independent contractors of

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the Administrative Agent or any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and upon reasonable notice and as often as may reasonably be desired (provided such visits shall not be undertaken more frequently than once per year, unless an Event of Default has occurred and is continuing) and to discuss the business, operations, properties and financial and other condition of the Group Members with officers and employees of the Group Members and with their independent certified public accountants.

6.7 Notices. Promptly after a Responsible Officer obtains knowledge thereof, give notice to the Administrative Agent and each Lender of:

(a) the occurrence of any Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of any Group Member or (ii) litigation, investigation or proceeding that may exist at any time between any Group Member and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

(c) any litigation or proceeding affecting any Group Member (i) in which the amount involved is $500,000 or more and not covered by insurance, (ii) in which injunctive or similar relief is sought or (iii) which relates to any Loan Document;

(d) the following events, as soon as possible and in any event within 30 days after the Borrower knows thereof: (i) the occurrence of any Reportable Event with respect to any Pension Plan, a failure to make any required contribution to a Pension Plan or Multiemployer Plan, the creation of any Lien in favor of the PBGC or a Pension Plan or Multiemployer Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Pension Plan or Multiemployer Plan;

(e) any material change in accounting policies or financial reporting practices by any Loan Party;

(f) any development or event that has had or could reasonably be expected to have a Material Adverse Effect; and

(g) any early termination or expiration of any lease or any abandonment of any real property leased by any Loan Party.

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Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

6.8 Environmental Laws.

(a) Materially comply with, and take commercially reasonable steps to ensure material compliance by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and materially comply with and maintain, and take commercially reasonable steps to ensure that all tenants and subtenants obtain and materially comply with and maintain, any and all material licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

(b) Materially conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly materially comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

6.9 Operating Accounts. For so long as SVB is the Administrative Agent, maintain the Borrower’s and its Subsidiaries’ primary United States depository and operating accounts with SVB or SVB’s Affiliates.

6.10 Audits. At reasonable times, on one (1) Business Days’ notice (provided that no notice is required if an Event of Default has occurred and while it is continuing), the Administrative Agent, or its agents, shall have the right to inspect the Collateral and the right to audit and copy any and all of any Loan Party’s books and records including ledgers, federal and state tax returns, records regarding assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information. The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $850 per person per day (or such higher amount as shall represent the Administrative Agent’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. Such inspections and audits shall not exceed once per year, unless an Event of Default has occurred and is continuing.

6.11 Additional Collateral, etc.

(a) With respect to any property (to the extent included in the definition of Collateral) acquired after the Closing Date by any Loan Party (other than (x) any property described in paragraph

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(b), (c) or (d) below, and (y) any property subject to a Lien expressly permitted by Section 7.3(g)) as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected Lien, promptly (and in any event within five Business Days, or such longer period as the Administrative Agent may agree) (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent reasonably deems necessary or advisable to evidence that they are a Guarantor and to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such property and (ii) take all actions necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority (except as expressly permitted by Section 7.3) Lien in such property, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent.

(b) With respect to any fee interest in any real property having a value (together with improvements thereof) of at least $2,500,000 acquired after the Closing Date by any Loan Party (other than any such real property subject to a Lien expressly permitted by Section 7.3(f) or (g)), promptly (i) execute and deliver a first priority Mortgage (subject to Liens permitted by Section 7.3) in favor of the Administrative Agent, for the benefit of the Secured Parties, covering such real property, (ii) if reasonably requested by the Administrative Agent, provide the Lenders with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate, and (y) any consents or estoppels reasonably deemed necessary or advisable by the Administrative Agent in connection with creating a valid first priority Lien (subject Liens permitted by Section 7.3) pursuant to such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date by any Group Member (which, for the purposes of this Section 6.11(c), shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority Lien in the Capital Stock of such new Subsidiary that is owned by any Loan Party, (ii) deliver to the Administrative Agent such documents and instruments as may be required to grant, perfect, protect and ensure the priority of such security interest, including but not limited to, the certificates representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, (iii) cause such new Subsidiary (a) to become a party

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to the Guarantee and Collateral Agreement, (b) to take such actions necessary or advisable to grant to the Administrative Agent for the benefit of the Secured Parties a perfected first priority Lien in the Collateral described in the Guarantee and Collateral Agreement, with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent and (c) to deliver to the Administrative Agent a certificate of such Subsidiary, in a form reasonably satisfactory to the Administrative Agent, with appropriate insertions and attachments, and (iv) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent; provided, that to the extent the opinion is in respect of an entity organized, or Collateral located, in a jurisdiction for which an opinion has been delivered on the Closing Date, an opinion substantially similar in form and substance to such opinion delivered on the Closing Date shall be deemed satisfactory to the Administrative Agent.

(d) With respect to any new Excluded Foreign Subsidiary created or acquired after the Closing Date by any Loan Party and directly held by a Loan Party or a Domestic Subsidiary, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement, as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest in the Capital Stock of such new Subsidiary that is owned by any such Group Member (provided that in no event shall (A) more than 65% of the total outstanding voting Capital Stock of any such new Excluded Foreign Subsidiary owned directly by the Borrower or any Domestic Subsidiary (other than a Domestic Foreign Holding Company) be required to be so pledged or (B) any Capital Stock of any new Excluded Foreign Subsidiary owned by a Foreign Subsidiary or a Domestic Foreign Holding Company (or the assets of such new Excluded Foreign Subsidiary) be pledged hereunder), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Group Member, and take such other action as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(e) With respect to any holding company formed after the Closing Date to hold the Capital Stock of the Borrower, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement, as the Administrative Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest in the Collateral owned by such holding company (including the Capital Stock of the Borrower), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock of the Borrower,

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together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such holding company, and take such other action as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(f) Each Loan Party shall use commercially reasonable efforts (which shall not require any Loan Party to agree to any modification to any lease or to payment of any fees other than the landlord’s legal or out-of-pocket costs in connection with negotiating the landlord’s agreement or bailee letter) to obtain a landlord’s agreement or bailee letter, as applicable, from the lessor of each leased property or bailee with respect to any warehouse, processor or converter facility or other location where Collateral with a book value in excess of $1,000,000 is stored or located in the United States, which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord or bailee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent in its Permitted Discretion.

6.12 Use of Proceeds. Use the proceeds of each Credit Extension only for the purposes set forth in Section 4.16.

6.13 Designated Senior Indebtedness. Cause the Loan Documents and all of the Obligations to be deemed “Designated Senior Indebtedness” or a similar concept thereof for purposes of any subordinated Indebtedness of the Loan Parties.

6.14 Further Assurances. Subject to the limitations on perfection set forth herein and in the other Loan Documents, execute any further instruments and take such further action as the Administrative Agent reasonably deems necessary to perfect, protect, ensure the priority of or continue the Administrative Agent’s Lien on the Collateral or to effect the purposes of this Agreement.

6.15 Post-Closing Covenant. Without limiting the requirements set forth in Section 5.1(i) hereof and Section 5.8 of the Guarantee and Collateral Agreement, the Borrower shall deliver the following to the Administrative Agent within 30 days after the Closing Date (or such longer period as Administrative Agent may agree):

(i) That certain Full Recourse Promissory Note dated April 13, 2012 by and between the Borrower and David Faugno in the amount of $1,705,666.26, appropriately endorsed or accompanied by appropriate instruments of transfer in favor of the Administrative Agent;

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(ii) Evidence that the following UCC-1 financing statements have been terminated:

(a) Original File No. 20081624749 naming Yosemite Technologies, Inc., as debtor and Altos Ventures II, L.P. et al as secured party, filed May 9, 2008 with the Secretary of State of Delaware; and

(b) Original File No. 20083417852 naming Purewire, Inc., as debtor and Intersouth Partners VII, L.P. et al as secured party, filed October 8, 2008 with the Secretary of State of Delaware; and

(iii) An assignment of the United States copyrights listed on Schedule 6 to the Guarantee and Collateral Agreement from Yosemite Technologies, Inc. to the Borrower.

SECTION 7

NEGATIVE COVENANTS

The Borrower hereby agrees that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document (other than contingent indemnification obligations), including, without limitation, obligations under Specified Swap Agreement and Bank Services Agreement unless the obligations under such agreements have been Cash Collateralized or otherwise secured to the satisfaction of the Administrative Agent and Qualified Counterparty or provider of such Bank Services, as applicable, shall have been paid in full and all Letters of Credit have been canceled or Cash Collateralized in accordance with Section 3 hereof or have expired and all amounts drawn thereunder have been reimbursed in full or Cash Collateralized in accordance with Section 3 hereof, the Borrower shall not, nor permit any of its Subsidiaries to, directly or indirectly:

7.1 Financial Condition Covenants.

(a) Adjusted Quick Ratio. Permit the Adjusted Quick Ratio as at the last day of each month (i) for which financial statements are required to be delivered pursuant to Section 6.1(c)(i) or (c)(ii) hereof preceding each of the Borrower’s requests for a Revolving Extension of Credit and (ii) for which any Revolving Extension of Credit is outstanding as of the last day of such month, to be less than (A) if tested at any time from the Closing Date through July 31, 2013, 0.50:1.00, (B) if tested at any time from August 31, 2013 through October 31, 2013, 0.65:1.00, (C) if tested at any time from the November 30, 2013 through January 31, 2014, 0.80:1.00, (D) if tested at any time from the February 28, 2014 through April 30, 2014, 0.95:1.00, (E) if tested at any time from the May 31, 2014 through July 31, 2014, 1.05:1.00, and (F) if tested at any time thereafter, 1.10:1.00; provided that, for purposes of calculating

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the Adjusted Quick Ratio at any time from the Closing Date until delivery of the Borrower’s balance sheet for the month ending October 31, 2012 pursuant to Section 6.1(c)(i) hereof, cash balances constituting Qualified Cash for any month included in such calculation shall be calculated as of the Closing Date, after giving effect to the payment of the Closing Date Dividend.

(b) Minimum Consolidated Adjusted EBITDA. Permit Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries, as at the last day of each fiscal quarter (i) for which financial statements are required to be delivered pursuant to Section 6.1(b) hereof preceding each of the Borrower’s requests for a Revolving Extension of Credit and (ii) for which any Revolving Extension of Credit is outstanding on the last day of such fiscal quarter, tested on a trailing four fiscal quarter basis, to be less than $25,000,000.

7.2 Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) Indebtedness of any Group Member for Bank Services provided by any Lender or any Affiliate thereof;

(c) Indebtedness constituting a Permitted Intercompany Advance;

(d) Guarantee Obligations constituting a Permitted Intercompany Advance;

(e) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(e) and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity thereof or increasing the principal amount thereof);

(f) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity thereof or increasing the principal amount thereof);

(g) Surety Indebtedness;

(h) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(i) Indebtedness to the extent constituting Investments permitted under Sections 7.7(a) through (f), (g), (j), and (n);

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(j) Indebtedness under Swap Agreements permitted under Section 7.11, the terms of which are approved in writing by the Administrative Agent in its Permitted Discretion;

(k) (i) purchase price adjustments in connection with the Recapitalization Agreement and/or any Permitted Acquisition, (ii) indemnity payments in connection with the Recapitalization Agreement and/or any Permitted Acquisition, (iii) Earn-Out Obligations consistent with acquisitions of such nature and which are not disguised installment payments of the initial purchase price, (iv) Permitted Seller Debt and (v) any DP Amount and Accrued DP Interest; provided that in each case, (A) no Default or Event of Default has occurred and is continuing both immediately before and immediately after giving effect to the incurrence of such Indebtedness, (B) at the time of incurrence thereof, the Loan Parties shall be in pro forma compliance with the covenants and agreements set forth in this Agreement, it being understood that such covenants shall be determined on a pro forma basis after giving effect to the incurrence of such Indebtedness, and (C) the sum of the amounts pursuant to Section 7.2(k)(i)(1), (k)(ii), (k)(iii), (k)(iv) and (k)(v) plus the initial purchase price and all other consideration paid in connection with the Permitted Acquisitions, does not in the aggregate exceed the limit on consideration imposed by Section 7.7(m);

(l) other unsecured subordinated Indebtedness approved in writing by the Required Lenders; provided, however, that (i) no Default or Event of Default shall exist immediately prior to the incurrence of such subordinated Indebtedness or would immediately result therefrom, and (ii) such subordinated Indebtedness is subject to a subordination agreement or other subordination terms acceptable to the Required Lenders (which shall include, without limitation, unlimited payment blockage and standstill provisions);

(m) Indebtedness incurred in connection with the financing of insurance premiums and secured, if at all, by liens permitted under Section 7.3(r);

(n) Indebtedness arising from or the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight over drafts) drawn against insufficient funds in the ordinary course of business;

(o) Indebtedness in respect of netting services or overdraft protection or otherwise in connection with deposit or securities accounts in the ordinary course of business;

(p) unsecured Indebtedness of Borrower and its Subsidiaries owing to employees, former employees, officers, former officers, directors, former directors (or any spouses, ex spouses, or estates of an of the foregoing) in connection with the repurchase of Capital Stock of Borrower issued to any of the aforementioned employees, former employees, officers, former officers, directors (or any spouses, ex spouses, or estates of an of the foregoing) not to exceed $2,000,000 at any time outstanding;

(q) Other than funded bank Indebtedness, Indebtedness of any Person that becomes a Subsidiary after the Closing Date that exists at the time such Person becomes a Subsidiary and is not

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created in contemplation of or in connection with such Person becoming a Subsidiary; provided that such Indebtedness shall not in the aggregate exceed $1,000,000 at any time outstanding;

(r) Indebtedness of any Subsidiary of the Borrower organized under the laws of Germany incurred in respect of any part time worker arrangements falling under the German Old Age Employees Part Time Act (Altersteilzeitgesetz); and

(s) additional Indebtedness of the Group Members not described above in this Section 7.2 in an aggregate principal amount not to exceed $20,000,000 at any one time outstanding.

7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except:

(a) Liens for taxes, assessments or governmental charges, or levies not yet due or that are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the affected Group Member in conformity with GAAP;

(b) carriers’, warehousemen’s, landlord’s, mechanics’, materialmen’s, workmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

(c) Liens imposed by Requirements of Law, pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(e) easements, rights-of-way, restrictions (including zoning restrictions), covenants, licenses, encroachments, protrusions and other similar charges or encumbrances or minor title deficiencies on or with respect to any real property, in each case, whether now or hereafter in existence, incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Group Members;

(f) Liens in existence on the date hereof listed on Schedule 7.3(f) and any Lien granted as a replacement or substitute for a Lien, securing Indebtedness permitted by Section 7.2(e); provided that (A) no such Lien is spread to cover any additional property after the Closing Date, (B) that the amount of Indebtedness secured thereby is not increased, and (C) that any replacement or substitute Lien encumber not more property than the original Lien that such replacement or substitute Lien replaces or is substituted for;

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(g) Liens securing Indebtedness of any Group Member incurred pursuant to Section 7.2(f) to finance the acquisition of fixed or capital assets; provided that (i) such Liens shall be created substantially simultaneously with, or, if created after the acquisition, no more than three months after, the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (iii) the amount of Indebtedness secured thereby is not increased;

(h) Liens created pursuant to the Security Documents;

(i) any interest or title of a lessor, sublessors, licensor or licensee under any lease or license entered into by a Group Member in the ordinary course of its business and covering only the assets so leased or licensed;

(j) judgment Liens that do not constitute a Default or Event of Default under Section 8.1(h) of this Agreement;

(k) deposits made in the ordinary course of business to secure liability for premiums to insurance carriers;

(l) Liens on property of a person existing at the time such person is acquired or merged with or into or consolidated with any Group Member to the extent permitted hereunder (and not created in anticipation or contemplation thereof); provided that, such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements thereon) and are no more favorable to the lienholders than existing Liens in favor of the Administrative Agent;

(m) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods;

(n) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Group Member in the ordinary course of business in accordance with the past practices of such Group Member;

(o) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Group Member, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of Requirements of Law or under the general terms and conditions of banks and Sparkassen (Allgemeine Geschäftsbedingungen der Banken and Sparkassen) or any similar term applied by a German bank, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

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(p) (i) non-exclusive licenses of intellectual property or intellectual property rights and (ii) licenses of intellectual property or intellectual property rights that could not result in a legal transfer of title of such intellectual property or intellectual property rights that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas, in each case granted by any Group Member in the ordinary course of business, and not interfering in any material respect with the ordinary conduct of business of the Group Members;

(q) the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(r) Liens on insurance policies or the proceeds thereof granted in the ordinary course of business to secure the financing of insurance premiums with respect to such insurance policies; and

(s) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction, covering only the items being collected upon;

(t) Liens attaching solely to cash earnest money deposits in connection with any actual or intended Permitted Acquisition or attaching solely to cash earnest money deposits in connection with any actual or intended acquisition of property not otherwise prohibited hereunder;

(u) Liens granted by a Non-Loan Party in favor of a Loan Party in respect of Indebtedness or other obligations owned by such Subsidiary to such Loan Party;

(v) with respect to German law, any Lien arising under the general terms and conditions of banks or Sparkassen (Allgemeine Geschäftsbedingungen der Banken oder Sparkassen) with whom any Group Member maintains a banking relationship in the ordinary course of business; and

(w) Liens created in respect of the German Old Age Employees Part Time Act (Altersteilzeitgesetz) and the German Social Code (Sozialgesetzbuch);

(x) Liens securing Indebtedness permitted under Section 7.2(r); and

(y) Liens not otherwise permitted by this Section 7.3 so long as neither (i) the aggregate outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is incurred) of the assets encumbered thereby exceeds (as to the Borrower and its Subsidiaries) $250,000 at any one time.

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7.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, except that:

(a) any Subsidiary of the Borrower may be merged, consolidated or amalgamated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any Domestic Subsidiary that is a Wholly Owned Subsidiary Guarantor (provided that such Domestic Subsidiary that is a Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation);

(b) (i) any Subsidiary of the Borrower may Dispose of any or all of its assets (A) to the Borrower or any Domestic Subsidiary that is a Wholly Owned Subsidiary Guarantor (upon voluntary liquidation or otherwise) or (B) pursuant to a Disposition permitted by Section 7.5; and (ii) any Non-Loan Party may Dispose of all or any of its assets to any other Non-Loan Party or merge or consolidate with any other Non-Loan Party;

(c) Dispositions permitted by Section 7.5 may be made; and

(d) any Investment expressly permitted by Section 7.7 may be structured as a merger, consolidation or amalgamation.

7.5 Disposition of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

(a) the Disposition of obsolete or worn out property and the abandonment or other Disposition of Intellectual Property that is, in the reasonable judgment of the Borrower, no longer economically practicable to maintain in the ordinary course of business of the Group Members taken as a whole;

(b) the sale of Inventory in the ordinary course of business;

(c) Dispositions permitted by Sections 7.4(b)(i)(A) and (b)(ii);

(d) (i) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Wholly Owned Subsidiary Guarantor provided that the no cash consideration is paid to any such Subsidiary issuing Capital Stock that is not a Loan Party, (ii) the sale or issuance of the Capital Stock of any Subsidiary that is not a Loan Party to any other Subsidiary that is not a Loan Party and (iii) the sale or issuance of Qualified Capital Stock of the Borrower so long as such sale does not result in a Change of Control;

(e) the use or transfer of money or Cash Equivalents in a manner not otherwise prohibited by this Agreement or the other Loan Documents;

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(f) the non-exclusive licensing or sub-licensing of patents, trademarks, copyrights, and other Intellectual Property rights in the ordinary course of business;

(g) to the extent constituting a Disposition, leases of real or personal property in the ordinary course of business and in accordance with the applicable Security Documents;

(h) Investments made in compliance with Section 7.7;

(i) the Disposition of other property having a fair market value not to exceed $1,000,000 in the aggregate for any fiscal year of the Borrower, provided that the Borrower may designate one fiscal year during the term of this Agreement during which Borrower may Dispose of additional property having a fair market value not to exceed $500,000 (in addition to the $1,000,000 permitted in every fiscal year) by giving the Administrative Agent written notice of such election;

(j) (x) discounts of or forgiveness of accounts receivable or in connection with the collection or compromise thereof, in each case, in the ordinary course of business, and (y) sales, transfers and other Dispositions of accounts receivable in connection with collection thereof in the ordinary course of business;

(k) Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of any property or asset of a Group Member;

(l) Disposition of assets acquired by a Loan Party pursuant to a Permitted Acquisition disposed of within twelve (12) months after the date of the Permitted Acquisition so long as the consideration received for the assets to be so disposed is at least equal to the fair market value thereof; and

(m) Dispositions in one or more transactions of (i) the Borrower’s facility located at 3175 Winchester Blvd., Campbell, California 95008, (ii) all or part of the CudaTel line of business, and (iii) Third his Corporation and/or its Subsidiaries.

7.6 Restricted Payments. Make any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to any subordinated Indebtedness, Earn-Out Obligations, DP Amounts (including, in each case, any Accrued DP Interest), payments of any fees or expenses to the Permitted Investors, declare or pay any dividend (other than dividends payable solely in common stock of the Person making such dividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Group Member (collectively, “Restricted Payments”), except that:

(a) any Group Member (other than the Borrower) may make Restricted Payments to the Borrower or any Subsidiary;

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(b) so long as prior to or and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing, the Borrower may purchase Capital Stock or Capital Stock options from present or former directors, officers or employees (or their respective spouses, ex-spouses or estates) of any Group Member; provided that the aggregate amount of payments under this Section 7.6(b) during (i) the fiscal year of the Borrower ending February 28, 2013 shall not exceed $5,000,000, and (ii) any fiscal year of the Borrower thereafter shall not exceed the sum of (A) $1,000,000 plus (B) the amount, if a positive number, by which $1,000,000 exceeds the amount of Restricted Payments made pursuant to this Section 7.6(b) during the immediately preceding fiscal year of the Borrower;

(c) the Borrower may pay the Closing Date Dividend;

(d) the Borrower may make the Closing Date Share Repurchase;

(e) the Loan Parties may pay the fees and expenses pursuant to the Management Agreement to the extent permitted by Section 7.9 hereof;

(f) the Loan Parties may pay bonuses or make other payments in an aggregate amount not to exceed $8,700,000 to employee optionholders;

(g) the Loan Parties may pay amounts payable in respect of Permitted Seller Debt, Earn-Out Obligations and the DP Amounts (including, in each case, any Accrued DP Interest) so long as, in each case, prior to and immediately after giving effect thereto, (i) any such payments are in compliance with the subordination terms applicable to such Permitted Seller Debt, Earn-Out Obligations or DP Amounts, (ii) no Event of Default has occurred and is continuing and (iii) Liquidity of the Loan Parties is not less than $10,000,000 (of which amount at least $2,500,000 shall be unrestricted cash on deposit at SVB or its affiliates or at a financial institution located in the United States in each case in respect of which a Control Agreement, in form and substance reasonably satisfactory to the Administrative Agent, in favor of the Administrative Agent is in effect); and

(h) the Loan Parties may make other Restricted Payments in an amount not to exceed $10,000,000 in any fiscal year of the Borrower, so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) after giving effect to such Restricted Payment, the Loan Parties are in pro forma compliance with the covenants set forth in Section 7.1 hereof, and (iii) after giving effect to such Restricted Payment, Liquidity of the Loan Parties is not less than $20,000,000 (of which amount at least $5,000,000 shall be unrestricted cash on deposit at SVB or its affiliates or at a financial institution located in the United States in each case in respect of which a Control Agreement, in form and substance reasonably satisfactory to the Administrative Agent, in favor of the Administrative Agent is in effect).

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7.7 Investments. Make any advance, loan, extension of credit (by way of guarantee or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, “Investments”), except:

(a) extensions of trade credit in the ordinary course of business;

(b) Investments in cash and Cash Equivalents;

(c) Guarantee Obligations permitted by Section 7.2;

(d) (i) loans and advances to officers, directors and employees of any Group Member outstanding on the Closing Date in an amount not to exceed $3,000,000, and (ii) loans and advances to officers, directors and employees of any Group Member in an aggregate amount for all Group Members not to exceed $2,000,000 at any one time outstanding;

(e) Investments constituting a Permitted Intercompany Advance;

(f) Investments in the ordinary course of business consisting of endorsements of negotiable instruments for collection or deposit;

(g) Investments received in settlement of amounts due to any Group Member effected in the ordinary course of business or owing to any Group Member as a result of Insolvency Proceedings involving an account debtor or upon the foreclosure or enforcement of any Lien in favor of such Group Member;

(h) Investments outstanding on the date hereof and listed on Schedule 7.7(h);

(i) any Group Member may (i) acquire and hold accounts receivables owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) invest in, acquire and hold cash and Cash Equivalents, (iii) endorse negotiable instruments held for collection in the ordinary course of business or (iv) make lease, utility and other similar deposits in the ordinary course of business;

(j) Swap Agreements permitted under Section 7.11;

(k) Investments made by the Borrower or any Subsidiary as a result of consideration received in connection with a Disposition made in compliance with Section 7.5;

(l) Investments then existing when a Person becomes a Subsidiary or at the time such person merges or consolidates with the Borrower or any Subsidiary as permitted under Section 7.4;

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(m) Permitted Acquisitions in an amount not in excess of $100,000,000 in the aggregate for all Permitted Acquisitions during the term of this Agreement plus the Net Cash Proceeds received from the contribution of equity to the Borrower or the issuance of Capital Stock by the Borrower substantially contemporaneously with such Permitted Acquisition and any cash or Cash Equivalents purchased or acquired in such Permitted Acquisition;

(n) pledges and deposits permitted under Section 7.3;

(o) Investments consisting of endorsements for collection or deposit and Investments in deposit and investment accounts opened in the ordinary course of business with financial institutions;

(p) Investments consisting of earnest money deposits required in connection with any actual or intended Permitted Acquisition or consisting of earnest money deposits required in connection with any actual or intended acquisition of property not otherwise prohibited hereunder;

(q) Investments in any Foreign Subsidiary in an amount not to exceed, together with any loans, guarantees and advances of the type described in clause (d) of the definition of Permitted Intercompany Advances, $5,000,000 in the aggregate at any time outstanding to support the expansion of business and to finance general operating expenses of such Foreign Subsidiaries; and

(r) in addition to Investments otherwise expressly permitted by this Section, Investments by the Group Members in an aggregate amount (valued at cost) not to exceed $1,000,000 at any one time outstanding (net of returns on such Investment).

7.8 Modifications of Certain Preferred Stock and Debt Instruments. (a) Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Preferred Stock (i) that would provide for any redemption payment thereon prior to the date that is six months after the Revolving Termination Date or (ii) that would be otherwise materially adverse to any Lender or any other Secured Party in their capacity as such; or (b) other than pursuant to any refinancing or replacement of Indebtedness permitted by Section 7.2, amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Indebtedness permitted by Section 7.2 (other than Indebtedness pursuant to any Loan Document) that would shorten the maturity (but only to the extent such shortening, would result in the maturity of such Indebtedness to be prior to three months after the Revolving Termination Date) or increase the amount of any payment of principal thereof or the rate of interest thereon or shorten any date for payment of interest thereon or that would be otherwise materially adverse to any Lender or any other Secured Party.

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7.9 Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than the Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business of the relevant Group Member, and (c) upon fair and reasonable terms no less favorable to the relevant Group Member than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate, except that the following shall be permitted:

(a) so long as no Default or Event of Default shall has occurred and is continuing and no Default or Event of Default would occur after giving effect thereto, Group Members may (i) reimburse to the Sponsors and their Affiliates up to $200,000 per year of reasonable, documented, out-of-pocket expenses incurred with respect to the Group Members and (ii) pay to the Sponsors and their Affiliates fees in an aggregate amount not to exceed $250,000 (the “Management Fees”) in any fiscal quarter of the Borrower, in each case, pursuant to the Management Agreement; provided however, if all or part of the Management Fees cannot be paid during a given fiscal quarter, then the Management Fees for such fiscal quarter that are not paid during such fiscal quarter shall be accrued, on a cumulative basis, and such Management Fees shall be payable in any subsequent fiscal quarter the Loan Parties choose; provided further that the amount of any such Management Fees paid during any fiscal quarter shall not reduce the amount of Management Fees otherwise allowed to be paid for such fiscal quarter;

(b) reasonable and customary director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements; and

(c) transactions exclusively among or between Non-Loan Parties.

7.10 Sale Leaseback Transactions. Enter into any Sale Leaseback Transaction unless the Disposition of such property is permitted pursuant to Section 7.5 and the resulting Indebtedness is permitted under Section 7.2.

7.11 Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Capital Stock) and (b) Swap Agreements entered into to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

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7.12 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than February 28 or February 29 or change the Borrower’s method of determining fiscal quarters.

7.13 Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan Documents to which it is a party other than (a) this Agreement and the other Loan Documents, (b) any agreement evidencing Indebtedness permitted under this Agreement and secured by Liens permitted by clauses (f), (g), and (l) of Section 7.3 as to the assets securing such Indebtedness, (c) agreements that are customary restrictions on subleases, leases, licenses, or permits so long as such restrictions relate to the property subject thereto, (d) any agreement evidencing an asset sale, as to the assets being sold, and (e) agreements that are customary provisions restricting assignment or transfer of any contract entered into in the ordinary course of business.

7.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or advances to, or other Investments in, the Borrower or any other Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except for such encumbrances or restrictions existing under or by reason of (i) the Loan Documents, (ii) any agreement that has been entered into in connection with the Disposition of any of the Capital Stock or assets of any Subsidiary with regard to such Capital Stock or assets that are disposed of, (iii) customary restrictions on the assignment or transfer of leases, licenses and other agreements, (iv) agreements governing purchase money liens or Capital Lease Obligations otherwise permitted hereby which restrictions are only effective against the assets financed thereby, (v) agreements binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary of the Borrower, so long as such agreements were not entered into in contemplation of such Person becoming a Subsidiary of the Borrower, and (vi) the transfer of any property subject to Liens permitted by Section 7.3.

7.15 Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses in which the Group Members are engaged on the date of this Agreement or that are reasonably related, ancillary or complementary thereto.

7.16 Amendments to Organizational Agreements. Amend or permit any amendments to any Loan Party’s organizational documents that would contradict or compromise the purposes of this Agreement.

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7.17 Georgia Subsidiary. Permit Barracuda Networks, Inc., a Georgia entity and a wholly owned subsidiary of the Borrower, to engage in any business or own any property or assets other than immaterial property and assets.

SECTION 8

EVENTS OF DEFAULT

8.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default:

(a) the Borrower shall fail to pay any principal of any Loan when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder or under any other Loan Document (other than Bank Services Agreements), within three days after any such interest or other amount becomes due in accordance with the terms hereof; or

(b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document (other than Bank Services Agreements) or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document (other than Bank Services Agreements) shall prove to have been inaccurate in any material respect on or as of the date made or deemed made (or if any representation or warranty is (x) expressly stated to have been made as of a specific date, inaccurate in any material respect as of such specific date or (y) qualified by materiality in the text thereof, inaccurate in any respect ); or

(c) (i) any Loan Party shall default in the observance or performance of any agreement contained in Section 6.1, Section 6.2(b) or (d) or (h), Section 6.4(a), Section 6.5(b), Section 6.7, Section 6.9 or Section 7 of this Agreement or (ii) an “Event of Default” under and as defined in any Mortgage shall have occurred; or

(d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than (A) as provided in clause (i) above, paragraphs (a) through (c) of this Section 8.1 and (B) any Bank Services Agreements), and such default shall continue unremedied or unwaived for a period of 30 days thereafter; or

(e) any Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation, but excluding the Loans) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the

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observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, and in each case, shall continue beyond the period of grace provided in the instrument or agreement under which such Indebtedness was created, the effect of which default or other event or condition is to (x) cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable or (y) to cause, with the giving of notice if required, any Group Member to purchase or redeem or make an offer to purchase or redeem such Indebtedness prior to its stated maturity; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $1,000,000; or

(f) any Group Member shall commence any Insolvency Proceeding (a) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (b) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (a) results in the entry of an order for relief or any such adjudication or appointment, which order is not stayed or other similar relief is not granted under applicable state or federal law or (b) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

(g) (i) the Borrower or any Commonly Controlled Entity shall engage in any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) there shall be any failure to comply with the Pension Funding Rules, whether or not waived, or there shall arise any Lien in favor of the PBGC or a Plan on the assets of any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect

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to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Pension Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Pension Plan for purposes of Title IV of ERISA, (iv) any Pension Plan shall terminate for purposes of Title IV of ERISA, or (v) any Group Member or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan; and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or

(h) one or more judgments, decrees or OFAC-related fines or penalties shall be entered against any Group Member involving in the aggregate a liability (not paid or fully covered by insurance as to which the relevant insurance company has not denied coverage) of $1,000,000 or more, and all such judgments, decrees and OFAC-related fines or penalties shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or

(i) (1) any of the Security Documents shall cease, as a result of any action or inaction of any Group Member, to be in full force and effect, (2) any of the Security Documents shall cease, for any reason, to be in full force and effect with respect to Collateral having a fair market value in excess of $750,000, (3) any Loan Party or any Affiliate of any Loan Party shall assert that any Security Document has ceased, for any reason, to be in full force and effect, (4) any Lien created by any of the Security Documents shall, through the action or inaction of any Group Member, cease to be enforceable and of the same effect and priority purported to be created thereby, or (5) any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby with respect to Collateral having a fair market value in excess of $750,000; or

(j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert, other than in each case pursuant to its terms or as a direct result of action by Administrative Agent or any Lender; or

(k) a Change of Control shall occur; or

(l) any Governmental Approvals necessary for any Loan Party to operate in the ordinary course shall have been revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term;

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8.2 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to any Loan Party, the Commitments shall immediately terminate automatically and the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall automatically immediately become due and payable, and

(b) if such event is any other Event of Default, any of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Revolving Commitments and the L/C Commitment to be terminated forthwith, whereupon the Revolving Commitments and the L/C Commitments shall immediately terminate; (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable; and (iii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall exercise on behalf of itself, the Lenders and the Issuing Lender all rights and remedies available to it, the Lenders and the Issuing Lender under the Loan Documents. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall Cash Collateralize an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts so Cash Collateralized shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other Obligations of the Borrower and the other Loan Parties hereunder and under the other Loan Documents in accordance with Section 8.3. After all such Letters of Credit shall have expired or been fully drawn upon and all amounts drawn thereunder have been reimbursed in full and all other Obligations of the Borrower and the other Loan Parties hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, of the funds having been so Cash Collateralized shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section 8.2, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower.

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8.3 Application of Funds. After final maturity of the Obligations or the exercise of remedies provided for in Section 8.2, any amounts received by the Administrative Agent on account of the Obligations shall be applied by the Administrative Agent in the following order:

First, to the payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including, without limitation, fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Sections 2.14, 2.15 and 2.16) payable to the Administrative Agent in accordance with the terms hereof and the other Loan Documents in its capacity as such (including interest thereon);

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit fees set forth in Section 3.3(a)(i) payable to the Lenders and the Issuing Lender in accordance with the terms hereof and the other Loan Documents (including reasonable fees, charges and disbursements of counsel to the respective Lenders and the Issuing Lender and amounts payable under Sections 2.14, 2.15 and 2.16), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid Issuing Lender Fees and interest on the Loans, L/C Disbursements which have not yet been converted into Revolving Loans and other Obligations, ratably among the Lenders and the Issuing Lender in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Disbursements which have not yet been converted into Revolving Loans and other Obligations, ratably among the Lenders and the Issuing Lender in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the Issuing Lender, to Cash Collateralize that portion of the L/C Exposure comprised of the aggregate undrawn amount of Letters of Credit pursuant to Section 3.10;

Sixth, to the payment of Obligations arising under any Specified Swap Agreement, ratably among the Qualified Counterparties in proportion to the respective amounts described in this clause Sixth held by them; and

Last, the balance, if any, after all of the Obligations (including Obligations arising under Bank Services Agreements) have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Section 3.4, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit in accordance with Section 8.2(b) as they occur. Subject to Sections 3.4, 3.5 and 3.10, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If

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any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other obligations, if any, in the order set forth above.

SECTION 9

THE ADMINISTRATIVE AGENT

9.1 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints SVB to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.

(b) The provisions of this Section 9 (excluding Section 9.9) are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities to any Lender or any other Person, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

(c) The Administrative Agent shall also act as the collateral agent under the Loan Documents, and each of the Lenders (in their respective capacities as a Lender and, as applicable, Qualified Counterparty, provider of Bank Services) hereby irrevocably (i) authorizes the Administrative Agent to enter into all other Loan Documents, as applicable, including the Guarantee and Collateral Agreement, any other Security Documents, and any subordination agreements, and (ii) appoints and authorizes the Administrative Agent to act as the agent of the Secured Parties for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. The Administrative Agent, as collateral agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.2 for purposes of holding or enforcing any Lien

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on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Section 9 and Section 10 (including Section 9.7, as though such co-agents, sub-agents and attorneys-in-fact were the collateral agent under the Loan Documents) as if set forth in full herein with respect thereto. Without limiting the generality of the foregoing, the Administrative Agent is further authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action, or permit any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent to take any action, with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected the Liens upon any Collateral granted pursuant to any Loan Document.

9.2 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub agents.

9.3 Exculpatory Provisions. The Administrative Agent shall have no duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder and thereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent shall not:

(a) be subject to any fiduciary or other implied duties, regardless of whether any Default or any Event of Default has occurred;

(b) have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), as applicable; provided that the Administrative Agent shall not be required to take any action that, in its reasonable opinion or in the reasonable opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of

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doubt any action that may be in violation of the automatic stay under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any such laws; and

(c) except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Administrative Agent shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 8.2 and Section 10.1) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final and nonappealable judgment.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.4 Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension or renewal of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for any Loan Party), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. The

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Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or such other number or percentage of Lenders as shall be provided for herein or in the other Loan Documents) as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or such other number or percentage of Lenders as shall be provided for herein or in the other Loan Documents), and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and all future holders of the Loans.

9.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has received notice in writing from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action or refrain from taking such action with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

9.6 Non-Reliance on the Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys in fact or affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of a Group Member or any affiliate of a Group Member, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Group Members and their affiliates and made its own credit analysis and decision to make its Loans hereunder and enter into this Agreement. Each Lender also agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under or based

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upon this Agreement, the other Loan Documents or any related agreement or any document furnished hereunder or thereunder, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Group Members and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Group Member or any affiliate of a Group Member that may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys in fact or affiliates.

9.7 Indemnification. Each of the Lenders agrees to indemnify each of the Administrative Agent, the Issuing Lender and the Swingline Lender and each of its Related Parties in its capacity as such (to the extent not reimbursed by the Borrower or any other Loan Party and without limiting the obligation of the Borrower or any other Loan Party to do so), according to its Aggregate Exposure Percentage in effect on the date on which indemnification is sought under this Section 9.7 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, in accordance with its Aggregate Exposure Percentage immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent or such other Person in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent or such other Person under or in connection with any of the foregoing and any other amount not reimbursed by any Loan Party; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agent’s or such other Person’s gross negligence or willful misconduct and that with respect to such unpaid amounts owed to any Issuing Lender or Swingline Lender solely in its capacity as such, only the Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Lenders’ Revolving Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought). The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder.

9.8 The Administrative Agent in Its Individual Capacity. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each such Person serving as the

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Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower, any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.9 Successor Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with and with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed; provided, that no consent shall be required during continuance of an Event of Default), to appoint a successor, which shall be a commercial bank with an office in the State of California, Illinois or New York, or an Affiliate of any such bank with an office in the State of California, Illinois or New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the retiring Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed and such collateral security is assigned to such successor Administrative Agent) and (2) except for any indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent (other than any rights to indemnity payments owed to the retiring Administrative Agent), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of Section 9 and Section 10.5 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as the Administrative Agent.

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9.10 Collateral and Guaranty Matters. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any Collateral or other property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the applicable Issuing Lender shall have been made), including, without limitation, obligations under Specified Swap Agreement and Bank Services Agreement unless the obligations under such agreements have been Cash Collateralized or otherwise secured to the satisfaction of the Administrative Agent and any Qualified Counterparty or provider of such Bank Services, as applicable, (ii) that is sold or to be sold, disposed or to be disposed as part of or in connection with any sale or disposition permitted hereunder or under any other Loan Document, or (iii) subject to Section 10.1, if approved, authorized or ratified in writing by the Required Lenders;

(b) to subordinate or release any Lien on any Collateral or other property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.3(g); and

(c) to release any Guarantor from its obligations under the Guarantee and Collateral Agreement if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

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9.11 Proofs of Claim. In case of the pendency of any Insolvency Proceeding or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or Obligation in respect of any Letter of Credit shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated), by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Obligations in respect of any Letter of Credit and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.5 and 10.5) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.5 and 10.5.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

SECTION 10

MISCELLANEOUS

10.1 Amendments and Waivers.

(a) Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (ii) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of

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Default and its consequences; provided that no such waiver and no such amendment, supplement or modification shall (A) (1) forgive the principal amount or extend the final scheduled date of maturity of any Loan, (2) reduce the stated rate of any interest or fee payable hereunder (except that (i) any amendment or modification of defined terms used in the financial covenants in this Agreement and (ii) any waiver or any other modification of the Default Rate, shall not constitute a reduction in the rate of interest or fees for purposes of this clause (A)), (3) extend the scheduled date of any payment of any interest or fee, or (4) increase the amount of or extend the expiration date of any Lender’s Revolving Commitment, in each case without the written consent of each Lender directly affected thereby; (B) eliminate or reduce the voting rights of any Lender under this Section 10.1 without the written consent of such Lender; (C) amend, waive or otherwise modify the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, modify the provisions of Section 8.3, release all or substantially all of the Collateral or release all or substantially all of the Subsidiary Guarantors from their obligations under the Guarantee and Collateral Agreement, in each case without the written consent of all Lenders; (D) amend, modify or waive the pro rata requirements of Section 2.13 in a manner that adversely affects Lenders without the written consent of each Lender; (E) amend, modify or waive any provision of Section 9 without the written consent of the Administrative Agent (in addition to the Required Lenders); (F) amend, modify or waive any provision of Section 2.3 or 2.4 without the written consent of the Swingline Lender (in addition to the Required Lenders); or (G) amend, modify or waive any provision of Section 3 without the written consent of the Issuing Lender (in addition to the Required Lenders). Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured during the period such waiver is effective; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

(b) Notwithstanding anything to the contrary contained in Section 10.1(a), in the event that the Borrower requests that this Agreement or any of the other Loan Documents be amended or otherwise modified in a manner which would require the consent of all of the Lenders and such amendment or other modification is agreed to by the Borrower, the Required Lenders and the Administrative Agent, then, with the consent of the Borrower, the Administrative Agent and the Required Lenders, this Agreement or such other Loan Document may be amended without the consent of the Lender or Lenders who are unwilling to agree to such amendment or other modification (each, a “Minority Lender”), to provide for:

(i) the termination of the Commitment of each such Minority Lender;

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(ii) the assumption of the Loans and Commitment of each such Minority Lender by one or more Replacement Lenders pursuant to the provisions of Section 2.19; and

(iii) the payment of all interest, fees and other obligations payable or accrued in favor of each Minority Lender and such other modifications to this Agreement or to such Loan Documents as the Borrower, the Administrative Agent and the Required Lenders may determine to be appropriate in connection therewith.

(c) Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent, and the Borrower, (i) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Extensions of Credit and the accrued interest and fees in respect thereof and (ii) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

10.2 Notices.

(a) All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile or electronic mail), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of facsimile or electronic mail notice, when received, addressed as follows in the case of the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

The Borrower:	Barracuda Networks, Inc. 3175 S. Winchester Blvd Campbell, CA 95008
	Attention: Chief Financial Officer
	Facsimile No.: (866) 670-8599
	with a copy to:
	Kirkland & Ellis LLP
	555 California Street San Francisco, California 94104
	Attention: Christopher W. Kirkham
	Facsimile No.: (415) 439-1500

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Administrative Agent:	Silicon Valley Bank
	2400 Hanover Street
	Palo Alto, CA 94304
	Attention: Michael Willard
	Facsimile No.: (650) 320-0016
	with a copy to (which shall not constitute notice):
	Riemer & Braunstein LLP
	Three Center Plaza
	Boston, MA 02108-2003 Attention: Charles W. Stavros, Esq. Facsimile No.: 617-692-3441
	E-Mail: CStavros@riemerlaw.com

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including email and Internet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment); and (b) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (a) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (a) and (b), if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) (i) Each Loan Party agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Lender and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”).

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(i) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower or the other Loan Parties, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or the Issuing Lender by means of electronic communications pursuant to this Section, including through the Platform.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable and documented out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including the reasonable and documented fees and disbursements of counsel to the Administrative Agent and filing and recording fees and expenses, with statements with respect to the

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foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each Lender and the Administrative Agent for all its reasonable and documented out-of-pocket costs and expenses incurred after the occurrence and during the continuance of an Event of Default or in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any such other documents, including the fees and disbursements of counsel (including the allocated fees and expenses of in-house counsel) to each Lender and of counsel to the Administrative Agent, (c) to pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all fees, expenses, and liabilities that may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent and their respective officers, directors, employees, affiliates, agents and controlling persons (each, an “Indemnitee”) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to or arising out of or in connection with the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents related thereto (regardless of whether any Indemnitee is a party hereto and regardless of whether any such matter is initiated by a third party, the Borrower, any other Loan Party or any other Person), including any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Group Member or any of the Properties and the reasonable fees and expenses of legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan Party under any Loan Document (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”); provided that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities (i) are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or (ii) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations under this Agreement, but only if Borrower has obtained a final and nonappealable judgment in their favor on such claim as determined by a court of competent jurisdiction. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section 10.5 shall be payable not later than 10 days after written demand therefor. Statements payable by the Borrower pursuant to this Section 10.5 shall be submitted to the facsimile number and attention of the person set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. The agreements in this Section 10.5 shall survive repayment of the Loans and all other amounts payable hereunder.

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10.6 Successors and Assigns; Participations and Assignments.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of the Issuing Lender that issues any Letter of Credit), except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).

(b)

(i) Subject to the conditions set forth below in Section 10.6(b)(ii), any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent of:

(A) the Administrative Agent (such consent not to be unreasonably withheld or delayed or required in connection with an assignment to an Affiliate or an Approved Fund of a Lender);

(B) so long as no Event of Default has occurred and is continuing, the Borrower (such consent not to be unreasonably withheld or delayed, or required in connection with an assignment to an Affiliate or an Approved Fund of a Lender); and

(C) with respect to any proposed assignment of all or a portion of the L/C Commitment, the Issuing Lender;

provided that in no event shall any Lender assign all or any portion of its rights and obligations under this Agreement to the Borrower, any Affiliate of the Borrower, or any natural person.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 (provided that simultaneous assignments to or by two or more Approved Funds shall be aggregated for purposes of determining such amount), unless the Borrower and the Administrative Agent otherwise consent; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

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(B) the parties to each assignment of all or a portion of any Revolving Commitment shall (1) electronically execute and deliver to the Administrative Agent an Assignment and Assumption via an electronic settlement system acceptable to the Administrative Agent or (2) manually execute and deliver to the Administrative Agent an Assignment and Assumption, together with (except in the case of an assignment by a Lender to an Affiliate or an Approved Fund of such Lender) a processing and recordation fee of $3,500, payable by the assigning or assignee Lender as they shall mutually agree;

(C) no such assignment shall be made to a Defaulting Lender or any of its Subsidiaries; and

(D) the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire.

For the purposes of this Section 10.6, the term “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(iii) In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the Defaulting Lender’s Revolving Percentage of Loans previously requested by the Borrower but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon) and (B) acquire (and fund as appropriate) its full Revolving Percentage of all Loans, and its L/C Percentage of participations in Letters of Credit. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

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(iv) Subject to acceptance and recording thereof pursuant to Section 10.6(b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16 and 10.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 10.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.6(c).

(v) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Commitments of, and principal amount of the Revolving Loans owing to, each Lender pursuant to the terms hereof from time to time, and the names and addresses of the L/C Lenders, and the L/C Commitments of, and principal amounts owing to, each L/C Lender pursuant to the terms hereof from time to time (the “Revolving Loan Register”). The entries in the Revolving Loan Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent, the Issuing Lender and the Lenders may treat each Person whose name is recorded in the Revolving Loan Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Revolving Loan Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender. The Revolving Loan Register shall be available for inspection by the Borrower, the Issuing Lender, the Administrative Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(vi) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Eligible Assignee, the Eligible Assignee’s completed administrative questionnaire (unless the Eligible Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 10.6(b) and any written consent to such assignment required by Section 10.6(b) (in each case to the extent required), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the applicable Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the applicable Register as provided in this paragraph. This Section 10.6(b) shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

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(c)

(i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (other than a Defaulting Lender, a natural person, the Borrower or any of its Subsidiaries or Affiliates) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of Section 10.1 and (2) directly affects such Participant. In no case shall a Participant have the right to enforce any of the terms of any Loan Document. Subject to Section 10.6(c)(ii), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.6(b); provided that each Participant shall be subject to the terms and provisions of Section 2.15 as if it were a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7(b) as though it were a Lender; provided that such Participant shall be subject to Section 10.7(a) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15, or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower prior written consent. Any Participant that is a Foreign Lender shall not be entitled to the benefits of Section 2.15 unless such Participant complies with Section 2.15(d) or (e), as applicable.

(iii) Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the

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extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Eligible Assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in Section 10.6(d) above.

(f) Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the Commitments or Loans, as the case may be, represents and warrants as of the Closing Date or as of the effective date of the applicable Assignment and Assumption that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in commitments, loans or investments such as the Commitments and Loans; and (iii) it will make or invest in its Commitments and Loans for its own account in the ordinary course of its business and without a view to distribution of such Commitments and Loans within the meaning of the Securities Act or the Exchange Act, or other federal securities laws (it being understood that, subject to the provisions of this Section 10.6, the disposition of such Commitments and Loans or any interests therein shall at all times remain within its exclusive control).

10.7 Adjustments; Set-off.

(a) Except to the extent that this Agreement expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefitted Lender”) shall, at any time after the Loans and other amounts payable hereunder shall immediately become due and payable pursuant to Section 8.2, receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such

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other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, after the occurrence and during the continuation of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.19 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.

(c) To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (ii) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect. The obligations of the Lenders under clause (ii) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

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10.8 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.9 Counterparts.

(a) This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

(b) The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

10.10 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.10, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited

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under or in connection with any Insolvency Proceeding, as determined in good faith by the Administrative Agent or the Issuing Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.11 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower, the other Loan Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

10.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

10.13 Submission To Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

(a) submits to the exclusive jurisdiction of the State and Federal courts in the State of New York; provided that nothing in this Agreement shall be deemed to operate to preclude Administrative Agent or any Lender from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Administrative Agent or such Lender. Each party hereto expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each party hereto hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each party hereto hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to it at the applicable addresses set forth in Section 10.2 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of its actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid;

(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. EACH PARTY HERETO

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ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.13 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT; and

(c) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. The Administrative Agent and the Lenders agree that no Loan Party shall be liable to the Administrative Agent or the Lenders for consequential or punitive damages arising out of, or related to, or in connection with the Transaction.

10.14 Acknowledgements. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) none of the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders.

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10.15 Releases of Guarantees and Liens.

(a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.1) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (1) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.1 or (2) under the circumstances described in Section 10.15(b) below.

(b) At such time as the Loans and the other obligations under the Loan Documents including, without limitation, obligations under Specified Swap Agreement and Bank Services Agreement (other than inchoate indemnity obligations and obligations under or in respect of Specified Swap Agreements, to the extent no default or termination event shall have occurred thereunder) unless the obligations under such agreements have been Cash Collateralized or otherwise secured to the satisfaction of the Administrative Agent and any Qualified Counterparty or provider of such Bank Services, as applicable, shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person. The Administrative Agent shall take all commercially reasonable actions reasonably requested by any Loan Party to evidence such termination at such Loan Party’s expense.

10.16 Confidentiality. The Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Group Member, the Administrative Agent or any Lender pursuant to or in connection with this Agreement; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or any affiliate thereof, (b) subject to an agreement to comply with the provisions of this Section, to any actual or prospective Transferee or any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its Affiliates that are bound by a similar duty of confidentiality, (d) upon the request or demand of any Governmental Authority, with notice to the Borrower to the extent such notice is practicable and legally permissible (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, with notice to the Borrower to the extent such notice is practicable and legally permissible, (f) if requested or required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed through no fault of the Administrative Agent or any Lender, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, or (i) in connection with the exercise of any remedy hereunder or under any

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other Loan Document. Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative, or other agent of any party to this Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure is required to be kept confidential to the extent necessary to comply with any applicable federal or state securities laws.

10.17 Patriot Act. Each Lender and the Administrative Agent (for itself and not on behalf of any other party) hereby notifies each Loan Party that, pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the names and addresses and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Patriot Act. Each Loan Party will, and will cause each of its respective Subsidiaries to, provide, to the extent commercially reasonable or required by any Requirement of Law (but subject to any applicable local Requirement of Law), such information and take such actions as are reasonably requested by the Administrative Agent or any Lender to assist the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BORROWER:
BARRACUDA NETWORKS, INC., a Delaware corporation
By:	/s/ David Faugno
Name: David Faugno
Title: Chief Financial Officer

Signature Page to Credit Agreement

ADMINISTRATIVE AGENT AND LENDER:
SILICON VALLEY BANK, as Administrative Agent, Issuing Lender, Swingline Lender and as a Lender
By:	/s/ Michael Willard
Name: Michael Willard
Title: Relationship Manager

Signature Page to Credit Agreement

EXHIBIT A

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

GUARANTEE AND COLLATERAL AGREEMENT

Dated as of October 3, 2012

made by

BARRACUDA NETWORKS, INC.,

as the Borrower,

and the other Grantors referred to herein,

in favor of

SILICON VALLEY BANK,

as Administrative Agent

TABLE OF CONTENTS

		Page
SECTION 1.	DEFINED TERMS.		1
1.1	Definitions		1
1.2	Other Definitional Provisions		4
SECTION 2.	GUARANTEE.		5
2.1	Guarantee		5
2.2	Right of Contribution		6
2.3	No Subrogation		6
2.4	Amendments, etc. with respect to the Secured Obligations		6
2.5	Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents		7
2.6	Reinstatement		9
2.7	Payments		10
SECTION 3.	GRANT OF SECURITY INTEREST		10
3.1	Grant of Security Interests		10
SECTION 4.	REPRESENTATIONS AND WARRANTIES		12
4.1	Title; No Other Liens		12
4.2	Perfected Liens		12
4.3	Jurisdiction of Organization; Chief Executive Office		12
4.4	Inventory and Equipment		12
4.5	Farm Products		13
4.6	Pledged Collateral		13
4.7	Investment Accounts		13
4.8	Receivables		14
4.9	Intellectual Property		14
4.10	Commercial Tort Claims		15
SECTION 5.	COVENANTS		15
5.1	Delivery of Instruments, Certificated Securities and Chattel Paper		15
5.2	Maintenance of Insurance		15
5.3	Payment of Obligations		16
5.4	Maintenance of Perfected Security Interest; Further Documentation		16
5.5	Changes in Locations, Name, Etc		17
5.6	Notices		18
5.7	Instruments; Investment Property		18
5.8	Securities Accounts; Deposit Accounts		19
5.9	Intellectual Property		20

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TABLE OF CONTENTS

(Continued)

		Page
5.10	Receivables		21
5.11	Amendments to Material Contracts		21
5.12	Commercial Tort Claims		22
5.13	Compliance with GAAP		22
SECTION 6.	REMEDIAL PROVISIONS		22
6.1	Certain Matters Relating to Receivables		22
6.2	Communications with Obligors; Grantors Remain Liable		23
6.3	Investment Property		23
6.4	Proceeds to be Turned Over To Administrative Agent		24
6.5	Application of Proceeds		25
6.6	Code and Other Remedies		25
6.7	Registration Rights		26
6.8	Intellectual Property License		27
6.9	Deficiency		27
SECTION 7.	THE ADMINISTRATIVE AGENT		28
7.1	Administrative Agent’s Appointment as Attorney-in-Fact, etc		28
7.2	Duty of Administrative Agent		29
7.3	Authorization to File Financing Statements		30
7.4	Authority of Administrative Agent		30
SECTION 8.	MISCELLANEOUS		30
8.1	Amendments in Writing		30
8.2	Notices		30
8.3	No Waiver by Course of Conduct; Cumulative Remedies		31
8.4	Enforcement Expenses; Indemnification		31
8.5	Successors and Assigns		32
8.6	Set-Off		32
8.7	Counterparts		32
8.8	Severability		32
8.9	Section Headings		33
8.10	Integration		33
8.11	GOVERNING LAW		33
8.12	Submission to Jurisdiction; Waivers		33
8.13	Acknowledgements		34
8.14	Additional Grantors		34
8.15	Releases		34
8.16	WAIVER OF JURY TRIAL		35

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SCHEDULES
Schedule 1	Notice Addresses
Schedule 2	Investment Property
Schedule 3	Perfection Matters
Schedule 4	Jurisdictions of Organization and Chief Executive Offices, etc.
Schedule 5	Equipment and Inventory Locations
Schedule 6	Intellectual Property
Schedule 7	Commercial Tort Claims
ANNEXES
Annex 1	Form of Assumption Agreement

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GUARANTEE AND COLLATERAL AGREEMENT

This GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”), dated as of October 3, 2012, is made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, each a “Grantor” and, collectively, the “Grantors”), in favor of SILICON VALLEY BANK, as administrative agent (together with its successors, in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (each a “Lender” and, collectively, the “Lenders”) from time to time parties to that certain Credit Agreement, dated as of the date hereof (as amended, amended and restated, supplemented, restructured or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), among BARRACUDA NETWORKS, INC., a Delaware corporation (“Borrower”), the Lenders party thereto and the Administrative Agent.

INTRODUCTORY STATEMENTS

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective business;

WHEREAS, certain of the (a) Qualified Counterparties may enter into Specified Swap Agreements with the Borrower or (b) the Administrative Agent, any Lender or any Affiliate of any Lender may enter into Bank Services Agreements with the Loan Parties;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor derives substantial direct and indirect benefit from the extensions of credit under the Credit Agreement and from the Specified Swap Agreements and Bank Services; and

WHEREAS, it is a condition precedent to the Administrative Agent and the Lenders entering into the Credit Agreement that the Grantors shall have executed and delivered this Agreement in favor of the Administrative Agent for the ratable benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the above premises, the parties hereto hereby agree as follows:

SECTION 1. DEFINED TERMS.

1.1 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the respective meanings given to such terms in the Credit Agreement, and the following terms are used herein as defined in the UCC: Account, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity Account, Document, Equipment, Farm Products, Fixtures, General Intangible, Goods, Instrument, Inventory, Letter-of-Credit Rights, Money, Securities Account and Supporting Obligation.

(b) The following terms shall have the following meanings:

“Agreement”: as defined in the preamble hereto.

“Books”: all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for any Grantor in connection with the ownership of its assets or the conduct of its business or evidencing or containing information relating to the Collateral, including: (a) ledgers; (b) records indicating, summarizing, or evidencing such Grantor’s assets (including Inventory and Rights to Payment), business operations or financial condition; (c) computer programs and software; (d) computer discs, tapes, files, manuals, spreadsheets; (e) computer printouts and output of whatever kind; (f) any other computer prepared or electronically stored, collected or reported information and equipment of any kind; and (g) any and all other rights now or hereafter arising out of any contract or agreement between such Grantor and any service bureau, computer or data processing company or other Person charged with preparing or maintaining any of such Grantor’s books or records or with credit reporting, including with regard to any of such Grantor’s Accounts.

“Borrower”: as defined in the preamble hereto.

“Collateral”: as defined in Section 3.1.

“Collateral Account”: as defined in Section 6.1(a).

“Copyright License”: any written agreement which names a Grantor as licensor or licensee (including, without limitation, those listed on Schedule 6), or grants any right under any Copyright to a Grantor, including any rights to manufacture, distribute, exploit and sell materials derived from any Copyright, other than shrink-wrap, click-wrap, click-through or other similar licenses with respect to off-the-shelf products or personal computer software.

“Copyrights”: (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed on Schedule 6), all computer programs, computer databases, computer program flow diagrams, source codes, object codes and all tangible property embodying or incorporating any copyrights, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, and (b) the right to obtain all renewals thereof.

“Discharge of Obligations”: as defined in Section 2.1(d).

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“Exempt Accounts”: means (a) payroll accounts, tax escrow accounts and employee benefits accounts maintained in the ordinary course of business and (b) other accounts in an aggregate amount not to exceed $100,000.

“Grantor”: as defined in the preamble hereto.

“Guarantor”: as defined in Section 2.1(a).

“Investment Account”: any of a Securities Account, a Commodity Account or a Deposit Account.

“Investment Property”: the collective reference to (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the UCC (other than any Capital Stock or other ownership interests of an Excluded Foreign Subsidiary excluded from the definition of “Pledged Stock”), and (b) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Collateral.

“Issuer”: with respect to any Investment Property, the issuer of such Investment Property.

“Patent License”: any written agreement which names a Grantor as licensor or licensee or grants to such Grantor any right under any Patent, including the right to manufacture, use or sell any invention covered in whole or in part by such Patent, including, without limitation, any such agreements referred to on Schedule 6, other than shrink-wrap, click-wrap, click-through or other similar licenses with respect to off-the-shelf products or personal computer software.

“Patents”: (a) all letters patent of the United States, the European Union, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, including, without limitation, any of the foregoing referred to on Schedule 6, (b) all applications for letters patent of the United States, the European Union, or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any of the foregoing referred to on Schedule 6, and (c) all rights to obtain any reissues or extensions of the foregoing.

“Pledged Collateral”: (a) any and all Pledged Stock; (b) all other Investment Property of any Grantor; (c) all warrants, options or other rights entitling any Grantor to acquire any interest in Capital Stock or other securities of the direct or indirect Subsidiaries of such Grantor or of any other Person; (d) all Instruments; (e) all securities, property, interest, dividends and other payments and distributions issued as an addition to, in redemption of, in renewal or exchange for, in substitution or upon conversion of, or otherwise on account of, any of the foregoing.

“Pledged Notes”: all promissory notes listed on Schedule 2 and all other promissory notes issued to or held by any Grantor.

“Pledged Stock”: all of the issued and outstanding shares of Capital Stock, whether certificated or uncertificated, of any Grantor’s direct Subsidiaries now or hereafter owned by any

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such Grantor and including the Capital Stock listed on Schedule 2 hereof (as amended or supplemented from time to time), provided, however, unless otherwise required pursuant to the Credit Agreement, in no event shall more than 65% of the Capital Stock of any Excluded Foreign Subsidiary be required to be pledged hereunder.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the UCC and, in any event, shall include, without limitation, all dividends or other income from any Investment Property constituting Collateral and all collections thereon or distributions or payments with respect thereto.

“Receivable”: any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

“Rights to Payment”: any and all of any Grantor’s Accounts and any and all of any Grantor’s rights and claims to the payment or receipt of money or other forms of consideration of any kind in, to and under or with respect to its Chattel Paper, Documents, General Intangibles, Instruments, Investment Property, Letter-of-Credit Rights, Proceeds and Supporting Obligations.

“Secured Obligations”: collectively, the “Obligations”, as such term is defined in the Credit Agreement.

“Secured Parties”: means the Administrative Agent, the Lenders (including any Issuing Lender in its capacity as Issuing Lender), any Lender or any Affiliate of a Lender in its capacity as a provider of Bank Services, and any Qualified Counterparty with whom the Borrower enters into a Specified Swap Agreement.

“Trademark License”: any agreement which (a) names a Grantor as licensor or licensee and (b) grants to such Grantor any right to use any Trademark (excluding shrink wrap, click wrap, click through or other similar licenses with respect to off-the-shelf products or personal computer software), including, without limitation, any of the foregoing referred to on Schedule 6.

“Trademarks”: (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, Internet domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the U.S. Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto, including, without limitation, any of the foregoing referred to on Schedule 6, and (b) the right to obtain all renewals thereof.

1.2 Other Definitional Provisions. The rules of interpretation set forth in Section 1.2 of the Credit Agreement are by this reference incorporated herein, mutatis mutandis, as if set forth herein in full.

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SECTION 2. GUARANTEE.

2.1 Guarantee.

(a) Each Grantor who has executed this Agreement as of the date hereof, together with each Grantor who accedes to this Agreement as a Grantor after the date hereof (each a “Guarantor” and, collectively, the “Guarantors”), hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective permitted successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower and the other Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations. Each Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of such Guarantor and shall not be contingent upon the Administrative Agent’s or any Secured Party’s exercise or enforcement of any remedy it or they may have against the Borrower, any other Guarantor, any other Person, or all or any portion of the Collateral.

(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws or applicable foreign laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(c) Each Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the amount of the maximum liability of such Guarantor hereunder in accordance with Section 2.1(b) above without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and effect until all the Secured Obligations (in each case excluding inchoate indemnity obligations) shall have been satisfied by payment in full, no Letter of Credit or obligations under any Bank Services Agreement or Specified Swap Agreements shall be outstanding (unless Cash Collateralized or otherwise secured to the reasonable satisfaction of the Administrative Agent, Issuing Lender, Qualified Counterparty or provider of such Bank Services, as applicable) and all of the Commitments are terminated (the “Discharge of Obligations”), notwithstanding that from time to time during the term of the Credit Agreement the outstanding amount of the Secured Obligations may be zero.

(e) No payment made by the Borrower, any Guarantor, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from the Borrower, any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such

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payment (other than any payment made by such Guarantor in respect of the Secured Obligations or any payment received or collected from such Guarantor in respect of the Secured Obligations), remain liable for the Secured Obligations up to the maximum liability of such Guarantor hereunder in accordance with Section 2.1(b) above until the Discharge of Obligations.

2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. If in connection with any payment made by any Guarantor hereunder any rights of contribution arise in favor of such Guarantor against one or more other Guarantors, such rights of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower or any other Guarantor or any Collateral or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the Secured Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, in each case, until the Discharge of Obligations. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to the Discharge of Obligations, such amount shall be held by such Guarantor in trust for the Administrative Agent and the other Secured Parties, shall be segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied in such order as set forth in Section 6.5 hereof irrespective of the occurrence or the continuance of any Event of Default.

2.4 Amendments, etc. with respect to the Secured Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Secured Obligations made by the Administrative Agent or any other Secured Party may be rescinded by the Administrative Agent or such Secured Party and any of the Secured Obligations continued, and the Secured Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended,

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modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any other Secured Party, and the Credit Agreement, the other Loan Documents, the Specified Swap Agreements, the Letters of Credit, any Bank Services Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, all Lenders, or other Secured Party, as the case may be) may deem advisable from time to time in accordance with the terms of such documents, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any other Secured Party for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

2.5 Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2.

Each Guarantor waives (i) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the other Guarantors with respect to the Secured Obligations (ii) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of such Guarantor or the right of such Guarantor to proceed against the Borrower or any other obligor of the Secured Obligations for reimbursement; and (iii) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law that limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Agreement.

Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Secured Obligations or any other Collateral therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any other Secured Party, (ii) any defense, setoff or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Administrative Agent or any other Secured Party, (iii) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to

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constitute, an equitable or legal discharge of the Borrower and the Guarantors for the Secured Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance (iv) any Insolvency Proceeding with respect to the Borrower, any Guarantor or any other Person, (v) any merger, acquisition, consolidation or change in structure of the Borrower, any Guarantor or any other Person, or any sale, lease, transfer or other disposition of any or all of the assets or Capital Stock of the Borrower, any Guarantor or any other Person, (vi) any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and rights under this Agreement or the other Loan Documents, including any Secured Party’s right to receive payment of the Secured Obligations, or any assignment or other transfer, in whole or in part, of any Secured Party’s interests in and to any of the Collateral, (vi) any Secured Party’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to any of the Secured Obligations, and (vii) any other guaranty, whether by such Guarantor or any other Person, of all or any part of the Secured Obligations or any other indebtedness, obligations or liabilities of any Guarantor to any Secured Party.

When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any other Secured Party may, but shall be under no obligation to make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any Collateral or guarantee for the Secured Obligations or any right of offset with respect thereto. Any failure by the Administrative Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such Collateral or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such Collateral, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

Each Guarantor acknowledges that all or any portion of the Secured Obligations may now or hereafter be secured by a Lien or Liens upon any assets or claims owned by the relevant Guarantor according to this Agreement or according to any other security agreement to be entered into under any state law or foreign law, in particular but without limitation upon real property owned or leased by the Borrower or any Guarantor and evidenced by certain documents including, without limitation, deeds of trust and assignments of rents. Any Secured Party may, pursuant to the terms of said documents and applicable law, foreclose under all or any portion of one or more of said Liens by means of judicial or nonjudicial sale or sales. Each Guarantor agrees that any Secured Party may exercise whatever rights and remedies it may have with respect to said real property security, all without affecting the liability of any Guarantor hereunder, except to the extent such Secured Party realizes payment by such action or proceeding. No election to proceed in one form of action or against any party, or on any obligation shall constitute a waiver of any Secured Party’s right to proceed in any other form of action or against any Guarantor or any other Person, or diminish the liability of any Guarantor, or affect the right of such Secured Party to proceed against any Guarantor

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for any deficiency, except to the extent such Secured Party realizes payment by such action, notwithstanding the effect of such action upon any Guarantor’s rights of subrogation, reimbursement or indemnity, if any, against the Borrower, any Guarantor, or any other Person.

Each Guarantor further unconditionally consents and agrees that, without notice to or further assent from any Guarantor: (a) the principal amount of the Secured Obligations may be increased or decreased and additional indebtedness or obligations of the Borrower or any other Persons under the Loan Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Loan Document or otherwise; (b) the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Secured Obligation or any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; (c) the time for the Borrower’s (or any other Loan Party’s) performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as the Administrative Agent may deem proper; (d) in addition to the Collateral, the Secured Parties may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Secured Obligations, and may, from time to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (e) any Secured Party may discharge or release, in whole or in part, any other Guarantor or any other Loan Party or other Person liable for the payment and performance of all or any part of the Secured Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall any Secured Party be liable to any Guarantor for any failure to collect or enforce payment or performance of the Secured Obligations from any Person or to realize upon the Collateral, and (f) the Secured Parties may request and accept other guaranties of the Secured Obligations and any other indebtedness, obligations or liabilities of the Borrower or any other Loan Party to any Secured Party and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; in each case (a) through (f), as the Secured Parties may deem advisable, and without impairing, abridging, releasing or affecting this Agreement.

2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any such Guarantor or any substantial part of its respective property, or otherwise, all as though such payments had not been made.

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2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in Dollars at the Funding Office.

SECTION 3. GRANT OF SECURITY INTEREST

3.1 Grant of Security Interests. Each Grantor hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest and wherever located (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Commercial Tort Claims;

(d) all Deposit Accounts;

(e) all Documents;

(f) all Equipment;

(g) all Fixtures;

(h) all General Intangibles;

(i) all Goods;

(j) all Instruments;

(k) all Intellectual Property, and all claims for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom;

(l) all Inventory;

(m) all Investment Property (including all Pledged Collateral), and all rights, interests and claims with respect thereof, including under any and all related agreements, instruments and other documents;

(n) all Letter-of-Credit Rights;

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(o) all Money;

(p) all Books and records pertaining to the Collateral

(q) all other property not otherwise described above; and

(r) to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and collateral security and guarantees given by any Person with respect to any of the foregoing.

Notwithstanding any of the other provisions set forth in this Section 3, this Agreement shall not constitute a grant of a security interest in, and the term “Collateral” shall not include, (A)(1) leasehold interests in real property, (2) motor vehicles, (3) any property to the extent that such grant of a security interest is prohibited by any Requirement of Law of a Governmental Authority or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, instrument or other document evidencing or giving rise to such property, except (i) to the extent that the terms in such contract, license, instrument or other document providing for such prohibition, breach, default or termination, or requiring such consent are not permitted under the terms and conditions of the Credit Agreement or (ii) to the extent that such Requirement of Law or the term in such contract, license, agreement, instrument or other document providing for such prohibition, breach, default or termination or requiring such consent is ineffective under Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity; provided, however, that such security interest shall attach immediately at such time as such Requirement of Law is not effective or applicable, or such prohibition, breach, default or termination is no longer applicable or is waived, and to the extent severable, shall attach immediately to any portion of the Collateral that does not result in such consequences; and provided, further, that no United States intent-to-use trademark or service mark application shall be included in the Collateral to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark or service mark application under Federal law; provided, further however after such period, each Grantor acknowledges that such interest in such trademark or service mark application shall be subject to a security interest in favor of the Administrative Agent and shall be included in the Collateral and (4) Capital Stock or other ownership interests of an Excluded Foreign Subsidiary excluded from the definition of “Pledged Stock” and (B) any property located in the United States that cannot be perfected by the filing of a UCC Financing Statement in which the Administrative Agent, in its sole discretion, determines the cost of perfecting a security interest therein outweighs the benefit of the Secured Parties of the security to be afforded thereby.

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SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party that:

4.1 Title; No Other Liens. Except for the Liens permitted to exist on the Collateral by Section 7.3 of the Credit Agreement, such Grantor owns each item of the Collateral in which a Lien is granted by it free and clear of any and all Liens and other claims of others. No financing statement, fixture filing or other public notice with respect to all or any part of the Collateral is on file or of record or will be filed in any public office, except such as have been filed as permitted by the Credit Agreement. For the avoidance of doubt, it is understood and agreed that each Grantor may, as part of its business, grant licenses to third parties to use Intellectual Property included in the Collateral. For purposes of this Agreement and the other Loan Documents, such licensing activity shall not constitute a “Lien” on such Intellectual Property. The Administrative Agent and each other Secured Party understands that any such licenses may be exclusive to the applicable licensees, and such exclusivity provisions may limit the ability of the Administrative Agent to utilize, sell, lease or transfer the related Intellectual Property or otherwise realize value from such Intellectual Property pursuant hereto.

4.2 Perfected Liens. The security interests granted to the Administrative Agent pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to the Administrative Agent in completed and duly (if applicable) executed form) will constitute valid perfected security interests under United States law in all of the Collateral in favor of the Administrative Agent to the extent a security interest can be perfected by such filings and other actions, for the ratable benefit of the Secured Parties, as collateral security for the Secured Obligations, enforceable in accordance with the terms hereof against any creditors of any Grantor and any Persons purporting to purchase any Collateral from any Grantor, and (ii) are prior to all other Liens on the Collateral in existence on the date hereof except for Liens permitted by the Credit Agreement which have priority over the Liens of the Administrative Agent on the Collateral (for the ratable benefit of the Secured Parties) by operation of law, and in the case of Collateral other than Pledged Collateral, Liens permitted by Section 7.3 of the Credit Agreement.

4.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor’s jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor’s chief executive office or sole place of business, as the case may be, are specified on Schedule 4.

4.4 Inventory and Equipment. On the date hereof (a) the Inventory and (b) the Equipment (other than mobile goods Inventory or Equipment in the possession of any employee or Equipment at other locations in connection with the repair or refurbishment thereof in the ordinary course of business) of each Grantor are kept at the locations in the United States listed on Schedule 5 and at other locations where the book value of the Equipment and Inventory located (x) at any one of such other locations not listed on Schedule 5 is not in excess of $200,000 (excluding leasehold improvements) and (y) at all such other locations not listed on Schedule 5 is not in excess of $400,000.

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4.5 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

4.6 Pledged Collateral. (a) All of the Pledged Stock held by such Grantor has been duly and validly issued, and is fully paid and non-assessable, subject in the case of Pledged Stock constituting partnership interests or limited liability company membership interests to future assessments required under applicable law and any applicable partnership or operating agreement, (b) such Grantor is or, in the case of any such additional Pledged Collateral will be, the legal record and beneficial owner thereof, (c) in the case of Pledged Stock of a Subsidiary of such Grantor or Pledged Collateral of such Grantor constituting Instruments issued by a Subsidiary of such Grantor, there are no restrictions on the transferability of such Pledged Collateral or such additional Pledged Collateral to the Administrative Agent or with respect to the foreclosure, transfer or disposition thereof by the Administrative Agent, except as provided under applicable securities or “Blue Sky” laws, and (d) the Pledged Stock pledged by such Grantor constitute all of the issued and outstanding shares of Capital Stock of each Issuer owned by such Grantor, and such Grantor owns no securities convertible into or exchangeable for any shares of Capital Stock of any such Issuer that do not constitute Pledged Stock hereunder.

4.7 Investment Accounts.

(a) Schedule 2 sets forth under the headings “Securities Accounts” and “Commodity Accounts”, respectively, all of the Securities Accounts and Commodity Accounts in which such Grantor has an interest as of the Closing Date. As of the Closing Date, such Grantor is the sole entitlement holder of each such Securities Account and Commodity Account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Administrative Agent) having “control” (within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other interest in, any such Securities Account or Commodity Account or any securities or other property credited thereto, except for, subject to the relevant Control Agreement, the account bank party to such Control Agreement;

(b) Schedule 2 sets forth under the heading “Deposit Accounts” all of the Deposit Accounts in which such Grantor has an interest as of the Closing Date. As of the Closing Date, such Grantor is the sole account holder of each such Deposit Account and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Administrative Agent) having either sole dominion and control (within the meaning of common law) or “control” (within the meaning of Section 9¬104 of the UCC) over, or any other interest in, any such Deposit Account or any money or other property deposited therein, except for, subject to the relevant Control Agreement, the account bank party to such Control Agreement; and

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(c) Except as otherwise permitted under Section 5.7 or as otherwise agreed by the Administrative Agent, such Grantor has taken all actions necessary or requested to: (i) establish the Administrative Agent’s “control” (within the meanings of Sections 8-106 and 9-106 of the UCC) over any Certificated Securities (as defined in Section 9-102 of the UCC); (ii) establish the Administrative Agent’s “control” (within the meanings of Sections 8-106 and 9106 of the UCC) over any portion of the Investment Accounts constituting Securities Accounts, Commodity Accounts, Securities Entitlements or Uncertificated Securities (each as defined in Section 9-102 of the UCC); (iii) establish the Administrative Agent’s “control” (within the meaning of Section 9-104 of the UCC) over all Deposit Accounts other than Exempt Accounts; and (iv) deliver all Instruments (as defined in Section 9-102 of the UCC) to the Administrative Agent to the extent required hereunder; provided, that the Administrative Agent shall not send a notice of sole control or similar notice unless an Event of Default has occurred and is continuing.

4.8 Receivables. No amount payable to such Grantor under or in connection with any Receivable or other Right to Payment in excess of $150,000 is evidenced by any Instrument (other than checks, drafts or other Instruments that will be promptly deposited in an Investment Account) or Chattel Paper which has not been delivered to the Administrative Agent. None of the account debtors or other obligors in respect of any Receivable in excess of $150,000 in the aggregate is the government of the United States or any agency or instrumentality thereof.

4.9 Intellectual Property.

(a) Schedule 6 lists (i) all registrations and applications for Intellectual Property (including, without limitation, registered Copyrights, Patents, Trademarks and all applications therefor), in each case owned by such Grantor in its own name on the date hereof, and (ii) all Copyright Licenses, Patent Licenses and Trademark Licenses which, to the knowledge of such Grantor, are material to the business of such Grantor.

(b) To the knowledge of the Grantors, each Grantor owns, is licensed to use, or otherwise has valid rights to use all Intellectual Property necessary for the conduct of its business as currently conducted, except as could not reasonably be expected to have a Material Adverse Effect. The use of such Intellectual Property by each Grantor does not, to the knowledge of the Grantors, infringe on the rights of any Person in any material respect where such infringement could reasonably be expected to have a Material Adverse Effect. No material claim has been asserted in writing and is pending against any Grantor by any Person challenging or questioning such Grantor’s use of any Intellectual Property or the validity or effectiveness of such Grantor’s Intellectual Property (other than routine office actions in the course of prosecution of applications to register Intellectual Property), nor does any Grantor know of any valid basis for any such claim, unless such claim could not reasonably be expected to have a Material Adverse Effect.

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(c) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or such Grantor’s rights in, any Intellectual Property or Intellectual Property License in any respect that could reasonably be expected to have a Material Adverse Effect.

(d) Except as set forth on Schedule 6(d), no action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question the validity of any material Intellectual Property owned by a Grantor or such Grantor’s ownership interest therein, and (ii) which, if adversely determined, could have a Material Adverse Effect.

4.10 Commercial Tort Claims. Such Grantor does not have any Commercial Tort Claims having a potential value in excess of $150,000 except as set forth in Schedule 7.

SECTION 5. COVENANTS

Each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that, from and after the date of this Agreement until the Discharge of Obligations:

5.1 Delivery of Instruments, Certificated Securities and Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument (other than checks, drafts or other Instruments that will be promptly deposited in an Investment Account), Certificated Security or Chattel Paper evidencing an amount in excess of $150,000, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly indorsed in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement.

5.2 Maintenance of Insurance.

(a) Such Grantor shall maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

(b) All such insurance shall (i) provide that no cancellation, shall be effective until at least 30 days after receipt by the Administrative Agent of written notice thereof, (ii) name (if legally permissible pursuant to the governing laws of the applicable insurance contract) the Administrative Agent as an additional insured party or lender loss payee (or, at the request of the Administrative Agent, assign payment claims under such insurance contract to the Administrative Agent), (iii) to the extent available on commercially reasonable terms, and if reasonably requested by the Administrative Agent, include a breach of warranty clause and (iv) be reasonably satisfactory in all other respects to the Administrative Agent.

(c) The Borrower shall deliver to the Administrative Agent a report of a reputable insurance broker with respect to such insurance and such supplemental reports with respect thereto, in each case, as the Administrative Agent may from time to time reasonably request (but no more frequently than quarterly unless an Event of Default shall have occurred and is continuing).

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5.3 Payment of Obligations. As and to the extent required of Borrower pursuant to the terms of the Credit Agreement, such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all taxes, assessments and governmental charges or levies imposed upon the Collateral or other material obligations if the failure to pay such obligations would be reasonably likely to result in a Lien being imposed upon the Collateral, or in respect of income or profits therefrom, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral (other than Liens permitted under Section 7.3 of the Credit Agreement), except that no such tax, assessment, charge or levy imposed upon the Collateral or other material obligations, or claim need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor.

5.4 Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interests of the Secured Parties created by this Agreement as perfected security interests having at least the priority described in Section 4.2 (except to the extent such security interests are permitted to be disposed of pursuant to and in accordance with the Loan Documents). Each Grantor shall use commercially reasonable efforts to defend the right, title and interest of the Administrative Agent in and to the Collateral against the claims and demands of all Persons whomsoever, and each shall take such actions, including (x) notification of the Administrative Agent’s interest in Collateral at Administrative Agent’s request, and (y) the institution of litigation against third parties as shall be deemed by such Grantor to be prudent in order to protect and preserve each Grantor’s and the Administrative Agent’s respective and several interests in the Collateral.

(b) Such Grantor will furnish to the Administrative Agent from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection therewith as the Administrative Agent may reasonably request, all in reasonable detail.

(c) Such Grantor shall take such other action as may be reasonably necessary, or as the Administrative Agent may reasonably request, to perfect the Administrative Agent’s security interest in the United States Intellectual Property included in the Collateral, including, without

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limitation, delivery of a fully executed Intellectual Property Security Agreement in form and substance acceptable to the Administrative Agent. Following the creation or other acquisition of any Intellectual Property by any Grantor after the date hereof which is registered or becomes registered or the subject of an application for registration with the United States Copyright Office or the United States Patent and Trademark Office or any similar office or agency in any other country, as applicable, such Grantor shall concurrently with the delivery of the quarterly financial statements pursuant to Section 6.1(b) of the Credit Agreement, modify this Agreement by amending Schedule 6 to include any Intellectual Property which becomes part of the Collateral and which was not included on Schedule 6 as of the date hereof and, if requested by the Administrative Agent, record a fully executed Intellectual Property Security Agreement in form and substance acceptable to the Administrative Agent in respect of such newly created or acquired United States Intellectual Property with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, and take such other action as may be reasonably necessary, or as the Administrative Agent or the Required Lenders may reasonably request to perfect the Administrative Agent’s security interest in such United States Intellectual Property.

(d) At any time and from time to time, upon the reasonable written request of the Administrative Agent, and at the sole expense of such Grantor, but in any case subject to the terms and conditions hereof, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of the Credit Agreement and this Agreement and of the rights and powers herein granted, including, without limitation, (i) filing any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby and (ii) in the case of Investment Property, Investment Accounts, Letter-of-Credit Rights and any other relevant Collateral, taking any actions necessary to enable the Administrative Agent to obtain “control” (within the meaning of the UCC) with respect thereto to the extent required hereunder.

5.5 Changes in Locations, Name, Etc. Such Grantor will not, except upon 15 days’ (or such shorter period as may be reasonably agreed to by the Administrative Agent) prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a) all additional executed financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein, and (b) if applicable, a written supplement to Schedule 4 showing the relevant new jurisdiction of organization, location of chief executive office or sole place of business, as appropriate:

(i) change its jurisdiction of organization, identification number from the jurisdiction of organization (if any) or the location of its chief executive office or sole place of business, as appropriate, from that referred to in Section 4.3; or

(ii) change its name.

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5.6 Notices. Such Grantor will advise the Administrative Agent promptly following such Grantor’s knowledge thereof, in reasonable detail, of:

(a) any Lien (other than Liens permitted under Section 7.3 of the Credit Agreement) on any of the Collateral; and

(b) the occurrence of any other event affecting the aggregate value of the Collateral or the security interests created hereby or by any other Security Document which could reasonably be expected to have a Material Adverse Effect.

5.7 Instruments; Investment Property.

(a) Upon the request of the Administrative Agent, such Grantor will (i) promptly deliver to the Administrative Agent, or an agent designated by it, appropriately endorsed or accompanied by appropriate instruments of transfer or assignment all letters of credit of such Grantor, and all other Rights to Payment held by such Grantor at any time evidenced by promissory notes, trade acceptances or other instruments in amounts in excess of $150,000, and (ii) provide such notice, obtain such acknowledgments and take all such other action, with respect to any Letter-of-Credit Rights in amounts in excess of $150,000 held by such Grantor, as the Administrative Agent shall reasonably specify.

(b) If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the other Secured Parties, hold the same in trust for the Administrative Agent and the other Secured Parties and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Secured Obligations (subject in each case to the limitations in the definition of “Pledged Stock” and “Collateral”). Any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected

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security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Secured Obligations. If any sums of money or property so paid or distributed in respect of such Investment Property shall be received by such Grantor, during the occurrence or continuance of an Event of Default, such Grantor shall, until such money or property is paid or delivered to the Administrative Agent, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, hold such money or property in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Secured Obligations.

(c) Without the prior written consent of the Administrative Agent, except as permitted by the Credit Agreement, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer to issue any Capital Stock of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any Capital Stock of any nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof that constitutes Collateral hereunder, (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, on any of the Investment Property or Proceeds thereof that constitutes Collateral hereunder, or any interest therein, except for the security interests created by this Agreement or (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof that constitutes Collateral hereunder other than pursuant to the Loan Documents.

(d) In the case of any Grantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Capital Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 5.7(a) and (b) with respect to the Pledged Collateral issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the Capital Stock issued by it.

5.8 Securities Accounts; Deposit Accounts.

(a) With respect to any Securities Account other than Exempt Accounts maintained by any Grantor, such Grantor shall (within (i) thirty (30) days of the Closing Date (or such longer period as the Administrative Agent shall agree)) with respect to Securities Accounts maintained by any Grantor on the Closing Date and (ii) promptly with respect to any Securities Accounts established by any Grantor after the Closing Date), if requested by the Administrative Agent, cause such securities intermediary to enter into an agreement in form and substance satisfactory to the Administrative Agent with respect to such Securities Account pursuant to which such securities intermediary shall agree to comply with the Administrative Agent’s “entitlement orders” without further consent by such Grantor, as requested by the Administrative Agent;

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(b) With respect to any other Investment Account other than Exempt Accounts maintained by any Grantor, such Grantor shall (within (i) thirty (30) days of the Closing Date (or such longer period as the Administrative Agent shall agree)) with respect to Deposit Accounts maintained by any Grantor on the Closing Date and (ii) promptly with respect to any Deposit Accounts established by any Grantor after the Closing Date) enter into and shall cause the depositary institution maintaining such account to enter into a Control Agreement with respect to such Deposit Account;

(c) The Administrative Agent agrees that it will only communicate “entitlement orders”, “instructions”, “notice of control” or similar communications with respect to the Deposit Accounts and Securities Accounts of the Grantors after the occurrence and during the continuance of an Event of Default;

(d) Such Grantor shall give the Administrative Agent immediate notice of the establishment of any new Investment Account established by such Grantor with respect to any Investment Property held by such Grantor; and

(e) Notwithstanding the foregoing, Grantors shall not be required to enter into account control or similar agreements for Exempt Accounts.

5.9 Intellectual Property.

(a) Such Grantor (either itself or through licensees) will (i) continue to use each material Trademark in order to maintain such material Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under each such material Trademark, (iii) use each such material Trademark with the appropriate notice of registration and all other notices and legends required by applicable Requirements of Law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of any such material Trademark unless the Administrative Agent, for the ratable benefit of the Secured Parties, shall obtain, to the extent available, a perfected security interest in such mark pursuant to this Agreement, and (v) not (and not knowingly permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any such material Trademark may become invalidated or impaired in any way.

(b) Such Grantor (either itself or through licensees) will not do any act, or omit to do any act, whereby any material Patent owned by such Grantor may become forfeited, abandoned or dedicated to the public.

(c) Such Grantor (either itself or through licensees) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any such material Copyrights of such Grantor may become invalidated or otherwise impaired. Such Grantor will not (either itself or through licensees) do any act whereby any material portion of the Copyrights of such Grantor may fall into the public domain.

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(d) Such Grantor will not do any act that knowingly uses any Intellectual Property to infringe the intellectual property rights of any other Person in any material respect.

(e) Such Grantor will notify the Administrative Agent promptly if it knows, or has reason to know, that any application or registration relating to any material Intellectual Property of such Grantor may become forfeited, abandoned or dedicated to the public (other than due to such Grantor’s sole election in the application of its reasonable business judgment in the ordinary course of business), or of any material adverse determination (including, without limitation, the institution of, or any such determination in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any other foreign patent, trademark or copyright registration office which may be competent pursuant to applicable laws, but excluding any routine office actions in the course of prosecution of any applications to register Intellectual Property) regarding such Grantor’s ownership of, or the validity of, any material Intellectual Property or such Grantor’s right to register the same or to own and maintain the same.

(f) [Reserved].

(g) Subject to such Grantor’s sole discretion in the application of its reasonable business judgment in the ordinary course of business, such Grantor will use commercially reasonable efforts to take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each material application (and to obtain the relevant registration) and to maintain each registration of the material Intellectual Property owned by such Grantor, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability.

(h) In the event that any material Intellectual Property owned by a Grantor is infringed, misappropriated or diluted by a third party, such Grantor shall take such actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Intellectual Property.

5.10 Receivables. Other than in the ordinary course of business consistent with its past practice or as permitted by Section 7.5(j) of the Credit Agreement, such Grantor will not (a) grant any extension of the time of payment of any Receivable, (b) compromise or settle any Receivable for less than the full amount thereof, (c) release, wholly or partially, any Person liable for the payment of any Receivable, (d) allow any credit or discount whatsoever on any Receivable or (e) amend, supplement or modify any Receivable in any manner that could adversely affect the value thereof.

5.11 Amendments to Material Contracts. Such Grantor shall not amend or permit any amendments to, or terminate or waive any provision of, any material Contractual Obligation if such amendment, termination, or waiver would contradict or compromise the purposes of the Loan Documents.

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5.12 Commercial Tort Claims. If such Grantor shall at any time hold or acquire any Commercial Tort Claim with a potential value in excess of $150,000, such Grantor will give the Administrative Agent prompt notice, and in any event within fifteen (15) Business Days after the same is acquired by it.

5.13 Compliance with GAAP. Each Grantor agrees that, at the request of the Administrative Agent, it will provide the Administrative Agent with financial statements that have been prepared in accordance with GAAP in addition to the accounting regulations of the relevant foreign country which are be applicable to the relevant Grantor.

SECTION 6. REMEDIAL PROVISIONS

Each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that, from and after the date of this Agreement until the Discharge of Obligations:

6.1 Certain Matters Relating to Receivables.

(a) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s Receivables, and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a Commodity Account, Deposit Account or Securities Account that is subject to a Control Agreement in favor of Administrative Agent (a “Collateral Account”), subject to withdrawal by the Administrative Agent for the account of the Secured Parties only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Grantor. After the occurrence and during the continuance of an Event of Default, each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(b) At the Administrative Agent’s request, after the occurrence of an Event of Default, each Grantor shall deliver to the Administrative Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original orders, invoices and shipping receipts.

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6.2 Communications with Obligors; Grantors Remain Liable.

(a) The Administrative Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default, upon two (2) Business Days’ prior written notice to the Borrower, communicate with obligors under the Receivables to verify with them to the Administrative Agent’s satisfaction the existence, amount and terms of any Receivables.

(b) Upon the request of the Administrative Agent, at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables that the Receivables have been assigned to the Administrative Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Administrative Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Lender of any payment relating thereto, nor shall the Administrative Agent nor any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

6.3 Investment Property.

(a) Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given written notice to the relevant Grantor of the Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all dividends paid in respect of the Pledged Collateral and all payments made in respect of the Pledged Notes to the extent permitted by the Credit Agreement, and to exercise all voting and corporate or other organizational rights with respect to the Investment Property of such Grantor; provided, however, that no vote shall be cast or corporate or other organizational right exercised or other action taken, except for the filing of any petition in bankruptcy, which would materially adversely affect the rights of the Administrative Agent or the other Secured Parties, or the value of the Pledged Stock, unless otherwise permitted in the Credit Agreement, this Agreement or any other Loan Document.

(b) If an Event of Default shall occur and be continuing and the Administrative Agent shall have given written notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends,

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payments or other Proceeds paid in respect of the Investment Property (including the Pledged Collateral) of any or all of the Grantors and make application thereof to the Secured Obligations in the order set forth in Section 6.5, and (ii) any and all of such Investment Property shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Investment Property at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of any such Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other organizational structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of such Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Collateral or Pledged Notes pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, subsequent to receipt of any instruction pursuant to clause (i) above, pay any dividends or other payments with respect to the Pledged Collateral or, as applicable, the Pledged Notes directly to the Administrative Agent.

(d) If an Event of Default shall have occurred and be continuing, the Administrative Agent shall have the right to apply the balance from any Deposit Account or instruct the bank at which any Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of the Administrative Agent.

(e) If an Event of Default shall have occurred and be continuing, the Administrative Agent may, in its sole discretion, cause all or any part of the Collateral held by it to be transferred into its name or the name of its nominee or nominees.

6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the rights of the Administrative Agent and the other Secured Parties specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing and as requested by the Administrative Agent, all Proceeds received by any Grantor consisting of cash, checks, Cash Equivalents and other near-cash items shall be held by such Grantor in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of

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such Grantor, and upon the request of the Administrative Agent, shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account over which it maintains control, within the meaning of the UCC. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the other Secured Parties) shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

6.5 Application of Proceeds. If an Event of Default shall have occurred and be continuing, at any time at the Administrative Agent’s election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, in payment of the Secured Obligations in accordance with Section 8.3 of the Credit Agreement.

6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Secured Parties, may exercise, upon prior written notice thereof to the Borrower, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC or any other applicable law. Without limiting the generality of the foregoing, if an Event of Default shall occur and be continuing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent or any other Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this Section 6.6, in accordance with the provisions of Section 6.5, only after deducting all reasonable out-of-pocket costs and expenses incurred in connection therewith or incidental to the care or safekeeping of any of

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the Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Secured Obligations, in such order as is contemplated by Section 8.3 of the Credit Agreement, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including Section 9-615(a)(3) of the UCC, but only to the extent of the surplus, if any, owing to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any other Secured Party arising out of the exercise by any of them of any rights hereunder, except for claims that are found by a final non-appealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Administrative Agent or such Secured Party or their respective agents. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

6.7 Registration Rights.

(a) If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(b) Each Grantor recognizes that, if the Administrative Agent shall determine to exercise its rights to sell any or all of the Pledged Stock pursuant to Section 6.6, the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges

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and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

(c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any applicable Requirement of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement.

6.8 Intellectual Property License. Solely for the purpose of enabling the Administrative Agent to exercise rights and remedies under this Section 6 and at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies following the occurrence and during the continuation of an Event of Default, each Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, an irrevocable (during the term of this Agreement), non-exclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of said Trademarks, to use, operate under, license, or sublicense any Intellectual Property now owned or hereafter acquired by the Grantors.

6.9 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Secured Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any other Secured Party to collect such deficiency.

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SECTION 7. THE ADMINISTRATIVE AGENT

Each Grantor covenants and agrees with the Administrative Agent and the other Secured Parties that:

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, upon the occurrence and during the continuation of an Event of Default, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, upon the occurrence and during the continuation of an Event of Default, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor (except as required hereunder or by the other Loan Documents), to do any or all of the following upon the occurrence and during the continuation of an Event of Default:

(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent’s and the other Secured Parties’ security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens (except to the extent expressly provided otherwise under the terms of the Credit Agreement) levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v) (A) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (E) defend any suit, action or proceeding brought against such Grantor

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with respect to any Collateral; (F) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; (G) assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Administrative Agent deems reasonably necessary to protect, preserve or realize upon the Collateral and the Administrative Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements contained herein and such failure results in an Event of Default that is continuing, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

(c) The reasonable documented out of pocket expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the highest rate per permitted under the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand, to the extent the Borrower would be required to do so pursuant to the Credit Agreement.

(d) To the fullest extent permitted by applicable law, each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue, and in accordance with the terms, hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the

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Administrative Agent and the other Secured Parties hereunder are solely to protect the Administrative Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the Administrative Agent or any other Secured Party to exercise any such powers. The Administrative Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct or their breach of this Agreement.

7.3 Authorization to File Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Administrative Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Administrative Agent determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Each Grantor authorizes the Administrative Agent to use the collateral description “all assets, whether now owned or hereafter acquired” or any other similar collateral description in any such financing statements. Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

SECTION 8. MISCELLANEOUS

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

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8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default, as applicable. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

8.4 Enforcement Expenses; Indemnification.

(a) Each Guarantor agrees to pay or reimburse the Administrative Agent and each other Secured Party for all its reasonable and documented out-of-pocket costs and expenses incurred in collecting against such Guarantor under the guaranty contained in Section 2 of this Agreement or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including, without limitation, the fees and disbursements of counsel to the extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit Agreement (including the allocated fees and expenses of in-house counsel) to the Administrative Agent and of counsel to each other Secured Party.

(b) Each Guarantor agrees to pay, and to save the Administrative Agent and each other Secured Party harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all Other Taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement to the extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit Agreement.

(c) Each Guarantor agrees to pay, and to save the Administrative Agent and each other Secured Party harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to the Credit Agreement.

(d) The agreements in this Section 8.4 shall survive repayment of the Secured Obligations and any other amounts payable under the Credit Agreement and the other Loan Documents.

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8.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Administrative Agent and each other Secured Party and their respective permitted successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative Agent and each other Secured Party and any Affiliate thereof at any time and from time to time after the occurrence and during the continuance of an Event of Default, without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to setoff and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Secured Party or such Affiliate to or for the credit or the account of such Grantor, or any part thereof in such amounts as the Administrative Agent or such Secured Party may elect, against and on account of the Secured Obligations and liabilities of such Grantor to the Administrative Agent or such Secured Party hereunder and under the other Loan Documents and claims of every nature and description of the Administrative Agent or such Secured Party against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement, any other Loan Document or otherwise, as the Administrative Agent or such Secured Party may elect, whether or not the Administrative Agent or any other Secured Party has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The rights of the Administrative Agent and each other Secured Party under this Section 8.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such other Secured Party may have.

8.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile and/or electronic mail), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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8.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the agreement of the Grantors, the Administrative Agent and the other Secured Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any other Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

8.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the state and federal courts of the United States of America for the State of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection, to the extent permitted by law that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address referred to in Section 8.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.12 any special, exemplary, punitive or consequential damages.

-33-

8.13 Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any other Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among any of the Secured Parties or among the Grantors and any of the Secured Parties.

8.14 Additional Grantors. Each Subsidiary of a Grantor that is required to become a party to this Agreement pursuant to Section 6.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

8.15 Releases.

(a) Upon the Discharge of Obligations, the Collateral shall be released from the Liens in favor of the Administrative Agent and the other Secured Parties created hereby, this Agreement shall terminate with respect to the Administrative Agent and the other Secured Parties, and all obligations (other than those expressly stated to survive such termination) of each Grantor to the Administrative Agent or any other Secured Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party. At the sole expense of any Grantor following any such termination, the Administrative Agent shall deliver such documents as such Grantor shall reasonably request to evidence such termination.

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by Section 7 of the Credit Agreement, then the Liens on such Collateral created hereunder shall be deemed automatically released, the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases

-34-

or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral, as applicable. A Guarantor shall be deemed automatically released from its obligations hereunder in the event that all the Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed of to a Person other than a Loan Party in a transaction permitted by Section 7 of the Credit Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days, or such shorter period as the Administrative Agent may agree, prior to the date of the proposed release, a written request for release identifying the relevant Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Borrower stating that such transaction is in compliance with Section 7 of the Credit Agreement and the other Loan Documents.

8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND THE ADMINISTRATIVE AGENT EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

[Remainder of page intentionally left blank]

-35-

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement to be duly executed and delivered as of the date first above written.

GRANTORS:

BORROWER:

BARRACUDA NETWORKS, INC.,

a Delaware corporation

By:

Name:

Title:

GUARANTOR:

BARRACUDA NETWORKS, INC.,

a Georgia corporation

By:

Name:

Title:

Signature Page 1 to Guarantee and Collateral Agreement

ADMINISTRATIVE AGENT:

SILICON VALLEY BANK

By:

Name:

Title:

Signature Page 2 to Guarantee and Collateral Agreement

SCHEDULE 1

NOTICE ADDRESSES OF GUARANTORS

Guarantor Notice Address

Schedule 1

Guarantee & Collateral Agreement

SCHEDULE 2

DESCRIPTION OF INVESTMENT PROPERTY

Pledged Stock:

Grantor Issuer Class of Capital Stock Certificate No. No. of Shares / Units

Pledged Notes:

Grantor Date of Note Maturity Date of Note Principal Amount of Note Name of Note Obligor Are Note Obligations Secured (Y or N)

Securities Accounts:

Grantor Name of Securities Intermediary Account No. Description of Investment Property

Commodity Accounts:

Deposit Accounts:

Grantor Name of Depository Bank Address of Depository Bank Account No.

Schedule 2

Guarantee & Collateral Agreement

SCHEDULE 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

Uniform Commercial Code Filings

Grantor Filing Jurisdiction

Copyright, Patent and Trademark Filings

Schedule 3

Guarantee & Collateral Agreement

SCHEDULE 4

LOCATION OF JURISDICTION OF ORGANIZATION,

CHIEF EXECUTIVE OFFICE AND LOCATION OF BOOKS

Grantor Jurisdiction of Organization Organizational Identification Number Location of Chief Executive Office Location of Books

Schedule 4

Guarantee & Collateral Agreement

SCHEDULE 5

LOCATIONS OF EQUIPMENT AND INVENTORY

Schedule 5

Guarantee & Collateral Agreement

SCHEDULE 6

RIGHTS OF THE GRANTORS RELATING TO PATENTS

Issued Patents of Borrower

Jurisdiction Patent No. Issue Date Inventor Title

Pending Patent Applications of Borrower

Jurisdiction Serial No. Filing Date Inventor Title

Issued Patents and Pending Patent Applications Licensed to Borrower

Schedule 6

Guarantee & Collateral Agreement

RIGHTS OF THE GRANTORS RELATING TO TRADEMARKS

Registered Trademarks of Borrower

Jurisdiction Registration No. Registration Date Filing Date Registered Owner Mark

Pending Trademark Applications of Borrower

Jurisdiction Application No. Filing Date Applicant Mark

Registered Trademarks and Pending Trademark Applications Licensed to Borrower

Schedule 6

Guarantee & Collateral Agreement

RIGHTS OF THE GRANTORS RELATING TO COPYRIGHTS

Registered Copyrights of Borrower

Jurisdiction Registration No. Registration Date Work of Authorship

Pending Copyright Applications of Borrower

Jurisdiction Application No. Application Date Work of Authorship

Registered Copyrights and Pending Copyright Applications Licensed to Borrower

Schedule 6

Guarantee & Collateral Agreement

SCHEDULE 7

COMMERCIAL TORT CLAIMS

Schedule 7

Guarantee & Collateral Agreement

ANNEX 1 TO

GUARANTEE AND COLLATERAL AGREEMENT

FORM OF

ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT, dated as of [                    ], is executed and delivered by [                    ] (the “Additional Grantor”), in favor of SILICON VALLEY BANK, as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”) from time to time parties to that certain Credit Agreement, dated as of October 3, 2012 (as amended, amended and restated, supplemented, restructured or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), among BARRACUDA NETWORKS, INC., a Delaware corporation (“Borrower”), the Lenders party thereto and the Administrative Agent. All capitalized terms not defined herein shall have the respective meanings ascribed to such terms in such Credit Agreement.

WITNESSETH:

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into that certain Guarantee and Collateral Agreement, dated as of October 3, 2012, in favor of the Administrative Agent for the benefit of the Secured Parties defined therein (the “Guarantee and Collateral Agreement”);

WHEREAS, the Borrower is required, pursuant to Section 6.11 of the Credit Agreement to cause the Additional Grantor to become a party to the Guarantee and Collateral Agreement in order to grant in favor of the Administrative Agent (for the ratable benefit of the Lenders) the Liens and security interests therein specified and provide its guarantee of the Obligations as therein contemplated; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 8.14 of the Guarantee and Collateral Agreement, (a) hereby becomes a party to the Guarantee and Collateral Agreement as both a “Grantor” and a “Guarantor” thereunder with the same force and effect as if originally named therein as a Grantor and a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Grantor and a Guarantor thereunder, and (b) hereby grants to the Administrative Agent, for the benefit of the Secured Parties, as security for the Secured Obligations, a security interest in all of the Additional Grantor’s right, title and interest in any and to all Collateral of the Additional Grantor, in each case whether now owned or hereafter acquired or in

Annex 1

Guarantee & Collateral Agreement

which the Additional Grantor now has or hereafter acquires an interest and wherever the same may be located, but subject in all respects to the terms, conditions and exclusions set forth in the Guarantee and Collateral Agreement. The information set forth in Schedule 1 hereto is hereby added to the information set forth in the Schedules to the Guarantee and Collateral Agreement. The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Section 4 of the Guarantee and Collateral Agreement (x) that is qualified by materiality is true and correct, and (y) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date (except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty was true and correct in all material respects as of such earlier date).

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3. Loan Document. This Assumption Agreement shall constitute a Loan Document under the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]
By:
	Name:
	Title:

Annex 1

Guarantee & Collateral Agreement

Schedule to

Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 2

Supplement to Schedule 3

Supplement to Schedule 4

Supplement to Schedule 5

Supplement to Schedule 6

Supplement to Schedule 7

Annex 1

Guarantee & Collateral Agreement

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

This Compliance Certificate is delivered pursuant to Section 6.2(a)(ii) of the Credit Agreement, dated as of October 3 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

1. We are the duly elected, qualified and acting [Insert Titles of applicable Responsible Officers] of Borrower.

2. We have reviewed and are familiar with the contents of this Compliance Certificate.

3. We have reviewed the terms of the Credit Agreement and the other Loan Documents and have made, or caused to be made under our supervision, a review in reasonable detail of the transactions and condition of Borrower and its Subsidiaries during the accounting period covered by the financial statements attached hereto as Attachment 1 (the “Financial Statements”). Such review did not disclose the existence during or at the end of the accounting period covered by the Financial Statements, and we have no knowledge of the existence as of the date of this Compliance Certificate, of any condition or event which constitutes a Default or Event of Default [, except for [if applicable, describe condition or event constituting a Default or Event of Default].

4. Attached hereto as Attachment 2 are the computations showing compliance with the covenants set forth in Section 7.1 of the Credit Agreement.

5. The following is a description of any change in the jurisdiction of organization of any Loan Party since the date of the most recent Compliance Certificate delivered to the Administrative Agent (or in the case of the first Compliance Certificate, since the Closing Date) to the extent not previously disclosed to the Administrative Agent: [describe any such change here, or indicate “None”, as applicable].

6. Attached hereto as Attachment 3 is a list of any material Intellectual Property acquired by any Loan Party (or previously acquired immaterial Intellectual Property that has become material)) since the date of the most recent Compliance Certificate delivered to the Administrative Agent (or in the case of the first Compliance Certificate, since the Closing Date) to the extent not previously disclosed to the Administrative Agent.

[Remainder of page intentionally left blank; signature page follows]

IN WITNESS WHEREOF, we have executed this Compliance Certificate this      day of             , 20    .

BARRACUDA NETWORKS, INC.

By:

Name:

Title:

Attachment 1

to Compliance Certificate

[Attach Financial Statements]

Attachment 1

to Compliance Certificate

The information described herein is as of                     ,      and pertains to the period from to                     ,     , to                     ,     .

I.	Minimum Adjusted Quick Ratio (Section 7.1(a))
	A.	Qualified Cash		$
		Plus
	B.	Net billed accounts receivable		$
	C.	Sum of Line I.A. and I.B.:		$
	D.	The sum of the following:		$
		1.	Consolidated Current Liabilities:	$
		Plus, without duplication,
		2.	All outstanding Revolving Extensions of Credit (including any Revolving Extensions of Credit requested by the Borrower at the time of this calculation of the Adjusted Quick Ratio):	$
		Less
		3.	DP Amounts:	$
		Less
		4.	the current portion of deferred revenues:	$
		5.	The sum of Lines D.1 plus D.2, minus the sum of Lines D.3 and D.4:	$
	E.	Adjusted Quick Ratio (Line C divided by Line D.5):

Required: The Borrower shall not permit the Adjusted Quick Ratio as at the last day of each month (i) for which financial statements are required to be delivered pursuant to Section 6.1(c)(i) or (c)(ii) hereof preceding each of the Borrower’s requests for a Revolving Extension of Credit and (ii) for which any Revolving Extension of Credit is outstanding as of the last day of such month, to be less than (A) if tested at any time

from the Closing Date through July 31, 2013, 0.50:1.00, (B) if tested at any time from August 31, 2013 through October 31, 2013, 0.65:1.00, (C) if tested at any time from the November 30, 2013 through January 31, 2014, 0.80:1.00, (D) if tested at any time from the February 28, 2014 through April 30, 2014, 0.95:1.00, (E) if tested at any time from the May 31, 2014 through July 31, 2014, 1.05:1.00, and (F) if tested at any time thereafter, 1.10:1.00; provided that, for purposes of calculating the Adjusted Quick Ratio at any time from the Closing Date until delivery of the Borrower’s balance sheet for the month ending October 31, 2012 pursuant to Section 6.1(c)(i) hereof, cash balances constituting Qualified Cash for any month included in such calculation shall be calculated as of the Closing Date, after giving effect to the payment of the Closing Date Dividend.

Required to be tested?	Yes	No
If required to be tested, in compliance?	Yes	No

II.	Maximum Consolidated Adjusted EBITDA (Section 7.1(b))
	A.	Consolidated Net Income	$
		Plus
	B.	Consolidated Interest Expense Plus	$
	C.	Provisions for taxes based on income, profits, or capital, including federal, foreign, state, franchise, excise, and similar taxes paid or accrued	$
		Plus
	D.	total depreciation expense Plus	$
	E.	total amortization expense Plus	$
	F.	other non-cash items reducing Consolidated Net Income including, without limitation, goodwill impairment charges and accrued vacation expense, stock compensation or other stock related charges (excluding amortization of a prepaid cash item that was paid in a prior period)	$
		Plus
	G.	extraordinary, non-recurring or restructuring expenses or charges including severance	$
		Plus
	H.	transition, integration, restructuring and similar fees, charges and expenses in connection with or arising out of, the transactions contemplated by this Agreement incurred or to be incurred prior to the end of the Borrower’s second full fiscal quarter after the Closing Date	$

	Plus
I.	management fees paid pursuant to the Management Agreement in an amount not to exceed $2,000,000 in any four consecutive fiscal quarter period	$
	Plus
J.	transaction or similar fees (provided however, transaction fees may only be added back to Consolidated EBITDA to the extent documented and disclosing the sources used to pay such transaction fees) and expenses permitted to be paid or accrued under the Loan Documents in connection with acquisitions, investments, debt offerings and equity offerings permitted under the Loan Documents	$
	Plus
K.	fees and expenses (including, without limitation, audit fees), as well as special bonuses payable to the Borrower’s management personnel, in each case related to, or incurred in connection with, the transactions contemplated by the Loan Documents that are paid by the Borrower and its Subsidiaries (i) prior to or on the Closing Date, as described in more detail on the funds flow statement provided to the Administrative Agent on the Closing Date, and (ii) no later than 90 days after the Closing Date, and reasonably documented (consistent with the Sponsor’s or the Borrower’s internal policies)	$
	Plus
L.	any expense deducted in calculating Consolidated Net Income for such period and reimbursed during such period or an earlier period (and not added back to Consolidated EBITDA in any earlier period) by third parties (other than the Borrower and its Subsidiaries)	$
M.	expenses and payments that are covered by indemnification or purchase price adjustment provisions in any agreement entered into by the Borrower or any Subsidiary in connection with the transaction or any proposed or actual Permitted Acquisition that are actually reimbursed during such period	$
	Plus

N.	any foreign currency translation losses (or minus any foreign currency translation gains (including gains or losses related to currency re- measurement of Indebtedness))	$
	Plus
O.	one-time fees, costs and expenses associated with the search, hiring and replacement (including severance expenses) of senior executives of the Borrower and its Subsidiaries	$
	Plus
P.	fees and expenses associated with the Phion Acquisition	$
	Plus
Q.	the reasonable and customary fees and expenses of the Borrower and its Subsidiaries incurred in connection with any amendment or modification to, or refinancing of, the Loan Documents	$
	Plus
R.	costs and expenses (including, without limitation, any fines or other penalties) in connection with OFAC-related investigations, proceedings and remedial measures in an aggregate amount not to exceed $10,000,000	$
	Plus
S.	proceeds actually received in cash from business interruption insurance to the extent not already included in Consolidated Net Income	$
	Minus
T.	the sum, without duplication of the amounts for such period of: (i) capitalized software development costs, plus (ii) non-cash items increasing Consolidated Net Income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period), plus (iii) interest income	$

in each case with respect to clauses II(B) through II(S) above to the extent that such items were deducted in arriving at Consolidated Net Income for such period, all of the foregoing as determined on a consolidated basis for the Borrower and its Subsidiaries in conformity with GAAP; provided, that amounts added back pursuant to clauses II(G), (H), (J) (but excluding amounts paid or incurred with respect to Permitted Acquisitions), (0) (but excluding all amounts paid or incurred with respect to the replacement of the Borrower’s chief executive officer incurred in connection with the

transaction), II(P), and (Q) (but excluding amendment fees and all amounts incurred in connection with any refinancing (in whole or in part) of the Revolver in which then then-current Lenders participate) (the “Capped Amounts”) shall not exceed in the aggregate for any period an amount equal to 10.0% of Consolidated Adjusted EBITDA for such period as calculated utilizing a calculation of “Consolidated EBITDA” determined before giving effect to any adjustments pursuant to any of such clauses; provided further that the Capped Amounts must be factually supportable and certified in writing in reasonably detail by the chief financial officer of the Borrower.

Required: The Borrower shall not permit Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries, as at the last day of each quarter (i) for which financial statements are required to be delivered pursuant to Section 6.1(b) hereof preceding each of the Borrower’s requests for a Revolving Extension of Credit and (ii) during which any Revolving Extension of Credit is outstanding, tested on a trailing four quarter basis, to be less than $25,000,000.

Required to be tested?	Yes	No
If required to be tested, in compliance?	Yes	No

Attachment 3

to Compliance Certificate

[List any material Intellectual Property acquired by any Loan Party (or previously acquired immaterial Intellectual Property that has become material) since the most recent Compliance Certificate delivered to the Administrative Agent (or, in the case of the first Compliance Certificate, since the Closing Date), or indicate “None”, as applicable.]

EXHIBIT C

FORM OF SECRETARY’S CERTIFICATE

[LOAN PARTY NAME]

October     , 2012

Pursuant to Section 5.1(g) of the Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”), the undersigned Secretary of [Insert Name of Loan Party] (the “Certifying Loan Party”) hereby certifies, solely in such capacity and not in any individual capacity, as follows:

1. The representations and warranties of the Certifying Loan Party set forth in each of the Loan Documents to which it is a party or which are contained in any certificate furnished by or on behalf of the Certifying Loan Party pursuant to any of the Loan Documents to which it is a party are, (i) to the extent qualified by materiality, true and correct, and (ii) to the extent not qualified by materiality, true and correct in all material respects, in each case, on and as of the date hereof with the same effect as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date.

2. I am the duly elected and qualified Secretary of the Certifying Loan Party.

3. No Default or Event of Default has occurred and is continuing as of the date hereof or immediately after giving effect to the Loans to be made on the date hereof and the use of proceeds thereof.

4. The conditions precedent set forth in Section 5.1 of the Credit Agreement were satisfied on the part of the Certifying Loan Party as of the Closing Date.

5. There are no liquidation or dissolution proceedings pending or, to my knowledge, threatened against the Certifying Loan Party, nor has any other event occurred which could materially adversely affect or threaten the continued corporate existence of the Certifying Loan Party.

6. The Certifying Loan Party is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization.

7. Attached hereto as Annex 1 is a true and complete copy of resolutions duly adopted by the Board of Directors of the Certifying Loan Party on             , 20    ; such

resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect.

8. Attached hereto as Annex 2 is a true and complete copy of the By-Laws of the Certifying Loan Party as in effect on the date hereof.

9. Attached hereto as Annex 3 is a true and complete copy of the Certificate of Incorporation of the Certifying Loan Party as in effect on the date hereof, along with a long-form good-standing certificate for the Certifying Loan Party from the jurisdiction of its organization.

10. The following persons are now duly elected and qualified officers of the Certifying Loan Party holding the offices indicated next to their respective names below, and the signatures appearing opposite their respective names below are the true and genuine signatures of such officers, and each of such officers is duly authorized to execute and deliver on behalf of the Certifying Loan Party each of the Loan Documents to which it is a party and any certificate or other document to be delivered by the Certifying Loan Party pursuant to the Loan Documents to which it is a party:

Name	Office	Signature
[                    ]	[                    ]
[                    ]	[                    ]
[                    ]	[                    ]
[                    ]	[                    ]
[                    ]	[                    ]

IN WITNESS WHEREOF, I have hereunto set my hand as of the date first set forth above.

Name:
Title:	Secretary

I, [            ], in my capacity as the [            ] of the Certifying Loan Party, do hereby certify in the name and on behalf of the Certifying Loan Party that [        ] is the duly elected and qualified Secretary of the Certifying Loan Party and that the signature appearing above is [her][his] genuine signature.

Name:
Title:	Secretary

Resolutions

By-Laws

Certificate of Incorporation and Good-Standing Certificate

EXHIBIT D

FORM OF SOLVENCY CERTIFICATE

To the Administrative Agent,

and each of the Lenders party

to the Credit Agreement referred to below:

This SOLVENCY CERTIFICATE (this “Certificate”) is delivered pursuant to Section 5.1(j) of the Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The undersigned Responsible Officer of the Borrower, in such capacity only and not in his/her individual capacity, does hereby certify as of the date hereof that the Loan Parties, when taken as a whole and after giving effect to the transactions contemplated by the Credit Agreement, on a consolidated basis, are Solvent.

By:

Name:

Title:

as Responsible Officer of:

BARRACUDA NETWORKS, INC.,

a Delaware corporation

EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption Agreement (the “Assignment Agreement”) is dated as of the Assignment Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment Agreement as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Assignment Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including without limitation any letter of credit deposits, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment Agreement, without representation or warranty by the Assignor.

1. Assignor:
2. Assignee:
[for Assignee, if applicable, indicate [Affiliate][Approved Fund] of [identify Lender]]
3. Borrower:	BARRACUDA NETWORKS, INC.
4. Administrative Agent:	SILICON VALLEY BANK.

5. Credit Agreement:	Credit Agreement, dated as of October 3, 2012, among Borrower, the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent.
6. Assigned Interest[s]:

Assignor	Assignee	Facility Assignedl	Aggregate Amount of Commitment / Loans for all Lenders2	Amount of Commitment / Loans Assigned3	Percentage Assigned of Commitment / Loans4	CUSIP
				$	$
				$	$
				$	$

[7. Trade Date:                                                                                                                        ]⁵

Assignment Effective Date:             , 20    [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE ASSIGNMENT EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

[Signature pages follow]

1. Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment Agreement (e.g. “Revolving Facility”, etc.)

2. Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Assignment Effective Date.

3. Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Assignment Effective Date.

4. Set forth, to at least 9 decimals, as a percentage of the applicable Commitment/Loans of all Lenders thereunder.

5. To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.

The terms set forth in this Assignment Agreement are hereby agreed to:

ASSIGNOR1
[NAME OF ASSIGNOR]
By:
	Name:
	Title:
ASSIGNEE2
[NAME OF ASSIGNEE]
By:
	Name:
	Title:

1. Add additional signature blocks as needed.

2. Add additional signature blocks as needed.

Consented to and Accepted:

SILICON VALLEY BANK,
as Administrative Agent

By:

Name:

Title:

By:

Name:

Title:

[Consented to:]³

[NAME OF RELEVANT PARTY]

By:

Name:

Title:

[NAME OF RELEVANT PARTY]

By:

Name:

Title:

3. To be added only if the consent of the Borrower and/or other parties (e.g. Swingline Lender, Issuing Lender) is required by the terms of the Credit Agreement.

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of any Loan Party, any of their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by any Loan Party, any of their respective Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document or any other instrument or document furnished pursuant hereto or thereto.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an Assignee under Section 10.6(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.6(b)(i) of the Credit Agreement), (iii) from and after the Assignment Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment Agreement and to purchase the Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment Agreement and to purchase the Assigned Interest, and (vii) if it is a Non-U.S. Lender, attached to the Assignment Agreement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on any Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Assignment Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Assignment Effective Date and to the Assignee for amounts which have accrued from and after the Assignment Effective Date.

3. General Provisions. This Assignment Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment Agreement may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment Agreement. This Assignment Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

EXHIBIT F-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered by its proper and duly authorized signatory as of the day and year first written above.

[Name of Lender]

By

Name:

Title:

EXHIBIT F-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered by its proper and duly authorized signatory as of the day and year first written above.

[Name of Participant]

By

Name:

Title:

EXHIBIT F-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships for U.S. Federal Income Tax Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered by its proper and duly authorized signatory as of the day and year first written above.

[Name of Participant]

By

Name:

Title:

EXHIBIT F-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships for U.S. Federal Income Tax Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (“Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

Pursuant to the provisions of Section 2.15 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-811V1Y accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-811V1Y accompanied by an IRS Form W-8BEN from each of such partner’ s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered by its proper and duly authorized signatory as of the day and year first written above.

[Name of Lender]

By

Name:

Title:

EXHIBIT G-1

FORM OF REVOLVING LOAN NOTE

THIS REVOLVING LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS REVOLVING LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE REVOLVING LOAN REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

$             Santa Clara, California October 3, 2012

FOR VALUE RECEIVED, the undersigned, BARRACUDA NETWORKS, INC., a Delaware corporation (the “Borrower”), hereby unconditionally promise to pay to             (the “Lender”) or its registered assigns at the Funding Office specified in the Credit Agreement (as hereinafter defined) in Dollars and in immediately available funds, on the Revolving Termination Date the principal amount of (a)             ($        ,000,000), or, if less, (b) the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in the Credit Agreement.

The holder of this Revolving Loan Note (this “Note”) is authorized to indorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type and amount of each Revolving Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such indorsement shall constitute prima facie evidence of the accuracy of the information indorsed. The failure to make any such indorsement or any error in any such indorsement shall not affect the obligations of any Borrower in respect of any Revolving Loan.

This Note (a) is one of the Revolving Loan Notes referred to in the Credit Agreement, dated as of October 3, 2012, among Borrower, the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”), (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement.

This Note is secured and guaranteed as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof.

Upon the occurrence and during the continuance of any one or more of the Events of Default, all principal and all accrued interest then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, indorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT AGREEMENT.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

BARRACUDA NETWORKS, INC.,

a Delaware corporation

By

Name:

Title:

Schedule A

to Revolving Loan Note

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

Date Amount of
ABR Loans Amount
Converted to
ABR Loans Amount of
Principal of
ABR Loans
Repaid Amount of
ABR Loans
Converted to
Eurodollar
Loans Unpaid
Principal
Balance of
ABR Loans Notation
Made By

Schedule B

to Revolving Loan Note

LOANS, CONTINUATIONS, CONVERSIONS

AND REPAYMENTS OF EURODOLLAR LOANS

Date Amount of
Eurodollar
Loans Amount
Converted to
Eurodollar
Loans Interest
Period and
Eurodollar
Rate with
Respect
Thereto Amount of
Principal of
Eurodollar
Loans
Repaid Amount of
Eurodollar
Loans
Converted to
ABR Loans Unpaid
Principal
Balance of
Eurodollar
Loans Notation
Made By

EXHIBIT G-2

FORM OF SWINGLINE LOAN NOTE

THIS SWINGLINE LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS SWINGLINE LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE REVOLVING LOAN REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

$             Santa Clara, California October 3, 2012

FOR VALUE RECEIVED, the undersigned, BARRACUDA NETWORKS, INC., a Delaware corporation (the “Borrower”), hereby unconditionally promise to pay to             (the “Lender”) or its registered assigns at the Funding Office specified in the Credit Agreement (as hereinafter defined) in Dollars and in immediately available funds, on or before October 3, 2014 the principal amount of (a)             ($        ,000,000), or, if less, (b) the aggregate unpaid principal amount of all Swingline Loans made by the Lender to the Borrower pursuant to Section 2.3 of the Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in the Credit Agreement.

The holder of this Swingline Loan Note (this “Note”) is authorized to indorse on the schedule annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date and amount of each Swingline Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof. Each such indorsement shall constitute prima facie evidence of the accuracy of the information indorsed. The failure to make any such indorsement or any error in any such indorsement shall not affect the obligations of the Borrower in respect of any Swingline Loan.

This Note (a) is the Swingline Loan Note referred to in the Credit Agreement, dated as of September     , 2012, among Borrower, the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”), (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof.

Upon the occurrence and during the continuance of any one or more of the Events of Default, all principal and all accrued interest then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, indorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT AGREEMENT.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

BARRACUDA NETWORKS, INC.,

a Delaware corporation

By

Name:

Title:

Schedule A

to Swingline Loan Note

LOANS AND REPAYMENTS

Date Amount of Loans Amount of Principal
of ABR Loans Repaid Unpaid Principal
Balance of ABR Loans Notation
Made By

EXHIBIT H

FORM OF NOTICE OF BORROWING

Date:             

TO:	SILICON VALLEY BANK
	2400 Hanover Street
	Palo Alto, CA 94304
	Attention: Corporate Services Department
RE:	Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (the “Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”)

Ladies and Gentlemen:

The undersigned refers to the Credit Agreement, and hereby gives you notice irrevocably, pursuant to Sections [2.2]⁹ [2.4]¹⁰ of the Credit Agreement, of the borrowing of a Loan.

1. The requested Borrowing Date, which shall be a Business Day, is             .

2. The aggregate amount of the requested Loan is $            .

3. The requested Loan shall consist of $            of ABR Loans and $            of Eurodollar Loans.

4. The duration of the Interest Period for the Eurodollar Loans included in the requested Loan shall be     months.

5. The undersigned hereby certifies, solely on behalf of the Borrower and not in any individual capacity, that the following statements are true on the date hereof, and will be true on the date of the proposed Loan, before and immediately after giving effect thereto:

(a) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date;

9. To be used for any Notice of Borrowing of Revolving Loans.

10. To be used for any Notice of Borrowing of Swingline Loans.

(b) no Default or Event of Default shall have occurred and be continuing as of or on such date or immediately after giving effect to the extensions of credit requested to be made on such date; and

(c) if this Notice of Borrowing is being delivered pursuant to Section 2.2 of the Credit Agreement, the requested Revolving Loan will not, when added to the aggregate outstanding amount of the Swingline Loans and the aggregate undrawn amount of all outstanding Letters of Credit and the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans, incurred on behalf of the Borrower and owing to such Lender, exceed the Total Revolving Commitments.

BARRACUDA NETWORKS, INC.,

a Delaware corporation

By

Name:

Title:

For internal Bank use only

Eurodollar Pricing Date	Eurodollar Rate	Eurodollar Variance		Maturity Date
			%

EXHIBIT I

FORM OF NOTICE OF CONVERSION/CONTINUATION

Date:                     

TO:	SILICON VALLEY BANK
	2400 Hanover Street
	Palo Alto, CA 94304
	Attention:
RE:	Credit Agreement, dated as of October 3, 2012, among BARRACUDA NETWORKS, INC. (the “Borrower”), the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as amended, restated, amended and restated, supplemented, restructured or otherwise modified from time to time, the “Credit Agreement”)

Ladies and Gentlemen:

The undersigned refers to the Credit Agreement, and hereby gives you notice irrevocably, pursuant to Section [2.8(a)]¹¹ [and] [2.8(b)]¹² of the Credit Agreement, of the [conversion] [continuation] of the Loans specified herein, that:

1. The date of the [conversion] [continuation] is             , 20    .

2. The aggregate amount of the proposed Loans to be [converted] [continued] is $        .

3. The Loans are to be [converted into] [continued as] [Eurodollar] [ABR] Loans.

4. The duration of the Interest Period for the Eurodollar Loans included in the [conversion] [continuation] shall be          months.

5. The undersigned, solely on behalf of the Borrower and not in any individual capacity, hereby certifies that on the date hereof no Default or Event of Default has occurred and is continuing, nor shall a Default or Event of Default have occurred and be continuing as of or on the date of the proposed [conversion] [continuation] or immediately after giving effect thereto.

1. To be used for conversions.

2. To be used for continuations.

BARRACUDA NETWORKS, INC.,

a Delaware corporation

By

Name:

Title:

For internal Bank use only

Eurodollar Pricing Date	Eurodollar Rate	Eurodollar Variance		Maturity Date
			%

SCHEDULE 1.1A

COMMITMENTS

AND AGGREGATE EXPOSURE PERCENTAGES

Revolving Commitment

Lender	Revolving Commitment		Revolving Percentage
Silicon Valley Bank	$	40,000,000		100	%
Total	$	40,000,000		100	%

L/C Commitment

Lender	L/C Commitments (sublimit)		L/C Percentage
Silicon Valley Bank	$	10,000,000		100	%
Total	$	10,000,000		100	%

Swingline Commitment

Lender	Swingline Commitments		Swingline Percentage
Silicon Valley Bank	$	1,000,000		100	%
Total	$	1,000,000		100	%

Schedule 4.15

Subsidiaries/Capital Stock

(a) Capitalization

Issuer	Jurisdiction of Organization	Owner	Percentage Owned
Barracuda Networks, Inc.	Delaware, USA	N/A		N/A
Third Iris Corp	Cayman Islands	Barracuda Networks, Inc.		62.96	%
Barracuda Networks AG (Austria)	Austria	Barracuda Networks, Inc.		97.35	%
Barracuda Networks AG (Switzerland)	Switzerland	Barracuda Networks AG (Austria)		100	%
Barracuda Network GmbH	Germany	Barracuda Networks AG (Switzerland)		100	%
Barracuda Netherlands BV	Netherlands	Barracuda Networks AG (Austria)		100	%
Phion Middle East FZE	United Arab Emirates	Barracuda Networks AG (Austria)		100	%
Barracuda Networks Technology Co, Ltd.	China	Barracuda Networks, Inc.		100	%
Netcontinuum Private Limited	India	Barracuda Networks, Inc.		100	%
3 Sp Limited	United Kingdom	Barracuda Networks, Inc.		100	%
Barracuda Networks, Ltd.	United Kingdom	Barracuda Networks, Inc.		100	%
Barracuda Networks, KK.	Japan	Barracuda Networks, Inc.		100	%

(b) Outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments

1. The Company has an earnout agreement associated with the acquisition of Bitleap LLC in September 2009. This earnout will be completed in December 2012. The earnout stipulates that the participants in the earnout plan can receive 50% of the earnout value in common stock, and 50% of the earnout value in cash each annual calendar period. The Company issued 82,585 shares in CY09 (partial period), 264,410 shares in CY10, and all cash in CY11. The number is shares to be issued is based on the fair value as of December 2012, but the Company currently estimates that approximately $4,000,000 in value of common stock could be issued as part of the CY12 earnout.

Schedule 4.19(a)

Financing Statements and Other Filings

Agreements to be filed with the Secretary of State of the State of Delaware:

UCC-1 Financing Statement

Agreements to be filed with the United States Patent and Trademark Office:

The Patent Security Agreement, dated as of the Closing Date, by and between Barracuda Networks, Inc. and Silicon Valley Bank.

The Trademark Security Agreement, dated as of the Closing Date, by and between Barracuda Networks, Inc. and Silicon Valley Bank.

Agreement to be filed with the United States Copyright Office:

The Copyright Security Agreement, dated as of the Closing Date, by and between Barracuda Networks, Inc. and Silicon Valley Bank.

Schedule 7.2(e)

Existing Indebtedness

Loan Assumption Agreement dated December 20, 2011 by and between Bryan Family Partnership II, Ltd. (“Bryan Family”) and Barracuda Networks, Inc., whereby Barracuda Networks, Inc. assumed all of Bryan Family’s obligations under that certain Real Estate Note dated June 20, 2007 made by Bryan Family for the benefit of Symetra Life Insurance Company, in the amount of $6,750,000, due and payable in full on July 1, 2017, and at an annual interest rate of 6.23%.

Schedule 7.3(f)

Existing Liens

Entity/Subject Name	Jurisdiction	Other Party	File Date	File Type	File/Case/Book/ Page #	Thru Date
BARRACUDA NETWORKS, INC.	DE - SECRETARY OF STATE	U.S. BANCORP	7/18/2007	Original UCC Filing	72715323	9/4/2012
BARRACUDA NETWORKS, INC.	DE - SECRETARY OF STATE	SYMETRA LIFE INSURANCE COMPANY	12/23/2011	Original UCC Filing	14949684	9/4/2012

Schedule 7.7(h)

Existing Investments

1. Promissory note dated May 12, 2010 made by George Gutierrez for the benefit of Barracuda Networks, Inc. in the amount of 121,500.00, payable on or before May 12, 2015, and at an annual compounded interest rate of eight percent (8%).

2. Employee Loan Agreement and Promissory note dated June 10, 2011 by and between Barracuda Networks, Inc. and Rick Drum in the amount of $100,000.00, payable on or before June 9, 2016, and at an annual interest rate of six percent (6%) compounding annually.

3. Employee Loan Agreement and Promissory note dated July 13, 2011 by and between Barracuda Networks, Inc. and Blair Hankins in the amount of $100,000.00, payable on or before July 12, 2016, and at an annual interest rate of six percent (6%) compounding annually.

4. Employee Loan Agreement and Promissory note dated March 27, 2012 by and between Barracuda Networks, Inc. and Blair Hankins in the amount of $50,000.00, payable on or before July 12, 2016, and at an annual interest rate of six percent (6%) compounding annually.

5. Employee Loan Agreement and Promissory note dated October 16, 2009 by and between Barracuda Networks, Inc. and Christopher Hobbs in the amount of $100,000.00, payable on or before October 14, 2014, and at an annual interest rate of six percent (6%) compounding annually.

6. Employee Loan Agreement and Promissory note dated October 16, 2009 by and between Barracuda Networks, Inc. and Christopher Hobbs in the amount of $100,000.00, payable on or before October 14, 2014, at an annual interest rate of six percent (6%), compounding annually.

7. Employee Loan Agreement and Promissory note dated April 13, 2011 by and between Barracuda Networks, Inc. and Viki Lin in the amount of $26,900.00, payable on or before April 13, 2015, and at an annual interest rate of seven percent (7%) compounding annually.

8. Secured Loan Agreement dated June 25, 2010 by and between Barracuda Networks, Inc. and Marc Wolfe in the amount of $230,986.00 payable on or before August 29, 2015, and at an annual interest rate of six percent (6%), compounded and payable monthly.

9. Secured Loan Agreement dated October 3, 2011 by and between Barracuda Networks, Inc. and Marc Wolfe in the amount of $15,000.00, due on October 4, 2016, and at an annual interest rate of six percent (6%) compounded and payable monthly.

10. Full Recourse Promissory Note dated April 13, 2012 by and between Barracuda Networks, Inc. and David Faugno in the amount of $1,705,666.26, payable on or before April 13, 2016, and at an annual interest rate of seven percent (1.15%) compounding semi-annually.

11. Redhand Technologies, Inc. Promissory Note dated October 27, 2011 by and between Barracuda Networks, Inc. and Redhand Technologies, Inc. in the amount of $100,000, payable on demand, and at an annual interest rate of seven percent (5%) compounding semi-annually.

EX-10.14

Exhibit 10.14

LEASE

BY AND BETWEEN

M WEST PROPCO XVII, LLC,

a Delaware limited liability company,

as Landlord

and

BARRACUDA NETWORKS, INC.,

a Delaware corporation,

as Tenant

For Premises located at

5710 Fontanoso Way

San Jose, California

TABLE OF CONTENTS

	Page
ARTICLE 1 DEFINITIONS		1
ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE		3
ARTICLE 3 RENT		5
ARTICLE 4 USE OF PREMISES		6
ARTICLE 5 TRADE FIXTURES AND ALTERATIONS		8
ARTICLE 6 REPAIR AND MAINTENANCE		12
ARTICLE 7 WASTE DISPOSAL AND UTILITIES		14
ARTICLE 8 OPERATING EXPENSES		17
ARTICLE 9 INSURANCE		23
ARTICLE 10 LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY		25
ARTICLE 11 DAMAGE TO PREMISES		26
ARTICLE 12 CONDEMNATION		28
ARTICLE 13 DEFAULT AND REMEDIES		29
ARTICLE 14 ASSIGNMENT AND SUBLETTING		33
ARTICLE 15 GENERAL PROVISIONS		38

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LEASE

This Lease is dated as of the lease reference date specified in Section A of the Summary of Basic Lease Terms and is made by and between the party identified as Landlord in Section B of the Summary and the party identified as Tenant in Section C of the Summary.

SUMMARY OF BASIC LEASE TERMS

SECTION (LEASE REFERENCE)	TERMS
A.     Lease Reference Date:          (Introduction)	June 17, 2013
B.     Landlord:          (Introduction)	M West Propco XVII, LLC, a Delaware limited liability company
C.     Tenant:          (Introduction)	Barracuda Networks, Inc., a Delaware corporation
D.     Premises:          (§ 1.20)	That area consisting of approximately 47,378 square feet of gross leasable area, comprising the entire building located at 5710 Fontanoso Way, San Jose, California, as shown on Exhibit A.
E.     Project          (§ 1.21)	The land and improvements shown on Exhibit A currently with the following building(s) and commonly referred to as the Silver Creek Business Park: (1) 5905 Silver Creek Valley Road, San Jose, California, which contains approximately 98,361 square feet of gross leasable area; (2) 5965 Silver Creek Valley Road, San Jose, California, which contains approximately 97,749 rentable square feet of gross leasable area; (3) 5710 Fontanoso Way, San Jose, California, which contains approximately 47,378 square feet of gross leasable area; (4) 5750 Fontanoso Way, San Jose, California, which contains approximately 98,382 square feet of gross leasable area; and

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	(5) 5845 Hellyer Avenue, San Jose, California, which contains approximately 98,382 square feet of gross leasable area. The total gross leasable area of the buildings in the Project is approximately 440,232 square feet.
F.      Building:          § 1.7	The building in which the Premises are located and having an address of 5710 Fontanoso Way, San Jose, California. The Building contains approximately 47,378 square feet of gross leasable area. The gross leasable area of the Premises, Building and Project referred to above shall be deemed the actual gross leasable area in the Premises, Building and Project.
G.     Tenant’s Share:          (§ 1.28)	100% of the Building based on the ratio that the rentable square footage of the Premises bears to the total rentable square footage in the Building. 10.76% of the Project based on the ratio that the gross leasable square footage of the Premises bears to the total gross leasable square footage in all buildings (including the Building) in the Project.
H.     Tenant’s Allocated Parking Stalls:          (§ 4.5)	143 stalls.
I.       Commencement Date:          (§ 1.8)	September 1, 2013
J.      Lease Term:          (§ 1.17)	Sixty (60) calendar months (inclusive of the partial month following the Commencement Date if such date is not the first day of a month).

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K.     Base Monthly Rent:          (§ 3.1)
Months 1 - 12:	$0.00
Months 13 - 24:	$ 0.00
Months 25 - 36:	$37,902.40
Months 37 - 48:	$42,640.20
Months 49 - 60:	$47,378.00
L.     Prepaid Rent:          (§ 3.3)	$37,902.40
M.    Security Deposit:          (§ 3.5)	$37,902.40
N.     Permitted Use:	The Premises shall be used for general office, research and development, manufacturing, shipping and receiving and all other legally permitted uses (the “Permitted Use”), but only to the extent permitted by the City of San Jose and all agencies and governmental authorities having jurisdiction thereof and for any other purpose permitted by law and consistent with the character of the Project.
O.     Permitted Tenant’s Alterations limit:          (§ 5.2)	$50,000.00
P.      Tenant’s Liability Insurance Minimum:          (§ 9.1)	$2,000,000 per occurrence with a $3,000,000 aggregate limit
Q.     Landlord’s Address:          (§ 1.3)	Through August 31, 2013: M West Propco XIII, LLC c/o M West Properties 5014 Old Ironsides Drive, Suite 210 Santa Clara, CA 95054 Attn.: Property Manager From and after September 1, 2013: M West Propco XIII, LLC c/o M West Properties 3351 Olcott Street Santa Clara, CA 95054 Attn.: Property Manager

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With copies to:	Divco West Real Estate Services, Inc. 575 Market Street, 35th floor San Francisco, CA 94105 Attn.: Steve Novick and Divco West Real Estate Services, Inc. 575 Market Street, 35th floor San Francisco, CA 94105 Attn.: Jackie Moore
R.     Tenant’s Address:          (§ 1.3)	Barracuda Networks, Inc. 3175 Winchester Blvd Campbell, CA 95008 Attn.: General Counsel
S.      Retained Real Estate Brokers:          (§ 15.13)	Cornish & Carey Commercial represents Tenant Colliers International represents Landlord
T.     Lease:          (§ 1.16)	This Lease includes the summary of the Basic Lease Terms, the Lease, and the following exhibits and addenda: Exhibit A - Project Site Plan and Outline of the Premises Exhibit B - Work Letter for Tenant Improvements Exhibit B-1 - Preliminary Plans Exhibit C - Acceptance Agreement Exhibit D - Option to Extend

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The foregoing Summary is hereby incorporated into and made a part of this Lease. Each reference in this Lease to any term of the Summary shall mean the respective information set forth above and shall be construed to incorporate all of the terms provided under the particular paragraph pertaining to such information. In the event of any conflict between the Summary and the Lease, the Summary shall control.

ARTICLE 1 DEFINITIONS

1.1 General: Any initially capitalized term that is given a special meaning by this Article 1, the Summary, or by any other provision of this Lease (including the exhibits attached hereto) shall have such meaning when used in this Lease or any addendum or amendment hereto unless otherwise clearly indicated by the context.

1.2 Additional Rent: The term “Additional Rent” is defined in Section 3.2.

1.3 Address for Notices: The term “Address for Notices” means the addresses set forth in Sections Q and R of the Summary.

1.4 Agents: The term “Agents” means the following: (i) with respect to Landlord, the employees and agents of Landlord; and (ii) with respect to Tenant, the employees, contractors, agents and invitees of Tenant and Tenant’s subtenants and their respective agents, employees, contractors, and invitees.

1.5 Agreed Interest Rate: The term “Agreed Interest Rate” means that interest rate determined as of the time it is to be applied that is equal to the lesser of (i) 5% in excess of the discount rate established by the Federal Reserve Bank of San Francisco as it may be adjusted from time to time, or (ii) the maximum interest rate permitted by Law.

1.6 Base Monthly Rent: The term “Base Monthly Rent” means the fixed monthly rent payable by Tenant pursuant to Section 3.1 which is specified in Section K of the Summary.

1.7 Building: The term “Building” means the building in which the Premises are located which Building is identified in Section F of the Summary.

1.8 Commencement Date: The term “Commencement Date” is the date the Lease Term commences, which term is defined in Section 2.2.

1.9 Common Area: The term “Common Area” means all areas and facilities within the Project that are not designated by Landlord for the exclusive use of Tenant or any other lessee or other occupant of the Project, including the parking areas, access and perimeter roads, pedestrian sidewalks, landscaped areas, trash enclosures, recreation areas and the like.

1.10 Operating Expenses: The term “Operating Expenses” is defined in Section 8.2.

1.11 Effective Date: The term “Effective Date” means the date the last signatory to this Lease whose execution is required to make it binding on the parties hereto shall have executed this Lease.

1.12 Event of Tenant’s Default: The term “Event of Tenant’s Default” is defined in Section 13.1.

1.13 Hazardous Materials: The terms “Hazardous Materials” and “Hazardous Materials Laws” are defined in Section 7.2F.

1.14 Insured and Uninsured Peril: The terms “Insured Peril” and “Uninsured Peril” are defined in ¶11.2E.

1.15 Law: The term “Law” means any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, state, federal or other government agency or authority having jurisdiction over the parties to this Lease or the Premises, or both, in effect either at the Effective Date or any time during the Lease Term, including, without limitation, any Hazardous Material Law (as defined in Section 7.2F) and the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et. seq. and any rules, regulations, restrictions, guidelines, requirements or publications promulgated or published pursuant thereto.

1.16 Lease: The term “Lease” means the Summary and all elements of this Lease identified in Section T of the Summary, all of which are attached hereto and incorporated herein by this reference.

1.17 Lease Term: The term “Lease Term” or “Term” means the term of this Lease which shall commence on the Commencement Date and continue for the period specified in Section J of the Summary.

1.18 Lender: The term “Lender” means any beneficiary, mortgagee, secured party, lessor, or other holder of any Security Instrument.

1.19 Permitted Use: The term “Permitted Use” means the use specified in Section N of the Summary.

1.20 Premises: The term “Premises” means that building area described in Section D of the Summary that is within the Building.

1.21 Project: The term “Project” means that real property and the improvements thereon which are specified in Section E of the Summary. Landlord reserves the right, in its sole and absolute discretion, to include such other buildings in the Project, to sell, transfer, assign or otherwise dispose of any building or parcel in the Project and elect to remove such building and/or parcel from the Project.

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1.22 Private Restrictions: The term “Private Restrictions” means all recorded covenants, conditions and restrictions, private agreements, reciprocal easement agreements, and any other recorded instruments affecting the use of the Premises which (i) exist as of the Effective Date, or (ii) are recorded after the Effective Date.

1.23 Real Property Taxes: The term “Real Property Taxes” is defined in Section 8.3.

1.24 Intentionally Omitted.

1.25 Security Instrument: The term “Security Instrument” means any underlying lease, mortgage or deed of trust which now or hereafter affects the Project, and any renewal, modification, consolidation, replacement or extension thereof.

1.26 Summary: The term “Summary” means the Summary of Basic Lease Terms that immediately precedes Article I of this Lease.

1.27 Tenant’s Alterations: The term “Tenant’s Alterations” or “Tenant’s Alteration” or “Tenant Alteration” means all improvements, additions, alterations, and fixtures installed in the Premises by Tenant.

1.28 Tenant’s Share: The term “Tenant’s Share” means the percentage obtained by dividing Tenant’s gross leasable area in the Premises (as set forth D of the Summary) by the gross leasable area in the Building or the Project, as applicable, which as of the Effective Date are the percentages identified in Section G of the Summary.

1.29 Trade Fixtures: The term “Trade Fixtures” means (i) Tenant’s inventory, furniture, signs, and business equipment, and (ii) anything affixed to the Premises by Tenant at its expense for purposes of trade, manufacture, ornament or domestic use (except replacement of similar work or material originally installed by Landlord) which can be removed without material injury to the Premises unless such thing has, by the manner in which it is affixed, become an integral part of the Premises.

ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE

2.1 Demise of Premises: Landlord hereby leases to Tenant, and Tenant leases from Landlord, for the Lease Term upon the terms and conditions of this Lease, the Premises for Tenant’s own use in the conduct of Tenant’s business together with (i) the non-exclusive right to use the number of Tenant’s Allocated Parking Stalls within the Common Area (subject to the limitations set forth in Section 4.5), and (ii) the non-exclusive right to use the Common Area for ingress to and egress from the Premises.

2.2 Commencement Date: The Commencement Date shall be the date set forth in Section I of the Summary.

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2.3 Construction of Improvements: Tenant shall construct the Tenant Improvements (as defined in Exhibit B) in accordance with the terms of Exhibit B.

2.4 Delivery and Acceptance of Possession: If this Lease provides that Landlord must deliver possession of the Premises to Tenant on a certain date, and if Landlord is unable to deliver possession of the Premises to Tenant on or before such date for any reason whatsoever, then this Lease shall not be void or voidable except as provided in this paragraph, and Landlord shall not be liable to Tenant for any loss or damage resulting therefrom. If Landlord does not deliver possession of the Premises to Tenant within thirty 30 days after the Effective Date, then Tenant shall have the right to terminate this Lease upon written notice to Landlord within ten (10) days after the end of said time period.

Tenant acknowledges that it has had an opportunity to conduct, and has conducted, such inspections of the Premises as it deems necessary to evaluate its condition. Tenant agrees to accept possession of the Premises in its then existing condition, “AS-IS”. At the time Landlord delivers possession of the Premises to Tenant, Landlord and Tenant shall together execute an acceptance agreement in the form attached as Exhibit C, appropriately completed. Landlord shall have no obligation to deliver possession, nor shall Tenant be entitled to take occupancy, of the Premises until such acceptance agreement has been executed, and Tenant’s obligation to pay Base Monthly Rent and Additional Rent shall not be excused or delayed because of Tenant’s failure to execute such acceptance agreement. Notwithstanding anything set forth above to the contrary, Landlord shall, on or before the Commencement Date (i) repair the Building’s inoperable loading dock in order to cause the same to be in working condition, and (ii) cause the HVAC units located on the roof of the Building, and the roof of the Building itself, to be in working condition and repair (the “Warranted Systems”). The foregoing shall not be deemed to require Landlord to replace any of the Warranted Systems, as opposed to repair any Warranted Systems. If it is determined during the first sixty (60) days of the Lease Term that any of the Warranted Systems were not in working condition and repair as of the Commencement Date, Landlord shall not be liable to Tenant for any damages, but as Tenant’s sole remedy, Landlord, at no cost to Tenant (and which shall not be included in Operating Expenses), shall perform such work or take such other action as may be necessary to place the same in working condition and repair.

2.5 Early Occupancy: Landlord shall deliver possession of the Premises to Tenant on the Effective Date. Tenant shall be permitted to enter the Premises from and after the Effective Date solely for the purpose of constructing the Tenant Improvements pursuant to the terms and conditions of Exhibit B, attached hereto, and for installing Trade Fixtures and cabling, and otherwise preparing the Premises for Tenant’s use, and such entry shall be subject to all the provisions of this Lease other than the payment of Base Monthly Rent and Additional Rent, including, without limitation, Tenant’s compliance with the insurance and indemnity requirements of this Lease. Said early possession (so long as Tenant does not conduct business) shall not advance the Commencement Date of this Lease.

2.6 Tenant’s Early Termination Right: Notwithstanding anything to the contrary contained in the Lease, Tenant may terminate the Lease effective as of the day preceding the second (2^nd) anniversary of the Commencement Date (the “Early Termination Date”) by giving Landlord

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notice (the “Termination Notice”) of Tenant’s election to terminate the Lease not less than nine (9) months prior to the Early Termination Date. Failure to timely exercise such option shall result in such option expiring and being of no further force or effect. If Tenant properly exercises its option to terminate in accordance with the provisions hereof, this Lease shall be terminated on the Early Termination Date without further liability of Tenant hereunder, except for such liability that has accrued on or prior to the Early Termination Date and such liability that survives termination of the Lease by the terms hereof.

ARTICLE 3 RENT

3.1 Base Monthly Rent: Tenant shall not be obligated to pay monthly Base Rent for the initial two (2) years of the Lease Term, as set forth in Section K of the Summary; provided, however, all other provisions of this Lease, including the payment of “Additional Rent”, as defined in Section 3.2 below, shall be in full force and effect as of the Commencement Date. Commencing on the third (3^rd) anniversary of the Commencement Date and continuing throughout the remainder of the Lease Term, Tenant shall pay to Landlord the Base Monthly Rent set forth in Section K of the Summary.

3.2 Additional Rent: Commencing on the Commencement Date and continuing throughout the Lease Term, Tenant shall pay the following as additional rent (the “Additional Rent”): (i) any late charges or interest due Landlord pursuant to Section 3.4; (ii) Tenant’s Share of Operating Expenses as provided in Section 8.1; (iii) Landlord’s share of any Subrent received by Tenant upon certain assignments and sublettings as required by Section 14.1; (iv) any legal fees and costs due Landlord pursuant to Section 15.9; and (v) any other charges due Landlord pursuant to this Lease.

3.3 Payment of Rent: Concurrently with the execution of this Lease by Tenant, Tenant shall pay to Landlord the amount set forth in Section L of the Summary as prepayment of rent for credit against the first installment(s) of Base Monthly Rent. The term “Rent” or “rent” shall mean Base Monthly Rent, Additional Rent and other sums required to be paid by Tenant under this Lease. All rent required to be paid in monthly installments shall be paid in advance on the first day of each calendar month during the Lease Term. All rent shall be paid in lawful money of the United States, without any abatement, deduction or offset whatsoever (except as specifically provided in Section 11.4 and Section 12.3), and without any prior demand therefor. Rent shall be paid to Landlord at its address set forth in Section Q of the Summary, or at such other place as Landlord may designate from time to time. Tenant’s obligation to pay Base Monthly Rent and Tenant’s Share of Operating Expenses shall be prorated at the commencement and expiration of the Lease Term.

3.4 Late Charge and Interest

(a) Late Charge. Tenant acknowledges that the late payment by Tenant of any installment of rent, or any other sum of money required to be paid by Tenant under this Lease, will cause Landlord to incur certain costs and expenses not contemplated under this Lease, the exact amount of such costs being extremely difficult and impractical to fix. Such costs and expenses will include, without limitation, attorneys’ fees, administrative and collection costs, and processing and

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accounting expenses and other costs and expenses necessary and incidental thereto. If any Base Monthly Rent or Additional Rent is not received by Landlord from Tenant when due such payment is due, then Tenant shall immediately pay to Landlord a late charge equal to 5% of such delinquent rent as liquidated damages for Tenant’s failure to make timely payment. In no event shall this provision for a late charge be deemed to grant to Tenant a grace period or extension of time within which to pay any rent or prevent Landlord from exercising any right or remedy available to Landlord upon Tenant’s failure to pay any rent due under this Lease in a timely fashion, including any right to terminate this Lease pursuant to Section 13.2(B). Notwithstanding anything to the contrary herein, before assessing a late charge or late interest the first time in any twelve (12) month period, Landlord shall provide Tenant written notice of the delinquency, and shall waive such late charge and late interest if Tenant pays such delinquency within five (5) days thereafter.

(b) Interest. If any rent remains delinquent for a period in excess of ten (10) days then, in addition to such late charge, Tenant shall pay to Landlord interest on any rent that is not paid when due at the Agreed Interest Rate following the date such amount became due until paid.

3.5 Security Deposit: On the Effective Date, Tenant shall deposit with Landlord the amount set forth in Section M of the Summary as security for the performance by Tenant of its obligations under this Lease, and not as prepayment of rent (the “Security Deposit”). Landlord may from time to time apply such portion of the Security Deposit as is reasonably necessary for the following purposes: (i) to remedy any default by Tenant in the payment of rent; (ii) to repair damage to the Premises caused by Tenant; (iii) to clean the Premises upon termination of the Lease; and (iv) to remedy any other default of Tenant to the extent permitted by Law and, in this regard, Tenant hereby waives any restriction on the uses to which the Security Deposit may be put contained in California Civil Code Section 1950.7, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant. In the event the Security Deposit or any portion thereof is so used, Tenant agrees to pay to Landlord promptly upon demand an amount in cash sufficient to restore the Security Deposit to the full original amount. Landlord shall not be deemed a trustee of the Security Deposit, may use the Security Deposit in business, and shall not be required to segregate it from its general accounts. Tenant shall not be entitled to any interest on the Security Deposit. If Landlord transfers the Premises during the Lease Term, Landlord shall pay the Security Deposit to any transferee of Landlord’s interest in conformity with the provisions of California Civil Code Section 1950.7 and/or any successor statute, in which event the transferring Landlord will be released from all liability for the return of the Security Deposit.

ARTICLE 4 USE OF PREMISES

4.1 Limitation on Use: Tenant shall use the Premises solely for the Permitted Use specified in Section N of the Summary. There shall not be any change in use without the prior written consent of Landlord which will not be unreasonably withheld. Tenant shall not do anything in or about the Premises which will (i) cause structural injury to the Building, or (ii) cause damage to any part of the Building except to the extent reasonably necessary for the installation of Tenant’s

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Trade Fixtures and Tenant’s Alterations, and then only in a manner which has been first approved by Landlord in writing. Tenant shall not operate any equipment within the Premises which will (i) materially damage the Building or the Common Area, (ii) overload existing electrical systems or other mechanical equipment servicing the Building, (iii) impair the efficient operation of the sprinkler system or the heating, ventilating or air conditioning (“HVAC”) equipment within or servicing the Building, or (iv) damage, overload or corrode the sanitary sewer system. Tenant shall not set any load on the floor in excess of the load limits provided by Landlord. Any dust, fumes, or waste products generated by Tenant’s use of the Premises shall be contained and disposed so that they do not (i) create an unreasonable fire or health hazard, (ii) damage the Premises, or (iii) result in the violation of any Law. Except as approved by Landlord in its sole discretion, Tenant shall not change the exterior of the Building or install any equipment or antennas on or make any penetrations of the exterior or roof of the Building; provided, however, to the extent Tenant requests Landlord consent to install equipment on the roof of the Building, Landlord shall reasonably cooperate with Tenant, subject to Landlord’s standard design and installation parameters, in connection therewith. Tenant shall not commit any waste in or about the Premises, and Tenant shall keep the Premises in a neat, clean, attractive and orderly condition, free of any nuisances. Tenant shall not conduct on any portion of the Premises or the Project any sale of any kind, including any public or private auction, fire sale, going-out-of-business sale, distress sale or other liquidation sale.

4.2 Compliance with Regulations: Tenant shall not use the Premises in any manner which violates any Laws or Private Restrictions which affect the Premises. Tenant shall abide by and promptly observe and comply with all Laws and Private Restrictions. Tenant shall not use the Premises in any manner which will cause a cancellation of any insurance policy covering Tenant’s Alterations or any improvements, installed by Landlord at its expense or which poses an unreasonable risk of damage or injury to the Premises. Tenant shall not sell, or permit to be kept, used, or sold in or about the Premises any article which may be prohibited by the standard form of fire insurance policy. Tenant shall comply with all reasonable requirements of any insurance company, insurance underwriter, or Board of Fire Underwriters which are necessary to maintain the insurance coverage carried by either Landlord or Tenant pursuant to this Lease. Notwithstanding anything to the contrary in this Lease, including Section 7.4, Tenant shall not be required to perform alterations to comply with any Private Restrictions, insurance company, board or underwriter’s requirements or Laws, except as provided in Section 5.3, below.

4.3 Outside Areas: No materials, supplies, tanks or containers, equipment, finished products or semi-finished products, raw materials, inoperable vehicles or articles of any nature shall be stored upon or permitted to remain outside of the Premises except in fully fenced and screened areas outside the Building which have been designed for such purpose and have been approved in writing by Landlord for such use by Tenant.

4.4 Signs: Tenant shall not place on any portion of the Premises any sign, placard, lettering in or on windows, banner, displays or other advertising or communicative material which is visible from the exterior of the Building without the prior written approval of Landlord. All such approved signs shall strictly conform to all Laws, Private Restrictions, and Landlord’s sign criteria then in effect and shall be installed at the expense of Tenant. Tenant shall maintain such signs in good condition and repair.

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4.5 Parking: Tenant is allocated and shall have the non-exclusive right to use not more than the number of Tenant’s Allocated Parking Stalls contained within the Project described in Section H of the Summary for its use and the use of Tenant’s Agents. Tenant shall not at any time use more parking spaces than the number so allocated to Tenant or park its vehicles or the vehicles of others in any portion of the Project not designated by Landlord as a non-exclusive parking area. Except for the parking immediately adjacent to the Premises, in which case Tenant shall have exclusive parking rights, Tenant shall not have the exclusive right to use any specific parking space. If Landlord grants to any other tenant the exclusive right to use any particular parking space(s), Tenant shall not use such spaces. Landlord reserves the right, after having given Tenant reasonable notice, to have any vehicles owned by Tenant or Tenant’s Agents utilizing parking spaces in excess of the parking spaces allowed for Tenant’s use to be towed away at Tenant’s cost. All trucks and delivery vehicles shall be (i) parked at the rear of the Building, (ii) loaded and unloaded in a manner which does not interfere with the businesses of other occupants of the Project, and (iii) permitted to remain on the Project only so long as is reasonably necessary to complete loading and unloading. In the event Landlord is required by any Law to limit or control parking in the Project, whether by validation of parking tickets or any other method of assessment, Tenant agrees to participate in such validation or assessment program under such reasonable rules and regulations as are from time to time established by Landlord. All parking for Tenant and Tenant’s employees, contractors, customers and invitees shall be free of charge, and any validation system shall provide for full credit and/or reimbursement for said users; provided, however, Tenant shall be obligated to pay any and all taxes related to such parking.

4.6 Rules and Regulations: Landlord may from time to time promulgate reasonable and nondiscriminatory rules and regulations applicable to all occupants of the Project for the care and orderly management of the Project and the safety of its tenants and invitees. Such rules and regulations shall be binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees to abide by such rules and regulations. If there is a conflict between the rules and regulations and any of the provisions of this Lease, the provisions of this Lease shall prevail. Landlord shall not be responsible for the violation by any other tenant of the Project of any such rules and regulations. The Rules and Regulations of the Project shall not unreasonably affect Tenant’s use or occupancy of the Premises, shall not be enforced against Tenant in a discriminatory manner and shall not be altered without prior notice to all tenants of the Project.

ARTICLE 5 TRADE FIXTURES AND ALTERATIONS

5.1 Trade Fixtures: Throughout the Lease Term, Tenant may provide and install, and shall maintain in good condition, any Trade Fixtures required in the conduct of its business in the Premises, except to the extent (a) any Trade Fixture will use, generate, store or dispose of any Hazardous Material in which case the prior written consent of Landlord in its sole and absolute discretion shall be required before such Trade Fixture may be installed, or (b) any Trade Fixture will constitute a Tenant Alteration, in which case it shall be subject to the requirements set forth below for the construction of a Tenant Alteration, including, without limitation, the prior written consent of Landlord. All Trade Fixtures shall remain Tenant’s property.

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5.2 Tenant’s Alterations: Construction by Tenant of a Tenant Alteration shall be governed by the following; provided, however, the construction of the “Tenant Improvements,” as that term is defined in Exhibit B, attached hereto, shall be governed by the terms and conditions of Exhibit B and not this Section 5.2:

A. Consent Required. Tenant shall not construct any Tenant’s Alterations or otherwise alter the Premises without Landlord’s prior written approval, which will not be unreasonably withheld unless such Tenant Alteration affects areas outside of the Premises or the exterior of the Building or the structural parts of the Building, in which case Landlord may withhold its consent in its sole and absolute discretion. Notwithstanding the foregoing, Landlord’s consent shall not be required for any Alteration to the interior of the Premises that complies with the following requirements: (a) is cosmetic in nature such as painting, (b) does not affect the roof or any area outside of the Premises or require work inside the walls or above the ceiling of the Premises; (c) does not affect the structural parts of the Building or electrical, plumbing, HVAC or mechanical systems in the Building or servicing the Premises, or the sprinkler or other life safety system; and (d) costs less than the Permitted Tenant Alterations Limit specified in Section O of the Summary per work of improvement (herein referred to as “Minor Alteration”). Tenant shall provide Landlord with prior written notice of any Minor Alteration that requires a building permit. In the event Landlord’s approval for any Tenant’s Alterations is required, Tenant shall not construct the Tenant Alteration until Landlord has approved in writing the plans and specifications therefor, and such Tenant’s Alterations shall be constructed substantially in compliance with such approved plans and specifications by a licensed contractor first approved by Landlord. All Tenant’s Alterations constructed by Tenant shall be constructed by a licensed contractor in accordance with all Laws using new materials of good quality.

B. Other Requirements. Tenant shall not commence construction of any Tenant’s Alterations until (i) all required governmental approvals and permits have been obtained, (ii) all requirements regarding insurance imposed by this Lease have been satisfied, (iii) Tenant has given Landlord at least five days’ prior written notice of its intention to commence such construction, and (iv) if reasonably requested by Landlord, Tenant has obtained contingent liability and broad form builders’ risk insurance in an amount reasonably satisfactory to Landlord if there are any perils relating to the proposed construction not covered by insurance carried pursuant to Article 9.

C. Restoration. All Tenant’s Alterations shall remain the property of Tenant during the Lease Term but shall not be altered or removed from the Premises. At the expiration or sooner termination of the Lease Term, all Tenant’s Alterations shall be surrendered to Landlord as part of the realty and shall then become Landlord’s property, and Landlord shall have no obligation to reimburse Tenant for all or any portion of the value or cost thereof; provided, however, that if Landlord informs Tenant at the time Landlord consents to a Tenant Alteration, that such Tenant Alteration must be removed prior to the expiration of the Lease Term or promptly following termination of the Lease, Tenant shall so remove such Tenant’s Alterations prior to the expiration of

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the Lease Term or promptly following termination of the Lease. Notwithstanding the foregoing, Tenant shall not be obligated to remove any Tenant’s Alterations with respect to which the following is true: (i) Tenant was required, or elected, to obtain the approval of Landlord to the installation of the Leasehold Improvement in question; (ii) at the time Tenant requested Landlord’s approval, Tenant requested of Landlord in writing that Landlord inform Tenant of whether or not Landlord would require Tenant to remove such Tenant Alteration at the expiration of the Lease Term; and (iii) at the time Landlord granted its approval, it did not inform Tenant that it would require Tenant to remove such Leasehold Improvement at the expiration of the Lease Term. Notwithstanding anything to the contrary in this Lease, Tenant shall not be required to remove the Tenant Improvements to the extent consistent with the Preliminary Plans attached as Exhibit B-1 to this Lease.

D. Removal of Electrical and Telecommunication Wires. Except with respect to Wires that Tenant elects to remove prior to the expiration or sooner termination of the Term of this Lease, Landlord may elect to:

(1) Retain any or all wires, cables, and similar installations appurtenant thereto installed by Tenant (“Wires”) with the Premises or anywhere in the Building outside the Premises, including, without limitation, the plenums or risers of the Building; or

(2) Remove any or all of the Wires and restore the Premises or the Building, as the case may be, to their condition existing prior to the installation of the Wires at Landlord’s sole cost and expense.

Tenant shall comply with all applicable Laws with respect to the Wires; provided, however, Tenant shall not be required to remove the Wires. Except with respect to Wires that Tenant elects to remove, Tenant covenants that: (a) Tenant shall be the sole owner of the Wires, Tenant shall have the sole right to surrender the Wires, and the wires shall be free of all liens and encumbrances; and (b) All Wires shall be left in good condition, working order, properly labeled and capped or sealed at each end and in each telecommunications/electrical closet and junction box, and in safe condition.

The provisions of Section 5.2D and all subsections thereof shall survive the expiration or sooner termination of the Term of this Lease.

5.3 Alterations Required by Law: Tenant shall make any alteration, addition or change of any sort to the Premises that is required by any Law because of (i) Tenant’s particular use or change of use of the Premises; (ii) Tenant’s application for any permit or governmental approval; or (iii) Tenant’s construction or installation of any Tenant’s Alterations or Trade Fixtures. Any other alteration, addition, or change required by Law which is not the responsibility of Tenant pursuant to the foregoing shall be made by Landlord (subject to Landlord’s right to reimbursement from Tenant specified in Section 5.4).

5.4 Amortization of Certain Capital Improvements: Tenant shall pay Additional Rent in the event Landlord reasonably elects or is required to make any of the following kinds of capital improvements to the Project: (i) capital improvements required to be constructed in order to comply

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with any Law not in effect or applicable to the Project as of the Effective Date; (ii) modification of existing or construction of additional capital improvements or building service equipment, which modifications or additions are reasonably intended to reduce overall costs to Tenant due to the reduced consumption of utility services or Operating Expenses of the Project; (iii) replacement (but not upgrade) of capital improvements or building service equipment existing as of the Effective Date when required because of normal wear and tear; and (iv) restoration of any part of the Project (excluding the structural portions of the Building) that has been damaged by any peril to the extent the cost thereof is not covered by insurance proceeds actually recovered by Landlord up to a maximum amount per occurrence of 2% of the then replacement cost of the Project. The amount of Additional Rent Tenant is to pay with respect to each such capital improvement shall be determined as follows:

A. Amortization Period. All costs paid by Landlord to construct such improvements (including financing costs) shall be amortized over the useful life of such improvement (as reasonably determined by Landlord in accordance with generally accepted accounting principles) with interest on the unamortized balance at the then prevailing market rate Landlord would pay if it borrowed funds to construct such improvements from an institutional lender, and Landlord shall inform Tenant of the monthly amortization payment required to so amortize such costs, and shall also provide Tenant with the information upon which such determination is made.

B. Payment. As Additional Rent, Tenant shall pay at the same time the Base Monthly Rent is due an amount equal to Tenant’s Share of that portion of such monthly amortization payment fairly allocable to the Building (as reasonably determined by Landlord) for each month after such improvements are completed until the first to occur of (i) the expiration of the then-current Lease Term (as it may be extended), or (ii) the end of the term over which such costs were amortized.

5.5 Mechanic’s Liens: Tenant shall keep the Project free from any liens and shall pay when due all bills arising out of any work performed, materials furnished, or obligations incurred by Tenant or Tenant’s Agents relating to the Project. If any claim of lien is recorded (except those caused by Landlord or Landlord’s Agents), Tenant shall bond against or discharge the same within 20 days after the same has been recorded against the Project. Should any lien be filed against the Project or any action be commenced affecting title to the Project, the party receiving notice of such lien or action shall immediately give the other party written notice thereof.

Notwithstanding anything to the contrary contained in this Lease, Tenant shall have no obligation for the cost of or to reimburse Landlord for any costs related to the repair or replacement (but not including the cost of normal and customary maintenance) of the structural components of the Premises, Building or Project.

5.6 Taxes on Tenant’s Property: Tenant shall pay before delinquency any and all taxes, assessments, license fees and public charges levied, assessed or imposed against Tenant or Tenant’s estate in this Lease or the property of Tenant situated within the Premises which become due during the Lease Term. If any tax or other charge is assessed by any governmental agency because of the execution of this Lease, such tax shall be paid by Tenant. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments.

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ARTICLE 6 REPAIR AND MAINTENANCE

6.1 Tenant’s Obligation to Maintain: Except as otherwise provided in Section 6.2, Section 11.1, and Section 12.3, Tenant shall be responsible for the following during the Lease Term:

A. General. Tenant shall clean and maintain in good order, condition, and repair and replace when necessary the Premises and every part thereof, through regular inspections and servicing, including, but not limited to: (i) all plumbing and sewage facilities (including all sinks, toilets, faucets and drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing system; (ii) all fixtures, interior walls, floors, carpets and ceilings; (iii) all windows, doors, entrances, plate glass, and showcases (including cleaning both interior and exterior surfaces); (iv) all electrical facilities and all equipment (including all lighting fixtures, lamps, bulbs, tubes, fans, vents, exhaust equipment and systems); and (v) any automatic fire extinguisher equipment in the Premises. Any costs associated with the repair or replacement (but not including the cost of normal and customary maintenance) of any structural portions of the Premises shall be at Landlord’s sole cost.

B. Utilities and Glass. With respect to utility facilities serving the Premises (including electrical wiring and conduits, gas lines, water pipes, and plumbing and sewage fixtures and pipes), Tenant shall be responsible for the maintenance and repair of any such facilities which serve only the Premises, including all such facilities that are within the walls or floor, or on the roof of the Premises, and any part of such facility that is not within the Premises, but only up to the point where such facilities join a main or other junction (e.g., sewer main or electrical transformer) from which such utility services are distributed to other parts of the Project as well as to the Premises.

C. Windows. Tenant shall replace any damaged or broken glass in the Premises (including all interior and exterior doors and windows) with glass of the same kind, size and quality. Tenant shall repair any damage to the Premises (including exterior doors and windows) caused by vandalism or any unauthorized entry. Tenant shall maintain continuously throughout the Lease Term a service contract for the washing of all windows (both interior and exterior surfaces) in the Premises, which contract provides for the periodic washing of all such windows at least once every 6 months during the Lease Term. Tenant shall furnish Landlord with copies of all such service contracts, which shall provide that they may not be canceled or changed without at least 30 days’ prior written notice to Landlord.

D. HVAC. Tenant shall (i) maintain, repair and replace when necessary all HVAC equipment which services only the Premises, and shall keep the same in good condition through regular inspection and servicing, and (ii) maintain continuously throughout the Lease Term a service contract for the maintenance of all such HVAC equipment with a licensed HVAC repair and maintenance contractor reasonably approved by Landlord, which contract provides for the periodic inspection and servicing of the HVAC equipment in accordance with the manufacturer’s guidelines. Notwithstanding the foregoing, Landlord may elect at any time to assume responsibility for the maintenance, repair and replacement of such HVAC equipment which serves only the

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Premises; provided, however, if Landlord elects to assume such responsibility, then the costs incurred by Landlord shall be included in Operating Expenses to the extent such costs do not exceed the greater of (a) the amount incurred by Tenant prior to Landlord’s election, and (b) an amount that is consistent with the costs incurred by the landlords of comparable buildings in the vicinity of the Building, taking into account any differences in equipment and the nature of the work being performed. Tenant shall furnish Landlord with copies of all such service contracts, which shall provide that they may not be canceled or changed without at least 30 days’ prior written notice to Landlord.

E. Standards. All repairs and replacements required of Tenant shall be promptly made with new or like new materials of like kind and quality. If the work affects the structural parts of the Building or if the estimated cost of any item of repair or replacement is in excess of the Permitted Tenant’s Alterations Limit, then Tenant shall first obtain Landlord’s written approval of the scope of the work, plans therefor, materials to be used, and the contractor.

6.2 Landlord’s Obligation to Maintain: Landlord shall repair, maintain and operate the Common Area and repair and maintain the roof, utilities that are underground or that do not exclusively serve the Premises, and exterior and structural parts of the building(s) located on the Project so that the same are kept in good order and repair. If there is central HVAC or other building service equipment and/or utility facilities serving portions of the Common Area and/or both the Premises and other parts of the Building, Landlord shall maintain and operate (and replace when necessary) such equipment. If a building service equipment serving the Premises needs to be replaced, Landlord shall perform such replacement and Tenant shall pay its amortized share of such replacement pursuant to Section 5.4 above. Landlord shall not be responsible for repairs required by an accident, fire or other peril or for damage caused to any part of the Project by any act or omission of Tenant or Tenant’s Agents except as otherwise required by Article 11. Landlord may engage contractors of its choice to perform the obligations required of it by this Article, and the necessity of any expenditure to perform such obligations shall be at the sole discretion of Landlord. The manner in which the Common Areas are repaired, maintained and operated shall be at the reasonable discretion of Landlord (but shall at least be consistent with the manner in which the common areas of comparable buildings in the vicinity of the Building are maintained and operated).

6.3 Control of Common Area: Landlord shall at all times have exclusive control of the Common Area. Landlord shall have the right, without the same constituting an actual or constructive eviction and without entitling Tenant to any abatement of rent, to: (i) close any part of the Common Area to whatever extent required in the opinion of Landlord’s counsel to prevent a dedication thereof or the accrual of any prescriptive rights therein; (ii) temporarily close the Common Area to perform maintenance or for any other reason deemed sufficient by Landlord; (iii) change the shape, size, location and extent of the Common Area; (iv) eliminate from or add to the Project any land or improvement, including multi-deck parking structures; (v) make changes to the Common Area including, without limitation, changes in the location of driveways, entrances, passageways, doors and doorways, elevators, stairs, restrooms, exits, parking spaces, parking areas, sidewalks or the direction of the flow of traffic and the site of the Common Area; (vi) remove unauthorized persons from the Project; and/or (vii) change the name of the Building or Project.

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Tenant shall keep the Common Area clear of all obstructions created or permitted by Tenant. If in the opinion of Landlord unauthorized persons are using any of the Common Area by reason of the presence of Tenant in the Building, Tenant, upon demand of Landlord, shall restrain such unauthorized use by appropriate proceedings. In exercising any such rights regarding the Common Area, (i) Landlord shall make a reasonable effort to minimize any disruption to Tenant’s business, and (ii) Landlord shall not exercise its rights to control the Common Area in a manner that would materially interfere with Tenant’s use of the Premises without first obtaining Tenant’s consent. Landlord shall have no obligation to provide guard services or other security measures for the benefit of the Project. Tenant assumes all responsibility for the protection of Tenant and Tenant’s Agents from acts of third parties; provided, however, that nothing contained herein shall prevent Landlord, at its sole option, from providing security measures for the Project.

ARTICLE 7 WASTE DISPOSAL AND UTILITIES

7.1 Waste Disposal: Tenant shall store its waste either inside the Premises or within outside trash enclosures that are fully fenced and screened in compliance with all Private Restrictions, and designed for such purpose. All entrances to such outside trash enclosures shall be kept closed, and waste shall be stored in such manner as not to be visible from the exterior of such outside enclosures. Tenant shall cause all of its waste to be regularly removed from the Premises at Tenant’s sole cost. Tenant shall keep all fire corridors and mechanical equipment rooms in the Premises free and clear of all obstructions at all times.

7.2 Hazardous Materials: Landlord and Tenant agree as follows with respect to the existence or use of Hazardous Materials on the Project:

A. Hazardous Materials Disclosure Certificate. Tenant shall deliver to Landlord an executed Hazardous Materials disclosure statement, substantially in the form required by Landlord from time to time describing Tenant’s then present use of Hazardous Materials on the Premises, and any other reasonably necessary documents as requested by Landlord.

B. Hazardous Materials Usage. Tenant shall not be entitled to use, store, generate, transport or dispose of any Hazardous Materials (herein referred to as “Hazardous Materials Usage”) on, in, or about any portion of the Premises, Building or the Project without, in each instance, obtaining Landlord’s prior written consent thereto in its sole and absolute discretion, except Tenant shall be entitled to use and store only those Hazardous Materials which are (i) typically used in the ordinary course of business light manufacturing use in the manner for which they were designed and in such limited amounts as may be normal, customary and necessary for Tenant’s business in the Premises, and (ii) in full compliance with Laws, and all judicial and administrative decisions pertaining thereto. Any Hazardous Materials Usage of Hazardous Materials by Tenant and Tenant’s Agents after the Effective Date in or about the Project shall strictly comply with all applicable Laws, including all Hazardous Materials Laws now or hereinafter enacted. Tenant shall not be entitled nor permitted to install any tanks under, on or about the Premises, Building or Project for the storage of Hazardous Materials without the express written consent of Landlord, which may be given or withheld in Landlord’s sole and absolute discretion.

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C. Tests and Inspections. Landlord shall have the right at all times during the Term of this Lease to (i) inspect the Premises, (ii) conduct tests and investigations to determine whether Tenant is in compliance with the provisions of this Section 7.2 or to determine if Hazardous Materials are present in, on or about the Project, and (iii) request lists of all Hazardous Materials used, stored or otherwise located on, under or about any portion of the Premises and/or the Common Areas. The cost of all such inspections, tests and investigations shall be borne by Tenant, if Landlord reasonably determines that Tenant or any of Tenant’s Agents are directly or indirectly responsible in any manner for any contamination revealed by such inspections, tests and investigations. The aforementioned rights granted herein to Landlord and its representatives shall not create (a) a duty on Landlord’s part to inspect, test, investigate, monitor or otherwise observe the Premises or the activities of Tenant and Tenant’s Agents with respect to Hazardous Materials, including without limitation, Tenant’s operation, use and any remediation related thereto, or (b) liability on the part of Landlord and its representatives for Tenant’s use, storage, disposal or remediation of Hazardous Materials, it being understood that Tenant shall be solely responsible for all liability in connection therewith.

D. Notice. Tenant shall give to Landlord immediate verbal and follow-up written notice of any spills, releases, discharges, disposals, emissions, migrations, removals or transportation of Hazardous Materials on, under or about any portion of the Premises, Common Areas or Project; provided that Tenant has actual, implied or constructive knowledge of such event(s). Tenant, at its sole cost and expense, covenants and warrants to promptly investigate, clean up, remove, restore and otherwise remediate (including, without limitation, preparation of any feasibility studies or reports and the performance of any and all closures) any spill, release, discharge, disposal, emission, migration or transportation or other Hazardous Materials Usage of Hazardous Materials arising from or related to the acts or omissions of Tenant or Tenant’s Agents such that the affected portions of the Project and any adjacent property are returned to the condition existing prior to the appearance of such Hazardous Materials as required by Hazardous Material Law or such higher standard as may be mutually and reasonably agreed upon by Landlord and Tenant to the extent consistent with remediation standards generally imposed by the landlords of comparable buildings in the San Jose area. Any such investigation, clean up, removal, restoration and other remediation shall only be performed after Tenant has obtained Landlord’s prior written consent in its reasonable discretion. Notwithstanding the foregoing, Tenant shall be entitled to respond immediately to an emergency without first obtaining Landlord’s prior written consent. Tenant, at its sole cost and expense, shall conduct and perform, or cause to be conducted and performed, all closures as required by any Hazardous Materials Laws or any agencies or other governmental authorities having jurisdiction thereof with respect to Hazardous Materials usage by Tenant or Tenant’s Agents. If Tenant fails to so promptly investigate, clean up, remove, restore, provide closure or otherwise so remediate, Landlord may, but without obligation to do so, take any and all steps necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon demand, for all costs and expenses to Landlord of performing investigation, clean up, removal, restoration, closure and remediation work. All such work undertaken by Tenant, as required herein, shall be performed in accordance with applicable Hazardous Material Laws or such higher standard mutually and reasonably agreed upon by Landlord and Tenant to the extent consistent with remediation standards generally imposed by the landlords of comparable buildings in the San Jose area.

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E. Indemnity. Tenant shall indemnify, hold harmless, and, at Landlord’s option (with such attorneys as Landlord may approve in advance and in writing), defend Landlord and Landlord’s officers, directors, shareholders, partners, members, managers, employees, contractors, property managers, agents and mortgagees and other lien holders, from and against any and all “Losses” (hereinafter defined) arising from or related to: (a) any violation or alleged violation by Tenant or any of Tenant’s Agents of any of the Laws, including, without limitation, the Hazardous Materials Laws; (b) any breach of the provisions of this Section 7.2 or any subsection thereof by Tenant or any of Tenant’s Agents; or (c) any Hazardous Materials Usage by Tenant or any of Tenant’s Agents on, about or from the Premises of any Hazardous Material approved by Landlord under this Lease. The term “Losses” shall mean all claims, demands, expenses, actions, judgments, damages, penalties, fines, liabilities, losses of every kind and nature (including, without limitation, property damage, diminution in value of Landlord’s interest in the Premises or the Project, damages for the loss or restriction on use of any space or amenity within the Building or the Project, damages arising from any adverse impact on marketing space in the Project, sums paid in settlement of claims and any costs and expenses associated with injury, illness or death to or of any person), suits, administrative proceedings, costs and fees, including, but not limited to, attorneys’ and consultants’ fees and expenses, and the costs of cleanup, remediation, removal and restoration. To the actual knowledge of Landlord, except as set forth in reports delivered to Tenant before Tenant’s execution of this Lease, Landlord has no written notices indicating the presence of Hazardous Material on the Project or the soil, surface water or groundwater thereof in violation of Hazardous Material Laws. Landlord hereby agrees that Tenant shall have no liability or responsibility for any existing Hazardous Materials on or about the Premises, Building or Project as of the Effective Date.

F. Hazardous Material. As used herein, the term “Hazardous Material,” means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United States Government or under any Hazardous Material Law. The term “Hazardous Material,” includes, without limitation, petroleum products, asbestos, PCB’s, and any material or substance which is (i) listed under Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ii) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42 U.S.C. 6903), or (iii) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response; Compensation and Liability Act, 42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used herein, the term “Hazardous Material Law” shall mean any statute, law, ordinance, or regulation of any governmental body or agency (including the U.S. Environmental Protection Agency, the California Regional Water Quality Control Board, and the California Department of Health Services) which regulates the use, storage, release or disposal of any Hazardous Material.

G. Survival. The obligations of Landlord and Tenant under this Section 7.2 shall survive the expiration or earlier termination of the Lease Term. The rights and obligations of Landlord and Tenant with respect to issues relating to Hazardous Materials are exclusively established by this Section 7.2. In the event of any inconsistency between any other part of this Lease and this Section 7.2, the terms of this Section 7.2 shall control.

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7.3 Utilities: Tenant shall promptly pay, as the same become due, all charges for water, gas, electricity, telephone, sewer service, waste pick-up and any other utilities, materials or services furnished directly to or used by Tenant on or about the Premises during the Lease Term, including, without limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee (excluding any connection fees or hook-up fees which relate to making the existing electrical, gas, and water service available to the Premises as of the Commencement Date), and (ii) penalties for discontinued or interrupted service.

7.4 Compliance with Governmental Regulations: Tenant shall comply with all rules, regulations and requirements promulgated by national, state or local governmental agencies or utility suppliers concerning the use of utility services, including any rationing, limitation or other control. Tenant shall not be entitled to terminate this Lease nor to any abatement in rent by reason of such compliance.

ARTICLE 8 OPERATING EXPENSES

8.1 Tenant’s Payment Obligation: As Additional Rent, Tenant shall pay Tenant’s Share (specified in Section G of the Summary) of all Operating Expenses; provided, however, if the Project contains more than one building, then Tenant shall pay Tenant’s Share of all Operating Expenses fairly allocable to the Building as provided below, including (a) all Operating Expenses paid with respect to the maintenance, repair, replacement and use of the Building, and (b) a proportionate share of all Operating Expenses which relate to the Project in general that are not fairly allocable to any one building that is part of the Project. Tenant shall pay such share of the actual Operating Expenses incurred or paid by Landlord but not theretofore billed to Tenant within 30 days after receipt of a written bill therefor from Landlord, on such periodic basis as Landlord shall designate, but in no event more frequently than once a month. Alternatively, Landlord may from time to time require that Tenant pay Tenant’s Share of Operating Expenses in advance in estimated monthly installments, in accordance with the following: (i) Landlord shall deliver to Tenant Landlord’s reasonable estimate of the Operating Expenses it anticipates will be paid or incurred for the Landlord’s fiscal year in question; (ii) during such Landlord’s fiscal year Tenant shall pay such share of the estimated Operating Expenses in advance in monthly installments as required by Landlord due with the installments of Base Monthly Rent; and (iii) within 180 days after the end of each Landlord’s fiscal year, Landlord shall furnish to Tenant a statement in reasonable detail of the actual Operating Expenses paid or incurred by Landlord during the just ended Landlord’s fiscal year (the “Annual Reconciliation Statement”) and thereupon there shall be an adjustment between Landlord and Tenant, with payment to Landlord or credit by Landlord against the next installment of Base Monthly Rent, as the case may require, within 30 days after delivery by Landlord to Tenant of said statement, so that Landlord shall receive the entire amount of Tenant’s Share of all Operating Expenses for such Landlord’s fiscal year and no more. The failure of Landlord to deliver such annual reconciliation statement within said 180-day period under clause (iii) above shall not constitute a waiver or otherwise release a party from its obligation to make a payment or credit when such reconciliation is actually done, provided that, other than Real Property Taxes and costs incurred for utilities, Tenant shall not be responsible for Tenant’s Share of any Operating Expenses which are first billed to Tenant more than two (2) calendar years after the end of the calendar year to which such Operating Expenses relate.

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Notwithstanding anything to the contrary in this Lease, if the Project consists of multiple buildings, certain Operating Expenses may pertain to a particular building(s) and other Operating Expenses to the Project as a whole. Landlord reserves the right in its sole discretion to allocate any such costs applicable to any particular building within the Project to the building in question whose tenants shall be responsible for payment of their respective proportionate shares in the pertinent building and other such costs applicable to the Project to each building in the Project (including the Building) with the tenants in each such building being responsible for paying their respective proportionate shares in such building of such costs to the extent required under the applicable leases. Landlord shall in good faith attempt to allocate such costs to the buildings (including the Building) in a reasonable, non-discriminatory manner and such allocation shall be binding on Tenant.

8.2 Operating Expenses Defined: The term “Operating Expenses” shall mean the total amounts paid or payable, whether by Landlord or others on behalf of Landlord, in connection with the ownership, maintenance, repair, and operations of the Building, the Common Areas and the Project, including without limitation, the following:

A. All costs and expenses paid or incurred by Landlord in doing the following (including payments to independent contractors providing services related to the performance of the following): (i) maintaining, cleaning, repairing and resurfacing the roof (including repair of leaks) and the exterior surfaces (including painting) of all buildings located on the Project; (ii) maintenance of the liability, fire, property damage, earthquake and other insurance covering the Project carried by Landlord pursuant to Section 9.2 (including the prepayment of premiums for coverage of up to one year); (iii) maintaining, repairing, operating and replacing when necessary HVAC equipment, utility facilities and other building service equipment; (iv) providing utilities to the Common Area (including lighting, trash removal and water for landscaping irrigation); (v) complying with all applicable Laws and Private Restrictions; (vi) operating, maintaining, repairing, cleaning, painting, re-striping and resurfacing the Common Area; (vii) replacement or installation of lighting fixtures, directional or other signs and signals, irrigation systems, trees, shrubs, ground cover and other plant materials, and all landscaping in the Common Area; and (viii) providing security (provided, however, that Landlord shall not be obligated to provide security and if it does, Landlord may discontinue such service at any time and in any event Landlord shall not be responsible for any act or omission of any security personnel); and (ix) capital improvements as provided in Section 5.4 hereof;

B. The following costs: (i) Real Property Taxes as defined in Section 8.3; (ii) the amount of any “deductible” paid by Landlord with respect to damage caused by any Insured Peril; (iii) the cost to repair damage caused by an Uninsured Peril up to a maximum amount equal to 2% of the replacement cost of the buildings or other improvements damaged; provided, however, to the extent such cost is a capital cost, as determined in accordance with general real estate management and accounting principles (provided that there shall be a presumption that a single cost in excess of

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$20,000.00 shall be a capital cost and if Landlord intends to expense such cost then Landlord shall be required to provide reasonable evidence that treating such cost as an expense, as opposed to a capital cost, is consistent with the treatment of such costs by the landlords of comparable buildings in the San Jose area), then such cost shall be amortized in accordance with Section 5.4 of this Lease, above; and (iv) that portion of all compensation (including benefits and premiums for workers’ compensation and other insurance) paid to or on behalf of employees of Landlord but only to the extent they are involved in the performance of the work described by Section 8.2A that is fairly allocable to the Project;

C. Fees for property management services rendered by either Landlord or a third party manager engaged by Landlord (which may be a party affiliated with Landlord), not to exceed the monthly rate of 3% of the gross revenues of the Project (provided that such fee shall be reduced to 3% of the net revenues from and after the second (2^nd) anniversary of the Commencement Date), plus charges for office rent for property management, supplies, equipment, salaries, wages, bonuses and other compensation (including fringe benefits, vacation, holidays and other paid absence benefits) relating to employees of Landlord or its property manager or agents engaged in the management, operation, repair, or maintenance of the Building and/or Common Areas of the Project (provided that if such management office is not located within the Project, then such costs shall be reasonably and equitably allocated amongst all properties managed by the personnel located in such office);

D. All additional costs and expenses incurred by Landlord with respect to the operation, protection, maintenance, repair and replacement of the Project which would be considered a current expense (and not a capital expenditure) pursuant to generally accepted accounting principles; provided, however, that Operating Expenses shall not include any of the following: (i) payments on any loans or ground leases affecting the Project; (ii) depreciation of any buildings or any major systems of building service equipment within the Project; (iii) leasing commissions; (iv) the cost of tenant improvements installed for the exclusive use of other tenants of the Project; and (v) any cost incurred in complying with Hazardous Materials Laws or in connection with the presence of any Hazardous Materials that was not brought onto the Project by Tenant or any of Tenant’s Agents, which subject is governed exclusively by Section 7.2.

E. Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include:

(1) costs, including legal fees, space planners’ fees, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants initially occupying space in the Project after the Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any common areas of the Building or Project or parking facilities);

(2) any reserves except for Capital Reserves;

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(3) costs associated with the operation of the business of the limited liability company, partnership or entity which constitutes Landlord, as the same are distinguished from the costs of operation of the Building or Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Building or Project). Costs associated with the operation of the business of the limited liability company, partnership or entity which constitutes Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants;

(4) except for a management fee provided in Section 8.2C above, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;

(5) costs arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services and costs or expenses incurred due to violation by Landlord of any term or condition of the Lease;

(6) costs for capital repairs to the structural parts of the Building consisting of the roof structure (as opposed to the roof membrane), foundation and exterior load bearing walls;

(7) costs which would properly be capitalized under sound real estate management and accounting principles, except to the extent provided in Section 5.4, and provided that there shall be a presumption that a single cost in excess of $20,000.00 shall be a capital cost and if Landlord intends to expense such cost then Landlord shall be required to provide reasonable evidence that treating such cost as an expense, as opposed to a capital cost, is consistent with the treatment of such costs by the landlords of comparable buildings in the San Jose area; and

(8) costs of a type for which Tenant reimburses Landlord directly or which Tenant pays directly to a third person.

F. In addition to Tenant’s Share of Operating Expenses, Tenant shall also pay as additional rent a fixed monthly sum of $107.04 payable each month, which represents the long term capital reserve (“Capital Reserve”) for the following (each a “Capital Reserve Replacement”): replacement of HVAC units, replacement of the roof membrane to the Building and painting the exterior of the Building. Landlord shall apply the Capital Reserve to the cost of any Capital Reserve Replacement until the Capital Reserve is exhausted. In the event any actual expenditure incurred by the Landlord for any Capital Reserve Replacement exceeds the amount of the Capital Reserve (after exhaustion of the Capital Reserve), Landlord will amortize the amount in excess of the balance of the Capital Reserve over the useful life of the Capital Reserve Replacement, and Tenant will pay Landlord the equivalent of the monthly amortized amount each month through the remaining Term and any extension thereof.

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8.3 Real Property Taxes Defined: The term “Real Property Taxes” shall mean all taxes, assessments, levies, and other charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including all installments of principal and interest required to pay any existing or future general or special assessments for public improvements, services or benefits, and any increases resulting from reassessments resulting from a change in ownership, new construction, or any other cause), now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against, or with respect to the value, occupancy or use of all or any portion of the Project (as now constructed or as may at any time hereafter be constructed, altered, or otherwise changed) or Landlord’s interest therein, the fixtures, equipment and other property of Landlord, real or personal, that are an integral part of and located on the Project, the gross receipts, income, or rentals from the Project, or the use of parking areas, public utilities, or energy within the Project, or Landlord’s business of leasing the Project. The parties acknowledged that Proposition 13 was adopted by the voters of the State of California in the June 1978 election (“Proposition 13”) and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Real Property Taxes shall also include any governmental or private assessments or the Project’s contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies. If at any time during the Lease Term the method of taxation or assessment of the Project prevailing as of the Effective Date shall be altered so that in lieu of or in addition to any Real Property Tax described above there shall be levied, assessed or imposed (whether by reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any other cause) an alternate or additional tax or charge (i) on the value, use or occupancy of the Project or Landlord’s interest therein, or (ii) on or measured by the gross receipts, income or rentals from the Project, on Landlord’s business of leasing the Project, or computed in any manner with respect to the operation of the Project, then any such tax or charge, however designated, shall be included within the meaning of the term Real Property Taxes for purposes of this Lease. If any Real Property Tax is based upon property or rents unrelated to the Project, then only that part of such Real Property Tax that is fairly allocable to the Project shall be included within the meaning of the term Real Property Taxes. Notwithstanding the foregoing, the term Real Property Taxes shall not include estate, inheritance, transfer, gift or franchise taxes of Landlord or the federal or state net income tax imposed on Landlord’s income from all sources. In addition, all assessments which can be paid by Landlord in installments, shall be paid by Landlord in the maximum number of installments permitted by Law (except to the extent inconsistent with the general practice of landlords of the comparable buildings located in the San Jose area) and shall be included as Real Property Taxes in the year in which the installment is actually paid.

The parcel containing the Building may be a separate tax parcel that may also contain other buildings on such parcel. In such event and if the Building and the buildings and improvements are currently included in the same tax bill and contain different size and types of improvements, Landlord shall have the right to allocate the Taxes to each such building in accordance with Landlord’s reasonable accounting and management principles.

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8.4 Adjustments. Notwithstanding the foregoing provisions, Tenant’s Share as to certain expenses included in Operating Expenses may be calculated differently to yield a higher percentage share for Tenant as to those expenses if Landlord permits other tenants or occupants in the Project to incur such expenses directly rather than have Landlord incur the expense in common for the Project. In such case, Tenant’s Share of the applicable expense shall be calculated as having as its denominator the sum of the gross leasable areas of all premises in the Project less the gross leasable areas of tenants who have incurred such expense directly. Nothing herein shall imply that Landlord will permit Tenant or any other tenant of the Project to incur Common Area Costs. Any such permission shall be in the sole discretion of Landlord. If the Building or Project is not one hundred percent (100%) occupied during all or a portion of any calendar year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Building and Project been one hundred percent (100%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year.

8.5 Landlord’s Books and Records. Within ninety (90) days after receipt of a Landlord’s year-end statement of Operating Expenses (the “Statement”) by Tenant, if Tenant disputes the amount of Operating Expenses set forth in the Statement, an independent certified public accountant (which accountant is a member of a nationally or regionally recognized accounting firm and which accountant shall not be compensated on a contingency fee or similar basis related to the result of such audit), designated by Tenant, may, after reasonable notice to Landlord and at reasonable times subject to Landlord’s reasonable scheduling requirements, inspect Landlord’s records at Landlord’s offices; provided that Tenant is not then in default under this Lease and Tenant has paid all amounts required to be paid under the applicable Statement; and further provided that such inspection must be completed within thirty (30) days after Landlord’s records are made available to Tenant. Tenant agrees that any records of Landlord reviewed under this Section 8.5 shall constitute confidential information of Landlord, which Tenant shall not disclose, nor permit to be disclosed by Tenant or Tenant’s accountant, and Tenant and Tenant’s accountant shall be required to execute Landlord’s form of confidentiality and non-disclosure agreement prior to being provided with access to Landlord’s books and records. If, within thirty (30) days after such inspection, Tenant notifies Landlord in writing that Tenant still disputes such Operating Expenses included in the Statement, then a certification as to the proper amount shall be made, at Tenant’s expense, by an independent certified public accountant selected by Landlord, which certification shall be final and conclusive; provided, however, if the actual amount of Operating Expenses due for that year to which the Statement applies, as determined by such certification, is determined to have been overstated by more than five percent (5%), then Landlord shall pay the costs associated with such certification. Tenant’s failure to dispute the amount of Additional Rent set forth in any Statement within ninety (90) days after Tenant’s receipt of such Statement shall be deemed to be Tenant’s approval of such Statement and Tenant, thereafter, waives the right or ability to dispute the amounts set forth in such Statement, which Statement shall be considered final and binding. Tenant hereby acknowledges that Tenant’s sole right to inspect Landlord’s books and records and to contest the amount of Operating

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Expenses payable by Tenant shall be as set forth in this Section 8.5, and Tenant hereby waives any and all other rights pursuant to applicable Laws to inspect such books and records and/or to contest the amount of Operating Expenses payable by Tenant.

ARTICLE 9 INSURANCE

9.1 Tenant’s Insurance: Tenant shall maintain insurance complying with all of the following:

A. Types. Tenant shall procure, pay for and keep in full force and effect the following:

(1) Commercial general liability insurance, including property damage, against liability for personal injury, bodily injury, death and damage to property occurring in or about, or resulting from an occurrence in or about, the Premises with combined single limit coverage of not less than the amount of Tenant’s Liability Insurance Minimum specified in Section P of the Summary, which insurance shall contain a “contractual liability” endorsement insuring Tenant’s performance of Tenant’s obligation to indemnify Landlord contained in Section 10.3;

(2) Fire and property damage insurance in so-called “all risk” form insuring Tenant’s Trade Fixtures, and Tenant’s Alterations for the full actual replacement cost thereof; and

(3) Insurance for: (a) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident; (b) Employers Liability with limits of $1,000,000 each accident, $1,000,000 disease policy limit, $1,000,000 disease—each employee; (c) Business Interruption Insurance for 100% of the 12 months actual loss sustained, and (d) Excess Liability in the amount of $3,000,000. In addition, whenever Tenant shall undertake any alterations, additions or improvements in, to or about the Leased Premises (“Work”) the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Work, without limitation including liability under any applicable structural work act, and such other insurance as Landlord shall require; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Work.

B. Requirements. Where applicable and required by Landlord, each policy of insurance required to be carried by Tenant pursuant to this Section 9.1: (i) shall name Landlord and such other parties in interest as Landlord reasonably designates as additional insured; (ii) shall be primary insurance which provides that the insurer shall be liable for the full amount of the loss up to and including the total amount of liability set forth in the declarations without the right of contribution from any other insurance coverage of Landlord; (iii) shall be in a commercially reasonable form; (iv) shall be carried with commercially reasonable companies; (v) shall provide that such policy shall not be subject to cancellation, lapse or change except after at least 30 days prior written notice to Landlord so long as such provision of 30 days notice is reasonably obtainable, but in any event not less than 10 days prior written notice; (vi) shall have a “deductible” in such

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amount as is consistent with the deductible amounts of similar tenants under leases allowing uses consistent with the Permitted Use; (vii) shall contain a cross liability endorsement; and (viii) shall contain a “severability” clause. If Tenant has in full force and effect a blanket policy of liability insurance with the same coverage for the Premises as described above, as well as other coverage of other premises and properties of Tenant, or in which Tenant has some interest, such blanket insurance shall satisfy the requirements of this Section 9.1.

C. Evidence. A copy of each paid-up policy evidencing the insurance required to be carried by Tenant pursuant to this Section 9.1 (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that such policy has been issued, providing the coverage required by this Section 9.1, and containing the provisions specified herein, shall, upon written request, be delivered to Landlord prior to the time Tenant or any of its Agents enters the Premises and upon renewal of such policies, but not less than 5 days prior to the expiration of the term of such coverage. Landlord may, at any time, and from time to time, inspect and/or copy any and all insurance policies required to be procured by Tenant pursuant to this Section 9.1. If any Lender or insurance advisor reasonably determines at any time that the amount of coverage required for any policy of insurance Tenant is to obtain pursuant to this Section 9.1 is not adequate, then Tenant shall increase such coverage for such insurance to such amount as such Lender or insurance advisor reasonably deems adequate, not to exceed the level of coverage for such insurance commonly carried by comparable businesses similarly situated.

9.2 Landlord’s Insurance: Landlord shall have the following obligations and options regarding insurance:

A. Property Damage. Landlord shall maintain a policy or policies of fire and property damage insurance in so-called “all risk” form insuring Landlord (and such others as Landlord may designate) against loss of rents for a period of not less than 12 months and from physical damage to the Project with coverage of not less than the full replacement cost thereof. Landlord may so insure the Project separately, or may insure the Project with other property owned by Landlord which Landlord elects to insure together under the same policy or policies. Landlord shall have the right, but not the obligation, in its sole and absolute discretion, to obtain insurance for such additional perils as Landlord deems appropriate, in accordance with sound real estate management and accounting practices. All such coverage shall contain “deductibles” which Landlord deems appropriate in accordance with sound real estate management and accounting principles. Landlord shall not be required to cause such insurance to cover any Trade Fixtures or Tenant’s Alterations of Tenant.

B. Other. Landlord shall maintain a policy or policies of commercial general liability insurance insuring Landlord (and such others as are designated by Landlord) against liability for personal injury, bodily injury, death and damage to property occurring or resulting from an occurrence in, on or about the Project, with combined single limit coverage in such amount as Landlord from time to time determines is reasonably necessary for its protection in accordance with sound real estate management and accounting practices.

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C. Tenant’s Obligation to Reimburse: If Landlord’s insurance rates for the Building are increased at any time during the Lease Term as a result of the nature of Tenant’s use of the Premises, Tenant shall reimburse Landlord for the full amount of such increase immediately upon receipt of a bill from Landlord therefor.

9.3 Release and Waiver of Subrogation: Notwithstanding anything to the contrary in this Lease, the parties hereto release each other, and their respective agents and employees, from any liability for damage to property that is caused by or results from any risk insured against under any valid and collectible property insurance policy carried by either of the parties or required to be carried under this Lease, regardless of the negligence of either party, and each party shall ensure that each such policy contains a waiver of subrogation by the insurer and is in force at the time of such injury or damage; subject to the following limitations: (i) the foregoing provision shall not apply to the commercial general liability insurance described by subparagraphs Section 9.1A and Section 9.2B; and (ii) such release shall apply to liability resulting from any risk insured against or covered by self-insurance maintained or provided by Tenant to satisfy the requirements of Section 9.1 to the extent permitted by this Lease. Each party shall cause each property insurance policy obtained by it to provide that the insurer waives all right of recovery by way of subrogation against the other party and its agents and employees in connection with any injury or damage covered by such policy.

ARTICLE 10 LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY

10.1 Limitation on Landlord’s Liability: Landlord shall not be liable to Tenant, nor shall Tenant be entitled to terminate this Lease or to any abatement of rent (except as expressly provided otherwise herein), for any injury to Tenant or Tenant’s Agents, damage to the property of Tenant or Tenant’s Agents, or loss to Tenant’s business resulting from any cause, including without limitation any: (i) failure, interruption or installation of any HVAC or other utility system or service; (ii) failure to furnish or delay in furnishing any utilities or services when such failure or delay is caused by fire or other peril, the elements, labor disturbances of any character, or any other accidents or other conditions beyond the reasonable control of Landlord; (iii) limitation, curtailment, rationing or restriction on the use of water or electricity, gas or any other form of energy or any services or utility serving the Project; (iv) vandalism or forcible entry by unauthorized persons or the criminal act of any person; or (v) penetration of water into or onto any portion of the Premises or the Building through roof leaks or otherwise. Notwithstanding the foregoing but subject to Section 9.3, Landlord shall be liable for any such injury, damage or loss which is proximately caused by Landlord’s breach of this Lease, or the willful misconduct or negligence of Landlord or its agent, employees or contractors. Landlord shall hold harmless, indemnify, and defend Tenant from any and all liability, penalties, losses, damages, costs, expenses, causes of action, claims and/or judgments (including, without limitation, reasonable attorneys’ fees) arising from the gross negligence or willful misconduct of Landlord or Landlord’s breach of the terms of this Lease, except to the extent caused by Tenant and/or any of Tenant’s agents, servants, employees, and independent contractors.

10.2 Limitation on Tenant’s Recourse: If Landlord is a corporation, limited liability company, trust, partnership, joint venture, unincorporated association or other form of business

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entity: (i) the obligations of Landlord shall not constitute personal obligations of the officers, directors, trustees, partners, joint venturers, members, owners, stockholders, or other principals or representatives of such business entity; and (ii) Tenant shall not have recourse to the assets of such officers, directors, trustees, partners, joint venturers, members, owners, stockholders, principals or representatives except to the extent of their interest in the Project. Tenant shall have recourse only to the amount of the interest of Landlord in the Project, including all rents and other proceeds thereof, for the satisfaction of the obligations of Landlord and shall not have recourse to any other assets of Landlord in excess thereof for the satisfaction of such obligations.

10.3 Indemnification of Landlord: Tenant shall hold harmless, indemnify and defend Landlord, and its employees, agents and contractors, with competent counsel reasonably satisfactory to Landlord (and Landlord agrees to accept counsel that any insurer requires be used), from all liability, penalties, losses, damages, costs, expenses, causes of action, claims and/or judgments arising by reason of any death, bodily injury, personal injury or property damage resulting from (i) any cause or causes whatsoever (other than the willful misconduct or negligence of Landlord or Landlord’s agents, employees or contractors, or Landlord’s breach of this Lease) occurring in or about or resulting from an occurrence in or about the Premises during the Lease Term, (ii) the negligence or willful misconduct of Tenant or its agents, employees and contractors, wherever the same may occur, or (iii) an Event of Tenant’s Default. The provisions of this Section 10.3 shall survive the expiration or sooner termination of this Lease.

ARTICLE 11 DAMAGE TO PREMISES

11.1 Landlord’s Duty to Restore: If the Premises are damaged by any peril after the Effective Date, Landlord shall restore the Premises unless the Lease is terminated by Landlord pursuant to Section 11.2 or by Tenant pursuant to Section 11.3. All insurance proceeds available from the fire and property damage insurance carried by Landlord pursuant to Section 9.2 shall be paid to and become the property of Landlord. If this Lease is terminated pursuant to either Section 11.2 or Section 11.3, then all insurance proceeds available from insurance carried by Tenant which covers loss to Tenant’s Alterations shall be paid to Tenant and Tenant shall promptly remit such proceeds to Landlord. If this Lease is not so terminated, then upon receipt of the insurance proceeds (if the loss is covered by insurance) and the issuance of all necessary governmental permits, Landlord shall commence and diligently prosecute to completion the restoration of the Premises, to the extent then allowed by Law, to substantially the same condition in which the Premises were immediately prior to such damage. Landlord’s obligation to restore shall be limited to the Premises and interior improvements constructed by Landlord as they existed as of the Commencement Date, excluding any Tenant’s Alterations, Trade Fixtures and/or personal property constructed or installed by Tenant in the Premises. Tenant shall forthwith replace or fully repair all Tenant’s Alterations and Trade Fixtures installed by Tenant and existing at the time of such damage or destruction, and all insurance proceeds received by Tenant from the insurance carried by it pursuant to Section 9.1A(2) shall be used for such purpose.

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11.2 Landlord’s Right to Terminate: Landlord shall have the right to terminate this Lease in the event any of the following occurs, which right may be exercised only by delivery to Tenant of a written notice of election to terminate within 30 days after the date of such damage:

A. Damage From Insured Peril. The Building is damaged by an Insured Peril to such an extent that the estimated cost to restore exceeds 33% of the then actual replacement cost thereof;

B. Damage From Uninsured Peril. The Building or Project is damaged by an Uninsured Peril and not required to be insured against pursuant to the Lease to such an extent that the estimated cost to restore exceeds 2% of the then actual replacement cost thereof; provided, however, that Landlord may not terminate this Lease pursuant to this Section 11.2B if Tenant agrees in writing to pay the amount by which the cost to restore the damage exceeds such amount and subsequently deposit such uninsured amount with Landlord within 30 days after Landlord has notified Tenant of its election to terminate this Lease;

C. Damage Near End of Term. The Premises are damaged by any peril within 12 months of the last day of the Lease Term and, in the reasonable opinion of Landlord’s architect or construction consultant, the restoration of the Premises cannot be substantially completed within 30 days after the date of such damage; or

D. Restrictions on Restoration. The Building or Project is damaged by any peril and, because of the Laws then in force, (i) cannot be restored at reasonable cost to substantially the same condition in which it was prior to such damage, or (ii) cannot be used for the same use being made thereof before such damage if restored as required by this Article.

E. Defined Terms. As used herein, the following terms shall have the following meanings: (i) the term “Insured Peril” shall mean a peril actually insured against or required to be insured against pursuant to the Lease for which the insurance proceeds actually received by Landlord are sufficient (except for any “deductible” amount specified by such insurance) to restore the Project under then existing building codes to the condition existing immediately prior to the damage; and (ii) the term “Uninsured Peril” shall mean any peril which is not an Insured Peril. Notwithstanding the foregoing, for the purpose of determining Landlord’s restoration obligations, if the “deductible” for earthquake or flood insurance exceeds 2% of the replacement cost of the improvements insured, such peril shall be deemed an “Uninsured Peril”.

11.3 Tenant’s Right to Terminate: If the Premises are damaged by any peril and Landlord does not elect to terminate this Lease or is not entitled to terminate this Lease pursuant to Section 11.2, then within sixty (60) days, Landlord shall furnish Tenant with the written opinion of Landlord’s architect or construction consultant as to when the restoration work required of Landlord may be completed. Tenant shall have the right to terminate this Lease in the event any of the following occurs, which right may be exercised only by delivery to Landlord of a written notice of election to terminate within 15 business days after Tenant receives from Landlord the estimate of the time needed to complete such restoration.

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A. Major Damage. The Premises are damaged by any peril and, in the reasonable opinion of Landlord’s architect or construction consultant, the restoration of the Premises cannot be substantially completed within one hundred eighty (180) days after the date of such damage; or

B. Damage Near End of Term. The Premises are damaged by any peril within 12 months of the last day of the Lease Term and, in the reasonable opinion of Landlord’s architect or construction consultant, the restoration of the Premises cannot be substantially completed within 30 days after the date of such damage.

11.4 Abatement of Rent: In the event of damage to the Premises which does not result in the termination of this Lease, the Base Monthly Rent and the Additional Rent shall be temporarily abated during the period of restoration in proportion to the degree to which Tenant’s use of the Premises is impaired by such damage. Tenant shall not be entitled to any compensation or damages from Landlord for loss of Tenant’s business or property or for any inconvenience or annoyance caused by such damage or restoration. Tenant hereby waives the provisions of California Civil Code Sections 1932(2) and 1933(4).

ARTICLE 12 CONDEMNATION

12.1 Landlord’s Termination Right: Landlord shall have the right to terminate this Lease if, as a result of a taking by means of the exercise of the power of eminent domain (including a voluntary sale or transfer by Landlord to a condemnor under threat of condemnation), (i) all or any part of the Premises is so taken, (ii) more than 10% of the Building Leasable Area is so taken, or (iii) more than 50% of the Common Area is so taken. Any such right to terminate by Landlord must be exercised within a reasonable period of time, to be effective as of the date possession is taken by the condemnor.

12.2 Tenant’s Termination Right: Tenant shall have the right to terminate this Lease if, as a result of any taking by means of the exercise of the power of eminent domain (including any voluntary sale or transfer by Landlord to any condemnor under threat of condemnation), (i) 10% or more of the Premises is so taken and that part of the Premises that remains cannot be restored within a reasonable period of time and thereby made reasonably suitable for the continued operation of the Tenant’s business, or (ii) there is a taking affecting the Common Area and, as a result of such taking, Landlord cannot provide parking spaces within reasonable walking distance of the Premises equal in number to at least 80% of the number of spaces allocated to Tenant by Section 2.1, whether by rearrangement of the remaining parking areas in the Common Area (including construction of multi-deck parking structures or re-striping for compact cars where permitted by Law) or by alternative parking facilities on other land. Tenant must exercise such right within a reasonable period of time, to be effective on the date that possession of that portion of the Premises or Common Area that is condemned is taken by the condemnor.

12.3 Restoration and Abatement of Rent: If any part of the Premises or the Common Area is taken by condemnation and this Lease is not terminated, then Landlord shall restore the remaining portion of the Premises and Common Area and interior improvements constructed by Landlord as

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they existed as of the Commencement Date, excluding any Tenant’s Alterations, Trade Fixtures and/or personal property constructed or installed by Tenant. Thereafter, except in the case of a temporary taking, as of the date possession is taken the Base Monthly Rent and Operating Expenses shall be reduced in the same proportion that the floor area of that part of the Premises so taken (less any addition thereto by reason of any reconstruction) bears to the original floor area of the Premises.

12.4 Temporary Taking: If any portion of the Premises is temporarily taken for one hundred eighty (180) days or less, this Lease shall remain in effect. If any portion of the Premises is temporarily taken by condemnation for a period which exceeds one hundred eighty (180) days or which extends beyond the natural expiration of the Lease Term, and such taking materially and adversely affects Tenant’s ability to use the Premises for the Permitted Use, then Tenant shall have the right to terminate this Lease, effective on the date possession is taken by the condemnor.

12.5 Division of Condemnation Award: Any award made as a result of any condemnation of the Premises or the Common Area shall belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of its right, title and interest in any such award; provided, however, that Tenant shall be entitled to receive any condemnation award that is made directly to Tenant for the following so long as the award made to Landlord is not thereby reduced: (i) for the taking of personal property or Trade Fixtures belonging to Tenant, (ii) for the interruption of Tenant’s business or its moving costs, (iii) for loss of Tenant’s goodwill; or (iv) for any temporary taking where this Lease is not terminated as a result of such taking. The rights of Landlord and Tenant regarding any condemnation shall be determined as provided in this Article, and each party hereby waives the provisions of California Code of Civil Procedure Section 1265.130 and the provisions of any similar law hereinafter enacted allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

ARTICLE 13 DEFAULT AND REMEDIES

13.1 Events of Tenant’s Default: Tenant shall be in default of its obligations under this Lease if any of the following events occurs (an “Event of Tenant’s Default”):

A. Payment. Tenant shall have failed to pay Base Monthly Rent or Additional Rent when due, and such failure is not cured within 3 days after delivery of written notice from Landlord specifying such failure to pay; or

B. General Covenant. Tenant shall have failed to perform any term, covenant, or condition of this Lease other than those referred to in any other subsection of this Section 13.1, and Tenant shall have failed to cure such breach within 10 days after written notice from Landlord specifying the nature of such breach where such breach could reasonably be cured within said 10 day period, or if such breach could not be reasonably cured within said 10 day period, Tenant shall have failed to commence such cure within said 10 day period and thereafter continue with due diligence to prosecute such cure to completion within such time period as is reasonably needed; or

C. Transfer. Tenant shall have sublet the Premises or assigned its interest in the Lease in violation of the provisions contained in Article 14; or

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D. Abandonment. Tenant shall have abandoned the Premises; or

E. Insolvency. The occurrence of the following: (i) the making by Tenant of any general arrangements or assignments for the benefit of creditors; (ii) Tenant becomes a “debtor” as defined in 11 USC §101 or any successor statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this Section 13.1E is contrary to any applicable Law, such provision shall be of no force or effect; or

F. Required Documents. Tenant shall have failed to deliver documents required of it pursuant to Section 15.4 or Section 15.6 within the time periods specified therein, where such failure continues for more than three (3) business days after notice from Landlord.

Any written notice of default sent by Landlord to Tenant shall be in lieu of, and not in addition to, any termination notice required under applicable statutory or regulatory provisions (and no further notice shall be required should Landlord elect to terminate this Lease as set forth below).

13.2 Landlord’s Remedies: If an Event of Tenant’s Default occurs, Landlord shall have the following remedies, in addition to all other rights and remedies provided by any Law or otherwise provided in this Lease, to which Landlord may resort cumulatively or in the alternative:

A. Continue. Landlord may keep this Lease in effect and enforce by an action at law or in equity all of its rights and remedies under this Lease, including (i) the right to recover the rent and other sums as they become due by appropriate legal action, (ii) the right to make payments required of Tenant or perform Tenant’s obligations and be reimbursed by Tenant for the cost thereof with interest at the Agreed Interest Rate from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific performance to compel Tenant to perform its obligations under this Lease. Notwithstanding anything contained in this Lease, in the event of a breach of an obligation by Tenant which results in a condition which poses an imminent danger to safety of persons or damage to property, an unsightly condition visible from the exterior of the Building, or a threat to insurance coverage, then if Tenant does not cure such breach within 3 days after delivery to it of written notice from Landlord identifying the breach, Landlord may cure the breach of Tenant and be reimbursed by Tenant for the cost thereof with interest at the Agreed Interest Rate from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. Should Landlord not terminate this Lease by giving Tenant written notice, Landlord may enforce all its rights and remedies under this Lease, including the right to recover the rent as it becomes due under the Lease as provided in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).

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B. Enter and Relet. Landlord may enter the Premises and release them to third parties for Tenant’s account for any period, whether shorter or longer than the remaining Lease Term. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in releasing the Premises, including brokers’ commissions, expenses of altering and preparing the Premises required by the releasing. Tenant shall pay to Landlord the rent and other sums due under this Lease on the date the rent is due, less the rent and other sums Landlord received from any releasing. No act by Landlord allowed by this subparagraph shall terminate this Lease unless Landlord notifies Tenant in writing that Landlord elects to terminate this Lease. Notwithstanding any releasing without termination, Landlord may later elect to terminate this Lease because of the default by Tenant.

C. Terminate. Landlord may terminate this Lease by giving Tenant written notice of termination, in which event this Lease shall terminate on the date set forth for termination in such notice. Any termination under this Section 13.2C shall not relieve Tenant from its obligation to pay sums then due Landlord or from any claim against Tenant for damages or rent previously accrued or then accruing. In no event shall any one or more of the following actions by Landlord, in the absence of a written election by Landlord to terminate this Lease, constitute a termination of this Lease: (i) appointment of a receiver or keeper in order to protect Landlord’s interest hereunder; (ii) consent to any subletting of the Premises or assignment of this Lease by Tenant, whether pursuant to the provisions hereof or otherwise; or (iii) any other action by Landlord or Landlord’s Agents intended to mitigate the adverse effects of any breach of this Lease by Tenant, including without limitation any action taken to maintain and preserve the Premises or any action taken to relet the Premises or any portions thereof to the extent such actions do not affect a termination of Tenant’s right to possession of the Premises.

D. No Deemed Termination. In the event Tenant breaches this Lease and abandons the Premises, this Lease shall not terminate unless Landlord gives Tenant written notice of its election to so terminate this Lease. No act by or on behalf of Landlord intended to mitigate the adverse effect of such breach, including those described by Section 13.C, shall constitute a termination of Tenant’s right to possession unless Landlord gives Tenant written notice of termination.

E. Damages. In the event Landlord terminates this Lease, Landlord shall be entitled, at Landlord’s election, to damages in an amount as set forth in California Civil Code Section 1951.2 as in effect on the Effective Date. For purposes of computing damages pursuant to California Civil Code Section 1951.2, (i) an interest rate equal to the Agreed Interest Rate shall be used where permitted, and (ii) the term “rent” includes Base Monthly Rent and Additional Rent. Such damages shall include:

(1) The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided, computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%); and

(2) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease, or which in

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the ordinary course of things would be likely to result therefrom, including the following: (i) expenses for cleaning, repairing or restoring the Premises; (ii) expenses for altering, remodeling or otherwise improving the Premises for the purpose of reletting, including installation of leasehold improvements (whether such installation be funded by a reduction of rent, direct payment or allowance to a new tenant, or otherwise), provided such costs shall be amortized over the term of any such reletting and such damages shall only include the amount allocable to the remaining Lease Term; (iii) broker’s fees, advertising costs and other expenses of reletting the Premises, provided such costs shall be amortized over the term of any such reletting and such damages shall only include the amount allocable to the remaining Lease Term; (iv) costs of carrying the Premises, such as taxes, insurance premiums, utilities and security precautions; (v) expenses in retaking possession of the Premises; and (vi) attorneys’ fees and court costs incurred by Landlord in retaking possession of the Premises and in releasing the Premises or otherwise incurred as a result of Tenant’s default.

F. Non Exclusive Remedies. Nothing in this Section 13.2 shall limit Landlord’s right to indemnification from Tenant as provided in Section 7.2 and Section 10.3. Any notice given by Landlord in order to satisfy the requirements of Section 13.1A or Section 13.1B above shall also satisfy the notice requirements of California Code of Civil Procedure Section 1161 regarding unlawful detainer proceedings.

13.3 Waiver: One party’s consent to or approval of any act by the other party requiring the first party’s consent or approval shall not be deemed to waive or render unnecessary the first party’s consent to or approval of any subsequent similar act by the other party. The receipt by Landlord of any rent or payment with or without knowledge of the breach of any other provision hereof shall not be deemed a waiver of any such breach unless such waiver is in writing and signed by Landlord. No delay or omission in the exercise of any right or remedy accruing to either party upon any breach by the other party under this Lease shall impair such right or remedy or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by either party of any breach of any provision of this Lease shall not be deemed to be a waiver of any subsequent breach of the same or of any other provisions herein contained.

13.4 Limitation On Exercise of Rights: At any time that an Event of Tenant’s Default has occurred and remains uncured, (i) it shall not be unreasonable for Landlord to deny or withhold any consent or approval requested of it by Tenant which Landlord would otherwise be obligated to give, and (ii) Tenant may not exercise any option to extend.

13.5 Waiver by Tenant of Certain Remedies: Tenant waives the provisions of Sections 1932(1), 1941 and 1942 of the California Civil Code and any similar or successor law regarding Tenant’s right to terminate this Lease or to make repairs and deduct the expenses of such repairs from the rent due under this Lease. Tenant hereby waives any right of redemption or relief from forfeiture under the laws of the State of California, or under any other present or future law, including the provisions of Sections 1174 and 1179 of the California Code of Civil Procedure.

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ARTICLE 14 ASSIGNMENT AND SUBLETTING

14.1 Transfer By Tenant: The following provisions shall apply to any assignment, subletting or other transfer by Tenant or any subtenant or assignee or other successor in interest of the original Tenant (collectively referred to in this Section 14.1 as “Tenant”):

A. Transfer. Tenant shall not do any of the following (collectively referred to herein as a “Transfer”), whether voluntarily, involuntarily, by operation of law or otherwise without the prior written consent of Landlord, which consent shall not be unreasonably withheld: (i) sublet all or any part of the Premises or allow it to be sublet, occupied or used by any other person (the agents and servants of Tenant excepted) whether by sublease, license, concession, franchise, agency, or management agreement; (ii) assign its interest in this Lease; (iii) mortgage or encumber the Lease (or otherwise use the Lease as a security device) in any manner; or (iv) materially amend or modify an assignment, sublease or other transfer that has been previously approved by Landlord. Tenant shall reimburse Landlord for all reasonable costs and attorneys’ fees incurred by Landlord, not to exceed $1,500 for a Transfer in the ordinary course of business, in connection with the evaluation, processing, and/or documentation of any requested Transfer, whether or not Landlord’s consent is granted. Landlord’s reasonable costs shall include the cost of any review or investigation performed by Landlord or consultant acting on Landlord’s behalf of (i) Hazardous Materials used, stored, released, or disposed of by the potential Subtenant or Assignee, and/or (ii) violations of Hazardous Materials Law by the Tenant or the proposed Subtenant or Assignee. Any Transfer so approved by Landlord shall not be effective until Tenant has delivered to Landlord an executed counterpart of the document evidencing the Transfer which (i) is in a form reasonably approved by Landlord, (ii) contains the same terms and conditions as stated in Tenant’s notice given to Landlord pursuant to Section 14.1B, and (iii) in the case of an assignment of the Lease, contains the agreement of the proposed transferee to assume all obligations of Tenant under this Lease arising after the effective date of such Transfer and to remain jointly and severally liable therefor with Tenant. Any attempted Transfer without Landlord’s consent shall constitute an Event of Tenant’s Default and shall be voidable at Landlord’s option. Landlord’s consent to any one Transfer shall not constitute a waiver of the provisions of this Section 14.1 as to any subsequent Transfer or a consent to any subsequent Transfer. No Transfer, even with the consent of Landlord, shall relieve Tenant of its personal and primary obligation to pay the rent and to perform all of the other obligations to be performed by Tenant hereunder. The acceptance of rent by Landlord from any person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any Transfer.

B. Procedure. At least 15 days before a proposed Transfer is to become effective, Tenant shall give Landlord written notice of the proposed terms of such Transfer and request Landlord’s approval, which notice shall include the following: (i) the name and legal composition of the proposed transferee; (ii) a current financial statement of the transferee, financial statements of the transferee covering the preceding three years if the same exist, and (if available) an audited financial statement of the transferee for a period ending not more than one year prior to the proposed effective date of the Transfer, all of which statements are prepared in accordance with generally accepted accounting principles; (iii) the nature of the proposed transferee’s business to be carried on in the Premises; (iv) all consideration to be given on account of the Transfer; (v) a current

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financial statement of Tenant; and (vi) an accurately filled out response to Landlord’s standard hazardous materials questionnaire. Tenant shall provide to Landlord such other information as may be reasonably requested by Landlord within seven days after Landlord’s receipt of such notice from Tenant. Landlord shall respond in writing to Tenant’s request for Landlord’s consent to a Transfer within the later of (i) 15 days of receipt of such request together with the required accompanying documentation, or (ii) 7 days after Landlord’s receipt of all information which Landlord reasonably requests within seven days after it receives Tenant’s first notice regarding the Transfer in question. If Landlord fails to respond in writing within said period, then Tenant shall provide a second written notice to Landlord requesting such consent and if Landlord fails to respond within 7 days after receipt of such second notice, then Landlord will be deemed to have consented to such Transfer. Tenant shall immediately notify Landlord of any modification to the proposed terms of such Transfer, which shall also be subject Landlord’s consent in accordance with the same process for obtaining Landlord’s initial consent to such Transfer.

C. Recapture. In the event that Tenant seeks to make any Transfer (other than a Permitted Transfer) at any time prior to the second (2^nd) anniversary of the Commencement Date, Landlord shall have the right to terminate this Lease or, in the case of a sublease of less than all of the Premises, terminate this Lease as to that part of the Premises proposed to be so sublet so that Landlord is thereafter free to lease the Premises (or, in the case of a partial sublease, the portion proposed to be so sublet) to whomever it pleases on whatever terms are acceptable to Landlord. In the event Landlord elects to so terminate this Lease, then the Lease shall so terminate in its entirety (or as to the space to be so sublet) fifteen (15) days after Landlord has notified Tenant in writing of such election. Upon such termination, Tenant shall be released from any further obligation under this Lease if it is terminated in its entirety, or shall be released from any further obligation under the Lease with respect to the space proposed to be sublet in the case of a proposed partial sublease. In the case of a partial termination of the Lease, the Base Monthly Rent and Tenant’s Share shall be reduced to an amount which bears the same relationship to the original amount thereof as the area of that part of the Premises which remains subject to the Lease bears to the original area of the Premises. Landlord and Tenant shall execute a cancellation and release with respect to the Lease to effect such termination.

D. Other Requirements. If Landlord consents to a Transfer proposed by Tenant, Tenant may enter into such Transfer, and if Tenant does so, the following shall apply:

(1) Tenant shall not be released of its liability for the performance of all of its obligations under the Lease.

(2) If Tenant assigns its interest in this Lease, then Tenant shall pay to Landlord 50% of the positive difference, if any, received by Tenant, between (i) the amount paid by such assignee to Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent paid by Tenant for the Premises. In the case of assignment, the amount of Subrent owed to Landlord shall be paid to Landlord on the same basis, whether periodic or in lump sum, that such Subrent is paid to Tenant by the assignee.

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(3) If Tenant sublets any part of the Premises, then with respect to the space so subleased, Tenant shall pay to Landlord 50% of the positive difference, if any, between (i) all Subrent paid by the subtenant to Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent allocable to the space sublet. Such amount shall be paid to Landlord on the same basis, whether periodic or in lump sum, that such Subrent is paid to Tenant by its subtenant.

(4) Tenant’s obligations under this Section 14.1D shall survive any Transfer, and Tenant’s failure to perform its obligations hereunder shall be an Event of Tenant’s Default. Landlord shall have the right at reasonable intervals to inspect Tenant’s books and records relating to the payments due hereunder. Landlord may condition its approval of any Transfer upon obtaining a certification from both Tenant and the proposed transferee of all Subrent and other amounts that are to be paid to Tenant in connection with such Transfer.

(5) As used in this Section 14.1D, the term “Subrent” shall mean any consideration of any kind received, or to be received, by Tenant as a result of the Transfer, if such sums are related to Tenant’s interest in this Lease or in the Premises, including payments from or on behalf of the transferee (in excess of the fair market value thereof) for Tenant’s assets, fixtures, leasehold improvements, goodwill, equipment and furniture after deducting Tenant’s reasonable and actual out-of-pocket costs of such Transfer, which costs may include but are not limited to, attorneys’ fees, broker commissions and tenant improvements.

E. Deemed Transfers. Except for a Permitted Transfer, the term “Transfer” shall include any of the following, whether voluntary or involuntary and whether effected by death, operation of law or otherwise:

(1) If Tenant is a closely held corporation (i.e., one whose stock is not publicly held and not traded through an exchange or over the counter):

(a) The sale or other transfer of more than an aggregate of fifty percent (50%) of the voting shares of Tenant or more in the aggregate, in a single transaction or series of related transactions over a period of time other than in connection with a public offering or other equity financing; or

(b) The dissolution, merger, consolidation, or other reorganization of Tenant.

F. Permitted Transfers. Notwithstanding anything contained in Section 14.1, Landlord’s consent is not required for a deemed Transfer due to a transfer of Tenant’s stock under Section 14.1.E(1)(a) or any Transfer by Tenant to an Affiliate, as defined below, or to an entity which is the resulting entity of a merger or consolidation of Tenant during the Lease Term, or to a purchaser of a all or substantially all of Tenant’s assets, as long as the following conditions are met and Tenant otherwise complies with the other provisions of Section 14.1 (each such Transfer shall be referred to as a “Permitted Transfer”):

(a) At least ten (10) business days before the Transfer, Landlord receives written notice of the Transfer (as well as any documents or information reasonably requested by Landlord regarding the Transfer or Transferee);

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(b) The Transfer is not a subterfuge by Tenant to avoid its obligations under this Lease;

(c) If the Transfer is an assignment, Transferee assumes in writing all of Tenant’s obligations under this Lease relating to the Leased Premises; and

(d) Transferee (or Tenant, in the case of a deemed Transfer under Section 14.1.E(1)(a)), has a tangible net worth, as evidenced by financial statements delivered to Landlord and certified by an independent certified public accountant in accordance with generally accepted accounting principles that are consistently applied (“Net Worth”), at least equal to Tenant’s Net Worth immediately before the Transfer.

For purposes hereof, the term “Affiliate” means any entity that controls, is controlled by, or is under common control with Tenant. “Control” means the direct or indirect ownership of more than fifty percent (50%) of the voting securities of an entity or possession of the right to vote more than fifty percent (50%) of the voting interest in the ordinary direction of the entity’s affairs. Landlord shall not be entitled to terminate the Lease pursuant to Section 14.1C due to a Permitted Transfer or to receive any part of any Subrent resulting from a Permitted Transfer that would otherwise be due it pursuant to Section 14.1D.

G. Reasonable Standards. The consent of Landlord to a Transfer may not be unreasonably withheld, provided that it is agreed to be reasonable for Landlord to reasonably consider any of the following reasons, which list is not exclusive, in electing to deny consent:

(1) The financial strength of the proposed transferee at the time of the proposed Transfer is not reasonably sufficient in light of the responsibilities to be undertaken in connection with the Transfer;

(2) The proposed transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project;

(3) A proposed transferee whose occupation of the Premises would cause a diminution in the value of the Building or Project (other than as a result of the rental rate to be paid by such proposed transferee being less than the Rent being paid by Tenant);

(4) A proposed transferee whose impact or affect on the common facilities or the utility, efficiency or effectiveness of any utility or telecommunication system serving the Building or the Project or the other occupants of the Project would be adverse, disadvantageous or require improvements or changes in any utility or telecommunication capacity currently serving the Building or the Project;

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(5) A proposed transferee whose occupancy will require a variation in the terms of this Lease (including, without limitation, a variation in the use clause) or which otherwise adversely affects any interest of Landlord;

(6) The existence of any Event of Default by Tenant under any provision of this Lease;

(7) A proposed transferee who is or is likely to be, or whose business is or is likely to be, subject to compliance with additional laws or other governmental requirements beyond those to which Tenant or Tenant’s business is subject;

(8) The proposed Transferee is a governmental agency or unit;

(9) Landlord otherwise reasonably determines that the proposed Transfer would have the effect of decreasing the value of the Building or the Project, or increasing the expenses associated with operating, maintaining and repairing the Building or the Project; or

(10) The proposed Transferee will use, store or handle Hazardous Materials (defined above) in or about the Premises of a type, nature or quantity not then acceptable to Landlord, and which would not then generally be acceptable to the landlords of comparable buildings in the San Jose area.

H. Reasonable Restriction. The restrictions on Transfer described in this Lease are acknowledged by Tenant to be reasonable for all purposes, including, without limitation, the provisions of California Civil Code (the “Code”) Section 1951.4(b)(2). Tenant expressly waives any rights which it might otherwise be deemed to possess pursuant to applicable law, including, without limitation, Section 1997.040 of the Code, to limit any remedy of Landlord pursuant to Section 1951.2 or 1951.4 of the Code by means of proof that enforcement of a restriction on use of the Premises would be unreasonable.

14.2 Transfer By Landlord: Landlord and its successors in interest shall have the right to transfer their interest in this Lease and the Project at any time and to any person or entity. In the event of any such transfer, the Landlord originally named herein (and, in the case of any subsequent transfer, the transferor) from the date of such transfer, shall be automatically relieved, without any further act by any person or entity, of all liability for the performance of the obligations of the Landlord hereunder which may accrue after the date of such transfer. After the date of any such transfer, the term “Landlord” as used herein shall mean the transferee of such interest in the Premises. Notwithstanding any provision to the contrary contained in the Lease, the release of Landlord from any liability accruing after the date Landlord transfers title to the Premises and the agreement by Tenant to look solely to Landlord’s successor-in-interest shall be conditioned upon (a) delivery to Landlord’s successor of any and all funds in the hands of Landlord at the time of the transfer in which Tenant has an interest, or in lieu thereof, delivery of such funds to Tenant and (b) the assumption, in writing, of all of Landlord’s obligations under the Lease by Landlord’s successor in interest.

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ARTICLE 15 GENERAL PROVISIONS

15.1 Landlord’s Right to Enter: Landlord and its agents may enter the Premises at any reasonable time after giving at least 24 hours’ prior notice to Tenant (and immediately in the case of emergency) for the purpose of: (i) inspecting the same; (ii) posting notices of non-responsibility; (iii) supplying any service to be provided by Landlord to Tenant; (iv) showing the Premises to prospective purchasers, mortgagees or tenants; (v) making necessary alterations, additions or repairs; performing Tenant’s obligations when Tenant has failed to do so after written notice from Landlord; placing upon the Premises ordinary “for sale” signs; (viii) during the final nine (9) months of the Lease Term, placing upon the Premises ordinary “for lease” signs, and (ix) responding to an emergency. Landlord shall have the right to use any and all means Landlord may deem necessary and proper to enter the Premises in an emergency. Any entry into the Premises obtained by Landlord in accordance with this Section 15.1 shall not be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises. Landlord agrees to follow Tenant’s security procedures and Tenant may require any prospective tenant to sign commercially reasonable confidentiality agreement.

15.2 Surrender of the Premises: Upon the expiration or sooner termination of this Lease, Tenant shall vacate and surrender the Premises to Landlord in the same condition as existed at the Commencement Date, except for (i) reasonable wear and tear, (ii) damage caused by any peril or condemnation, (iii) contamination by Hazardous Materials for which Tenant is not responsible pursuant to Section 7.2A or Section 7.2B and (iv) alterations not required to be removed hereunder. In this regard, normal wear and tear shall be construed to mean wear and tear caused to the Premises by the natural aging process which occurs in spite of prudent application of the commercially reasonable standards for maintenance, repair and janitorial practices, and does not include items of neglected or deferred maintenance. In any event, Tenant shall cause the following to be done prior to the expiration or the sooner termination of this Lease: (i) all broken, marred, stained or nonconforming acoustical ceiling tiles shall be replaced; (ii) all interior and exterior windows shall be washed; (iii) the HVAC system shall be serviced by a reputable and licensed service firm and left in good operating condition and repair as so certified by such firm; and (iv) the plumbing and electrical systems and lighting shall be placed in good order and repair (including replacement of any burned out, discolored or broken light bulbs, ballasts, or lenses). If Landlord so requests, Tenant shall, prior to the expiration or sooner termination of this Lease, (i) remove any Tenant’s Alterations which Tenant is required to remove pursuant to Section 5.2 and repair all damage caused by such removal, and (ii) return the Premises or any part thereof to the condition existing prior to the construction of such Tenant’s Alterations. If the Premises are not so surrendered at the termination of this Lease, Tenant shall continue to be responsible for the payment of Rent until the Premises are so surrendered in accordance with said provisions and Tenant shall be liable to Landlord for all costs incurred by Landlord in returning the Premises to the required condition, plus interest on all costs incurred at the Agreed Interest Rate. Tenant shall indemnify Landlord against loss or liability resulting from delay by Tenant in so surrendering the Premises, including, without limitation, any claims made by any succeeding tenant or losses to Landlord due to lost opportunities to lease to succeeding tenants and losses and damages suffered by Landlord due to lost opportunities to lease any portion of the Premises to any such succeeding tenant or prospective tenant, together with, in each case, actual attorneys’ fees and costs.

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15.3 Holding Over: This Lease shall terminate without further notice at the expiration of the Lease Term. Any holding over by Tenant after expiration of the Lease Term shall not constitute a renewal or extension of the Lease or give Tenant any rights in or to the Premises except as expressly provided in this Lease. Any holding over after such expiration with the written consent of Landlord shall be construed to be a tenancy from month to month on the same terms and conditions herein specified insofar as applicable except that Base Monthly Rent shall be increased to an amount equal to 150% of the Base Monthly Rent payable during the last full calendar month of the Lease Term. In any event, no provision of this Section 15.3 shall be deemed to waive Landlord’s right of reentry or any other right under this Lease or at law. Additionally, in the event that upon termination of the Lease, Tenant has not fulfilled its obligation with respect to repairs and cleanup of the Premises or any other Tenant obligations as set forth in this Lease, then Landlord shall have the right to perform any such obligations as it deems necessary at Tenant’s sole cost and expense, and any time required by Landlord to complete such obligations shall be considered a period of holding over and the terms of this section shall apply.

15.4 Subordination: Tenant covenants and agrees that this Lease is subject and subordinate to any Security Instrument and to any advances made on the security thereof and to any and all increases, renewals, modifications, consolidations, replacements and extensions thereof; provided, however, that in consideration of and a condition precedent to Tenant’s agreement to subordinate this Lease to any future Security Instrument shall be the receipt by Tenant of a subordination non-disturbance and attornment agreement in standard commercially reasonable form provided by such Successor Landlord, which requires such Successor Landlord to accept this lease, and not to disturb tenant’s possession, so long as an event of default has not occurred and be continuing (a “SNDAA”) executed by Landlord and the appropriate Successor Landlord. This clause shall be self operative and no further instrument of subordination need be required by any owner or holder of any such ground lease, mortgage, deed of trust or security agreement. In confirmation of such subordination, at Landlord’s request, Tenant shall execute promptly any appropriate certificate or instrument that Landlord may request and Tenant hereby constitutes and appoints Landlord as Tenant’s attorney-in-fact to execute any such certificate or instrument for and on behalf of Tenant. Notwithstanding the foregoing, any Lender shall have the right to elect, by written notice given to Tenant, to have this Lease be superior to its Security Instrument. In the event of the enforcement by any holder of the Security Instrument (“Successor Landlord”) of the remedies provided for by law or by such Security Instrument, at Successor Landlord’s election, Tenant will attorn to and recognize as its landlord, and become the tenant of, such Successor Landlord, without any change in the terms or other provisions of this Lease or without the execution of any further instrument by Tenant; provided, however, that such Successor Landlord or successor in interest shall not be bound by (a) any payment of Base Monthly Rent or Additional Rent for more than one (1) month in advance, (b) any amendment or modification of this Lease, or any waiver of the terms of this Lease, made without the written consent of such Successor Landlord, (c) any offset right that Tenant may have against any former Landlord relating to any event or occurrence before the date of attornment, including any claim for damages of any kind whatsoever as the result of any breach by a former

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Landlord that occurred before the date of attornment; (d) any obligation to pay Tenant any sum(s) that any former Landlord owed to Tenant unless such sums, if any, shall have actually been delivered to Successor Landlord by way of an assumption of escrow accounts or otherwise, (e) any obligation to pay Tenant any security deposited with a former Landlord, unless such security was actually delivered to such Successor Landlord; (f) any obligation to commence or complete any initial construction of improvements in the Premises or any expansion or rehabilitation of existing improvements thereon; or (g) any obligation arising from representations and warranties related to a former Landlord. Upon request by such Successor Landlord, whether before or after the enforcement of its remedies, Tenant shall execute and deliver an instrument or instruments confirming and evidencing the attornment herein set forth, and Tenant hereby irrevocably appoints Landlord as Tenant’s agent and attorney-in-fact for the purpose of executing, acknowledging and delivering any such instruments and certificates. This Lease is further subject to and subordinate to all matters of record.

15.5 Lender Protection: Tenant will give the owners or holders of any Security Instrument (“Lienholder”), by registered mail, a copy of any notice of default Tenant serves on Landlord, provided that Landlord or Lienholder previously notified Tenant (by way of notice of assignment of rents and leases or otherwise) of the address of Lienholder. Tenant further agrees that if Landlord fails to cure such default within thirty (30) days after Landlord’s receipt of such notice of default from Tenant (provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, then Landlord shall have a reasonable time period to cure such default if it diligently commences such cure within such thirty (30) day period and thereafter diligently proceeds to rectify and cure such default), then Tenant will provide written notice of such failure to Lienholder and Lienholder will have an additional thirty (30) days within which to cure the default. Lienholder shall have no obligation to cure (and shall have no liability or obligation for not curing) any breach or default by Landlord, except to the extent that Lienholder agrees or undertakes otherwise in writing. If the default cannot be cured within the additional thirty (30) day period, then Lienholder will have such additional time as may be necessary to effect the cure if, within the thirty (30) day period, Lienholder has commenced and is diligently pursuing the cure (including, without limitation, commencing foreclosure proceedings and/or appointing a receiver if necessary to effect the cure).

15.6 Estoppel Certificates and Financial Statements: At all times during the Lease Term, Tenant agrees, following any request by Landlord, promptly to execute and deliver to Landlord within 15 days following delivery of such request an estoppel certificate: (i) certifying that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect, (ii) stating the date to which the rent and other charges are paid in advance, if any, and (iii) certifying such other factual information about the Lease as may be reasonably required by Landlord’s lender or prospective lender, or by any purchaser or prospective purchaser of the Building or the Project. If Tenant fails to deliver an estoppel certificate within 15 days after delivery of a request therefor, then Landlord may deliver a second (2^nd) request for an estoppels certificate to Tenant and Tenant’s failure to deliver an estoppel certificate within 5 days after delivery of such second (2^nd) request shall be a conclusive admission that, as of the date of the request for such statement: (i) this Lease is

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unmodified except as may be represented by Landlord in said request and is in full force and effect, (ii) there are no known uncured defaults in Landlord’s performance at that time, and (iii) no rent has been paid more than 30 days in advance. At any time during the Lease Term Tenant shall, upon 15 days’ prior written notice from Landlord, provide Tenant’s most recent financial statement and financial statements covering the 24 month period prior to the date of such most recent financial statement to any existing Lender or to any potential Lender or buyer of the Premises. Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant and shall be held confidentially by Landlord.

Tenant hereby authorizes Landlord to obtain one or more credit reports on Tenant at any time, and shall execute such further authorizations as Landlord may reasonably require in order to obtain a credit report.

15.7 Consent: Whenever Landlord’s approval or consent is required by this Lease, such approval or consent may, unless a different standard has been expressly provided in this Lease for the particular matter requiring Landlord’s consent or approval, not be unreasonably withheld, delayed, or conditioned.

15.8 Notices: Any notice required or desired to be given regarding this Lease shall be in writing and may be given by personal delivery, by courier service, or by mail. A notice shall be deemed to have been given (i) on the third business day after mailing if such notice was deposited in the United States mail, certified or registered, postage prepaid, addressed to the party to be served at its Address for Notices specified in Section Q or Section R of the Summary (as applicable), (ii) when delivered if given by personal delivery, and (iii) in all other cases when actually received at the party’s Address for Notices. Either party may change its address by giving notice of the same in accordance with this Section 15.8, provided, however, that any address to which notices may be sent must be a California address.

15.9 Attorneys’ Fees: In the event either Landlord or Tenant shall bring any action or legal proceeding for an alleged breach of any provision of this Lease, to recover rent, to terminate this Lease or otherwise to enforce, protect or establish any term or covenant of this Lease, the prevailing party shall be entitled to recover as a part of such action or proceeding, or in a separate action brought for that purpose, reasonable attorneys’ fees, court costs, and experts’ fees as may be fixed by the court.

15.10 Authority: If Tenant is a corporation, limited liability company, partnership or other entity, Tenant represents and warrants that each individual executing this Lease on behalf of said organization is duly authorized to execute and deliver this Lease on behalf of said organization in accordance with a duly adopted resolution or other applicable authorization of said organization, and that this Lease is binding upon said organization in accordance with its terms.

15.11 Miscellaneous: Should any provision of this Lease prove to be invalid or illegal, such invalidity or illegality shall in no way affect, impair or invalidate any other provision hereof, and such remaining provisions shall remain in full force and effect. Time is of the essence with respect

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to the performance of every provision of this Lease in which time of performance is a factor. The captions used in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. Any executed copy of this Lease shall be deemed an original for all purposes. This Lease shall, subject to the provisions regarding assignment, apply to and bind the respective heirs, successors, executors, administrators and assigns of Landlord and Tenant. “Party” shall mean Landlord or Tenant, as the context implies. This Lease shall be construed and enforced in accordance with the laws of the State of California. The language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning, and not strictly for or against either Landlord or Tenant. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership or corporation or joint venture, and the singular includes the plural. The terms “shall”, “will” and “agree” are mandatory. The term “may” is permissive. When a party is required to do something by this Lease, it shall do so at its sole cost and expense without right of reimbursement from the other party unless a provision of this Lease expressly requires reimbursement. Landlord and Tenant agree that (i) the gross leasable area of the Premises includes any atriums, but shall not include any depressed loading docks, covered entrances or egresses, and covered loading areas, (ii) each has had an opportunity to determine to its satisfaction the actual area of the Project and the Premises, (iii) all measurements of area contained in this Lease are conclusively agreed to be correct and binding upon the parties, even if a subsequent measurement of any one of these areas determines that it is more or less than the amount of area reflected in this Lease, and (iv) any such subsequent determination that the area is more or less than shown in this Lease shall not result in a change in any of the computations of rent, improvement allowances, or other matters described in this Lease where area is a factor. Where a party hereto is obligated not to perform any act, such party is also obligated to restrain any others within its control from performing said act, including the Agents of such party. Landlord shall not become or be deemed a partner or a joint venturer with Tenant by reason of the provisions of this Lease.

15.12 Termination by Exercise of Right: If this Lease is terminated pursuant to its terms by the proper exercise of a right to terminate specifically granted to Landlord or Tenant by this Lease, then this Lease shall terminate 30 days after the date the right to terminate is properly exercised (unless another date is specified in that part of the Lease creating the right, in which event the date so specified for termination shall prevail), the rent and all other charges due hereunder shall be prorated as of the date of termination, and neither Landlord nor Tenant shall have any further rights or obligations under this Lease except for those that have accrued prior to the date of termination or those obligations which this Lease specifically provides are to survive termination. This ¶15.12 does not apply to a termination of this Lease by Landlord as a result of an Event of Tenant’s Default.

15.13 Brokerage Commissions: Landlord and Tenant each represents and warrants to the other party that it has not authorized, retained or employed, or acted by implication to authorize, retain or employ, any real estate broker or salesman to act for it or on its behalf in connection with this Lease so as to cause the other party to be responsible for the payment of a brokerage commission, except for the Retained Real Estate Broker(s) identified in the Summary to this Lease. Landlord and Tenant shall each indemnify, defend and hold the other party harmless from and against any and all claims by any real estate broker or salesman (other than the Retained Real Estate Brokers) whom the indemnifying party authorized, retained or employed, or acted by implication to authorize, retain or employ, to act for the indemnifying party in connection with this Lease.

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15.14 Force Majeure: Any prevention, delay or stoppage due to strikes, lock-outs, inclement weather, labor disputes, inability to obtain labor, materials, fuels or reasonable substitutes therefor, governmental restrictions, regulations, controls, action or inaction, civil commotion, fire or other acts of God, and other causes beyond the reasonable control of Landlord (except financial inability) shall excuse the performance by Landlord, for a period equal to the period of any said prevention, delay or stoppage, of any obligation hereunder.

15.15 Entire Agreement: This Lease constitutes the entire agreement between the parties, and there are no binding agreements or representations between the parties except as expressed herein. Tenant acknowledges that neither Landlord nor Landlord’s Agents has made any legally binding representation or warranty as to any matter except those expressly set forth herein, including any warranty as to (i) whether the Premises may be used for Tenant’s intended use under existing Law, (ii) the suitability of the Premises or the Project for the conduct of Tenant’s business, or (iii) the condition of any improvements. There are no oral agreements between Landlord and Tenant affecting this Lease, and this Lease supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between Landlord and Tenant or displayed by Landlord to Tenant with respect to the subject matter of this Lease. This instrument shall not be legally binding until it is executed by both Landlord and Tenant. No subsequent change or addition to this Lease shall be binding unless in writing and signed by Landlord and Tenant.

15.16 OFAC Compliance. Each party shall take any actions that may be required to comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sanctions program administrated by the U.S. Department of Treasury’s Office of Foreign Asset Control or Financial Crimes Enforcement Network, or any other laws, regulations or executive orders designed to combat terrorism or money laundering, if applicable, to this Lease. Each party represents and warrants to the other party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury, as last updated prior to the date of this Lease.

[the balance of this page has been intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the intent to be legally bound thereby, to be effective as of the Effective Date.

LANDLORD:			TENANT:
M WEST PROPCO XVII, LLC,			BARRACUDA NETWORKS, INC.,
a Delaware limited liability company			a Delaware corporation
By:	Divco West Real Estate Services, Inc.,
	a Delaware corporation		By:	/s/ David Faugno
	Its Agent		Name:	David Faugno
			Title:	CFO
	By:	/s/ J. Moore	Dated:	6/18/13
	Name:
	Its:	Authorized Signatory
	Dated:	6/19/13

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EXHIBIT A

PROJECT SITE PLAN AND OUTLINE OF THE PREMISES

Exhibit A is intended only to show the general outline of the Project and the Premises. The depiction of interior windows, cubicles, modules, furniture and equipment in this Exhibit, if shown, is for illustrative purposes only, but does not mean that such items exist. Landlord is not required to provide, install or construct any such items. It is not to be scaled; any measurements or distances shown should be taken as approximate. The inclusion of elevators, stairways, electrical and mechanical closets, and other similar facilities for the benefit of occupants of the Project does not mean such items are part of the Premises.

EXHIBIT A

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EXHIBIT B

WORK LETTER FOR TENANT IMPROVEMENTS

WORK LETTER

This Exhibit B forms a part of that certain Lease (the “Lease”) by and between M West Propco XVII, LLC, a Delaware limited liability company, as Landlord, and Barracuda Networks, Inc., a Delaware corporation, as Tenant, to which this Exhibit is attached. If there is any conflict between this Exhibit and the Lease regarding the construction of the Tenant Improvements (hereinafter defined), this Exhibit shall govern. All capitalized terms referred to in this Exhibit shall have the same meaning provided in the Lease, except where expressly provided to the contrary in this Exhibit.

ARTICLE 1 DEFINITIONS

1. Additional Definitions. Each of the following terms shall have the following meaning:

Architect: The architectural firm selected by Tenant and approved by Landlord in its good faith discretion to prepare the “Preliminary Plans” and “Final Plans” (as such terms are hereinafter defined). Landlord hereby approves of AAI as Tenant’s Architect.

Contractor: The general contractor selected by Tenant and approved by Landlord in its sole and absolute discretion to construct the Tenant Improvements. The general contractor must be licensed and bondable in the State of California. Tenant may request that Landlord approve three (3) or more Contractors prior to competitive bidding, in which case Tenant may select any one of the Contractors approved by Landlord. Landlord hereby approves of TBI Construction as Tenant’s Contractor.

Construction Contract: The commercially reasonable (including industry standard warranties) construction contract to be entered into by Tenant and its Contractor in form, scope and substance satisfactory to Tenant.

Landlord’s Allowance: A total amount equal to $189,512.00 (i.e., an amount equal to $4.00 per rentable square foot of the Premises) to be paid by Landlord for the Construction Costs only for improvements to the base building of the Building, as reasonably approved by Landlord (the “Base Building Improvements”). Any unused portion of Landlord’s Allowance shall remain the property of Landlord, and Tenant shall have no interest in said funds. Tenant shall have until December 31, 2013 (the “Outside Date”) to use the Landlord’s Allowance for payment of Construction Costs for the Base Building Improvements. If Tenant has not complied with the requirements in this Exhibit for payment of Landlord’s Allowance by the Outside Date, Tenant shall not be entitled to any remaining unused amount of Landlord’s Allowance.

EXHIBIT B

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Substantial Completion, Substantially Complete, and Substantially Completed (or similar phrase): The foregoing shall mean when the following have occurred or would have occurred but for any delay cause by Tenant:

(a) Tenant has delivered to Landlord a certificate from the Architect, in a form reasonably approved by Landlord, that the Tenant Improvements have been Substantially Completed substantially in accordance with the Final Plans, except “punch list” items which may be completed within thirty (30) days without impairing Tenant’s use of the Premises or a material portion thereof, and Landlord has approved of the work in its reasonable discretion; and

(b) Tenant has obtained from the appropriate governmental authority a final certificate of occupancy (or all building permits with all inspections approved or the equivalent) and all other approvals and permits for the Premises permitting occupancy and use of the Premises for its permitted use under the Lease.

Tenant Improvements: The improvements to be constructed in accordance with the Final Plans, including the Base Building Improvements. Said work shall include architectural, mechanical and electrical work and life safety systems, to the extent reasonably required based on the nature of such Tenant Improvements, and shall be in accordance with the criteria, procedures and schedules referred to in this Exhibit. The Tenant Improvements shall comply in all respects with all applicable laws, statutes, ordinances, building codes and regulations (collectively, “Applicable Laws”).

Construction Costs: All costs, expenses, fees, taxes and charges to Tenant to construct the Tenant Improvements, including, without limitation, the following:

(1) architects, engineers and consultants in the preparation of the Preliminary Plans and the Final Plans, including mechanical, electrical, plumbing and structural drawings and of all other aspects of such plans for the Tenant Improvements, and for processing governmental applications and applications for payment, observing construction of the work, and other customary engineering, architectural, interior design and space planning services;

(2) surveys, reports, environmental and other tests and investigations of the site and any improvements thereon;

(3) labor, materials, equipment and fixtures supplied by the Contractor, its subcontractors and/or materialmen, including, without limitation, charges for a job superintendent and project representative;

(4) the furnishing and installation of all heating, ventilation and air conditioning duct work, terminal boxes, distributing defusers and accessories required for completing the heating, ventilation and air-conditioning system in the Premises, including costs of meter and key control for after-hour usage, if required by Landlord;

EXHIBIT B

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(5) all electrical circuits, wiring, lighting fixtures, and tube outlets furnished and installed throughout the Premises, including costs of meter;

(6) all window and floor coverings in the Premises, including, without limitation, all treatment and preparatory work required for the installation of floor coverings over the concrete or other structural floor;

(7) all fire and life safety control systems, such as fire walls, wiring and accessories installed within the Building;

(8) all plumbing, fixtures, pipes and accessories installed within the Building;

(9) fees charged by the city and/or county where the Building is located (including, without limitation, fees for building permits and approvals and plan checks) required for the work in the Building;

(10) construction administration expenses incurred by Tenant; provided there shall be no construction management fee payable to Landlord;

(11) all taxes, fees, charges and levies by governmental and quasi-governmental agencies for authorization, approvals, licenses and permits; and all sales, use and excise taxes for the materials supplied and services rendered in connection with the installation and construction of the Tenant Improvements; and

(12) all costs and expenses incurred to comply with all Applicable Laws of any governmental authority for any work at the Project (including, without limitation, work required outside of the Premises) in order to construct the Tenant Improvements (including, without limitation, work required in order to cause the Project, or any portion thereof, to comply with any and all handicap access laws).

The term Construction Costs under this Exhibit shall not include (i) any fees, costs, expenses, compensation or other consideration payable to Tenant, or any of its officers, directors, employees or affiliates, or (ii) the cost any of Tenant’s furniture, artifacts, trade fixtures, telephone and computer systems and related facilities, or equipment. Any fees or costs referred to in clauses (i) or (ii) above shall be paid by Tenant without resort to Landlord’s Allowance. Notwithstanding anything to the contrary in the Lease or this Work Letter, Landlord shall, at Landlord sole cost and expense (and which shall not be included in Operating Expenses), remove or encapsulate all asbestos and other Hazardous Materials, if any, located in the Premises and/or the Common Areas adjacent to the Premises, as of the date of the Lease in accordance with Landlord’s O&M program, to the extent required pursuant to H Laws.

EXHIBIT B

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ARTICLE 2 CONSTRUCTION OF TENANT IMPROVEMENTS

2.1 Preparation of Plans.

(a) Preliminary Plans. As soon as is reasonably possible after the date of the Lease, Tenant shall submit to its Architect all additional information, including occupancy requirements for the Premises (“Information”), necessary to enable the Architect to prepare preliminary plans for the Tenant Improvements showing, among other things, all demising walls, corridors, entrances, exits, doors, interior design and partition, and the locations of all display and storage rooms and bathrooms. As soon as is commercially reasonable after the date hereof, Tenant shall cause the Architect to prepare preliminary plans for the Tenant Improvements and shall deliver two copies of same to Landlord for its review and written approval in its good faith discretion. Within five (5) days after receipt of the preliminary plans, Landlord shall notify Tenant in writing that (i) Landlord approves of such preliminary plans or (ii) Landlord disapproves of such preliminary plans, the basis for disapproval and the changes requested by Landlord. Tenant shall cause the preliminary plans to be revised and shall submit the revised plans to Landlord for its review and approval as provided in this section. After approval of the preliminary plans as provided above, the preliminary plans shall be referred to as the “Preliminary Plans.” Landlord hereby approves of the Tenant Improvements described in Exhibit B-1 and shall not withhold its consent to the Working Drawings to the extent consistent therewith.

(b) Final Plans. Tenant shall cause the Architect to prepare final working drawings, which shall be consistent with the Preliminary Plans, compatible with the design, construction and equipment of the Building, comply with all Applicable Laws, capable of logical measurement and construction, and contain all such information as may be required for obtaining all permits and other governmental approvals for the construction of the Tenant Improvements (the “Working Drawings”). As soon as is commercially reasonable after approval of the Preliminary Plans are approved by the parties as provided above, Tenant shall submit two copies of the Working Drawings to Landlord for its review and approval in its good faith discretion. Within ten (10) days after receipt of the Working Drawings, Landlord shall notify Tenant in writing that (i) Landlord approves of such Working Drawings, or (ii) Landlord disapproves of such Working Drawings, the basis for disapproval and the changes requested by Landlord. Tenant shall cause the Working Drawings to be revised and shall submit the revised Working Drawings to Landlord for its review and approval as provided in this section. The Working Drawings approved in writing by the parties shall be referred to as the “Final Plans.”

(c) General. It is the responsibility of Tenant to assure that the Final Plans and the Tenant Improvements constructed thereunder conform to all of the Applicable Laws. Tenant shall submit to Landlord one (1) reproducible and four (4) prints of the Final Plans and an electronic unlocked version in CAD format.

2.2 Selection and Approval of Certain Contractors. Any subcontractor performing any work on the life safety or alarm systems or work affecting the roof shall be subject to Landlord’s prior written approval in its sole and absolute discretion and Landlord may require the Tenant use

EXHIBIT B

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Landlord’s contractor or a specific subcontractor for any such work. Landlord shall provide written notice of approval or disapproval within five (5) business days after Tenant’s request for such approval. The Construction Contract shall require, among other things, that the Contractor (a) obtain and deliver to Landlord evidence of insurance required by Landlord, and (b) execute, obtain and deliver to Tenant lien waivers in the form required under Applicable Law from the Contractor and all of its subcontractors, and (c) provide monthly progress payments, with a ten percent (10%) retention.

2.3 Information Provided by Landlord. Acceptance or approval of any plan, drawing or specification, including, without limitation, the Preliminary Plans and the Final Plans, by Landlord shall not constitute the assumption of any responsibility by Landlord for the accuracy or sufficiency of such plans and material, and Tenant shall be solely responsible therefor. Tenant agrees and understands that the review of all plans pursuant to the Lease or this Exhibit by Landlord is to protect the interests of Landlord in the Building, and Landlord shall not be the guarantor of, nor responsible for, the correctness, completeness or accuracy of any such plans or compliance of such plans with Applicable Laws. Any information that may have been furnished to Tenant by Landlord or others about the mechanical, electrical, structural, plumbing or geological (including soil and sub-soil) characteristics of the Building or Project (hereinafter referred to as the “Site Characteristics”) are for Tenant’s convenience only, and Landlord does not represent or warrant that the Site Characteristics are accurate, complete or correct or that the Site Characteristics are as indicated. Any information that has been furnished by Landlord to Tenant has been delivered on the expressed condition and understanding that Tenant will independently verify whether such information is accurate, complete or correct and not rely on such information provided by Landlord.

2.4 No Responsibility of Landlord. Landlord’s approval of any plans, including, without limitation, the Preliminary Plans or the Final Plans, shall not: (i) constitute an opinion or agreement by Landlord that such plans and Tenant Improvements are in compliance with all Applicable Laws, (ii) impose any present or future liability on Landlord; (iii) constitute a waiver of Landlord’s rights hereunder or under the Lease or this Exhibit; (iv) impose on Landlord any responsibility for a design and/or construction defect or fault in the Tenant Improvements, or (v) constitute a representation or warranty regarding the accuracy, completeness or correctness thereof.

2.5 Actual Review Costs. To the extent the same are consistent with the Tenant Improvements described in Exhibit B-1, Tenant shall not be required to pay to Landlord any costs in reviewing and approving the Preliminary Plans, Working Drawings and Final Plans.

2.6 Changes. After approval of the Preliminary Plans or Final Plans by Landlord and Tenant, any changes in the Preliminary Plans or Final Plans shall require the prior written consent of Landlord in its reasonable discretion and the parties shall follow the same process as was required under section 2.1 for approval of plans. Any change requested by Tenant that is approved in writing by Landlord shall be prepared by the Architect and shall be subject to the review and approval of Landlord’s architect in its sole and absolute discretion. The cost of such changes, including the cost to revise such plans, obtain any additional permits and construct any additional improvements required as a result thereof, and the cost for materials and labor, and all other additional costs incurred by Tenant from resulting delays in completing the Tenant Improvements, shall be included as part of the Construction Costs for the Tenant Improvements.

EXHIBIT B

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2.7 Construction Budget for Tenant Improvements. After approval of the Final Plans by Landlord and Tenant as provided above, Tenant shall prepare a detailed estimate of the Construction Costs for the Tenant Improvements (including the Base Building Improvements). Tenant shall deliver a copy of the construction budget to Landlord.

2.8 Building Permits and Approvals. Not later than after approval by Landlord and Tenant of the Final Plans and Construction Budget as provided above, Tenant or its Contractor shall submit the Final Plans to the appropriate governmental body for plan checking and all building permits and other governmental and quasi-governmental approvals.

2.9 Conduct of Work. Tenant shall confine the construction activity to within the Premises as much as possible and shall work in an orderly manner removing trash and debris from the project on a daily basis. At no time will pipes, wires, boards or other construction materials cross public areas where harm could be caused to the public. All such work shall be undertaken in strict compliance with all Applicable Laws and Landlord rules and regulations. If Tenant fails to comply with these requirements, Landlord shall have the right, but not the obligation, to cause remedial action (at Tenant’s cost) as deemed necessary by Landlord to protect the public. Tenant shall complete construction of the Tenant Improvements free and clear of all liens, security interests and encumbrances of any kind.

(a) Pre-construction Submittals to Landlord. A minimum of five (5) days prior to the commencement of construction, Tenant shall submit the following items to Landlord:

(1) A certificate setting forth the proposed commencement date of construction and the estimated completion dates of construction work, fixturing work and projected opening date;

(2) Certificates of all insurance required under the Lease and this Exhibit;

(3) Copies of all building permits, and all other permits and approvals required by governmental agencies to construct the Tenant Improvements; and

(4) Copies of all the construction contract with Tenant’s Contractor.

(b) Delays. Tenant shall with reasonable diligence prosecute construction of the Tenant Improvements to complete all work by the Commencement Date. Notwithstanding anything to the contrary in this Lease, Tenant shall not be required to design or construct any Tenant Improvements. Any delay in completing such work, including any delay as a result of governmental delays, acts of God and other events beyond the control of Tenant, shall not extend or delay the time for the commencement of payment Rent or any other sum under the Lease. If the Substantial Completion is delayed beyond September 1, 2013, then the Commencement Date shall be delayed

EXHIBIT B

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by one (1) day for each day of delay in the Substantial Completion to the extent such delay is caused by and results from a “Landlord Delay,” as that term is defined below. No Landlord Delay shall be deemed to have occurred unless and until Tenant has provided written notice to Landlord specifying the action or inaction that constitutes a Landlord Delay. If such action or inaction is not cured within one (1) business day after receipt of such notice, then a Landlord Delay, as set forth in such notice, shall be deemed to have occurred commencing as of the date such notice is received and continuing for the number of days the substantial completion of the Premises was in fact delayed as a direct result of such action or inaction. As used herein, “Landlord Delay” shall mean (1) the failure of Landlord to timely approve or disapprove any Tenant’s Preliminary Plans, Working Drawings and Final Plans; (2) unreasonable interference by Landlord, its agents, employee or contractors with the completion of the Tenant Improvements; and (3) delays due to Landlord’s failure to provide reasonable access to the Building for the construction of the Tenant Improvements.

(c) Correction of Work. Landlord may reject any portion of the Tenant Improvements which is defective or not in conformity with the Final Plans. Landlord shall not be responsible for correcting the portions of the Tenant Improvements which were defective or not in compliance with the Final Plans; all such work shall be the responsibility of Tenant at its sole cost and expense.

2.10 Notice of Completion; Copy of Record set of Plans. Within ten (10) days after completion of construction of the Tenant Improvements, Tenant shall cause a notice of completion (or the equivalent notice required under local law to provide notice to all contractors, subcontractors and materialmen that the work is completed and the time for filing any mechanic’s lien is running) to be recorded in the Official Records of the County where the Building is located, and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and expense. At the conclusion of construction: (i) Tenant shall cause the Architect and Contractor (A) to update the Final Plans as necessary to reflect all changes made to the Final Plans during the course of construction, (B) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of this Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set of drawings within ninety (90) days following issuance of a certificate of occupancy for the Premises; and (ii) Tenant shall deliver to Landlord a copy of all signed building permits and certificates of occupancy, and all warranties, guaranties, and operating manuals and information relating to the improvements, equipment and systems in the Premises.

2.11 Tenant’s Parties and Insurance. The Contractor and all subcontractors, laborers, materialmen, and suppliers used by Tenant collectively shall be referred to as “Tenant’s Parties”.

(a) Indemnity. Tenant’s indemnity of Landlord as set forth in the Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any negligence, willful misconduct or violation of this Lease by Tenant or Tenant’s Parties, or any one directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Tenant Improvements and/or Tenant’s disapproval of all or any portion of any request for payment.

EXHIBIT B

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(b) Requirements of Tenant’s Parties. Each of Tenant’s Parties shall guarantee to Tenant and for the benefit of Landlord that the portion of the Tenant Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof. Each of Tenant’s Parties shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after the later to occur of (i) completion of the work performed by such contractor or subcontractors, and (ii) the date when the Tenant Improvements have been Substantially Completed. The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection with such removal or replacement of all or any part of the Tenant Improvements, and/or the Building and/or common areas that may be damaged or disturbed thereby. All such warranties or guarantees as to material or workmanship of or with respect to the Tenant Improvements shall be contained in the construction contract or subcontract and shall be written such that such guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either. Tenant covenants to give to Landlord any assignment or other assurances which may be necessary to effect such right of direct enforcement.

(c) Insurance Requirements. In addition to the insurance requirements set forth in the Lease, Tenant shall comply with the following requirements:

(1) General Coverages. All of Tenant’s Parties shall carry worker’s compensation insurance covering all of their respective employees, and shall also carry commercial liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in the Lease.

(2) Special Coverage. Tenant shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Tenant Improvements, and such other insurance as Landlord may require. Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord including, but not limited to, the requirement that all of Tenant’s Parties shall carry excess liability and Products and Completed Operation Coverage insurance, each in amounts not less than $1,000,000 per incident, $1,000,000 in aggregate, and in form and with companies as are required to be carried by Tenant as set forth in the Lease.

(3) General Terms. Certificates for all insurance carried pursuant to the foregoing sections shall be delivered to Landlord before the commencement of construction of the Tenant Improvements and before the Contractor’s equipment is moved onto the site. All such policies of insurance must contain a provision that the company writing said policy will give Landlord thirty (30) days’ prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance. In the event that the Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same

EXHIBIT B

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at Tenant’s sole cost and expense. Tenant’s Parties shall maintain all of the foregoing insurance coverage in force until the Tenant Improvements are fully completed and accepted by Landlord, except for any Products and Completed Operation Coverage insurance required by Landlord, which is to be maintained for ten (10) years following completion of the work and acceptance by Landlord and Tenant. All policies carried under this section shall insure Landlord and Tenant, as their interests may appear. All insurance, except Workers’ Compensation, maintained by Tenant’s Parties shall preclude or waive subrogation claims by the insurer against anyone insured thereunder. Such insurance shall provide that it is primary insurance as respects the Landlord and that any other insurance maintained by Landlord is excess and noncontributing with the insurance required hereunder. The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under the Lease or this Exhibit.

2.12 Labor Matters. Tenant shall perform or cause Tenant’s contractor to perform all work in the making and/or installation of any repairs, alterations or improvements in a manner so as to avoid any labor dispute which causes or is likely to cause stoppage or impairment of work or delivery service or any other services in the Project. In the event there shall be any such stoppage or impairment as the result of any such labor dispute or potential labor dispute, Tenant shall immediately undertake such actions as may be necessary to eliminate such dispute or potential dispute, including, but not limited to, (a) removing all disputants from the job site until such time as the labor dispute no longer exists, (b) seeking an injunction in the event of a breach of contract between Tenant and Tenant’s contractor, and (c) filing appropriate unfair labor practice charges in the event of a union jurisdictional dispute.

2.13 Temporary Facilities During Construction. Tenant shall obtain in its name and pay for all temporary utility facilities, and the removal of debris, as necessary and required in connection with the construction of the Premises. Storage of Tenant’s contractors’ construction material, tools, equipment and debris shall be confined to the Premises and any other areas which may be designated for such purposes by Landlord. Landlord shall not be responsible for any loss or damage to Tenant’s and/or Tenant’s contractors’ equipment. In no event shall any materials or debris be stored in the malls or service or exit corridors of the Project.

2.14 Miscellaneous. The Tenant Improvements shall be subject to the inspection and approval of Landlord and its supervisory personnel. All contractors engaged by Tenant shall be bondable, licensed contractors, possessing good labor relations, capable of performing quality workmanship.

ARTICLE 3 PAYMENT OF CONSTRUCTIONS COSTS

3.1 Payment of Costs. Tenant shall pay for the Tenant Improvements, except for the Landlord’s Allowance, which Landlord shall advance as hereinafter provided. Landlord shall only be responsible for payment of up to the amount of Landlord’s Allowance. If the Construction Costs are greater than the amount of the Landlord’s Allowance, Tenant shall be solely responsible for such additional costs.

EXHIBIT B

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3.2 Payment by Landlord. Landlord shall make one payment of the Landlord’s Allowance within thirty (30) days after receipt by Landlord of (i) the final certificate of occupancy for the Premises, copies of all applicable building permits reflecting final sign-off by the local governmental authority, a copy of the as-built Final Plans for the Tenant Improvements, and (iv) unconditional lien waivers from the general contractor and all subcontractors and suppliers (v) receipt and approval by Landlord of the Architect’s certificate referred to in the definition of Substantial Completion in this Exhibit, which approval shall not be unreasonably withheld.

ARTICLE 4 GENERAL PROVISIONS

4.1 Tenant’s Representative. Tenant hereby authorizes Diane Honda as Tenant’s representative to act on its behalf and represents its interests with respect to all matters which pertain to the construction of Tenant Improvements, and to make decisions binding upon Tenant with respect to such matters.

4.2 Landlord Work. Landlord shall, at Landlord’s sole cost and expense, use commercially reasonable efforts to reduce the “buzzing” noise emitted from the onsite transformer. Notwithstanding anything to the contrary in this Lease, Tenant shall have no obligation to remove or upgrade the existing generator.

EXHIBIT B

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EXHIBIT B-1

PRELIMINARY PLANS

That certain Cost Detail, dated June 6, 2013, from Technical Builders, which scope of work is based on the revised plans A-100 and SP-4 dated May 23, 2013 by AAI.

EXHIBIT B-1

-1-

EXHIBIT C

ACCEPTANCE AGREEMENT

This Acceptance Agreement is made as of                  , 201     by and between the parties hereto with regard to that certain Lease dated June 17, 2013, by and between M West Propco XVII, LLC, a Delaware limited liability company, as Landlord (“Landlord”), and Barracuda Networks, inc., a Delaware corporation, as Tenant (“Tenant”), affecting those premises located at 5710 Fontanoso Way, San Jose, California. The parties hereto agree as follows:

1. Landlord delivered possession of the Premises to Tenant on                  , 201     with all improvements and work, if any, required of completed in a good and workmanlike manner and otherwise in the condition required under the Lease and Tenant accepted possession of the Premises.

2. The Commencement Date of the Lease Term for the Premises is                     , and the Lease Term for the Premises expires on                     , unless sooner terminated according to the terms of the Lease.

3. Base Monthly Rent is payable by Tenant in accordance with the following schedule:

1, 2013 -              1, 2014:	$	0.00
1, 2014 -              1, 2015:	$	0.00
1, 2015 -              1, 2016:	$	37,902.40
1, 2016 -              1, 2017:	$	42,640.20
1, 2017 -              1, 2018:	$	47,378.00

4. Each party represents and warrants to the other that it is duly authorized to enter into this document and perform its obligations without the consent or approval of any other party and that the person signing on its behalf is duly authorized to sign on behalf of such party.

LANDLORD: TENANT:

M WEST PROPCO XVII, LLC,		BARRACUDA NETWORKS, INC.,
a Delaware limited liability company		a Delaware corporation
By:	Divco West Real Estate Services, Inc.,
	a Delaware corporation	By:
	Its Agent	Name:
		Title:
	By:	Dated:
	Name:
	Its:
	Dated:

EXHIBIT C

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EXHIBIT D

OPTION TO EXTEND

This Exhibit D (this “Exhibit”) is made in connection with and is a part of that certain Lease, dated as of June 17, 2013 by and between M West Propco XVII, LLC, a Delaware limited liability company, as Landlord, and Barracuda Networks, Inc., a Delaware corporation, as Tenant (the “Lease”).

1. Definitions and Conflict. All capitalized terms referred to in this Exhibit shall have the same meaning as provided in the Lease, except as expressly provided to the contrary in this Exhibit. In case of any conflict between any term or provision of the Lease and any exhibits attached thereto and this Exhibit, this Exhibit shall control.

2. Option to Extend and Rent During the Extended Period: Tenant shall have one (1) option to extend the Term of the Lease for a period of five (5) years (the “Extension Period”) by giving written notice of exercise of such option (“Extension Option Notice”) at least two hundred seventy (270) days, but not more than three hundred sixty-five (365) days, prior to the expiration of the Term. The Extension Period shall commence, if at all, immediately following the expiration of the initial Term of the Lease. If Tenant is in default, after notice and the expiration of the applicable cure period, under any term or provision of the Lease on the date of giving the Extension Option Notice, or if Tenant is in default, after notice and the expiration of the applicable cure period, under any term or provision of the Lease on the date of the Extension Period is to commence, the Extension Period at the option of Landlord shall not commence and the Lease shall expire at the end of initial Term. The Extension Period shall be upon all of the terms and provisions of the Lease, except that (i) the Base Monthly Rent during the Extension Period shall be ninety five percent (95%) of then Fair Market Rent, (ii) any work, allowance, free rent, or concession provided by Landlord in connection with the commencement of the initial Term shall not apply; (iii) Tenant shall not have any additional option to extend; and (iv) Tenant shall not have any right to terminate the Lease during the Extension Period under Section 2.6 of the Lease.

2.1 Fair Market Rent. The term “Fair Market Rent” for purposes of determining Base Monthly Rent during the Extension Period shall mean the greater of (i) the Base Monthly Rent payable during the last month prior to the commencement of the Extension Period, or (ii) the base monthly rent generally applicable to leases at comparable class buildings of comparable size, age, quality of the Premises in the San Jose area projected as of the first day of the Extension Period, not subleased or subject to another party’s expansion rights or not leased to a tenant that holds an ownership interest in the landlord, by giving due consideration for the quality of the Building and improvements therein (including the quality of the then existing improvements in the Premises), the quality for credit tenants, for a term comparable to the Extension Period at the time the commencement of the Extension Period is scheduled to commence, without any deduction for commissions and otherwise subject to the terms and conditions of this Lease that will be applicable during the Extension Period. Notwithstanding anything to the contrary herein, the Fair Market Rent shall take into consideration that there will be no free rent, tenant improvements or other concessions under this Lease during the Extension Periods.

EXHIBIT D

-1-

2.2 Procedure to Determine Fair Market Rent. Landlord shall notify Tenant in writing of Landlord’s determination of the Fair Market Rent (“Landlord’s FMR”) within thirty (30) days after receipt of the Extension Option Notice. Within thirty (30) days after receipt of such written notice of Landlord’s FMR, Tenant shall have the right either to: (i) accept Landlord’s FMR, or (ii) elect to have the Fair Market Rent determined in accordance with the appraisal procedure set forth below. The failure of Tenant to provide written notice of its election under the preceding sentence shall be deemed an acceptance of Landlord’s FMR. The election (or deemed election) by Tenant under this section shall be non-revocable and binding on the parties.

2.3 Appraisers. If Tenant has elected to have the Fair Market Rent determined by an appraisal, then within ten (10) days after receipt of Tenant’s written notice of such an election, each party, by giving written notice to the other party, shall appoint a broker to render a written opinion of the Fair Market Rent for the Extension Period. Each broker must be a real estate broker licensed in the State where the Building is located for at least five years and with at least five years experience in the appraisal of rental rates of leases or in the leasing of space in office buildings in the area in which the Building is located and otherwise unaffiliated with either Landlord or Tenant. The two brokers shall render their written opinion of the Fair Market Rent for the Extension Period to Landlord and Tenant within thirty (30) days after the appointment of the second broker. If the Fair Market Rent of each broker is within three percent (3%) of each other, then the average of the two appraisals of Fair Market Rent shall be the Fair Market Rent for the Extension Period. If one party does not appoint its broker as provided above, then the one appointed shall determine the Fair Market Rent. The Fair Market Rent so determined under this section shall be binding on Landlord and Tenant.

2.4 Third Appraiser. If the Fair Market Rent determined by the brokers is more than three percent (3%) apart, then the two brokers shall pick a third broker within ten (10) days after the two brokers have rendered their opinions of Fair Market Rent as provided above. If the two brokers are unable to agree on the third broker within said ten (10) day period, Landlord and Tenant shall mutually agree on the third broker within ten (10) days thereafter. If the parties do not agree on a third qualified broker within ten (10) days, then at the request of either Landlord or Tenant, such third broker shall be promptly appointed by the then Presiding Judge of the Superior Court of the State of California for the County where the Building is located. The third broker shall be a person who has not previously acted in such capacity for either party and must meet the qualifications stated above.

2.5 Impartial Appraisal. Within thirty (30) days after its appointment, the third broker (the “Third Party”) shall render its written opinion of the Fair Market Rent for the Extension Period (“Third Opinion”). The appraisal of Fair Market Rent made by Landlord or Tenant’s broker that is the closest to the Fair Market Rent specified in the Third Opinion shall be the Fair Market Rent during the Extension Period. If the Fair Market Rent set forth in the Third Opinion is equidistant from the Fair Market Rent made by Landlord’s or Tenant’s broker, then the Fair Market Rent contained in the Third Opinion shall be the Fair Market Rent during the Extension Period. The Fair Market Rent so determined under this section shall be binding on Landlord and Tenant.

EXHIBIT D

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2.6 Appraisal Costs. Each party shall bear the cost of its own appraiser and one-half (1/2) the cost of the third appraiser.

2.7 Acknowledgment of Rent. After the Fair Market Rent for the Extension Period has been established in accordance with the foregoing procedure, Landlord and Tenant shall promptly execute an amendment to the Lease to reflect the Base Monthly Rent for the Extension Period.

2.8 Personal Option. The foregoing option to extend is personal to the original Tenant signing the Lease and any Affiliate pursuant to Section 14.1(F), above, but may not be assigned or transferred to or exercised by any other assignee, sublessee or transferee under a Transfer.

EXHIBIT D

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EX-10.15

Exhibit 10.15

Execution

RECAPITALIZATION AGREEMENT

by and among

BARRACUDA NETWORKS, INC.,

THE INVESTORS NAMED HEREIN

and

THE SELLING STOCKHOLDERS NAMED HEREIN

August 23, 2012

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

TABLE OF CONTENTS

		Page
ARTICLE 1 DIVIDEND
1A.	Dividend		1
ARTICLE 2 STOCK PURCHASE AND REPURCHASE
2A.	Authorization		2
2B.	Investment Transaction		2
2C.	Repurchase Transaction		3
2D.	Closing		3
2E.	Closing Documents		4
ARTICLE 3 CONDITIONS TO THE OBLIGATIONS OF THE INVESTORS
3A.	Representations and Warranties		5
3B.	Covenants		5
3C.	Closing Certificate		5
3D.	Opinion		5
3E.	Repurchase Transaction		5
3F.	Litigation		5
3G.	Third Party Consents and Approvals		5
3H.	Governmental Consents and Approvals		6
3I.	Good Standing Certificate		6
3J.	Material Adverse Effect		6
3K.	Internal Investigation Report		6
ARTICLE 4 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
4A.	Representations and Warranties		6
4B.	Covenants		6
4C.	Litigation		6
4D.	Governmental Consents and Approvals		7
4E.	Investment Transaction		7
4F.	Repurchase Transaction		7
4G.	Opinion		7
ARTICLE 5 CONDITIONS TO THE OBLIGATIONS OF THE SELLING STOCKHOLDERS
5A.	Representations and Warranties		7
5B.	Covenants		7
5C.	Litigation		7
5D.	Opinion		8
5E.	Repurchase Transaction		8
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
6A.	Organization, Corporate Power and Licenses		8
6B.	Capital Stock and Related Matters		8
6C.	Subsidiaries; Investments		10
6D.	Authorization; No Breach		10
6E.	Financial Statements		10
6F.	Absence of Undisclosed Liabilities		11
6G.	Accounts Receivable		11
6H.	No Material Adverse Effect		11
6I.	Absence of Certain Developments		12

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TABLE OF CONTENTS

(Continued)

		Page
6J.	Assets		13
6K.	Indebtedness		13
6L.	Tax Matters		13
6M.	Contracts and Commitments		15
6N.	Intellectual Property Rights		16
6O.	Litigation, Etc		17
6P.	Brokerage		18
6Q.	Insurance		18
6R.	Employees		18
6S.	ERISA		18
6T.	Compliance with Laws; Licenses; Certain Operations		19
6U.	Affiliated Transactions		20
6V.	Real Property		20
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
7A.	Capacity; Power and Authority		21
7B.	Authorization; No Breach		21
7C.	Title to Shares, Etc		21
7D.	Brokerage		22
7E.	Litigation, Etc		22
7F.	Representations and Warranties of the Company		22
7G.	Access to Data		22
7H.	Advisors; Tax Liability		22
ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
8A.	Organization, Power and Authority		23
8B.	Authorization; No Breach		23
8C.	Brokerage		23
8D.	Investment Representations		23
8E.	Rule 144		24
8F.	Access to Data		25
8G.	Tax Advisors		25
8H.	Legends		25
8I.	Litigation, Etc		26
ARTICLE 9 INDEMNIFICATION AND OTHER AGREEMENTS
9A.	Survival of Representations and Warranties		26
9B.	General Indemnification		26
9C.	Special Indemnification		29
9D.	Certain Waivers		31
9E.	Press Release and Announcements		31
9F.	Confidentiality		31
9G.	Further Assurances		32
9H.	Certain Restrictions		32
9I.	Pre-Closing Covenants		32
ARTICLE 10 DEFINITIONS
ARTICLE 11 TERMINATION
11A.	Termination		39
11B.	Effect of Termination		40

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TABLE OF CONTENTS

(Continued)

		Page
ARTICLE 12 MISCELLANEOUS
12A.	Fees and Expenses		40
12B.	Remedies		40
12C.	Consent to Amendments		40
12D.	Successors and Assigns		40
12E.	Severability		41
12F.	Counterparts		41
12G.	Descriptive Headings; Interpretation		41
12H.	Entire Agreement		41
12I.	No Third-Party Beneficiaries		41
12J.	Governing Law		42
12K.	Notices		42
12L.	No Strict Construction		43
12M.	California Corporate Securities Law		43
12N.	Waiver of Potential Conflicts of Interest		43
12O.	Waiver of All Rights		44

-iii-

EXHIBITS AND SCHEDULES

Exhibits:

Exhibit A	–	Amended and Restated Certificate of Incorporation
Exhibit B	–	Amended and Restated Voting Agreement
Exhibit C	–	Amended and Restated Investors Rights Agreement
Exhibit D	–	Right of First Refusal Agreement
Exhibit E	–	Management Rights Agreement for Sequoia Capital
Exhibit F	–	Management Rights Agreement for Francisco Partners
Exhibit G	–	Director Indemnification Agreement
Exhibit H	–	Non-Competition Agreement
Exhibit I	–	No-Hire and Non-Solicitation Agreement

Schedules:

Dividend Schedule

Schedule of Investors

Schedule of Selling Stockholders

-iv-

RECAPITALIZATION AGREEMENT

THIS RECAPITALIZATION AGREEMENT (this “Agreement”) is made and entered into as of August 23, 2012, by and among Barracuda Networks, Inc., a Delaware corporation (the “Company”), the Persons listed on the Schedule of Investors attached hereto (collectively referred to herein as the “Investors” and individually as an “Investor”), the Persons listed on the Schedule of Selling Stockholders attached hereto (collectively referred to herein as the “Selling Stockholders” and individually as a “Selling Stockholder”). The Company, the Investors and the Selling Stockholders are sometimes collectively referred to herein as the “Parties” and individually as a “Party.” Capitalized terms used herein and not otherwise defined herein have the meanings given to such terms in ARTICLE 10.

WHEREAS, the Selling Stockholders own an aggregate of 88,024,941 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), representing approximately 55.9% of the Common Stock on a Fully-Diluted Basis;

WHEREAS, the Investors and their Affiliates own an aggregate of 30,150,753 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred”), and 7,539,186 shares of Common Stock representing approximately 23.9% of the Common Stock on a Fully-Diluted Basis;

WHEREAS, the Company desires to pay a dividend to all stockholders of the Company;

WHEREAS, the Company desires to issue and sell to the Investors and the Investors desire to purchase from the Company newly-authorized shares of Series B Preferred Stock of the Company, par value $0.001 (the “Series B Preferred” and, together with the Series A Preferred, the “Preferred Stock”), a portion of which will be paid by certain Investors by reinvesting all or part of the Dividend received by such Investors; and

WHEREAS, the Company desires to use the entire amount raised in connection with the sale of the Series B Preferred to repurchase shares of Common Stock from the Selling Stockholders.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings contained herein, and intending to be legally bound, the Parties hereby agree as follows:

ARTICLE 1

DIVIDEND

1A. Dividend

The Company shall use cash on hand to pay a dividend (the “Dividend”) pursuant to the terms of the Company’s Certificate of Incorporation in an amount as close to One Hundred Thirty Million Dollars ($130,000,000) as possible (taking rounding into account). For information purposes only, the portion of the Dividend which would be payable to each of the Company’s stockholders if there are no changes to the Company’s issued and outstanding capital stock prior to the record date set by the Board in connection with the declaration of the Dividend (the “Record Date”) is set forth on the Dividend Schedule attached hereto. The Company shall provide a final, updated Dividend Schedule (the “Final Dividend Schedule”) based on the issued and outstanding capital stock as of the Record Date promptly following such Record Date and in any event, no later than two (2) business days prior to the Closing.

ARTICLE 2

STOCK PURCHASE AND REPURCHASE

2A. Authorization

(i) Subject to the satisfaction or waiver of the conditions set forth in ARTICLE 4, immediately prior to the Closing, the Company shall file the Amended and Restated Certificate of Incorporation of the Company, in the form of Exhibit A attached hereto (the “Certificate of Incorporation”), with the Secretary of State of the State of Delaware.

(ii) Subject to the satisfaction or waiver of the conditions set forth in ARTICLE 4, immediately prior to the Closing, the Company shall authorize the issuance to the Investors of an aggregate of Twenty Two Million Seven Hundred Twenty Seven Thousand Nine Hundred Thirteen (22,727,913) shares of Series B Preferred, having the rights and preferences set forth in the Certificate of Incorporation. The Series B Preferred shall be initially convertible into Twenty Two Million Seven Hundred Twenty Seven Thousand Nine Hundred Thirteen (22,727,913) shares of Common Stock (representing 14.4% of the Company’s Common Stock on a Fully-Diluted Basis as of the Closing, assuming conversion of the Series B Preferred, the Series A Preferred and the issuance of all unallocated stock options.

2B. Investment Transaction

On the basis of the representations, warranties, covenants and agreements set forth herein and subject to the satisfaction or waiver of the conditions set forth in ARTICLE 3 and ARTICLE 4 and the simultaneous consummation of the Repurchase Transaction (as defined below), the Company and each of the Investors agree to and shall consummate the following transaction (the “Investment Transaction”) at the Closing:

(i) the Company shall sell to the Investors, and the Investors shall purchase from the Company, an aggregate of Twenty Two Million Seven Hundred Twenty Seven Thousand Nine Hundred Thirteen (22,727,913) shares of Series B Preferred, with the number of shares of Series B Preferred to be purchased by each Investor set forth opposite such Investor’s name on the Schedule of Investors attached hereto (as such number of shares may be adjusted, if necessary, in accordance with the footnotes set forth on the Schedule of Investors) for an aggregate purchase price equal to One Hundred Twenty Seven Million Seven Hundred Fifty Two Thousand Two Hundred Seventy Two Dollars and Eighty Eight Cents ($127,752,272.88) (the “Preferred Stock Purchase Price”), payable in the manner set forth in Paragraph 2D(iii) below; and

(ii) the Investors shall pay to the Company (in the manner set forth in Paragraph 2D(iii) below) the portion of the Preferred Stock Purchase Price set forth opposite such Investor’s name on the Schedule of Investors attached hereto (as such amount may be adjusted, if necessary, in accordance with the footnotes set forth on the Schedule of Investors).

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2C. Repurchase Transaction

On the basis of the representations, warranties, covenants and agreements set forth herein and subject to the satisfaction or waiver of the conditions set forth in ARTICLE 4 and the simultaneous consummation of the Investment Transaction, the Company and each of the Selling Stockholders agree to and shall consummate the following transaction (the “Repurchase Transaction”) at the Closing:

(i) each Selling Stockholder shall sell, transfer, assign and deliver to the Company, and the Company shall accept, assume and receive from each Selling Stockholder, the number of shares of Common Stock set forth opposite such Selling Stockholder’s name on the Schedule of Selling Stockholders attached hereto for an aggregate purchase price equal to One Hundred Twenty Seven Million Seven Hundred Fifty Two Thousand Two Hundred Seventy Two Dollars and Eighty Six Cents ($127,752,272.86) (the “Common Stock Purchase Price”), payable in the manner set forth in Paragraph 2D(iv) below; and

(iii) the Company shall pay to each Selling Stockholder (in the manner set forth in Paragraph 2D(iv) below) the portion of the Common Stock Purchase Price set forth opposite such Selling Stockholder’s name on the Schedule of Selling Stockholders attached hereto.

2D. Closing

The closing of the Dividend, the Investment Transaction and Repurchase Transaction (the “Closing”) shall take place at the offices of Kirkland & Ellis LLP, 950 Page Mill Road, Palo Alto, California 94304, or at such other place as may be mutually agreeable to each of the Parties, at 10:00 a.m., local time, on (i) the second business day following the satisfaction or waiver by the Party entitled to the benefit thereof of the conditions to the Closing set forth in ARTICLE 3, ARTICLE 4 and ARTICLE 5 (other than the conditions to be satisfied at the Closing, but subject to the satisfaction of such conditions at the Closing), or (ii) such other date as the Investors, the Company and the Selling Stockholders mutually agree (the “Closing Date”). The Dividend, the Investment Transaction and the Repurchase Transaction shall each constitute a separate transaction hereunder. Subject to the satisfaction of the conditions to the Closing set forth in ARTICLE 3, ARTICLE 4 and ARTICLE 5, at the Closing, the Parties shall consummate the Dividend, the Investment Transaction and the Repurchase Transaction in the following manner and in the following order (except that each of the transactions shall be deemed to have been consummated simultaneously and none of the transactions described below shall be consummated unless all of such transactions are consummated):

(i) The Company shall pay to each stockholder the percentage of the Dividend set forth opposite such stockholder’s name on the Final Dividend Schedule; provided that any Investor shall be entitled to direct the Company to apply all or any portion of such dividend payment to be received by such Investor towards such Investor’s obligation to make a payment to the Company under Paragraph 2D(ii) below. Payments to be made pursuant to this Paragraph 2D(i) to Investors and Selling Stockholders shall be made by wire transfer of immediately available funds to an account designated by such Person.

(ii) Each Investor shall deliver to the Company such Investor’s portion of the Preferred Stock Purchase Price as set forth on the Final Dividend Schedule by wire transfer of immediately available funds to an account designated by the Company or by offsetting such amount by the amount payable to such Investor under Paragraph 2D(i) above.

(iv) The Company shall deliver to each Investor a stock certificate representing the shares of Series B Preferred purchased by such Investor, as set forth opposite such Investor’s name on the Schedule of Investors attached hereto, registered in such Investor’s name.

(v) The Company shall pay to each Selling Stockholder by wire transfer of immediately available funds to an account designated by such Selling Stockholders an amount equal to such Selling Stockholder’s portion of the Common Stock Purchase Price allocable to each of the Selling Stockholders as set forth on the Schedule of Selling Stockholders attached hereto (the “Repurchase Transaction Proceeds”).

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(vi) Each of the Selling Stockholders shall deliver to the Company the original stock certificate(s) representing the shares of Common Stock sold by such Selling Stockholder to the Company, as set forth on the Schedule of Stockholders attached hereto, duly endorsed in blank; and, if a Selling Stockholder delivers a stock certificate(s) representing more than the number of shares of Common Stock sold by such Selling Stockholders to the Company, the Company shall deliver to such Selling Stockholder a stock certificate representing the shares of Common Stock owned by such Selling Stockholder after such sale.

2E. Closing Documents

Subject to the satisfaction or waiver of the conditions to the Closing set forth in ARTICLE 3 and ARTICLE 4, at the Closing:

(i) the Company shall deliver to the Investors all of the following documents: (a) certified copies of the resolutions duly adopted by the Board authorizing the execution, delivery and performance of this Agreement and the other Transaction Agreements to which it is a party and the transactions contemplated hereby and thereby, including without limitation, the adoption and filing of the Certificate of Incorporation, the amendment to the Equity Incentive Plan, the declaration of the Dividend and the approval of the Investment Transaction and the Repurchase Transaction; and (b) certified copies of the Certificate of Incorporation and the Bylaws of the Company, both of which shall be in full force and effect under the laws of the State of Delaware as of the Closing and shall not have been amended or modified.

(ii) the Company, the Selling Stockholders, the Investors and all Persons listed on the signature pages attached thereto shall enter into: (a) an Amended and Restated Voting Agreement in the form of Exhibit B attached hereto (the “Voting Agreement”); (b) an Amended and Restated Investor Rights in the form of Exhibit C attached hereto (the “Investors Rights Agreement”); and (c) an Amended and Restated Right of First Refusal Agreement in the form of Exhibit D attached hereto (the “ROFR Agreement”).

(iii) the Company shall enter into a Management Rights Agreements with the Investors in the forms of Exhibit E and Exhibit F attached hereto (the “Management Rights Agreements”).

(iv) the Company and the Directors nominated by the Investors (as defined in the Voting Agreement) shall enter into a Director Indemnification Agreement in the form of Exhibit G attached hereto (the “Director Indemnification Agreement”).

(v) each of the Selling Stockholders shall execute and deliver a Non-Competition Agreement in the form of Exhibit H attached hereto (the “Non-Competition Agreement”).

(vi) each of the Selling Stockholders shall execute and deliver a No-Hire and Non-Solicitation Agreement in the form of Exhibit I attached hereto (the “No-Hire and Non-Solicitation Agreement”).

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ARTICLE 3

CONDITIONS TO THE OBLIGATIONS OF THE INVESTORS

The obligation of the Investors to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction as of the Closing of the following conditions (any of which may be waived in whole or in part solely by the unanimous consent of all Investors):

3A. Representations and Warranties

Each of the representations and warranties contained in ARTICLE 6 and ARTICLE 7 hereof that are subject to materiality qualifications shall be true and correct in all respects at and as of the Closing, and each of the representations and warranties contained in ARTICLE 6 and ARTICLE 7 hereof that are not subject to materiality qualifications shall be true and correct in all material respects at and as of the Closing, in each case as though made on and as of the Closing Date.

3B. Covenants

The Company and the Selling Stockholders shall have performed in all material respects all of the covenants required to be performed by such Parties hereunder prior to the Closing.

3C. Closing Certificate

The Investors shall have received a certificate of the Company, signed by an officer of the Company, stating that the conditions specified in Paragraphs 3A and 3B have been fully satisfied.

3D. Opinion

The Company shall have received the opinion of Valuation Research Corporation that the payment of the Dividend (i) will not cause the Company to be insolvent and (ii) satisfies the financial requirements of applicable corporate law and the Dividend shall have been declared by the Company’s board of directors (“Board”) with a record date prior to the Closing Date.

3E. Repurchase Transaction

The Company and the Selling Stockholders shall have simultaneously consummated the Repurchase Transaction in the manner set forth in Paragraph 2C.

3F. Litigation

No suit, action or other proceeding shall be pending or threatened before any Governmental Entity seeking to restrain or prohibit the transactions contemplated hereby (other than any such suit, action or proceeding brought by any of the Parties against any of the other Parties), and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect.

3G. Third Party Consents and Approvals

The Company shall have received or obtained all consents and approvals that are required in order to prevent a breach of or default under, a termination or modification of, or acceleration of the terms of, any contract, agreement or document identified with an asterisk “(*)” on the attached Contracts Schedule (collectively, the “Third Party Approvals”) as a result of the consummation of the transactions contemplated hereby, in each case on terms and conditions reasonably satisfactory to the Investors.

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3H. Governmental Consents and Approvals

The Parties shall have received or obtained all governmental and regulatory consents and approvals that are required to consummate the transactions contemplated by this Agreement (collectively, the “Governmental Approvals”).

3I. Good Standing Certificate

The Investors shall have received a good standing certificate of the Company from the Secretary of State of the State of Delaware, dated as of a date not more than three (3) business days prior to the Closing Date.

3J. Material Adverse Effect

Since February 29, 2011, there shall have been no Material Adverse Effect.

3K. Internal Investigation Report

The Investors shall have received the final report detailing the results of the Company’s internal investigation regarding the Company’s compliance with applicable U.S. export control and economic sanctions laws, regulations administered by the U.S. Office of Foreign Asset Control (“OFAC”), the U.S. Department of Commerce (“Commerce”) and the Department of State (“State”) (the “Internal Investigation Report”) and shall have had ten (10) business days to review the Internal Investigation Report.

ARTICLE 4

CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

The obligation of the Company to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction as of the Closing of the following conditions (any of which may be waived in whole or in part solely by the Company):

4A. Representations and Warranties

Each of the representations and warranties contained in ARTICLE 7 and ARTICLE 8 hereof that are subject to materiality qualifications shall be true and correct in all respects at and as of the Closing, and each of the representations and warranties contained in ARTICLE 7 and ARTICLE 8 hereof that are not subject to materiality qualifications shall be true and correct in all material respects at and as of the Closing, in each case as though made on and as of the Closing Date. Covenants. The Investors shall have performed in all material respects all of the covenants required to be performed by the Investors hereunder prior to the Closing. The Selling Stockholders shall have performed in all material respects all of the covenants required to be performed by the Selling Stockholders hereunder prior to the Closing.

4C. Litigation

No suit, action or other proceeding shall be pending or threatened before any Governmental Entity seeking to restrain or prohibit the transactions contemplated hereby (other than any such suit, action or proceeding brought by any of the Parties against any of the other Parties), and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect.

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4D. Governmental Consents and Approvals

The Parties shall have received or obtained all Governmental Approvals that are required to consummate the transactions contemplated hereby.

4E. Investment Transaction

The Investors shall have simultaneously purchased the shares of Series B Preferred and delivered the Preferred Stock Purchase Price to the Company in the manner set forth in Paragraph 2B.

4F. Repurchase Transaction

The Selling Stockholders shall have tendered their shares of Common Stock to consummate the Repurchase Transaction in the manner set forth in Paragraph 2C.

4G. Opinion

The Company shall have received the opinion of Valuation Research Corporation that the payment of the Dividend (a) will not cause the Company to be insolvent and (b) satisfies the financial requirements of applicable corporate law.

ARTICLE 5

CONDITIONS TO THE OBLIGATIONS OF THE SELLING STOCKHOLDERS

The obligation of the Selling Stockholders to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction as of the Closing of the following conditions (any of which may be waived in whole or in part solely by the unanimous consent of the Selling Stockholders):

5A. Representations and Warranties

Each of the representations and warranties contained in ARTICLE 8 that are subject to materiality qualifications shall be true and correct in all respects at and as of the Closing, and each of the representations and warranties contained in ARTICLE 8 hereof that are not subject to materiality qualifications shall be true and correct in all material respects at and as of the Closing, in each case as though made on and as of the Closing Date.

5B. Covenants

The Company shall have performed in all material respects all of the covenants required to be performed by the Company hereunder in connection with the Repurchase Transaction prior to the Closing.

5C. Litigation

No suit, action or other proceeding shall be pending or threatened before any Governmental Entity seeking to restrain or prohibit the Repurchase Transaction (other than any such suit, action or proceeding brought by any of the Parties against any of the other Parties), and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect.

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5D. Opinion

The Company shall have received the opinion of Valuation Research Corporation that the payment of the Dividend (i) will not cause the Company to be insolvent and (ii) satisfies the financial requirements of applicable corporate law and the Dividend shall have been declared by the Company’s Board with a record date prior to the Closing Date.

5E. Repurchase Transaction

The Company and the Selling Stockholders shall have simultaneously consummated the Repurchase Transaction in the manner set forth in Paragraph 2C.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As a material inducement to the Investors to enter into this Agreement and purchase the Series B Preferred hereunder, the Company hereby represents and warrants to the Investors, as of the date of this Agreement, that except as set forth in the disclosure letter delivered by the Company to the Investors pursuant to Paragraph 9I(ix) hereof (which disclosures shall identify the paragraph or subparagraph of this Agreement to which they apply but shall also qualify such other paragraphs or subparagraphs of this Agreement to the extent that it is reasonably apparent on its face (with or without a specific cross-reference) from a reading of the disclosure items that such disclosure is applicable to such other paragraph or subparagraph) (the “Company Disclosure Letter”) as follows:

6A. Organization, Corporate Power and Licenses

The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in every jurisdiction in which its ownership of property or conduct of business requires it to qualify, except where the failure to be so qualified would not have a Material Adverse Effect. The Company possesses all requisite corporate power and authority and all Licenses and authorizations necessary to own and operate its properties, to carry on its businesses as now conducted and to carry out the transactions contemplated by this Agreement, except for those Licenses the failure of which to have would not reasonably be expected to (x) subject the Company to any material liability or (y) adversely affect in any material respect the Company’s ability to conduct its business as presently conducted. A correct and complete copy of the Company’s current Bylaws have been furnished or made available to the Investors’ counsel, and there are no amendments to the Company’s current Bylaws that have not been furnished or made available to the Investors’ counsel. The attached Officers and Directors Schedule lists all of the current officers and directors of the Company and each of its Subsidiaries on the date hereof.

6B. Capital Stock and Related Matters

(i) On the date hereof, the authorized capital stock of the Company consists of (a) 31,500,000 shares of preferred stock, of which 31,500,000 shares are designated as Series A Preferred Stock and 30,150,753 of which are outstanding and held by certain of the Investors as set forth on the attached Capitalization Schedule and (b) 195,000,000 shares of Common Stock, of which 105,762,189 shares are issued and outstanding and held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 31,500,000 shares are reserved for issuance upon conversion of the Series A Preferred and 21,516,196 shares are reserved for issuance upon exercise of stock options or vesting of restricted stock units issued or available for issuance under the Equity Incentive Plan.

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(ii) Immediately following the consummation of the Investment Transaction and the Repurchase Transaction, the authorized capital stock of the Company will consist of (a) 52,878,666 shares of preferred stock, of which 30,150,753 are outstanding shares will be designated as Series A Preferred Stock and held by certain of the Investors as set forth on the attached Capitalization Schedule and 22,727,913 shares will be designated as Series B Preferred Stock and held by the Investors as set forth on the Schedule of Investors and (b) 210,307,804 shares of Common Stock, of which 83,034,276 shares shall be issued and outstanding and held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 52,878,666 shares shall be reserved for issuance upon conversion of the Series A Preferred and the Series B Preferred and 21,516,196 shares shall be reserved for issuance upon exercise of stock options or vesting of restricted stock units issued or available for issuance under the Equity Incentive Plan.

(iii) Except as set forth on the Capitalization Schedule and except as provided in this Agreement, on the date hereof, neither the Company or any of its Subsidiaries will have authorized or outstanding any stock or securities convertible or exchangeable for any shares of its capital stock or containing any profit participation features, nor any rights (whether contract rights or otherwise) or options to subscribe for or to purchase or otherwise acquire its capital stock or any stock or securities convertible into or exchangeable for its capital stock or any stock appreciation rights or phantom stock plans. Neither the Company or any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital stock, other than in connection with the Repurchase Transaction and as set forth in the Certificate of Incorporation. All of the outstanding shares of the Company’s capital stock were validly issued and are fully paid and non-assessable.

(iv) Except as set forth on the Capitalization Schedule and except as provided in the Investors’ Rights Agreement, there are no statutory or contractual shareholder preemptive rights or rights of first refusal or other similar restrictions with respect to the issuance of the Series B Preferred hereunder, the issuance of any Common Stock upon the conversion of the Preferred Stock or the consummation of the Repurchase Transaction, provided, however, the Common Stock issuable upon conversion of the Preferred Stock is subject to restrictions on transfer under applicable federal or state securities Laws. Subject to the accuracy of the Investors’ representations and warranties in ARTICLE 8, and the representations and warranties made by all of the Company’s investors in connection with the offer, sale or issuance of all equity securities previously issued, the Company has not violated, in any material respect, any applicable federal or state securities Laws in connection with the offer, sale or issuance of any of its equity securities and the issuance of the Series B Preferred hereunder and the issuance of Common Stock upon the conversion of the Preferred Stock does not require registration under the Securities Act or any applicable state securities Laws. Except as set forth in the Voting Agreement, there are no agreements or understandings between the Company, on the one hand, and the Company’s shareholders or any other Person on the other hand with respect to the voting or transfer of the Company’s capital stock or with respect to any other aspect of the Company’s governance and, to the Company’s knowledge, there is no agreement among the Company’s shareholders or among any other person with respect to the foregoing.

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6C. Subsidiaries; Investments

The attached Investments and Subsidiaries Schedule correctly sets forth the name of each Subsidiary of the Company, the jurisdiction of its incorporation and, with respect to any wholly-owned Subsidiary, the Persons owning the outstanding capital stock of such Subsidiary and, with respect to any non wholly-owned Subsidiary, the ownership interest of the Company or its direct or indirect Subsidiary in such entity. Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, possesses all requisite corporate power and authority and all material Licenses and authorizations necessary to own its properties and to carry on its businesses as now being conducted and is qualified in every jurisdiction in which the failure to so qualify has had or could reasonably be expected to have a Material Adverse Effect. All of the outstanding shares of capital stock of each Subsidiary are validly issued, fully paid and nonassessable, and all such shares that are owned by the Company or another Subsidiary are free and clear of any Encumbrance and not subject to any option or right to purchase any such shares. Neither the Company nor any Subsidiary has any obligation to make any additional Investments in any Person.

6D. Authorization; No Breach

The execution, delivery and performance of this Agreement, the Voting Agreement, the Investors’ Rights Agreement and all of the other agreements and instruments contemplated hereby to which the Company is a party, the offering, sale and issuance of the Series B Preferred, the consummation of the Repurchase Transaction and the issuance of Common Stock upon the conversion of the Preferred Stock have been duly authorized by the Company. This Agreement, when executed and delivered by the Company, constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles of equity, and the Certificate of Incorporation, when filed under the laws of the State of Delaware in accordance with the terms hereof, and all other agreements and instruments contemplated hereby to which the Company is a party, except for the Non-Competition Agreement and No-Hire and Non-Solicitation Agreements, when executed and delivered by the Company in accordance with the terms hereof, shall each constitute a valid and binding obligation of the Company, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles of equity. The execution and delivery by the Company of this Agreement, the Voting Agreement, the Investors’ Rights Agreement and all other agreements and instruments contemplated hereby to which the Company is a party, the issuance of the Series B Preferred, the consummation of the Repurchase Transaction, the issuance of Common Stock upon the conversion of the Preferred Stock and the fulfillment of and compliance with the respective terms hereof and thereof by the Company do not and shall not (i) conflict with or result in a breach of the material terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation of any Lien or Encumbrance upon the Company’s capital stock or assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any third party or any Governmental Entity pursuant to, the Certificate of Incorporation or Bylaws, or any Law to which the Company is subject, or any Material Contract, order, judgment or decree to which the Company is subject, and, in the case of Laws to which the Company is subject and Material Contracts, as could not reasonably be expected to have a Material Adverse Effect.

6E. Financial Statements

Attached hereto as the Financial Statements Schedule are the following financial statements (the “Financial Statements”):

(i) the audited consolidated balance sheet of the Company and its consolidated Subsidiaries as of February 28, 2011 and February 28, 2010 and the related statements of income and cash flows (or the equivalent) for the fiscal year then ended; and

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(ii) the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as of May 31, 2012 and the related statements of income and cash flows (or the equivalent) for the fiscal year then ended (the “Latest Balance Sheet”).

Each of the foregoing Financial Statements (including the notes thereto, if any) presents fairly in all material respects the financial condition and results of operations and cash flows of the Company and its consolidated Subsidiaries as of the dates thereof and for the periods covered thereby (subject, in the case of the unaudited Financial Statements, to normal and recurring year-end audit adjustments) and has been prepared in accordance with GAAP consistently applied throughout the periods covered thereby (subject, in the case of the Latest Balance Sheet, to the absence of footnote disclosures and normal and recurring year-end audit adjustments (none of which are expected to be material)).

6F. Absence of Undisclosed Liabilities

Neither the Company nor any of its Subsidiaries has any obligation or liability (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when asserted) arising out of transactions entered into by the Company or any of its Subsidiaries, or state of facts existing at or prior to the date hereof, or any action or inaction on the part of the Company or any of its Subsidiaries at or prior to the date hereof, other than: (i) liabilities set forth on the face of the Latest Balance Sheet (rather than in any notes thereto); (ii) liabilities and obligations which have arisen after the date of the Latest Balance Sheet in the ordinary course of business (none of which is a liability resulting from noncompliance with any applicable Laws, breach of contract, breach of warranty, tort, infringement, claim or lawsuit); (iii) obligations in respect of the transactions contemplated hereby; (iv) obligations under executory contracts entered into by the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice and (v) liabilities that individually could not reasonably be expected to exceed $500,000. Notwithstanding the foregoing, this representation and warranty will not apply to (and will exclude) any liability arising out of or related to facts, events, transactions, or actions or inactions, the subject matter of which is specifically addressed by another representation or warranty set forth in this Article 6.

6G. Accounts Receivable

All accounts and notes receivable reflected on the Latest Balance Sheet and all accounts receivable which have arisen after that date (net of allowances for doubtful accounts or provision for returns or other offsets as reflected thereon or, with respect to accounts receivable that have arisen since the date of the Latest Balance Sheet in the books and records of the Company and its consolidated Subsidiaries) are not, to the knowledge of the Company, subject to any valid set-off or counterclaim. No Person has any Lien on such receivables or any part thereof (other than Permitted Encumbrances).

6H. No Material Adverse Effect

Since February 29, 2012 through the date hereof, there has not occurred any fact, event or circumstance which has had or would reasonably be expected to have a Material Adverse Effect. Since February 29, 2012 through the date hereof, the Company and each of its Subsidiaries has conducted its business only in the ordinary course of business.

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6I. Absence of Certain Developments

Except as expressly contemplated by this Agreement and all of the other agreements and instruments contemplated hereby to which the Company is a party, since February 29, 2012 through the date hereof, neither the Company nor any of its Subsidiaries has:

(i) issued any notes, bonds or other debt or any capital stock or other equity securities or any securities or rights convertible, exchangeable or exercisable into any capital stock or other equity securities;

(ii) borrowed or incurred or become subject to any material liabilities, except as set forth in the Latest Balance Sheet or Section 6(g) of the Company Disclosure Letter and except for current liabilities incurred in the ordinary course of business;

(iii) discharged or satisfied any material Lien or paid any obligations in excess of $500,000, other than current liabilities paid in the ordinary course of business;

(iv) declared, set aside or made any payment or dividend of cash or other property to any of the Company’s stockholders, or purchased, redeemed or otherwise acquired any stockholders’ equity securities (including any warrants, options or other rights to acquire equity securities), except for repurchases from employees, directors or consultants pursuant to the terms of their stock option or purchase agreements or similar agreements;

(v) mortgaged or pledged any of its properties or assets or subjected them to any Lien, except for Permitted Encumbrances;

(vi) sold, assigned, leased, licensed or otherwise transferred any of its material tangible assets, except in the ordinary course of business consistent with past practice;

(vii) canceled, compromised, waived, or released any material right or claim (outside of the ordinary course of business);

(viii) other than in the ordinary course of business, sold, assigned, transferred, leased, licensed or otherwise encumbered any material Company Intellectual Property Rights, disclosed any proprietary confidential information related to any Company Intellectual Property Rights to any Person (other than to the Investors and other than in circumstances in which it has imposed reasonable confidentiality restrictions), or abandoned or permitted to lapse any Company Intellectual Property Rights material to its business;

(ix) made or granted any bonus or any wage or salary increase to any executive officer (except as approved by the Compensation Committee of the Board or required by pre-existing Material Contracts and for changes in compensation in the ordinary course of business and consistent with past practice in connection with promotions or periodic reviews), or, except as approved by the Compensation Committee of the Board or as required by Law, made or granted any material increase in any employee benefit plan or arrangement applicable to any executive officer, or amended or terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement applicable to any executive officer;

(x) made capital expenditures or commitments therefor that aggregate in excess of $500,000, except as otherwise contemplated and permitted by the Company’s current business plan and budget approved by the Board of Directors;

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(xi) made any loans or advances to, guarantees for the benefit of, or any Investments in, any Person (including incorporation of any Subsidiary), other than advances to employees in the ordinary course of business consistent with past practice;

(xii) made any charitable contributions or pledges exceeding in the aggregate $200,000 or made any political contributions;

(xiii) suffered any damage, destruction or casualty loss exceeding in excess of $200,000, that is not covered by insurance;

(xiv) made any change in any method of accounting or accounting policies that is material, except as required by concurrent changes in GAAP;

(xv) amended its certificate of incorporation, bylaws or other organizational documents;

(xvi) entered into any agreement or arrangement prohibiting or restricting it from freely engaging in its current business;

(xvii) entered into any collective bargaining agreement or other agreement with a labor organization;

(xviii) entered into any Material Contract outside of the ordinary course of business; or

(xix) agreed to do any of the foregoing.

6J. Assets

The Company or one of its Subsidiaries has good and valid title to, a valid leasehold interest in, or a valid license to use, the properties and tangible assets, used by it, located on its premises or shown on the Latest Balance Sheet or acquired thereafter, free and clear of all Liens, except for (i) properties and tangible assets disposed of in the ordinary course of business since the date of the Latest Balance Sheet, (ii) Liens disclosed on the Latest Balance Sheet and (iii) Permitted Encumbrances. Each of the Company and its Subsidiaries owns or has a valid leasehold interest in, all of the material tangible assets, properties and rights necessary for the conduct of its business as presently conducted. Notwithstanding any other provision of this Paragraph (k) to the contrary, no representation or warranty is made in this Paragraph (k) with respect to Intellectual Property Rights.

6K. Indebtedness

Neither the Company nor any of its consolidated Subsidiaries has any Indebtedness. As of the Closing, neither the Company, nor any of its consolidated Subsidiaries shall have any Indebtedness.

6L. Tax Matters

(a) each of the Company and each of its Subsidiaries has filed all Tax Returns which it is required to file under applicable laws and regulations, and all such Tax Returns are complete and correct in all material respects and have been prepared in material compliance with all applicable laws and regulations;

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(b) each of the Company and each of its Subsidiaries has paid all Taxes due and owing by it (whether or not such Taxes are shown or required to be shown on a Tax Return) and has withheld and paid over to the appropriate taxing authority all Taxes which it is required to withhold from amounts paid or owing to any employee, shareholder, creditor or other third party;

(c) none of the Company or any of its Subsidiaries has (1) waived any statute of limitations with respect to any Taxes or agreed to any extension of time for filing any Tax Return which has not been filed or (2) consented to extend to a date later than the date hereof the period in which any Tax may be assessed or collected by any taxing authority;

(d) the Latest Balance Sheet contains an adequate accrual or reserve for all Tax liabilities of the Company and its Subsidiaries as of the date thereof in accordance with relevant GAAP, and, since the date of the Latest Balance Sheet, none of the Company or any of its Subsidiaries has incurred any liability for Taxes other than in the ordinary course of business;

(e) no foreign, federal, state or local tax audits or administrative or judicial Tax proceedings are being conducted, pending, or, to the knowledge of the Company, threatened, with respect to the Company or any of its Subsidiaries;

(f) none of the Company or any of its Subsidiaries has received from any foreign, Federal, state or local taxing authority any notice of deficiency or proposed adjustment for any amount of Tax;

(g) there are no written claim has been made within the past three (3) years by a taxing authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns that allege such entity is or may be subject to Taxes assessed by such jurisdiction;

(h) none of the Company or any of its Subsidiaries has filed or been included in a combined, consolidated or unitary income Tax Return or any Person other than the Company;

(i) none of the Company or any of its Subsidiaries is (1) a party to or bound by any Tax allocation or Tax sharing agreement or (2) liable for the Taxes of another Person (A) as a transferee or successor or (B) by contract, indemnity, or otherwise;

(j) none of the Company or any of its Subsidiaries has filed or been included in a combined, consolidated or unitary income Tax Return or any Person other than the Company;

(k) none of the Company or any of its Subsidiaries is (1) a party to or bound by any Tax allocation or Tax sharing agreement or (2) liable for the Taxes of another Person (A) as a transferee or successor or (B) by contract, indemnity, or otherwise;

(l) none of the Company or any of its Subsidiaries has a permanent establishment in any foreign country, as defined in the relevant tax treaty between the United States and such foreign country;

(m) to the Company’s knowledge, none of the Company or any of its Subsidiaries has (1) granted to any Person an interest in a nonqualified deferred compensation plan (as defined in Code Section 409A(d)(1)) which interest has been or, upon the lapse of a substantial risk of forfeiture with respect to such interest, will be subject to the Tax imposed by Code Sections 409A(a)(1)(B) or 409A(b)(4)(A), (2) modified the terms of any nonqualified

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deferred compensation plan in a manner that could cause an interest previously granted under such plan to become subject to the Tax imposed by Code Sections 409A(a)(1)(B) or 409A(b)(4), or (3) any obligation to indemnify or otherwise reimburse any employee or other service provider for Taxes imposed on such Person as a result of the application of Section 409A of the Code to any deferred compensation arrangement to which the Corporation or the Company is a party; and

(n) there are no Liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company or any of its Subsidiaries.

Notwithstanding the foregoing representations and warranties in this Section 6L, for purposes of disclosure only (i.e. not for indemnification purposes) the Company and its Subsidiaries shall have no obligation to provide disclosure with respect to any individual matter as to which the aggregate liability for Taxes related thereto is not expected to exceed an aggregate of $50,000 (each, an “Undisclosed Tax Matter”). For the avoidance of doubt, each Undisclosed Tax Matter shall be subject to indemnification pursuant to the provisions of Paragraph 9B below.

6M. Contracts and Commitments

(i) Except as expressly contemplated by this Agreement, as of the date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by any:

(a) contract (other than distribution agreements, reseller agreements and intercompany agreements) which provides for the grant of rights to manufacture, produce, assemble, market, or sell the Company Products to any other Person, or that limits the Company’s and its Subsidiaries’ exclusive right to develop, manufacture, assemble, distribute, market or sell the Company Products, in each case that involves annual consideration in excess of $500,000;

(b) contract which imposes any limitation on the Company’s and its Subsidiaries freedom to engage or participate, or compete with any other Person, in any line of business, market or geographic area;

(c) contract pursuant to which it has agreed to provide any Person with access to the Source Code for any of the material Company Products, or to provide for the Source Code of any of the Company Products to be put in escrow;

(d) contract which includes any settlement, consent-to-use, standstill or standalone indemnification obligation with respect to Company Intellectual Property rights, which involve total consideration in excess of $500,000; or

(e) any other agreement that is material to the operation of the Company’s business and which involves annual consideration in excess of $500,000, other than agreements in the ordinary course of business.

(ii) All of the contracts, agreements and instruments set forth or required to be set forth in Section 6(m) of the Company Disclosure Letter (each, a “Material Contract”) are valid, binding and enforceable against the Company or its Subsidiaries, as applicable, and, to the knowledge of the Company, against the other parties thereto, in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles

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of equity. Each of the Company and its Subsidiaries is not in receipt of any claim of material default or material breach under each Material Contract; and neither the Company nor any of its Subsidiaries has any knowledge of any breach or cancellation or anticipated cancellation by the other parties to any Material Contract.

(iii) Investors’ counsel have been furnished with a true and correct copy of each Material Contract, together with all amendments, waivers or other changes thereto, other than Material Contracts with any of the Company’s Subsidiaries that are wholly-owned.

6N. Intellectual Property Rights

(i) To the knowledge of the Company, the Company and/or its Subsidiaries exclusively own and possess all right, title and interest in and to, or have the right to use pursuant to a valid license set forth in subsections (a) through (c) of Section 6(n) of the Company Disclosure Letter (or not required to be listed therein) all Intellectual Property used in or necessary to operate the Company’s and its Subsidiaries’ business as currently conducted, free and clear of all Liens, except for Permitted Encumbrances; provided, that the Investors acknowledge that the Open Source Software used in or necessary to operate the Company’s and its Subsidiaries’ business as currently conducted are not owned by the Company.

(ii) Section 6(n)(ii) of the Company Disclosure Letter sets forth true, complete and correct lists, as of the date hereof, of all of the following of the Company and its Subsidiaries: (a) issued patents and pending patent applications; (b) trademark and service mark registrations and pending applications for registration thereof; (c) copyright registrations and applications for registration thereof; (d) Internet domain name registrations; and (e) Company Products. All such registered Intellectual Property is owned solely by the Company and its Subsidiaries and, to the knowledge of Company, is not invalid or unenforceable, and has not expired or been cancelled or abandoned except for Intellectual Property not material to the business of the Company or its Subsidiaries.

(iii) All employees, officers, consultants and independent contractors of the Company and its Subsidiaries that are engaged in the development of any material Intellectual Property for the Company have executed a written nondisclosure agreement (in the form provided to counsel for the Investors) applicable to the protection of Confidential Information and to the ownership by the Company and its Subsidiaries of Intellectual Property. To the Company’s knowledge, none of its or any of its Subsidiaries’ employees, officers, consultants or independent contractors is in violation thereof. Other than under an appropriate confidentiality or nondisclosure agreement or contractual provision relating to confidentiality and nondisclosure, there has been no disclosure to any Person of material Confidential Information or trade secrets of the Company or any of its Subsidiaries.

(iv) The Company and its Subsidiaries has made reasonable business determinations with respect to the steps it has taken to maintain, protect and enforce all of the material Company Intellectual Property Rights.

(v) The consummation of the transactions contemplated by this Agreement will not (a) entitle any Person to claim any right to use or practice the Company Intellectual Property Rights or cause the Company or any of its Subsidiaries to grant, or be obligated to grant, to any Person any additional or new rights or licenses to the Company Intellectual Property Rights, or (b) impair the right, title or interest of the Company or any of its Subsidiaries in or to any of the Company Intellectual Property Rights.

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(vi) To the Company’s knowledge, (A) neither the Company nor any of its Subsidiaries has, infringed, misappropriated, diluted or otherwise violated (collectively, “Infringement”, “Infringe”, “Infringed” or “Infringing”), and (B) the conduct of the business of the Company and its Subsidiaries as previously conducted and as currently conducted does not Infringe, any Intellectual Property Rights of any Person. The Company (a) does not know of any facts or circumstances that are reasonably likely to give rise to a third Person prevailing in a claim of Infringement against Company or its Subsidiaries and (b) no suit has been made within the past four (4) years, is presently pending, or, to the Company’s knowledge, is threatened related to infringement or, challenging the Company’s or its Subsidiaries’, as applicable, exclusive ownership, or the validity, enforceability or registrability, of any of the Company Intellectual Property Rights, and (c) neither the Company nor any Subsidiary has requested nor received any opinions of counsel related to the foregoing.

(vii) Neither the Company nor any Subsidiary has disclosed or licensed, and neither the Company nor any Subsidiary has a duty or obligation (whether present, contingent, or otherwise) to disclose or license the Source Code for any Company Product to any escrow agent or to any Person who is not, as of the date of this Agreement, an employee of the Company or one of its Subsidiaries. To the Company’s knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, result in the disclosure or license of the Source Code for any Company Product to any Person who is not, as of the date of this Agreement, an employee of the Company or one of its Subsidiaries.

(viii) Neither the Company nor any Subsidiary has any obligation to develop any Software, content, technology or other Intellectual Property on behalf of any third party.

6O. Litigation, Etc

As of the date hereof, (i) there are no (and in the last four years there have not been any) written actions, suits, proceedings (including any administrative, self regulatory organization or arbitration proceedings), orders, or, to the Company’s knowledge, investigations or claims pending or threatened against the Company or its Subsidiaries (or to the Company’s knowledge, pending or threatened against any of the officers, directors or employees of the Company or any of its Subsidiaries with respect to or its businesses), or pending or threatened by the Company or any of its Subsidiaries against any Person, at law or in equity, or before or by any Governmental Entity (including any actions, suits, proceedings or investigations with respect to the transactions contemplated by this Agreement) that would result in material liability, either individually or in the aggregate, to the Company and its Subsidiaries; and (ii) neither the Company nor any of its Subsidiaries is subject to any arbitration proceedings under collective bargaining agreements or otherwise or any governmental investigations or inquiries. The foregoing includes, without limitation, written actions pending or threatened involving the prior employment of any of the current employees of the Company or any of its Subsidiaries, their use in connection with the Company’s or any of its Subsidiaries’ business of any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. As of the date hereof, neither the Company nor any of its Subsidiaries is subject to any judgment, order or decree of any court or other governmental agency or self-regulatory organization, and neither the Company nor any of its Subsidiaries has received any opinion or memorandum or advice from legal counsel or compliance personnel to the effect that it is exposed, from a legal standpoint, to any liability which may be (individually or in the aggregate) material to its business.

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6P. Brokerage

There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement to which the Company or any of its Subsidiaries is a party or to which the Company or any of its Subsidiaries is bound.

6Q. Insurance

The Company and each of its Subsidiaries maintains commercially reasonable levels of insurance with respect to its properties, assets and business, and each such policy is in full force and effect as of the date hereof. Neither the Company nor each of its Subsidiaries is in default in any material respect with respect to its obligations under any insurance policy maintained by it. Neither the Company nor each of its Subsidiaries has any self-insurance or co-insurance programs.

6R. Employees

To the Company’s knowledge, no executive officer of the Company or any of its Subsidiaries and no key group of employees or independent contractors of the Company or any of its Subsidiaries has any plans to terminate employment with the Company or its Subsidiaries. The Company and each of its Subsidiaries have complied in all material respects with all Laws relating to the employment of labor (including, without limitation, provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other taxes) and have complied in all material respects with all Laws related to the licensing of employees under its applicable Licenses. To the Company’s knowledge, the Company is not a party to any deferred compensation arrangement subject to Section 409A of the Code that does not comply with the requirements of Sections 409A(b)(2), (3), and (4).

6S. ERISA

(i) Neither the Company nor any of its Subsidiaries maintains, contributes to or has any actual or potential material liability with respect to any (x) “employee pension benefit plan” (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) (a “Savings Plan”), (y) “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) (a “Welfare Plan”) or (z) to the Company’s knowledge, any nonqualified deferred compensation, incentive, bonus, severance, retention, change-in-control, material fringe benefit, stock bonus or other material benefit arrangements (collectively (x), (y) and (z) above referred to as the “Plans”).

(ii) Neither the Company nor any of its Subsidiaries maintains, contributes to or has any actual or potential liability with respect to any active or terminated, funded or unfunded (w) employee benefit plan subject to Section 412 of the Code or Section 302 of Title I of ERISA, (x) multiemployer plan (as defined in Section 3(37) of ERISA), (y) defined benefit plan (as defined in Section 3(35) of ERISA) or (z) plan or arrangement to provide medical, health, life insurance or other welfare-type benefits for current or future retired or terminated employees (except for continued health benefit coverage required to be provided under Section 4980B of the Code or similar state Law).

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(iii) The Company has provided to the Investors accurate and complete copies of each of the Plans and any related trusts, insurance contracts or other agreements, the most recent IRS favorable determination letter (if any) issued with respect to any Savings Plan, IRS Form 5500s (including all attachments) for any Savings Plan and any Welfare Plan for the most recently completed plan year (unless the time for filing such 5500, including extensions has not yet passed, in which case the last filed 5500 shall be provided) and the most recent financial statement with respect to any Savings Plan.

(iv) Each of the Plans and all related funding arrangements materially comply in all material respects in form and operation with its terms and the applicable requirements of ERISA, the Code and any other Laws. Any Savings Plan has received a favorable GUST determination letter that it qualifies under the Code (and that its trust is exempt from Tax under the Code). Neither the Company nor any of its Subsidiaries has taken any action and, to the knowledge of the Company, nothing has occurred since the date of such favorable determination letter that could reasonably be expected to adversely affect the qualified status of any Savings Plan or the tax-exempt status of the trust. No asset of the Company or any of its Subsidiaries is subject to any Lien under ERISA or the Code. No Welfare Plan is self-insured.

(v) None of the Company or any of its Subsidiaries, nor, to the knowledge of the Company, any trustee or administrator of any Plan or other Person has engaged in any transaction with respect to any Plan which could subject the Stockholders or any of its employees to any material Tax, penalty or other liability imposed by ERISA or the Code. No material actions, suits, investigations, inquiries, audits or written claims with respect to any of the Plans (other than routine claims for benefits) are pending or, to the knowledge of the Company, threatened, and the Company is not aware of any facts or circumstances which could reasonably be expected to give rise to any such actions, suits, investigations, inquiries, audits or claims. The Company has complied in all material respects with the requirements of Section 4980B of the Code and Section 601 et seq. of ERISA (“COBRA”). To the Company’s knowledge, each individual who has received compensation for the performance of services on behalf of the Stockholders has been properly classified as an employee or independent contractor in accordance with applicable laws and each Plan has complied in all material respects with the “leased employee” provisions of the Code, if applicable. All contributions which are due under each of the Plans has been made, and all other contributions not yet due have been properly accrued for by the Company and its Subsidiaries. None of the Plans has any unfunded liabilities which are not fully accrued on the Latest Balance Sheet. The Company and its Subsidiaries have complied in all material respects with all reporting and disclosure obligations with respect to the Plans.

(vi) Neither the Company nor any of its Subsidiaries nor any affiliate has any material liability with respect to any “employee benefit plan” (as defined in Section 3(3) of ERISA) solely by reason of being treated as a single employer under Section 414 of the Code with any trade, business or entity other than the Company and its Subsidiaries.

6T. Compliance with Laws; Licenses; Certain Operations

(i) To the Company’s knowledge, the Company and its Subsidiaries are, and since January 1, 2012 have been, in compliance in all material respects with all applicable Laws of all Governmental Entities. No written notices have been received by and no claims have been filed against the Company or any of its Subsidiaries alleging a violation of any such Laws. To the Company’s knowledge, neither the Company nor any of its Subsidiaries is under investigation with respect to violations of such Laws.

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(ii) Since January 1, 2012, the Company and its Subsidiaries hold and are in compliance in all material respects with all Licenses of or from Governmental Entities required for the conduct of their businesses as presently conducted and the ownership of their properties, and the attached Licenses Schedule sets forth a list of all of such Licenses; and no written notices have been received by the Company or any of its Subsidiaries alleging the failure to hold any of the foregoing. All of such Licenses will be available for use by the Company and its Subsidiaries immediately after the Closing.

(iii) To the Company’s knowledge, neither the Company nor any of its Subsidiaries has at any time made any bribes, kickback payments or unlawful compensation payments to Government Officials to obtain or retain business. The Company represents that it has not (and has not permitted any of its Subsidiaries or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any Non-U.S. Official, in each case, in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any other similar applicable U.S. federal or state or non-U.S. Laws (the “FCPA”), the U.K. Bribery Act, or any other applicable anti-bribery or anticorruption law.

(iv) Neither the Company nor any of its Subsidiaries, nor any of their officers or directors, nor any agent acting on their behalf (i) has been or is designated on the OFAC’s Specially Designated Nationals and Blocked Persons List, Commerce’s Denied Persons List, the Commerce Entity List, the State Department Debarred List, or any similar list of a Governmental Entity. Neither the Company nor any of its Subsidiaries has (ii) participated in any transaction involving such designated person or entity, or any country that is subject to U.S. sanctions administered by OFAC and would be in violation of the OFAC sanctions regulations and (iii) exported or re-exported, directly or indirectly, any good, technology or service in violation of any applicable U.S. export control or economic sanctions laws, regulations or orders administered by OFAC, Commerce or the State Department.

6U. Affiliated Transactions

No officer, director, shareholder or Affiliate of the Company (other than any of its Subsidiaries) or, to the Company’s knowledge, any individual related by blood, marriage or adoption to any such individual or any entity in which any such Person or individual owns any beneficial interest, is a party to any material agreement, contract, commitment or transaction with the Company or any of its Subsidiaries or has any interest in any property used by the Company or any of its Subsidiaries (including any Company Intellectual Property Rights).

6V. Real Property

Section 6(w) of the Company Disclosure Letter sets forth a list of all leases, subleases, licenses or other agreements for the use or occupancy of any real property (the “Leased Real Property”) (including all amendments) held by the Company or any of its Subsidiaries (collectively, the “Leases”) and the address for each Leased Real Property. The Company has delivered or made available to the Investors a true and complete copy of each material Lease. With respect to each of the Leases: (i) the Lease is valid, binding and enforceable against the Company and its Subsidiaries, as applicable, and, to the knowledge of the Company, against the other parties thereto, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles of equity, and in full force and effect; (ii) the consummation of the transactions contemplated hereunder will not result in a breach of or default under the Lease;

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(iii) neither the Company, any of its Subsidiaries nor, to the Company’s knowledge, any other party to the Lease is in material breach or default under the Lease; (iv) neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, the other party to the Lease has repudiated any term thereof; and (v) neither the Company or any of its Subsidiaries has assigned, subleased, mortgaged, deeded in trust or otherwise transferred or encumbered the Lease or any interest therein. The Company and all of its Subsidiaries have valid title to all owned real property.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS

As a material inducement to the Investors to enter into this Agreement and purchase the Series B Preferred hereunder, each Selling Stockholder, severally as to itself and not jointly with any other, or as to any other, Selling Stockholder hereby represents and warrants to the Investors and the Company as follows:

7A. Capacity; Power and Authority

Such Selling Stockholder possesses all requisite capacity, power and authority to enter into and carry out the transactions contemplated by this Agreement.

7B. Authorization; No Breach

This Agreement and all other agreements contemplated hereby to which such Selling Stockholder is a party, when executed and delivered by such Selling Stockholder in accordance with the terms hereof, shall each constitute a valid and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles of equity. The execution and delivery by such Selling Stockholder of this Agreement and all other agreements contemplated hereby to which such Selling Stockholder is a party, the repurchase of such Selling Stockholder’s shares of Common Stock hereunder, and the fulfillment of and compliance with the respective terms hereof and thereof by such Selling Stockholder, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation of any lien, security interest, charge or encumbrance upon such Selling Stockholder’s assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any third party or any Governmental Entity pursuant to, any Law to which such Selling Stockholder is subject, or any agreement, instrument, order, judgment or decree to which such Selling Stockholder is subject.

7C. Title to Shares, Etc

Such Selling Stockholder is the sole record and beneficial owner of, and has good and marketable title to, the shares of Common Stock set forth adjacent to such Selling Stockholder’s name on the Schedule of Selling Stockholders, free and clear of all Liens, agreements, voting trusts, proxies and other arrangements or restrictions of any kind whatsoever (collectively, “Encumbrances”), other than Encumbrances created by this Agreement, the Voting Agreement and restrictions on transfer under applicable federal and state securities laws. At the Closing, such Selling Stockholder shall assign, transfer, and contribute to the Company good and marketable title to shares of Common Stock set forth adjacent to such Selling Stockholder’s name on the Schedule of Selling Stockholders free and clear of all Encumbrances, other than Encumbrances created by the Voting Agreement and restrictions on transfer under applicable federal and state securities laws.

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7D. Brokerage

Except as set forth on the attached Brokerage Schedule, there are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement to which such Selling Stockholder is a party or to which such Selling Stockholder is subject.

7E. Litigation, Etc

As of the date hereof, there are no actions, suits, proceedings (including any arbitration proceedings), orders, investigations or claims pending or, to such Selling Stockholder’s knowledge, threatened against or affecting such Selling Stockholder in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated hereby.

7F. Representations and Warranties of the Company

To the actual knowledge of such Selling Stockholder, each of the representations and warranties contained in ARTICLE 6 are true and correct in all respects as of the date hereof and as of the Closing.

7G. Access to Data

Such Selling Stockholder has had an opportunity to ask questions of, and receive answers from, the officers of Company concerning this Agreement and any Transaction Agreements and transactions contemplated hereby and thereby, as well as the Company’s business, management and financial affairs. Such Selling Stockholder believes that it has received all the information such Selling Stockholder considers necessary or appropriate for deciding whether to enter into this Agreement and any Transaction Agreements to which it is a party and to accept an amount equal to such Selling Stockholder’s portion of the Common Stock Purchase Price allocable to such Selling Stockholder set forth on the Schedule of Selling Stockholders attached hereto as consideration payable by the Company in connection with the Repurchase Transaction.

7H. Advisors; Tax Liability

Such Selling Stockholder has reviewed with its own counsel and advisors the federal, state, local and foreign Tax consequences of the transaction contemplated by this Agreement and any Transaction Agreements to which such Selling Stockholder is a party. Such Selling Stockholder acknowledges that it is relying solely on its own counsel and not on any statements or representations of the Company or its agents for legal or Tax advice with respect to this Agreement, the Transaction Agreements and transactions contemplated hereby and thereby. Such Selling Stockholder understands that it (and not the Company) shall be responsible for any Tax liability of such Selling Stockholder that may arise as a result of the transaction contemplated by this Agreement and any Transaction Agreements to which such Selling Stockholder is a party.

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ARTICLE 8

REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

As a material inducement to the Company and the Selling Stockholders to enter into this Agreement and take the actions set forth in ARTICLE 1 and ARTICLE 2, each Investor hereby represents and warrants to the Company and the Selling Stockholders as follows:

8A. Organization, Power and Authority

Such Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Such Investor possesses all requisite power and authority necessary to enter into and carry out the transactions contemplated by this Agreement.

8B. Authorization; No Breach

The execution, delivery and performance of this Agreement and all other agreements contemplated hereby to which such Investor is a party have been duly authorized by such Investor. This Agreement and all other agreements contemplated hereby to which such Investor is a party, when executed and delivered by such Investor in accordance with the terms hereof, shall each constitute a valid and binding obligation of such Investor, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws from time to time in effect which affect creditors’ rights generally and by general principles of equity. The execution and delivery by such Investor of this Agreement and all other agreements contemplated hereby to which such Investor is a party, the purchase of shares of Series B Preferred hereunder, and the fulfillment of and compliance with the respective terms hereof and thereof by such Investor, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation of any lien, security interest, charge or encumbrance upon such Investor’s assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any Governmental Entity pursuant to, the organizational documents of such Investor, or any Law to which such Investor is subject, or any agreement, instrument, order, judgment or decree to which such Investor is subject.

8C. Brokerage

There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement to which such Investor is a party or to which such Investor is subject.

8D. Investment Representations

(i) Such Investor is acquiring Restricted Securities hereunder for its own account with the present intention of holding such securities for purposes of investment, and such Investor has no intention of selling such securities in a public distribution in violation of the federal securities Laws or any applicable state securities Laws; provided that nothing contained herein shall prevent such Investor or any subsequent holder of such Restricted Securities from transferring such securities in compliance with the provisions of Paragraph 12C below.

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(ii) Such Investor is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

(iii) Such Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company and acknowledges that such Investor can protect its own interests. Such Investor has such knowledge and experience in financial and business matters so that such Investor is capable of evaluating the merits and risks of its investment in the Company.

(iv) Such Investor understands and acknowledges that the Company has a limited financial and operating history and that an investment in the Company is highly speculative and involves substantial risks. Such Investor can bear the economic risk of its investment and is able, without impairing the Investor’s financial condition, to hold the Preferred Stock and the Common Stock issuable on conversion of the Preferred Stock for an indefinite period of time and to suffer a complete loss of such Investor’s investment.

(v) Such Investor understands that the Restricted Securities to be purchased by it hereunder have not been registered under the Securities Act on the basis that the sale provided for in this Agreement is exempt from the registration provisions thereof and that the Company’s reliance on such exemption is predicated in part upon the representations of the Investors set forth herein.

(vi) Such Investor understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company’s securities.

8E. Rule 144

Such Investor acknowledges that the Preferred Stock and the Common Stock issuable on conversion of the Preferred Stock must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. Such Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “brokers’ transaction,” a transaction directly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable. Such Investor understands that the current public information referred to above is not now available and the Company has no present plans to make such information available. Such Investor acknowledges and understands that notwithstanding any obligation under the Investors’ Rights Agreement, the Company may not be satisfying the current public information requirement of Rule 144 at the time the Investor wishes to sell the Preferred Stock and the Common Stock issuable on conversion of the Preferred Stock, and that, in such event, such Investor may be precluded from selling such securities under Rule 144, even if the other applicable requirements of Rule 144 have been satisfied. Such Investor acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Preferred Stock and the Common Stock issuable on conversion of the Preferred Stock. Such Investor understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a

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registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

8F. Access to Data

Such Investor has had an opportunity to ask questions of, and receive answers from, the officers of the Company concerning this Agreement and all of the other agreements and instruments contemplated hereby to which Such Investor is a party, as well as the Company’s business, management and financial affairs, which questions were answered to its satisfaction. Such Investor believes that it has received all the information such Investor considers necessary or appropriate for deciding whether to purchase the Series B Preferred and the Common Stock issuable on conversion of the Preferred Stock. Such Investor acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. Such Investor also acknowledges that it is relying solely on its own counsel and not on any statements or representations of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement and all of the other agreements and instruments contemplated hereby to which Such Investor is a party. The foregoing, however, does not limit or modify the representations and warranties of the Company in ARTICLE 6 of this Agreement or the right of the Investors to rely thereon.

8G. Tax Advisors

Each Investor has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences to such Investor of this investment and the transactions contemplated by this Agreement and all other agreements contemplated hereby to which such Investor is a party. With respect to such matters, such Investor relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. Such Investor understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement and all other agreements contemplated hereby to which such Investor is a party.

8H. Legends

Such Investor understands and agrees that the certificates evidencing the Series B Preferred and the Common Stock issuable on conversion of the Preferred Stock, or any other securities issued in respect thereof upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall bear the following legend (in addition to any legend required by the Investors’ Rights Agreement or under applicable state securities laws):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

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8I. Litigation, Etc

As of the date hereof, there are no actions, suits, proceedings (including any arbitration proceedings), orders, investigations or claims pending or, to such Investor’s knowledge, threatened against or affecting such Investor in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated hereby.

ARTICLE 9

INDEMNIFICATION AND OTHER AGREEMENTS

9A. Survival of Representations and Warranties

The representations and warranties in this Agreement and the schedules attached hereto or in any writing delivered by any Party to another Party in connection with this Agreement shall survive the Closing as follows:

(i) the representations and warranties in Paragraphs 6A, 6B(i), 6B(ii), 6B(iii), 6C, 6D (the first two sentences), 6N(i), 6N(vi), 7A, 7B, 7C, 7D, 8A, 8B (the first two sentences) and 8C (each, an “Excluded Representation”) shall survive until the applicable statute of limitations for which an Indemnitee may have liability thereunder; and

(ii) all other representations and warranties in this Agreement (and the Parties’ right to make indemnification claims hereunder based on such representations) shall terminate on the first anniversary of the date hereof;

provided that a Party’s right to seek indemnification pursuant to Paragraph 9B for any particular inaccuracy or breach shall survive the time at which it would otherwise terminate pursuant to this Paragraph 9A if a Claim Notice shall have been delivered to the Party against whom such indemnity may be sought prior to such time (regardless of when Losses in respect thereof may actually be incurred).

9B. General Indemnification

(i) Indemnification by the Company. Subject to the applicable limitations set forth in this ARTICLE 9, the Company shall indemnify each of the Investor Parties and save and hold each of them harmless against and pay on behalf of or reimburse such Investor Parties as and when incurred for Losses which any such Investor Party suffers, sustains or becomes subject to as a result of: (a) any breach of any representation or warranty of the Company under this Agreement; (b) any nonfulfillment or breach of any covenant, agreement or other provision under this Agreement by the Company; provided that (i) the Company shall not be liable to indemnify any of the Investor Parties pursuant to clause (a) above (other than with respect to any Excluded Representation unless and until the Losses related thereto exceed an amount equal to $2,500,000 in the aggregate (the “Basket”); (ii) the Company’s aggregate cash liability under clauses (a) and (b) above (other than with respect to the Excluded Representations) shall in no event exceed $20,000,000, but with it being understood, however, that nothing in this Agreement (including this Paragraph 9B) shall limit or restrict any of the Investor Parties’ right to maintain or recover any amount from the Company in connection with any action or claim based upon fraud or intentional misrepresentation).

For purposes of determining under ARTICLE 6 the inaccuracy or breach of any representation or warranty herein or in any instrument or document delivered hereunder and the amount of any Losses that are indemnifiable hereunder, each such representation and warranty (other than the representation and

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warranty contained in the first sentence of Paragraph 6H) shall be read without regard and without giving effect to any materiality or Material Adverse Effect or similar qualification contained therein (as if such standard or qualification were deleted from such representation or warranty). For the avoidance of doubt, the Parties agree that the dollar thresholds contained in Paragraphs 6M(i)(a), 6M(i)(d) and 6M(i)(e) shall not be disregarded by operation of the preceding sentence.

All indemnification payments received by any Investor Party under this Paragraph 9B(i) shall be deemed adjustments to the Preferred Stock Purchase Price in respect of such Investor.

(ii) Indemnification by the Selling Stockholders. Each of the Selling Stockholders shall severally and not jointly indemnify the Company Parties and save and hold each of them harmless against and pay on behalf of or reimburse such Company Party as and when incurred for any Losses in excess of the Basket (as defined in Section 9B(i)) which any such Company Party suffers, sustains or becomes subject to, as a result of: (a) any breach of any representation or warranty of such Selling Stockholder under this Agreement; or (b) any nonfulfillment or breach of any covenant, agreement or other provision in this Agreement by such Selling Stockholder; provided that a Selling Stockholder’s aggregate liability under clauses (a) and (b) above (other than with respect to the Excluded Representations) shall in no event exceed the amount paid to such Selling Stockholder in the Repurchase Transaction (the “Stockholder Cap”), but with it being understood, however, that nothing in this Agreement (including this Paragraph 9B) shall limit or restrict any of the Company Parties’ right to maintain or recover any amount from a particular Selling Stockholder in connection with any action or claim based upon fraud or intentional misrepresentation. For purposes of determining the inaccuracy or breach of any representation or warranty in ARTICLE 7 and the amount of any Losses that are indemnifiable hereunder, each such representation and warranty (including any representation or warranty referenced therein) shall be read without regard and without giving effect to any materiality or Material Adverse Effect or similar qualification contained therein (as if such standard or qualification were deleted from such representation or warranty). The indemnification obligations of each Selling Stockholder shall be several and not joint and no Selling Stockholder shall have any liability for any breach of representation or warranty by any other Selling Stockholder. All indemnification payments made by Selling Stockholders under this Paragraph 9B(ii) shall be deemed adjustments to the amount paid to such Selling Stockholder in the Repurchase Transaction.

(iii) Indemnification by the Investors. Each of the Investors shall severally and not jointly indemnify the Company Parties and save and hold each of them harmless against and pay on behalf of or reimburse such Company Party as and when incurred for Losses which any such Company Party may suffer, sustain or become subject to, as a result of: (a) any breach of any representation or warranty of the Investors under ARTICLE 8 of this Agreement; or (b) any nonfulfillment or breach of any covenant, agreement or other provision by the Investors under this Agreement

(iv) Nature of Certain Indemnification Obligations. The representations and warranties of each of the Selling Stockholders in ARTICLE 7 of this Agreement and the covenants and agreements made by each of the Selling Stockholders under this Agreement in such Selling Stockholder’s individual capacity that are required to be performed or complied with by such Selling Stockholder after the Closing (such as those set forth in Paragraph 9C of this Agreement) are several obligations. This means that the particular Selling Stockholder making the representation, warranty, covenant or agreement will be solely responsible for any Losses the Company Parties may suffer as a result of any breach or nonfulfillment of any such representations, warranties, covenants or agreements.

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(v) Manner of Payment. Except as otherwise provided in this Paragraph 9B, any indemnification of the Investor Parties or the Company Parties pursuant to this Paragraph 9B shall be effected by wire transfer of immediately available funds from one or more of the Company, the Selling Stockholders or the Investors, as the case may be, to an account designated by any Investor Party or Company Party, as the case may be, within 15 days after the determination thereof.

(vi) Claims; Defense of Third Party Claims. Upon the occurrence of any event that any Person making a claim for indemnification (an “Indemnitee”) asserts to be the basis for a claim for indemnification against any Person obligated to provide indemnification to such Indemnitee (an “Indemnitor”) under this Paragraph 9B (a “Claim”), the Indemnitee shall deliver a Claim Notice to the Indemnitor in respect of the Claim in writing promptly after obtaining knowledge of the circumstances giving rise to such Claim (including, with respect to any Claim arising from any action, lawsuit, proceeding, investigation, demand or other claim by a third party (a “Third Party Claim”), receiving written notice of such Third Party Claim). For purposes hereof, a “Claim Notice” shall mean a certificate signed by an officer of such Party (A) stating that such Party has may suffer, sustain or become subject to Losses and specifying the individual items of Losses included in the amount so stated, (B) describing the Claim in reasonable detail, including the nature of the facts giving rise to such Claim and the basis thereof (specifying the applicable representation, warranty or covenant), and (C) together with supporting documentation as needed to provide the factual basis for such Claim, the amount reasonably necessary to satisfy such Claim, and the basis thereof. The delay or failure to so notify the Indemnitor shall not relieve the Indemnitor of its obligations hereunder except to the extent that (and only to the extent that) such failure shall have caused the damages for which the Indemnitor is obligated to be greater, in the reasonable estimation of the trier of fact, than such damages would have been had the Indemnitee given prompt notice hereunder. The Indemnitee shall respond promptly and in good faith to reasonable inquiries from the Indemnitor related to such Claim Notice. Whenever the Indemnitee shall have delivered a Claim Notice to the Indemnitor, the Indemnitor may, within thirty (30) days after receipt of such Claim Notice, notify the Indemnitee that the Indemnitor disputes the Claim for indemnification set forth in the Claim Notice, setting forth in reasonable detail the nature of the objections to the Claim in dispute (a “Dispute Notice”). If no Dispute Notice is delivered to the Indemnitee within such thirty (30) day period, such Claim shall be deemed valid, and the Indemnitor shall be obligated to pay the Indemnitee the amount specified in the Claim Notice with respect to such Claim. With respect to any Third Party Claim, the Indemnitor shall be entitled to control the defense of the action, lawsuit, proceeding, investigation, demand or other claim giving rise to such Claim. The Indemnitee shall reasonably cooperate with the Indemnitor in connection with the investigation and defense of such Third Party Claim and shall be entitled to participate in, but not determine or conduct, the defense of such Third Party Claim, and employ counsel of its own choice for such purpose, at its own expense, and at its option. The Indemnitee and its counsel and other representatives shall not communicate with the claimants with respect to any Third Party Claim, or their counsel or other representatives, about matters which may be relevant to such Third Party Claim or its defense or resolution, without the prior consent of the Indemnitor.

(vii) Losses Net of Insurance. The amount of any Loss for which indemnification is provided under this Paragraph 9B shall be net of any amounts actually recovered by the Indemnitee as a result of such Loss under insurance policies and any amount so recovered after the payment of indemnity shall be remitted to the Indemnitor(s) and, if more than one, on a pro rata basis based on the amount of indemnity originally paid.

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(viii) Mini-Basket; Limitation on Diminution in Value Claims. Notwithstanding anything herein to the contrary, the Investors shall not be entitled to any indemnification for (x) any individual event, occurrence, condition or set of facts or circumstances that would otherwise be indemnifiable pursuant to Paragraph 9B (other than with regard to Excluded Representations) where the aggregate Loss actually incurred by the Company with respect thereto (together with Losses from any substantially similar event, occurrence, condition or set of facts or circumstances) is less than One Hundred Thousand Dollars ($100,000) or (y) any portion of a Loss which is based on the diminution in value of the Series B Preferred resulting from the event, occurrence, condition or facts or circumstances on which the indemnification claim was based.

(ix) Sole Remedy. Except as set forth in Paragraph 9C, the Parties each acknowledge and agree that, following the Closing, the indemnification provisions in this Paragraph 9B shall be the sole and exclusive remedy of the Parties for all matters arising under or relating to this Agreement, except in the case of fraud or intentional misrepresentation, in which case the party being subject to such fraud or intentional misrepresentation shall have all rights and remedies under this Agreement and provided by law against the party that committed such fraud or intentional misrepresentation.

9C. Special Indemnification

Notwithstanding anything to the contrary, including, but not limited to, any limitations on indemnification set forth in Paragraph 9B and any disclosures made by the Company or any other persons to the Investors on the Company Disclosure Letter attached hereto or otherwise or any knowledge of the Investors or their representatives or advisors, in the event that the Company incurs aggregate Losses related to or incurred in connection with any failure by the Company to comply with any United States economic sanctions and export control laws, orders and regulations, including those administered by the OFAC, Commerce, and any related state or local laws in excess of $10,000,000 (collectively, the “Excess Export Losses”, which, for the avoidance of doubt, shall apply to all Indemnitors), the Selling Stockholders will indemnify the Investors and hold them harmless from and against an amount (the “Export Loss Indemnity Amount”) equal to the product of (i) the Excess Export Losses and (ii) the quotient, expressed as a decimal, determined by dividing (i) the number of shares of Common Stock into which the Series B Preferred Stock then held by the Investors is then convertible by (ii) the total number of shares of Common Stock outstanding at such time (on an as-converted basis). The Export Loss Indemnity Amount shall be satisfied by a cash payment of the Export Loss Indemnity Amount by each Selling Stockholder equal to the Export Loss Indemnity Amount multiplied by such Selling Stockholders Indemnity Percentage, as set forth on the Schedule of Selling Stockholders, attached hereto. The liability of each Selling Stockholder pursuant to this Paragraph 9C shall be capped at the Repurchase Transaction Proceeds received by such Selling Stockholder as set forth on the Schedule of Selling Stockholders attached hereto. All payments to the Investors under this Paragraph 9C shall be allocated among the Investors pro rata in accordance with each Investors’ relative ownership interest in the Series B Preferred Stock at Closing (as set forth on the Schedule of Investors attached hereto). All indemnification payments under this Paragraph 9C shall be deemed to be adjustments to the purchase price paid by the Investors hereunder. All obligations of the Selling Stockholders pursuant to this Paragraph 9C shall expire upon the earlier of (i) twenty-four (24) months from the date hereof or (ii) a Public Offering (as defined in the Company’s Certificate of Incorporation). An example of how the special indemnification provided in this Paragraph 9C would operate is as follows:

[Remainder of page intentionally left blank]

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SPECIAL INDEMNITY EXAMPLE – FOR ILLUSTRATIVE PURPOSES ONLY

Calculation of Export Loss Indemnity Amount
	$	20,000,000			Illustrative Export Losses
		(10,000,000	)		Deductible
	$	10,000,000		“A”	Excess Export Losses
		22,727,913			Series B Preferred Stock held by Investors (on an as converted basis)
		135,912,942			Total Common Stock outstanding (on as-converted basis), at time of payment
		16.7	%	“B”
	$	1,672,241		“C”= “A” x “B”	Export Loss Indemnity Amount
Calculation for Payment from Selling Stockholders
		4,500,000			Shares sold by Dean Drako
		1,404,127			Shares sold by Michael Perone
		16,825,766			Shares sold by Zach Levow
		22,727,913			Total shares sold by Selling Stockholders
		19.8	%	“D”	Dean Drako’s Indemnity Percentage
		6.2	%	“E”	Michael Perone’s Indemnity Percentage
		74.0	%	“F”	Zach Levow’s Indemnity Percentage
	$	331,094		“D” x “C”	Cash payment by Dean Drako
	$	103,165		“E” x “C”	Cash payment by Michael Perone
	$	1,237,981		“F” x “C”	Cash payment by Zach Levow
	$	1,672,241		“C”	Export Loss Indemnity Amount
Calculation for Payment to Investors
		14,204,946			Series B Preferred Stock shares purchased by FP
		8,522,967			Series B Preferred Stock shares purchased by Sequoia
		22,727,913			Total Series B shares purchased by Investors
		62.5	%	“G”	FP’s percentage ownership interest of Series B Preferred Stock
		37.5	%	“H”	Sequoia’s percentage ownership interest of Series B Preferred Stock
	$	1,045,150		“G” x “C”	Cash payment to FP
	$	628,090		“H” x “C”	Cash payment to Sequoia
	$	1,672,241		“C”	Export Loss Indemnity Amount

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9D. Certain Waivers

Each Selling Stockholder agrees that such Selling Stockholder and its Affiliates shall not make or have any right to make any claim for indemnification against the Company or any of its Affiliates by reason of the fact that he or it is or was a shareholder, director, officer, employee or agent of the Company or any of its Affiliates or is or was serving at the request of the Company as a director, officer, employee or agent of another entity (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses or otherwise and whether such claim is pursuant to any statute, charter document, bylaw, agreement or otherwise) with respect to any action, suit, proceeding, complaint, claim or demand brought by any of the Investor Parties against such Selling Stockholder pursuant to this Agreement, and each Selling Stockholder hereby acknowledges and agrees that such Selling Stockholder shall not have any claim or right to contribution or indemnity from the Company or any of its Affiliates with respect to any amounts paid by such Selling Stockholder pursuant to this ARTICLE 9. Effective upon the Closing, each of the Selling Stockholders hereby irrevocably waives, releases and discharges, and shall cause its Affiliates to irrevocably waive, release and discharge, the Company Parties and all of their Affiliates from any and all liabilities and obligations to such Selling Stockholder of any kind or nature whatsoever, whether in its or his capacity as a shareholder, officer or director of the Company or otherwise (other than compensation as an employee of the Company), in each case whether absolute or contingent, liquidated or unliquidated, and whether arising under any agreement or understanding (other than this Agreement and any of the other agreements executed and delivered in connection herewith) or otherwise at law or equity, and no Selling Stockholder or its Affiliates shall seek to recover any amounts in connection therewith or thereunder from the Stockholders. In no event shall the Company have any liability to any of the Selling Stockholders or any of their Affiliates whatsoever for any breaches of the representations, warranties, agreements or covenants of the Selling Stockholders hereunder.

9E. Press Release and Announcements

Unless required by law (in which case each Party agrees to consult with the other Parties prior to any such disclosure as to the form and content of such disclosure), no press releases or other releases of information related to this Agreement or the transactions contemplated hereby will be issued or released by any Party without the consent of the Company, the Investors and the Selling Stockholders; provided, however, that it is understood and agreed that the Company may make any such filings that are required by applicable federal or state securities Laws, including but not limited to the filing of a Form D within the meaning of Regulation D, promulgated by the Securities and Exchange Commission, without consulting with or obtaining consent from the other Parties prior to such filings if such filings are approved by the Company’s Board of Directors.

9F. Confidentiality

Each Selling Stockholder and each Investor agrees not to disclose or use at any time (and shall cause each of its Affiliates not to disclose or use at any time) any Confidential Information (whether or not such information is or was developed by the Selling Stockholders), except to the extent that such disclosure or use is undertaken in good faith in connection with the performance of such Selling Stockholder’s or Investor’s (as the case may be) duties to the Company and its Subsidiaries. Each Selling Stockholder and each Investor further agrees to take all appropriate steps (and to cause or its Affiliates to take all appropriate steps) to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event that any of the Selling Stockholders or Investors is required by Law to disclose any Confidential Information, such Selling Stockholder or Investor (as the case may be) shall promptly notify the Company in writing (to the extent such notification is permitted by applicable Law), which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with the Company to preserve the confidentiality of such information consistent with applicable Law, but such Selling Stockholder or Investor (as the case may be) shall in any event be permitted to make such disclosure solely to the extent required by Law.

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9G. Further Assurances

In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement or the transactions contemplated hereby, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under ARTICLE 9).

9H. Certain Restrictions

The Company and its Subsidiaries shall not enter into any banking or nonbanking transaction with Green Dot Corporation or any of its subsidiaries (Next Estate Communications and Bonneville Bancorp) (collectively, “Green Dot”) without the prior written consent of Sequoia Capital; provided, however, that this Paragraph 9H shall terminate upon such time as Sequoia Capital and its Affiliates are no longer subject to passivity commitments to the Federal Reserve Board with respect to Green Dot (the “Green Dot Expiration Condition”). Sequoia Capital shall provide the Company with reasonably prompt written notice of the occurrence of the Green Dot Expiration Condition.

9I. Pre-Closing Covenants

The Parties agree as follows with respect to the period of time between the execution of this Agreement and the Closing:

(i) General. Each of the Parties will use his, her, or its reasonable best efforts to take all actions and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the Closing conditions set forth in ARTICLE 3, ARTICLE 4 and ARTICLE 5 above).

(ii) Operation of Business. The Company shall operate its business in the ordinary course consistent with past practices and not engage in any activity described in Paragraph 6J above, except as otherwise contemplated and permitted by the Company’s current business plan and budget approved by the Board of Directors. The Selling Stockholders will not cause or permit the Company or any of its Subsidiaries to engage in any practice, take any action, or enter into any transaction: (a) outside the ordinary course of business; or (b) of the sort described in Paragraph 6J above.

(iii) Preservation of Business. The Company and its Subsidiaries shall, and the Selling Stockholders will cause each of the Company and its Subsidiaries to, use commercially reasonable efforts to keep their business and properties substantially intact, including its present operations, physical facilities, working conditions, insurance policies, and relationships with lessors, licensors, suppliers, customers, and employees.

(iv) Third Party Consents and Approvals. The Company shall use reasonable best efforts to obtain all Third Party Approvals marked with an asterisk (*) on the Closing Condition Schedule and commercially reasonable efforts to get other Third Party Approvals required as a result of the consummation of the transactions contemplated hereby.

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(v) Notice of Developments. The Company and the Selling Stockholders will give prompt written notice to the Investors of any material adverse development causing a breach of any of the representations and warranties in ARTICLE 6 above promptly after becoming aware of such material adverse development and the fact that such material adverse development would cause a breach of a representation and warranty in ARTICLE 6. No disclosure made pursuant to this Paragraph 9I(v) shall be deemed to amend or supplement the schedules attached hereto or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

(vi) Access Rights. The Company and its Subsidiaries shall, and the Selling Stockholders shall cause the Company and its Subsidiaries to, cause each of their respective officers, employees, and agents to give the Investors and their representatives reasonable access, during normal business hours, to the premises, facilities, properties, employees, books, records (including tax records), contracts, and documents of the Company and its Subsidiaries as from time to time may be reasonably requested by the Investors.

(vii) Regulatory Filings. Each of the Investors and the Company shall make all applicable filings, notices, petitions, statements, registrations, submissions of information, applications or submissions of other documents required by any Governmental Entity in connection with the Investment Transaction and the transactions contemplated hereby, including, without limitation, the Notification and Report Forms with the United States Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (“DOJ”) as required by the HSR Act (and each of the Investors and the Company shall use reasonable best efforts to file such forms as soon as practicable, and in no event later than five (5) business days following the execution and delivery of this Agreement).

(viii) Insurance. Prior to Closing, the Company will purchase directors and officers liability insurance with terms and conditions, including premiums and exclusions, that are approved by the Board of Directors. In furtherance of the foregoing, the Investors and the Selling Stockholders will cause their representatives on the Board of Directors to consider and approve a directors and officers liability insurance policy on terms available in the marketplace with coverage reasonably comparable to private companies of the approximate size and in businesses similar to the Company.

(ix) Company Disclosure Letter. The Company and the Selling Stockholders shall mutually deliver to the Investors the Company Disclosure Letter as soon as practicable but in any event within twenty (20) days after the date hereof. The Company and the Selling Stockholders shall cooperate with one another in the production of the Company Disclosure Letter. The Company shall accept for inclusion therein any disclosure that any Selling Stockholder feels is necessary to make the representation and warranty of such Selling Stockholder set forth in Paragraph 7F true and correct (with such modifications as the Company and the Selling Stockholders shall agree are necessary to make such disclosure factually accurate based on the information otherwise available to the Company with respect thereto).

ARTICLE 10

DEFINITIONS

For the purposes of this Agreement, the following terms have the meanings set forth below:

“Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise.

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“Affiliated Group” means any affiliated group as defined in Code §1504 that has filed a consolidated return for federal income tax purposes (or any similar group under state, local or foreign Law) for a period during which the Company or any of its Subsidiaries was a member.

“Cash” means as of any date of determination, the sum of the Company’s and its consolidated Subsidiaries’ actual consolidated cash (bank) balances (net of any bank overdrafts), as adjusted for any deposits in transit, any outstanding checks and any other proper reconciling items, in each case as determined in accordance with GAAP.

“Code” means the Internal Revenue Code of 1986, as amended, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that section regardless of how numbered or classified.

“Company Intellectual Property Rights” means Intellectual Property owned by the Company or its Subsidiaries at any time prior to and through the Closing Date.

“Company Loss” means any Loss which the Company may suffer, sustain or become subject to, as a result of, in connection with, relating or incidental to or by virtue of any matter set forth in Paragraph 8B(i).

“Company Parties” means the Company and its Subsidiaries and each of its Affiliates, shareholders, officers, directors, employees, agents, representatives, successors and permitted assigns.

“Company Products” means the Company’s security solutions (e.g., Barracuda Spam & Virus Firewall, Barracuda Web Filter, Barracuda Web Application Firewall, Barracuda NG Firewall, Barracuda SSL VPN), Networking Solutions (e.g., Barracuda Load Balancer, Barracuda Link Balancer), data protection solutions (e.g., Barracuda Message Archiver, Barracuda Backup Service), and cloud services (Barracuda Web Security Flex, Barracuda Email Security Service).

“Confidential Information” means all information of a confidential or proprietary nature (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the Company or any of its Subsidiaries or their business relations and or its business activities. The term “Confidential Information” shall not apply to any information, documents or materials which are, as shown by appropriate written evidence, in the public domain or, as shown by appropriate written evidence, shall come into the public domain, other than by reason of breach by the applicable party bound hereunder or its Affiliates.

“Equity Incentive Plan” means the Company’s 2004 Stock Option Plan, the Company’s 2012 Stock Option Plan, Purewire, Inc.’s 2008 Stock Incentive Plan and Restricted Stock Units issued by the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal law then in force.

“Fully-Diluted Basis”^„ means, as of the date of determination, all of the Company’s issued and outstanding Common Stock as of such date, assuming the exercise of all outstanding options, warrants, or other rights to acquire the Common Stock and the conversion of all outstanding convertible debt and equity securities and other instruments that are convertible into Common Stock (irrespective of whether (x) the holder of any such convertible, exchangeable or exercisable securities is entitled to convert, exchange or exercise such security as of such date, or (y) such security is “in the money” on such date).

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“GAAP” means United States generally accepted accounting principles.

“Governmental Entity” means (i) any federal, state, local, municipal, foreign or other government; (ii) any governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, entity or self-regulatory organization and any court or other tribunal); or (iii) any body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, or any successor statute, rules and regulations thereto.

“Indebtedness” means at any particular time, without duplication, (i) all indebtedness or other obligations of the Company and its Subsidiaries for borrowed money, whether current, short-term or long-term, secured or unsecured, (ii) all obligations of the Company and its Subsidiaries evidenced by any note, bond, debenture or other similar instrument or debt security, (iii) all indebtedness for the deferred purchase price of property or services with respect to which the Company or any of its Subsidiaries is liable, contingently or otherwise, as obligor or otherwise, which is not evidenced by a trade payable or other current liability, (iv) all obligations of the Company and its Subsidiaries under capitalized leases, (v) any indebtedness secured by a Lien on the assets of the Company or any of its Subsidiaries, and (vi) all guarantees by the Company or any of its Subsidiaries of the obligations of another Person; provided that trade payables incurred in the ordinary course of business and intra-company accounts shall not constitute “Indebtedness.”

“Intellectual Property” means any and all intellectual and proprietary rights, including any of the following: (i) patents and industrial designs (including utility model rights, design rights and industrial property rights), patent and industrial design applications, patent disclosures together with all reissues, continuations, continuations-in-part, revisions, divisionals, extensions, and reexaminations in connection therewith, (ii) internet domain names, trademarks, service marks, trade dress, trade names, logos and corporate names and registrations and applications for registration thereof together with all of the goodwill associated therewith, (iii) copyrights (registered or unregistered) and copyrightable works and registrations and applications for registration thereof, (iv) mask works and registrations and applications for registration thereof, (v) all Software, (vi) trade secrets and other Confidential Information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information).

“Investment” as applied to any Person means (i) any direct or indirect purchase or other acquisition by such Person of any notes, obligations, instruments, stock, securities or ownership interests (including Stockholders interests and joint venture interests) of any other Person and (ii) any capital contribution by such Person to any other Person.

“Investor Parties” means the Investors and their Affiliates, partners, members, officers, directors, employees, agents, representatives, successors and assigns and the Company, to the extent so designated from time to time by the Investors.

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“knowledge” means, when referring to the “knowledge of the Company” or any similar phrase or qualification based on knowledge of the Company, the actual knowledge of any of the Selling Stockholders and David Faugno.

“Law” means any federal, state, local, municipal or foreign statute, law, ordinance, regulation, rule, code, order, principle of common law or judgment enacted, promulgated, issued, enforced or entered by any Governmental Entity.

“Licenses” means all licenses, memberships, registrations, certifications, accreditations, permits, bonds, franchises, approvals, authorizations, consents or orders of, or filings with, any Governmental Entity, necessary for the Company’s and its Subsidiaries business as presently conducted. For the avoidance of doubt, the term “License” shall not include any license of Intellectual Property.

“Lien” or “Liens” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, any sale of receivables with recourse against the Company or any of its Subsidiaries, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute.

“Losses” means any loss, liability, cost, damage, fines, penalties, sanctions, deficiency, Tax, penalty, fine or expense, whether or not arising out of third party claims (including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing). For the avoidance of doubt, the preceding sentence shall include all Losses relating to United States economic sanctions and export control laws, orders and regulations, including those administered by Office of Foreign Asset Control, the United States Department of Commerce, and any related state or local laws.

“Material Adverse Effect” means any change, event, effect, occurrence, or development that, individually or in the aggregate with any such other changes, events, effects, occurrences or developments has had a material adverse effect upon the business, operations, assets, liabilities, financial condition or operating results of the Company and or its Subsidiaries taken as a whole; provided, however, that any adverse change, event or effect arising from or attributable to any of the following shall not be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur with respect to such entity: (i) conditions generally affecting the United States economy or generally affecting the industries in which the Company and or its Subsidiaries operate; (ii) any natural disasters or any national or international political or social conditions, including terrorism or the engagement by the United State in hostilities or acts of war; (iii) any changes in financial, banking or securities markets and any changes in interest rates (including any disruption thereof, or the decline in the price of any security or any market index); (iv) changes in any Laws, (v) the negotiation, entry into, announcement or performance of this Agreement and all of the agreements and instruments contemplated hereby to which the Company is a party (including compliance with the covenants set forth herein, and any action taken or omitted to be taken at the request of the Investors) or the taking of any action contemplated hereby or thereby; or (vi) the resignation of Mr. Drako pursuant to the Separation Agreement; provided, however, that the exclusions in clauses (i), (ii) and (iii) above shall be inapplicable to the extent that such events, conditions or events impact the Company and its Subsidiaries in a manner that is materially disproportionate relative to other Persons engaged in similar commercial activities, in similar geographic areas, as the Company and its Subsidiaries.

“Net Working Capital” means, as of immediately following the Closing and taking into account all payments to be made at or in connection with the Closing, the excess of the Stockholders’s total current assets as of such date (excluding any restricted cash balances) over the Stockholders’s total current liabilities as of such date, in each case as determined on a consolidated basis in accordance with

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GAAP. In determining total current assets and total current liabilities hereunder, (i) all accounting entries shall be taken into account regardless of their amount and all errors and omissions shall be corrected, (ii) all proper adjustments in accordance with GAAP shall be made and (iii) all appropriate reserves as determined in accordance with GAAP shall be included.

“Object Code” means computer software code, substantially or entirely in binary form, which is intended to be directly executable by a computer after suitable processing and linking but without the intervening steps of compilation or assembly.

“Option” means an option to purchase Common Stock (or a grant of restricted shares of Common Stock subject to vesting), and where referred to as a number of Options means the number of shares subject to such Option or the number of restricted shares granted, as applicable.

“Permitted Encumbrances” shall mean (i) statutory liens for current Taxes or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings by the Company (or its Subsidiaries) and for which appropriate reserves have been established in accordance with GAAP; (ii) mechanics’, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the ordinary course of business for amounts which are not delinquent and which are not, individually or in the aggregate, significant; (iii) zoning, entitlement, building and other land use regulations imposed by Governmental Entities having jurisdiction over the Leased Real Property which are not violated by the current use and operation of the Leased Real Property; (iv) covenants, conditions, restrictions, easements and other similar matters of record affecting title to the Leased Real Property which do not materially impair the occupancy or use of the Leased Real Property for the purposes for which it is currently used in connection with the Company’s or any of its Subsidiaries’ business; (v) any interest or title of a lessor or sublessor under any lease of real estate (and any Liens created by such lessor or sublessor on such party’s leasehold); (vi) licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business not materially detracting from the value of the business of the Company and or its Subsidiaries; (vii) any interest or title of a licensor under any license entered into in the ordinary course of business and covering only the assets licensed; (viii) purchase money Liens and Liens securing payments under capital lease arrangements; and (ix) Liens securing indebtedness or liabilities that are reflected in the Financial Statements or incurred in the ordinary course of business since the date of the Latest Balance Sheet.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental Entity.

“Restricted Securities” means (i) the Series B Preferred issued hereunder, (ii) the Common Stock issued upon conversion of the Preferred Stock, (iii) any other securities of the Company held by any of the Parties as of the Closing Date and (iv) any securities issued or exchanged with respect to the securities referred to in clauses (i), (ii) and (iii) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities shall cease to be Restricted Securities when they have been (a) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 (or any similar provision then in force) under the Securities Act or become eligible for sale pursuant to Rule 144 under the Securities Act or (c) otherwise transferred and new certificates for them not bearing the Securities Act legend set forth in Paragraph 8H have been delivered by the Company in accordance with Paragraph 12C(v). Whenever any particular securities cease to be Restricted Securities, the holder thereof shall be entitled to receive from the Company, without expense, new certificates representing such securities of like tenor not bearing a Securities Act legend of the character set forth in Paragraph 8H.

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“Securities Act” means the Securities Act of 1933, as amended, or any successor federal law then in force.

“Sequoia Capital” means Sequoia Capital Franchise Partners, Sequoia Capital Franchise Fund, Sequoia Capital Growth Fund III, Sequoia Capital Growth Partners III and Sequoia Capital Growth III Principals Fund.

“Software” means any and all (i) computer programs, operating systems, applications systems, interfaces, firmware or software code of any nature, whether operational, under development or inactive, including all Object Code, Source Code, rules, definitions, models and methodologies derived from the foregoing and any derivations, updates, enhancements and customization of any of the foregoing, whether in machine-readable form or otherwise and irrespective of the programming language, and whether stored, encoded, recorded or written on disk, tape, film, memory device, paper or other media of any nature; (ii) databases and compilations, including any and all data and collections of data whether machine readable or otherwise; (iii) diagrams, descriptions, schematics, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and (iv) all documentation, including user documentation, user manuals and training materials relating to any of the foregoing.

“Source Code” means human-readable computer software code, in a form other than Object Code form or machine-readable form, including related programmer comments and annotations, help text, data and data structures, object-oriented and other code, which may be printed out or displayed in human-readable form.

“Subject Business” means the Company’s core SMB and Enterprise focused products, including physical appliance, virtual appliance, and cloud versions of: (a) Spam & Virus Firewall, Web Filter, Web Application Firewall, NG Firewall; (b) Load Balancer; and (c) Message Archiver and Backup Service.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the limited liability company, Stockholders or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of the limited liability company, partnership, association or other business entity gains or losses or shall be or control each managing member, managing director or general partner of such limited liability company, partnership, association or other business entity. Notwithstanding anything to the contrary herein, for the purposes of this Agreement, the following entities shall not be Subsidiaries: (i) Barracuda Network AG, an entity formed under the laws of Austria, and formerly known as Phion AG, and its respective Subsidiaries (ii) Third Iris Corporation, an entity formed under the laws of the Cayman Islands, and its respective Subsidiaries and (iii) Nutshell, Inc, a Delaware corporation.

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“Tax” or “Taxes” means federal, state, county, local, foreign or other income, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, payroll, wage or other withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated and other taxes of any kind whatsoever (including deficiencies, penalties, additions to tax, and interest attributable thereto) whether disputed or not.

“Tax Return” means any return, information report or filing with respect to Taxes, including any schedules attached thereto and including any amendment thereof.

“Transaction Agreements” means this Agreement, the Certificate of Incorporation, Voting Agreement, Investors’ Rights Agreement, ROFR Agreement, Management Rights Agreements, and Director Indemnification Agreements.

“Treasury Regulations” means the United States Treasury Regulations promulgated under the Code, and any reference to any particular Treasury Regulation section shall be interpreted to include any final or temporary revision of or successor to that section regardless of how numbered or classified.

ARTICLE 11

TERMINATION

11A. Termination

Except as provided in Paragraph 11A hereof, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing:

(i) By written consent of the Company, each of the Investors and each of the Selling Stockholders; or

(ii) By the Company or the Investors if the Closing Date shall not have occurred by October 1, 2012 (the “End Date”); provided, however, that in the event that the Internal Investigation Report is not delivered to the Investors on or prior to September 21, 2012, the End Date shall automatically be extended to the date which is ten (10) business days after the Internal Investigation Report is delivered to the Investors; and provided, further, that the right to terminate this Agreement under this Paragraph 11A shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a breach of this Agreement; or

(iii) By the Investors, within five (5) business days from the receipt by the Investors of the Company Disclosure Letter, in the event the Company Disclosure Letter discloses any events, occurrences, conditions, facts or circumstances (x) not actually known by the Investors on the date hereof, and (y) which, in the good faith discretion of the Investors, subjects the Company to, or could reasonably be expected to subject the Company to, any material Loss or could reasonably be expected to materially impair the Company’s business, assets, properties, financial condition or prospects.

(iv) By the Investors, in their sole discretion, within five (5) business days from the receipt by the Investors of the Internal Investigation Report.

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11B. Effect of Termination

In the event of termination of this Agreement by any Party as provided above, this Agreement shall forthwith become void and of no further force and effect without any liability on the part of any Party hereto, and all rights and obligations of any Party hereto shall cease, except that Paragraphs 9E, 9F and 11B and ARTICLE 12 shall survive such termination indefinitely.

ARTICLE 12

MISCELLANEOUS

12A. Fees and Expenses

The Investors shall pay all of their own costs, fees and expenses incurred by the Investors in connection with this Agreement and the consummation (or the preparation for the consummation) of the transactions contemplated hereby (including fees and expenses of legal counsel, accountants and other representatives and consultants) (collectively referred to herein as “Investor Expenses”); provided that if the Closing is effected, the Company shall pay the documented, third party Investor Expenses. The Selling Stockholders shall be solely responsible for and shall pay all of the costs, fees and expenses incurred by the Selling Stockholders in connection with this Agreement and the consummation (or the preparation for the consummation) of the transactions contemplated hereby (including fees and expenses of legal counsel) (collectively, referred to herein as “Selling Stockholder Expenses”); provided that if the Closing is effected, the Company shall pay the documented, third party Selling Stockholder Expenses.

12B. Remedies

(i) Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter.

12C. Consent to Amendments

This Agreement may be amended or modified only with the written consent of the Company, the Selling Stockholders and the Investors. Any provision of this Agreement for the benefit of a Party may be waived in a writing executed by such Party and referring specifically to the provision being waived. No course of dealing between or among the Parties shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.

12D. Successors and Assigns

. This Agreement and all of the covenants and agreements contained herein and rights, interests or obligations hereunder, by or on behalf of any of the Parties hereto, shall bind and inure to the benefit of the respective successors and permitted assigns of the Parties hereto whether so expressed or not, except that neither this Agreement nor any of the covenants and agreements herein or rights, interests or obligations hereunder may be assigned or delegated by the Company or the Selling Stockholders, without the prior written consent of the Investors. The rights of each Investor pursuant to this Agreement may be assigned only in connection with, and in proportion to, the transfer by such Investor of shares of Preferred Stock.

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12E. Severability

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

12F. Counterparts

This Agreement may be executed simultaneously in counterparts (including by means of telecopied or electronically transmitted signature pages), any one of which need not contain the signatures of more than one Party, but all such counterparts taken together shall constitute one and the same Agreement.

12G. Descriptive Headings; Interpretation

The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any schedule or exhibit attached hereto and not otherwise defined therein shall have the meanings set forth in this Agreement. The use of the word “including” herein shall mean “including without limitation.” The Parties intend that each representation, warranty and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty or covenant. Any reference to the masculine, feminine or neuter gender shall be deemed to include any gender or all three as appropriate.

12H. Entire Agreement

This Agreement and the schedules attached hereto taken together with the other Transaction Agreements contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings (including that certain term sheet, dated March 23, 2012, by and between Francisco Partners III, L.P. and the Selling Stockholders), whether written or oral, relating to such subject matter in any way.

12I. No Third-Party Beneficiaries

This Agreement is for the sole benefit of the Parties and their successors and permitted assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the Parties and such successors and permitted assigns, any legal or equitable rights hereunder.

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12J. Governing Law

(i) All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the schedules and exhibits attached hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to any choice of law or conflict of laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware shall control the interpretation and construction of this Agreement (and all schedules and exhibits attached hereto), even though under that jurisdiction’s choice of law or conflict of laws analysis, the substantive law of some other jurisdiction would ordinarily apply.

(ii) Notwithstanding anything herein to the contrary, the Selling Stockholders hereto acknowledge and irrevocably agree (i) that any lawsuit, claim, complaint, or action, whether in law or in equity, whether in contract or in tort or otherwise (an “Action”), involving a Selling Stockholder arising out of, or relating to, the Restrictive Covenants shall be subject to the exclusive jurisdiction of any state or federal court sitting in the State of Delaware, and any appellate court thereof and each Selling Stockholder hereto submits for himself and his property with respect to any such Action to the exclusive jurisdiction of such court, (ii) not to bring or permit any of his Affiliates to bring or support anyone else in bringing any such Action in any court, other than the applicable courts specified in the preceding subclause (i), (iii) that service of process, summons, notice or document by registered mail addressed to them at their respective addresses provided herein shall be effective service of process against them for any such Action brought in any such court, (iv) to waive and hereby waive, to the fullest extent permitted by law, any objection which any of them may now or hereafter have to the laying of venue of, and the defense of an inconvenient forum to the maintenance of, any such Action in any such court, and (v) to waive and hereby waive any right to trial by jury in respect of any such Action.

12K. Notices

All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, one (1) day after being sent to the recipient by reputable overnight courier service (charges prepaid), upon machine-generated acknowledgment of receipt after transmittal by facsimile or five (5) days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the Company at the address indicated below, to the Investors at the addresses indicated on the Schedule of Investors attached hereto and to the Selling Stockholders at the addresses indicated on the Schedule of Selling Stockholders attached hereto or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

The Company:

Barracuda Networks, Inc.

3175 Winchester Blvd.

Campbell, California 95008

Attention: David Faugno

Telephone: (408)342-5400

Facsimile: (408)342-1061

Email: dfaugno@barracuda.com

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with a copy to:

(which shall not constitute notice)

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: Steven E. Bochner

                 Michael S. Ringler

                 Mark B. Baudler

Facsimile: (650) 493-6811

Email: mbaudler@wsgr.com

An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Paragraph 12O if sent with return receipt requested to the electronic mail address specified by the receiving party in a signed writing in a nonelectronic form. Electronic Notice shall be deemed received at the time the party sending the Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper in nonelectronic form (“Nonelectronic Notice”), which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.

12L. No Strict Construction

The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

12M. California Corporate Securities Law

THE SALE OF THE PREFERRED STOCK HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

12N. Waiver of Potential Conflicts of Interest

Each of the Investors and the Company acknowledges that Wilson Sonsini Goodrich & Rosati, Professional Corporation (“WSGR”) may have represented and may currently represent certain of the Investors. In the course of such representation, WSGR may have come into possession of confidential information relating to such Investors. Each of the Investors and the Company acknowledges that WSGR is representing only the Company in this transaction. Pursuant to Rule 3-310 of the Rules of Professional Conduct promulgated by the State Bar of California, an attorney must avoid representations in which the attorney has or had a relationship with another party interested in the representation without the informed written consent of all parties affected. By executing this Agreement, each of the Investors and the Company hereby waives any actual or potential conflict of interest which may arise as a result of WSGR’s representation of such persons and entities and WSGR’s possession of such confidential information. Each of the Investors and the Company represents that it has had the opportunity to consult with independent counsel concerning the giving of this waiver.

-43-

12O. Waiver of All Rights

Each of the Investors and the Selling Stockholders, in his or its capacity as a stockholder of the Company, hereby consents to the Investment Transaction and the Repurchase Transaction and irrevocably waives all rights such Person may have to participate in the Investment Transaction or the Repurchase Transaction, except as expressly provided herein. Such waiver includes, without limitation, any preemptive rights such Person may have pursuant to Section 4 of the Investors Rights Agreement and any purchase rights such Person may have pursuant to Sections 2.3 of the ROFR Agreement.

*        *        *         *        *

-44-

IN WITNESS WHEREOF, the Parties hereto have executed this Recapitalization Agreement on the date first written above.

BARRACUDA NETWORKS, INC.:
By:	David Faugno, CFO
Its:	/s/ David Faugno
SELLING STOCKHOLDERS
By:	Dean M. Drako
By:	Dean M. Drako Living Trust
By:
Its:
By:	Michael Perone
By:	Zachary Levow

[Signature Page to Recapitalization Agreement]

SELLING STOCKHOLDERS
By:	Dean M. Drako
	/s/ Dean Drako
By:	Dean M. Drako Living Trust
By:	/s/ Dean Drako
Its:

[Signature Page to Recapitalization Agreement]

SELLING STOCKHOLDERS
By:	Zachary Levow
	/s/ Zachary Levow

[Signature Page to Recapitalization Agreement]

SELLING STOCKHOLDERS
By:	Michael Perone
	/s/ Michael Perone

[Signature Page to Recapitalization Agreement]

INVESTORS:
SEQUOIA CAPITAL FRANCHISE FUND SEQUOIA CAPITAL FRANCHISE PARTNERS
By:	SCFF Management, LLC a Delaware Limited Liability Company General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member
SEQUOIA CAPITAL GROWTH FUND III SEQUOIA CAPITAL GROWTH PARTNERS III
SEQUOIA CAPITAL GROWTH III PRINCIPALS FUND
By:	SCGF III Management, LLC a Delaware Limited Liability Company General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member

[Signature Page to Recapitalization Agreement]

INVESTORS:
FRANCISCO PARTNERS, L.P.
By:	Francisco Partners GP, LLC
Its:	General Partner
By:	/s/ David R. Golob
Its:	Authorized Representative
FRANCISCO PARTNERS FUND A, L.P.
By:	Francisco Partners GP, LLC
Its:	General Partner
By:	/s/ David R. Golob
Its:	Authorized Representative
FRANCISCO PARTNERS III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David R. Golob
Its:	Manager
FRANCISCO PARTNERS PARALLEL FUND III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David R. Golob
Its:	Manager

[Signature Page to Recapitalization Agreement]

Dividend Schedule

Name	Common Shares	Preferred Shares		Total Shares Available for Dividend		Dividend
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
David Faugno	2,019,704.00		0.00		2,019,704.00		$1,931,836.05
[***]	[***]		[***]		[***]		[***]
Dean Drako	15,969,524.00		0.00		15,969,524.00		$15,274,764.05
[***]	[***]		[***]		[***]		[***]
Dean M. Drako Living Trust	15,969,529.00		0.00		15,969,529.00		$15,274,768.83
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Donna Drako	75,000.00		0.00		75,000.00		$71,737.10
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Preferred Shares		Total Shares Available for Dividend		Dividend
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
FP Annual Fund Investors, LLC	2,165.00		0.00		2,165.00		$2,070.82
Francisco Partners Fund A, L.P.	16,886.00		0.00		16,886.00		$16,151.37
Francisco Partners, L.P.	3,429,224.00		0.00		3,429,224.00		$3,280,034.37
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Gordon Stitt	150,000.00		0.00		150,000.00		$143,474.20
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Jeffrey Allen	360,000.00		0.00		360,000.00		$344,338.07
Jeffry and Teri Allen Revocable Trust--Dated January 29, 2002	194,805.00		0.00		194,805.00		$186,329.94
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Preferred Shares		Total Shares Available for Dividend		Dividend
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Michael Perone	22,434,356.00		0.00		22,434,356.00		$21,458,341.18
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Sequoia Capital Franchise Fund	900,000.00		0.00		900,000.00		$860,845.18
Sequoia Capital Franchise Partners	122,730.00		0.00		122,730.00		$117,390.59
Sequoia Capital Growth Fund III	2,887,464.00		0.00		2,887,464.00		$2,761,843.83
Sequoia Capital Growth III
Principals Fund	149,115.00		0.00		149,115.00		$142,627.70
Sequoia Capital Growth Partners III	31,602.00		0.00		31,602.00		$30,227.15
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
The Holly Levow 2010 Grantor Retained Annuity Trust	1,500,000.00		0.00		1,500,000.00		$1,434,741.96
The Michael Perone 2010 Four Year Grantor Retained Annuity Trust	1,402,147.00		0.00		1,402,147.00		$1,341,146.09
The Michael Perone 2010 Three Year Grantor Retained Annuity Trust	1,402,147.00		0.00		1,402,147.00		$1,341,146.09
The Michelle Perone 2010 Four Year Grantor Retained Annuity Trust	1,402,147.00		0.00		1,402,147.00		$1,341,146.09

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Preferred Shares		Total Shares Available for Dividend		Dividend
The Michelle Perone 2010 Three Year Grantor Retained Annuity Trust	1,402,147.00		0.00		1,402,147.00		$1,341,146.09
The Zach Levow 2010 Grantor Retained Annuity Trust	1,500,000.00		0.00		1,500,000.00		$1,434,741.96
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
Zachary Levow	25,042,944.00		0.00		25,042,944.00		$23,953,441.61
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
[***]	[***]		[***]		[***]		[***]
FP Annual Fund Investors, LLC	0.00		14,118.00		14,118.00		$13,503.80
Francisco Partners Fund A, L.P.	0.00		92,268.00		92,268.00		$88,253.85
Francisco Partners, L.P.	0.00		18,737,835.00		18,737,835.00		$17,922,638.67
Sequoia Capital Franchise Fund	0.00		2,487,438.00		2,487,438.00		$2,379,221.11
Sequoia Capital Franchise Partners	0.00		339,195.00		339,195.00		$324,438.20
Sequoia Capital Growth Fund III	0.00		7,999,938.00		7,999,938.00		$7,651,897.79
Sequoia Capital Growth III Principals Fund	0.00		391,770.00		391,770.00		$374,725.91
Sequoia Capital Growth Partners III	0.00		88,191.00		88,191.00		$84,354.22
	105,762,189.00		30,150,753.00		135,912,942.00		$130,000,000.95

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

SCHEDULE OF INVESTORS

Investor	Shares of Series B Preferred to be Purchased		Total Investment in Series B Preferred Stock
Francisco Partners III, L.P.		14,048,028.00	$	78,963,145.72
Francisco Partners Parallel Fund III, L.P.		156,918.00	$	882,026.93
Sequoia Capital Growth III Principals Fund*		92,040.00	$	517,351.47
Sequoia Capital Growth Partners III*		20,384.00	$	114,577.28
Sequoia Capital Growth Fund III**		7,755,512.00	$	43,593,280.44
Sequoia Capital Franchise Partners*		78,604.00	$	441,828.50
Sequoia Capital Franchise Fund*		576,427.00	$	3,240,062.54

* In the event that the amount of the Dividend paid to this Investor is less than the amount of the aggregate Preferred Stock Purchase Price to be paid by this Investor pursuant to this Schedule, (x) the number of shares of Series B Preferred Stock to be purchased by this Investor at the Closing shall be reduced to the maximum whole number of shares which can be purchased by this Investor using the entire amount of the Dividend paid to this Investor and (y) the aggregate Preferred Stock Purchase Price to be paid by this Investor reduced to reflect such lesser number of shares of Series B Preferred Stock purchased.

** In the event that the number of shares of Series B Preferred Stock to be purchased by other funds managed by Sequoia Capital are reduced at the Closing pursuant to this Schedule, (x) the number of shares of Series B Preferred Stock to be purchased by this Investor at the Closing shall be increased by the number of shares so reduced and (y) the aggregate Preferred Stock Purchase Price to be paid by this Investor increased to reflect such greater number of shares of Series B Preferred Stock purchased.

c/o Francisco Partners

One Letterman Drive

Building C

Suite 410

San Francisco, CA 94129

Attention: David Golob

Telephone: (415) 418-2900

Facsimile: (415) 418-2999

Email: golob@franciscopartners.com

c/o Sequoia Capital

3000 Sand Hill Road

Building 4, Suite 180

Menlo Park, CA 94025

Attention: Jim Goetz

Telephone: (650) 854-3927

Telecopy: (650) 854-2977

Email: goetz@sequoiacap.com

with a copy to:

(which shall not constitute notice to such Investors)

Kirkland & Ellis LLP

Page Mill Road

Palo Alto, CA 94304

Attention: Adam D. Phillips

Telephone: (650) 859-7050

Telecopy: (650) 859-7500

Email: aphillips@kirkland.com

SCHEDULE OF SELLING STOCKHOLDERS

Selling Stockholder	Shares of Common Stock to be Repurchased		Repurchase Transaction Proceeds		Indemnity Percentage
Dean M. Drako		2,250,000.00	$	12,647,118.72		9.9	%
Dean M. Drako Living Trust		2,250,000.00	$	12,647,118.72		9.9	%
Michael Perone		1,402,147.00	$	7,881,386.48		6.2	%
Zachary Levow		16,825,766.00	$	94,576,648.94		74.0	%
Total:		22,727,913.00	$	127,752,272.86		100.00	%

EX-10.16

Exhibit 10.16

AMENDMENT NO. 1 AND WAIVERS TO

RECAPITALIZATION AGREEMENT

THIS AMENDMENT NO. 1 AND WAIVERS TO RECAPITALIZATION AGREEMENT (this “Amendment”), is made as of October 3, 2012 by and among Barracuda Networks, Inc., a Delaware corporation (the “Company”), the Persons listed on the Schedule of Investors attached hereto (collectively referred to herein as the “Investors” and individually as an “Investor”), the Persons listed on the Schedule of Selling Stockholders attached hereto (collectively referred to herein as the “Selling Stockholders” and individually as a “Selling Stockholder”).

BACKGROUND

A. The Company, the Investors and the Selling Stockholders are parties to that certain Recapitalization Agreement, dated as of August 23, 2012 (the “Recapitalization Agreement”).

B. Section 12C of the Recapitalization Agreement requires the written consent of the Company, the Investors and the Selling Stockholders to amend, alter, or modify the terms of the Recapitalization Agreement.

C. The Company, the Investors and the Selling Stockholders desire to amend the Recapitalization Agreement in the manner set forth below.

NOW THEREFORE, in consideration of the matters set forth in the recitals and the covenants and provisions herein set forth, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

Section 1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Recapitalization Agreement.

Section 2. Amendments to the Recapitalization Agreement. As of the date hereof:

2.1. In Section 2B(i) of the Recapitalization Agreement the reference to “One Hundred Twenty Seven Million Seven Hundred Fifty Two Thousand Two Hundred Seventy Two Dollars and Eighty Eight Cents ($127,752,272.88)” shall be replaced by “One Hundred Twenty Seven Million Five Hundred Forty Four Thousand One Hundred Four Dollars and Ninety Three Cents ($127,544,104.93)”;

2.3. In Section 2C(i) of the Recapitalization Agreement the reference to “One Hundred Twenty Seven Million Seven Hundred Fifty Two Thousand Two Hundred Seventy Two Dollars and Eighty Six Cents ($127,752,272.86)” shall be replaced by “One Hundred Twenty Seven Million Five Hundred Forty Four Thousand One Hundred Four Dollars and Ninety Three Cents ($127,544,104.93)”;

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

2.6. Section 6B(i) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(i) On October 2, 2012, the authorized capital stock of the Company consists of (a) 31,500,000 shares of preferred stock, of which 31,500,000 shares are designated as Series A Preferred Stock and 30,150,753 of which are outstanding and held by certain of the Investors as set forth on the attached Capitalization Schedule and (b) 195,000,000 shares of Common Stock, of which 105,810,591 shares are issued and outstanding and held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 31,500,000 shares are reserved for issuance upon conversion of the Series A Preferred and 21,724,738 shares are reserved for issuance upon exercise of stock options or vesting of restricted stock units issued or available for issuance under the Equity Incentive Plan.”

2.7. Section 6B(ii) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(ii) Immediately following the consummation of the Investment Transaction and the Repurchase Transaction, the authorized capital stock of the Company will consist of (a) 52,878,666 shares of preferred stock, of which 30,150,753 will be designated as Series A Preferred Stock and held by certain of the Investors as set forth on the attached Capitalization Schedule and 22,727,913 shares will be designated as Series B Preferred Stock and held by the Investors as set forth on the Schedule of Investors and (b) 157,429,138 shares of Common Stock, of which 83,082,678 shares shall be issued and outstanding and held of record by the Selling Stockholders and other Persons as set forth on the attached Capitalization Schedule, 52,878,666 shares shall be reserved for issuance upon conversion of the Series A Preferred and the Series B Preferred and 21,724,738 shares shall be reserved for issuance upon exercise of stock options or vesting of restricted stock units issued or available for issuance under the Equity Incentive Plan.”

2.8. Section 6N(vi) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(vi) To the Company’s knowledge as of the date hereof, (A) neither the Company nor any of its Subsidiaries has, infringed, misappropriated, diluted or otherwise violated (collectively, “Infringement”, “Infringe”, “Infringed” or “Infringing”), and (B) the conduct of the business of the Company and its Subsidiaries as previously conducted and as currently conducted does not Infringe, any Intellectual Property Rights of any Person. As of the date hereof, the Company (a) does not know of any facts or circumstances that are reasonably likely to give rise to a third Person prevailing in a claim of Infringement against Company or its Subsidiaries and (b) no suit has been made within the past two (2) years, is presently pending, or, to the Company’s knowledge, is threatened by any third Person that has more than $100,000,000 in annual revenues and that is related to infringement or, that challenges the Company’s or its Subsidiaries’, as applicable, exclusive ownership, or the validity, enforceability or registrability, of any of the Company Intellectual Property Rights, and (c) neither the Company nor any Subsidiary has requested nor received any opinions of

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counsel related to the foregoing. For purposes of the Company’s representations and warranties in the last sentence of this Paragraph 6N(vi), “knowledge” or “know” means the actual knowledge of any of the Selling Stockholders, David Faugno and Kevin Cook that they have obtained following substantial communications with third Persons with respect to the matters referenced therein.”

2.9. Section 9A(i) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(i) the representations and warranties in Paragraphs 6A, 6B(i), 6B(ii), 6B(iii), 6C, 6D (the first two sentences), 7A, 7B, 7C, 7D, 8A, 8B (the first two sentences) and 8C (each, an “Excluded Representation”) shall survive until the applicable statute of limitations for which an Indemnitee may have liability thereunder;”

2.10. A new Section 9A(ii) shall be added to the Recapitalization Agreement to read as follows:

“(ii) the representations and warranties in Paragraphs 6N(i) and 6N(vi) (each, a “Special IP Representation”) shall survive until the applicable statute of limitations for which an Indemnitee may have liability thereunder; and”

2.11. The existing Section 9A(ii) of the Recapitalization Agreement shall be renumbered to Section 9(a)(iii).

2.12. The first paragraph of Section 9B(i) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(i) Indemnification by the Company. Subject to the applicable limitations set forth in this ARTICLE 9, the Company shall indemnify each of the Investor Parties and save and hold each of them harmless against and pay on behalf of or reimburse such Investor Parties as and when incurred for Losses which any such Investor Party suffers, sustains or becomes subject to as a result of: (a) any breach of any representation or warranty of the Company under this Agreement; (b) any nonfulfillment or breach of any covenant, agreement or other provision under this Agreement by the Company; provided that (i) the Company shall not be liable to indemnify any of the Investor Parties pursuant to clause (a) above (other than with respect to any Excluded Representation or Special IP Representation) unless and until the Losses related thereto exceed an amount equal to $2,500,000 in the aggregate (the “Basket”); (ii) the Company shall not be liable to indemnify any of the Investor Parties pursuant to clause (a) above with respect to any Special IP Representation unless and until the Losses related thereto exceed an amount equal to $1,000,000 in the aggregate (the “Mini Basket”); (iii) the Company’s aggregate cash liability under clauses (a) and (b) above (other than with respect to the Excluded Representations and the Special IP Representations) shall in no event exceed $20,000,000, but with it being understood, however, that nothing in this Agreement (including this Paragraph 9B) shall limit or restrict any of the Investor Parties’ right to maintain or recover any amount from the Company in connection with any action or claim based upon fraud or intentional misrepresentation).”

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2.13. Section 9B(ii) of the Recapitalization Agreement shall be amended and restated in its entirety to read as follows:

“(ii) Indemnification by the Selling Stockholders. Each of the Selling Stockholders shall severally and not jointly indemnify the Company Parties and save and hold each of them harmless against and pay on behalf of or reimburse such Company Party as and when incurred for any Losses in excess of the Basket (as defined in Section 9B(i)) which any such Company Party suffers, sustains or becomes subject to, as a result of: (a) any breach of any representation or warranty of such Selling Stockholder under this Agreement; or (b) any nonfulfillment or breach of any covenant, agreement or other provision in this Agreement by such Selling Stockholder; provided that a Selling Stockholder’s aggregate liability under clauses (a) and (b) above (other than with respect to the Excluded Representations and the Special IP Representations) shall in no event exceed the amount paid to such Selling Stockholder in the Repurchase Transaction (the “Stockholder Cap”), but with it being understood, however, that nothing in this Agreement (including this Paragraph 9B) shall limit or restrict any of the Company Parties’ right to maintain or recover any amount from a particular Selling Stockholder in connection with any action or claim based upon fraud or intentional misrepresentation. For purposes of determining the inaccuracy or breach of any representation or warranty in ARTICLE 7 and the amount of any Losses that are indemnifiable hereunder, each such representation and warranty (including any representation or warranty referenced therein) shall be read without regard and without giving effect to any materiality or Material Adverse Effect or similar qualification contained therein (as if such standard or qualification were deleted from such representation or warranty). The indemnification obligations of each Selling Stockholder shall be several and not joint and no Selling Stockholder shall have any liability for any breach of representation or warranty by any other Selling Stockholder. All indemnification payments made by Selling Stockholders under this Paragraph 9B(ii) shall be deemed adjustments to the amount paid to such Selling Stockholder in the Repurchase Transaction.”

2.14. A new Section 9J shall be added to the Recapitalization Agreement to read as follows:

Certificate of Incorporation Amendment. Promptly following the Closing, the Company shall use its reasonable best efforts to obtain the requisite approval from its Board and stockholders in order to amend the Certificate of Incorporation to revise the aggregate number of authorized shares of capital stock and to revise the aggregate number of authorized shares of Common Stock in such amounts as shall be mutually agreed upon by the Company and the Investors (the “Charter Amendment”) and to promptly thereafter file the Charter Amendment with the Secretary of State of the State of Delaware.

2.15. The Dividend Schedule shall be amended and restated as set forth on the Dividend Schedule, attached hereto as Exhibit A;

2.16. The Schedule of Investors shall be amended and restated as set forth on the Schedule of Investors, attached hereto as Exhibit B;

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2.17. The Schedule of Selling Stockholders shall be amended and restated as set forth on the Schedule of Selling Stockholders, including, but not limited to, the addition of the Zach Levow 2010 Grantor Retained Annuity Trust and the Holly Levow 2010 Grantor Retained Annuity Trust as Selling Stockholders, in the form attached hereto as Exhibit C;

2.18. The Certificate of Incorporation attached to the Recapitalization Agreement as Exhibit A shall be amended and restated in the form attached hereto as Exhibit D;

2.19. The Voting Agreement attached to the Recapitalization Agreement as Exhibit B shall be amended and restated in the form attached hereto as Exhibit E; and

2.20. The Investors’ Rights Agreement attached to the Recapitalization Agreement as Exhibit C shall be amended and restated in the form attached hereto as Exhibit F.

2.21. The ROFR Agreement attached to the Recapitalization Agreement as Exhibit D shall be amended and restated in the form attached hereto as Exhibit G.

Section 3. Waivers.

3.1 The Investors hereby irrevocably waive their right to receive the Internal Investigation Report pursuant to Section 3K of the Recapitalization Agreement.

3.2 The Investors hereby irrevocably waive their right to receive the Company Disclosure Letter within twenty (20) business days of the date of the Recapitalization Agreement. The Company Disclosure Letter, attached hereto as Exhibit H, is hereby incorporated by reference into the Recapitalization Agreement and made a part thereof.

Section 4. Miscellaneous.

4.1 Effect of Amendment. The execution, delivery and effectiveness of this Amendment shall not constitute a waiver or amendment of any provision of the Recapitalization Agreement, except as specifically set forth herein.

4.2 Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of the executed counterpart of this Amendment by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart to this Amendment.

4.3 Severability. The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment or any instrument or agreement required hereunder.

4.4 Captions. Section captions used in this Amendment are for convenience only, and shall not affect the construction of this Amendment.

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4.5 Entire Agreement. This Amendment embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such parties, verbal or written, relating to the subject matter hereof.

4.6 References. Any reference to the Recapitalization Agreement contained in any notice, request, certificate, or other document executed concurrently with or after the execution and delivery of this Amendment shall be deemed to include this Amendment unless the context shall otherwise require. Reference in any of this Amendment or the Recapitalization Agreement shall be a reference to the Recapitalization Agreement as amended hereby and as further amended, modified, restated, supplemented or extended from time to time.

Section 5. Governing Law. This Amendment shall be governed by and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.

BARRACUDA NETWORKS, INC.:
By:	/s/ David Faugno
Its:	CFO

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

SELLING STOCKHOLDER:
By:	Dean M. Drako
/s/ Dean M. Drako
By:	Dean M. Drako Living Trust
By:	/s/ Dean M. Drako
Its:

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

SELLING STOCKHOLDER:
By:	Michael Perone
/s/ Michael Perone

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

SELLING STOCKHOLDER:
By:	Zachary Levow
/s/ Zachary Levow

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

SELLING STOCKHOLDER:
THE HOLLY LEVOW 2010 GRANTOR RETAINED ANNUITY TRUST
By:	/s/ Holly Levow
Name:	Holly Levow
Title:
THE ZACH LEVOW 2010 GRANTOR RETAINED ANNUITY TRUST
By:	/s/ Zachary Levow
Name:	Zachary Levow
Title:

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

INVESTORS:
SEQUOIA CAPITAL FRANCHISE FUND SEQUOIA CAPITAL FRANCHISE PARTNERS
By:	SCFF Management, LLC a Delaware Limited Liability Company General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member
SEQUOIA CAPITAL GROWTH FUND III
SEQUOIA CAPITAL GROWTH PARTNERS III
SEQUOIA CAPITAL GROWTH III PRINCIPALS FUND
By:	SCGF III Management, LLC a Delaware Limited Liability Company General Partner of Each
By:	/s/ Jim Goetz
Its:	Managing Member

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

INVESTORS:
FRANCISCO PARTNERS, L.P.
By:	Francisco Partners GP, LLC
lts:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS FUND A, L.P.
By:	Francisco Partners GP, LLC
Its:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David Golob
Its:
FRANCISCO PARTNERS PARALLEL FUND III, L.P.
By:	Francisco Partners GP III, L.P.
Its:	General Partner
By:	Francisco Partners GP III Management, LLC
Its:	General Partner
By:	/s/ David Golob
Its:

[Signature Page to Amendment No. 1 to Recapitalization Agreement]

Exhibit A

DIVIDEND SCHEDULE

Name	Common Shares	Series A Preferred	Total Shares Available for Dividend		Dividend
[***]	[***]			[***]		[***]
Jeffry and Teri Allen Revocable Trust--Dated January 29, 2002	554,805.00			554,805.00		$530,479.09
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Series A Preferred	Total Shares Available for Dividend		Dividend
[***]	[***]			[***]		[***]
David Faugno	2,035,606.00			2,035,606.00		$1,946,353.08
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
FP Annual Fund Investors, LLC	2,615.00			2,615.00		$2,070.08
Francisco Partners, L.P.	3,429,224.00			3,429,224.00		$3,278,866.68
Francisco Partners Fund A, L.P.	16,886.00			16,886.00		$16,145.62
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Series A Preferred	Total Shares Available for Dividend		Dividend
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
Sequoia Capital Franchise Partners	122,730.00			122,730.00		$117,348.80
Sequoia Capital Franchise Fund	900,000.00			900,000.00		$860,538.72
Sequoia Capital Growth Fund III	2,887,464.00			2,887,464.00		$2,760,860.62
Sequoia Capital Growth Partners III	31,602.00			31,602.00		$30,216.39
Sequoia Capital Growth III Principals Fund	149,115.00			149,115.00		$142,576.93
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Series A Preferred	Total Shares Available for Dividend		Dividend
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
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[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
Donna Drako	75,000.00			75,000.00		$71,711.56
Gordon Stitt	150,000.00			150,000.00		$143,423.12
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
[***]	[***]			[***]		[***]
The Michelle Perone 2010 Three Year Grantor Retained Annuity Trust	1,114,793.00			1,114,793.00		$1,065,913.93
The Michelle Perone 2010 Four Year Grantor Retained Annuity Trust	1,203,600.00			1,203,600.00		$1,150,827.11

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Name	Common Shares	Series A Preferred		Total Shares Available for Dividend		Dividend
The Michelle Perone 2010 Four Year Grantor Retained Annuity Trust	1,203,600.00				1,203,600.00		$1,150,827.11
The Michael Perone 2010 Four Year Grantor Retained Annuity Trust	1,203,600.00				1,203,600.00		$1,150,827.11
The Michael Perone 2010 Three Year Grantor Retained Annuity Trust	1,114,793.00				1,114,793.00		$1,065,913.93
Michael Perone	22,920,257.00				22,920,257.00		$21,915,298.30
Michelle Perone	485,901.00				485,901.00		$464,596.25
The Holly Levow 2010 Grantor Retained Annuity Trust	1,192,592.00				1,192,592.00		$1,140,301.77
Holly Levow	307,408.00				307,408.00		$293,929.43
Zachary Levow	25,350,352.00				25,350,352.00		$24,238,843.66
The Zach Levow 2010 Grantor Retained Annuity Trust	1,192,592.00				1,192,592.00		$1,140,301.77
Dean Drako	15,969,524.00				15,969,524.00		$15,269,326.26
Dean M. Drako Living Trust	15,969,529.00				15,969,529.00		$15,269,331.04
FP Annual Fund Investors, LLC			14,118.00		14,118.00		$13,498.99
Francisco Partners, L.P.			18,737,835.00		18,737,835.00		$17,916,258.25
Francisco Partners Fund A, L.P.			92,268.00		92,268.00		$88,222.43
Sequoia Capital Franchise Partners			339,195.00		339,195.00		$324,322.70
Sequoia Capital Franchise Fund			2,487,438.00		2,487,438.00		$2,378,374.11
Sequoia Capital Growth Fund III			7,999,938.00		7,999,938.00		$7,649,173.73
Sequoia Capital Growth Partners III			88,191.00		88,191.00		$84,324.19
Sequoia Capital Growth III Principals Fund			391,770.00		391,770.00		$374,592.51
Total:	105,810,591.00		30,150,753.00		135,961,344.00		$130,000,001.07

[***] Information has been omitted and submitted separately to the Securities and Exchange Commission.

Confidential treatment has been requested with respect to the omitted portions.

Exhibit B

SCHEDULE OF INVESTORS

Investor	Shares of Series B Preferred to be Purchased	Total Investment in Series B Preferred Stock
Francisco Partners III, L.P.	14,048,028.00	$78,834,478.00
Francisco Partners Parallel Fund III L.P.	156,918.00	$880,589.69
Sequoia Capital Growth III Principals Fund	92,157.00	$517,165.04
Sequoia Capital Growth Partners III	120,410.00	$114,536.48
Sequoia Capital Growth Fund III	7,754,534.00	$43,516,758.37
Sequoia Capital Franchise Partners	78,704.00	$441,669.73
Sequoia Capital Franchise Fund	577,162.00	$3,238,907.62

c/o Francisco Partners

One Letterman Drive

Building C

Suite 410

San Francisco, CA 94129

Attention: David Golob

Telephone: (415) 418-2900

Facsimile: (415) 418-2999

Email: golob@franciscopartners.com

c/o Sequoia Capital

3000 Sand Hill Road

Building 4, Suite 180

Menlo Park, CA 94025

Attention: Jim Goetz

Telephone: (650) 854-3927

Telecopy: (650) 854-2977

Email: goetz@sequoiacap.com

with a copy to:

(which shall not constitute notice to such Investors)

Kirkland & Ellis LLP

950 Page Mill

Road Palo Alto, CA 94304

Attention: Adam D. Phillips

Telephone: (650) 859-7050

Telecopy: (650) 859-7500

Email: aphillips@kirkland.com

Exhibit C

SCHEDULE OF SELLING STOCKHOLDERS

Selling Stockholder	Shares of Common Stock to be Repurchased	Repurchase Transaction Proceeds	Indemnity Percentage
Dean M. Drako	2,250,000.00	$12,626,510.67	9.9%
Dean M. Drako Living Trust	2,250,000.00	$12,626,510.67	9.9%
Michael Perone	1,402,147.00	$7,868,544.03	6.2%
Zachary Levow	15,378,794.00	$86,302,447.38	67.6%
The Zach Levow 2010 Grantor Retained Annuity Trust	723,486.00	$4,060,046.09	3.2%
The Holly Levow 2010 Grantor Retained Annuity Trust	723,486.00	$4,060,046.09	3.2%
Total:	22,727,913.00	$127,544,104.93	100.00%

Exhibit D

Certificate of Incorporation

Please see attached.

Exhibit E

Voting Agreement

Please see attached.

Exhibit F

Investors’ Rights Agreement

Please see attached.

Exhibit G

ROFR Agreement

Please see attached.

Exhibit H

Company Disclosure Letter

Please see attached.

EX-10.17

Exhibit 10.17

LEASE

LEASE, entered into May 24, 2012 between 317 Maynard LLC, a Michigan limited liability company (hereinafter referred to as “Host”) whose address is c/o First Martin Corporation, 115 Depot Street, Ann Arbor, Michigan 48104 and Barracuda Networks, Inc,, a Delaware corporation (hereinafter referred to as “Guest”) whose address is 3175 S. Winchester Boulevard, Campbell, California 95008, by which the parties agree as follows:

1. Leased Premises. Host leases to Guest certain premises (hereinafter referred to as the “Premises”) located at 317 Maynard Street, Ann Arbor, Michigan (hereinafter sometimes referred to as the “Building”), as shown on Exhibit A attached hereto, containing a rentable area of approximately 42,204 square feet.

2. Term. The term of this Lease shall commence on the later of the date Host’s Improvements for the Premises (as defined in Paragraph 3 hereof) is Substantially Complete or October 1, 2012 (“Commencement Date”), and shall continue through and until October 31, 2017. As used herein, the term “Lease Year” shall mean a period of twelve (12) consecutive months. The first Lease Year shall begin November 1, 2012. For purposes of the Lease, “substantially completed” shall mean constructed in a good and workmanlike manner and fully finished in accordance with the requirements of all applicable laws, regulations, governmental permits and the provisions of the Lease, excepting only punch-list items which do not affect the use or aesthetic appearance of the Premises or related facilities. Notwithstanding anything to the contrary contained herein, the commencement of this Lease and all of Guest’s obligations hereunder are contingent upon Guest receiving approval for state and local incentives totaling at least $1.2 million dollars (the “Contingency”). Guest shall give Host notice that it is waiving such contingency on or before July 15, 2012; otherwise this Lease shall terminate and neither party shall have any further obligation to the other.

3. Construction of Initial Improvements. Host shall provide at its sole cost the improvements set forth, in Exhibit B attached (“Host’s Improvements”). Except as otherwise agreed, Guest shall be responsible for the costs of all other improvements, which costs shall be paid by Guest within thirty (30) days of receipt of invoices. All improvements to the Premises shall be done by Host or Host’s designated contractors, provided such costs are consistent with bids obtained by Guest for the work from other licensed contractors.

4. Rent. Guest shall pay to Host as monthly rent for the Premises for the term hereof the amounts set forth below in advance on the first day of each month.

Lease Month	Monthly Amount
Commencement Date to 30 days after Commencement Date	$	0.00
1-12	$	55,392.75
13-24	$	57,151.25
25-36	$	58,909.75
37-48	$	60,668.25
49-60	$	62,426.75

Guest shall be entitled to 30 days free rent at commencement of the lease. In order to retain the above payment schedule, Guest shall receive a credit against the first month’s payable rent for that number of days less than 30 of free rent not already received based on the actual Commencement Date. Partial months shall be prorated based on a 365-day year. If any rent payment due hereunder is more than seven days late, Guest shall pay Host a service fee equal to one percent (1%) of said rent payment. The payment of this late payment service fee will not constitute a waiver by Host of any default by Guest under this Lease. The rent to be paid by Guest hereunder shall not be diminished by the additional payments to be made by Guest as provided in Paragraphs 5, 6 and 8 hereof.

5. Utilities. Guest shall pay for the cost of all gas, electricity, water and other utilities used by Guest in or for the Premises. Said utilities shall be separately metered.

6. Janitorial Service. Guest shall provide, at its sole expense, janitorial service for the Premises. Host shall provide at its sole expense light bulb replacement for building standard lights (fluorescent tubes) and window washing once a year.

7. Increase in Operating Expenses Pass-Through. Deleted.

8. Taxes.

(a) Guest shall be liable for and shall pay thirty days prior to delinquency the following:

(i) taxes, levies and assessments levied against or measured by the cost or value of Guest’s equipment, fixtures and other personal property located in the Premises including the cost or value of any leasehold improvements made in or to the Premises by Guest or for Guest after commencement of the Lease, regardless of whether Guest paid for such improvements. Guest shall report annually all leasehold improvements for the Premises on the City of Ann Arbor’s personal property assessment form and send a copy to the Host within five (5) days after the date the form is due to the City of Ann Arbor.

(ii) taxes, levies and assessments levied upon or measured by the Rental or any other sum payable hereunder or on Host’s business of leasing the Premises excepting only net income taxes and that portion, if any, of income and franchise taxes which may hereafter be assessed in lieu of or substituted in whole or in part for real estate and personal property taxes the increases in which are payable by Guest and other Guests pursuant to Paragraph 4 hereof.

(iii) taxes, levies and assessments levied against or with respect to the possessions, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Guest of the Premises; or

(iv) taxes, levies and assessments levied against or upon the transaction or any document to which Guest is a party creating or transferring an interest in the Premises.

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(b) If any of the taxes, levies and assessments mentioned in subparagraph 8(a) above are levied against Host or Host’s property, including the Building, or if the assessed value of the Building is increased by a value placed upon the property described in (i) above, and if Host pays such taxes, levies and assessments or the portion of such taxes, levies and assessments resulting from such increase in the assessment, such amounts shall not be payable by Guest to Host.

9. Security Deposit. Guest shall deposit with Host upon satisfaction of the Contingency the amount of $55,392.75 as security for Guest’s faithful performance of its obligations hereunder. If Guest fails to pay the rent or otherwise defaults with respect to any provision of this Lease, Host may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default, or for the payment of any other sum to which Host may become obligated by reason of Guest’s default or to compensate Host for any loss or damage which Host may suffer thereby. Said deposit shall not be a limitation on Host’s damages or other rights under this Lease, or a payment of liquidated damages or an advance payment of the rent. If Host so uses or applies all or any portion of said deposit, Guest shall, within fifteen (15) days after written, demand thereof, deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount hereinabove stated and Guest’s failure to do so shall be a material breach of this Lease. Host shall not be required to keep said deposit separate from its general accounts. If Guest performs all of Guest’s obligations hereunder, said deposit, or so much thereof as has not theretofore been applied by Host, shall be returned, without payment of interest or other increment for its use, to Guest at the expiration of the term hereof, within fifteen days and after Guest has vacated the Premises. No trust relationship is created herein between Host and Guest with respect to said security deposit.

10. Place and Form for Payment of Rent. All payments of rent shall be delivered to Host at First Martin Corporation, 115 Depot Street, Ann Arbor, Michigan 48104 or at such other place as Host shall designate from time to time in writing. Rent payments shall be made payable to 317 Maynard LLC.

11. Financing.

(a) If in connection with obtaining by Host of any financing or refinancing for the Building, the lender shall request reasonable modifications in this Lease as a condition to such financing or refinancing, Guest will not unreasonably withhold, delay or defer its consent thereto, provided that such modifications do not increase the obligations of Guest hereunder or in any manner adversely affect the leasehold interest hereby created.

(b) Guest agrees that this Lease shall be subordinate to any mortgages that may hereafter be placed or made upon the Building, provided the mortgagee named in any such mortgages shall agree to recognize the lease of Guest in the event of foreclosure if Guest is not in default.

(c) Guest agrees within thirty (30) days after request by Host to execute in recordable form and deliver to Host a statement, in writing, certifying (a) that this Lease is in full force and effect, (b) the date of commencement of the term of this Lease, (c) that rent is paid currently without any off-set or defense thereto, (d) the amount of rent, if any, paid in advance, and (e) that there are no uncured defaults by Host or stating those claimed by Guest, provided that, in fact, such facts are accurate and ascertainable.

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(d) If proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage made by Host covering the leased Premises, Guest shall become the guest of, and attorn to, the purchaser upon any such foreclosure or sale and recognize such purchaser as the Host under this Lease. The obligation of Guest hereunder to attorn to the purchaser shall be conditioned upon the agreement of such purchaser to recognize the rights of Guest under this Lease.

12. Use of Premises.

(a) Guest shall use and occupy the Premises only for office use consistent with the zoning of the Building.

(b) Guest will keep the Premises clean and shall not create any nuisance, noises, vibrations, electrical discharges, radiation or other disturbances that shall in any way unreasonably impair the peace, quietness, comfort, or security of the building wherein the Premises are situated nor do anything that will cause any extra hazard, impair the validity of any policy of insurance now or hereafter placed on the Building, or any of its contents, or that will increase the rate of premium on any such policy or that will violate any prohibitions in any such policy.

(c) Guest, shall, at its own cost and expense, comply with all of the requirements of all valid laws and regulations, municipal, state and federal, now in force, or which may hereafter be in force, pertaining to the Premises, and the use and occupancy thereof. Host hereby warrants, represents and covenants that upon Host’s tender of possession of the Premises to Guest, the premises and Guest’s occupancy and use thereof as contemplated by the Lease shall comply with all applicable governmental laws, rules, regulations and ordinances, including without limitation all applicable fire and building codes (provided that Guest’s Work, if any, complies with all such rules, regulations, ordinances and codes); all air quality standards established by law; all covenants, conditions, restrictions and easements affecting the Premises; and the requirements of all other leases for space within the Building. For the term of this lease and apart from Guest’s use, Host warrants, represents and covenants that the Premises and the Building shall so comply.

(d) Guest shall not sell, rent or keep drug paraphernalia, pornographic materials or sexually explicit materials in or from the Premises; Guest shall not use the Premises for any activity included in the definition of “adult entertainment business” in the City of Ann Arbor Zoning Ordinance, regardless of whether an activity is a “principal” activity.

13. Acceptance of Premises.

(a) When Host is ready to grant possession of the Premises to Guest, the parties shall walk through the Premises together and shall set forth any punch-list items in writing signed by Host and Guest. Notwithstanding anything to the contrary contained in the Lease, Guest’s acceptance of the Premises shall be subject to (a) Host’s correction of all such Punch-list items within thirty (30) days after the Delivery Date; (b) latent defects; and (c) Host’s warranties as to defects.

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(b) Notwithstanding any provision to the contrary contained in the Lease, if the Delivery Date has not occurred by the date which is one hundred twenty (120) days after the issuance of a building permit, Guest shall have the right to cancel the Lease upon five (5) days written notice to Host. Upon such cancellation, Host shall refund any prepaid rent to Guest, and Host and Guest shall have no liability thereafter accruing the Lease.

(c) Host hereby warrants, represents and covenants that on the Commencement Date, the Premises and the building systems shall be free from faults or defects and that the Premises and the common areas shall comply with all applicable laws, statutes, ordinance, governmental rules, regulations and requirements, including without limitation all applicable fire and building codes, all covenants, conditions, restrictions and easements affecting the Premises. With regard to the Americans with Disabilities Act, the Premises shall comply with the Act and all standards provided for by the Act which are applicable to the Building and Premises. If, within one (1) year after the Commencement Date, any portion of the Premises is found to be faulty or defective or not in conformance with the provisions of the Lease, Host shall cause the same to be corrected at its own expense promptly after receipt of a written notice from Guest to do so.

(d) Host, at Host’s expense, shall engage a qualified industrial hygienist to survey the Building for asbestos and prepare a report on his findings, which report shall be provided to Guest within thirty (30) days of the date hereof. Said report shall include the Hygienist’s recommendations as to what asbestos, if any, is hazardous to human health and should be removed; and Host shall remove such asbestos prior to the Commencement Date. Host warrants that any asbestos remaining in the building will not be injurious to Guest’s employees, agents and visitors. Host shall indemnify, defend and hold Guest harmless against all claims, losses or liabilities arising out of or in connection with the presence of any asbestos and Guest shall be entitled to claim from Host all consequential damages arising out of Host’s breach of the warranty contained in the previous sentence.

Notwithstanding any provision to the contrary contained in the Lease, if the recommendations of the Hygienist for removal of asbestos are not completed prior to Commencement Date, Guest shall have no obligation to commence the Lease and shall have the right to cancel the Lease upon five (5) days written notice to Host. Upon such cancellation, Host shall refund any prepaid rent to Guest, and Host and Guest shall have no liability thereafter accruing the Lease.

(e) As soon as Host’s Work (if any) is sufficiently complete to allow the commencement of Guest’s Work, Host shall allow Guest to enter the Premises for the purpose of completing Guest’s Work and installing Guest’s trade fixtures, equipment, furnishings and other personal property. Such entry shall not be deemed to be an acceptance of the Premises by Guest for the purpose of commencement of the Lease Term, unless the conditions for commencement of the Lease Term as described in Section 1.1 have been satisfied.

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14. Host’s Repairs.

(a) With the exception of premises janitorial service, Host, at its sole cost and expense, shall keep in good order, maintain and repair the Premises, the Common Areas and the structural and public areas of the Building such as lobbies, stairs, corridors, common restrooms, roof, elevators, HVAC (with the exception of dedicated air conditioning units for Guest’s computer room), escalators, and structural elements; provided, however, Host shall not be responsible for repair or replacement of damage or unusual wear and tear to same which is the result of omission, negligence or willful misconduct of Guest or Guest’s agents, employees, contractors, subcontractors, subguests or invitees, such damage or wear and tear being the sole responsibility of Guest and Guest shall promptly accomplish repairs or replacements due to such damage or wear and tear upon demand by Host. Guest shaft secure a maintenance contract for said dedicated air conditioning units for the computer room. Said contract shall be with a qualified air conditioning contractor and shall provide for regular maintenance and inspection at the intervals recommended by the manufacturer of said units. Guest shall not be required to make any structural repairs or alterations or capital improvements to the Premises or the fire-proofing system serving the Premises (including the existing sprinkler system) which may be required by law (whether presently existing or hereinafter enacted), insurance regulations or otherwise, except as may be required solely by Guest’s negligence or Guest’s particular use of the Premises. In addition, Guest shall not be required to make any changes to the entrances and exits to the Premises (including exterior doorways) or any structural changes to the Premises required by the Americans with Disabilities Act and any rules or regulations related thereto. Host, at Host’s expense, shall provide exterior trash and recycling containers for Guest’s use and shall cause said containers to be emptied as required. Notwithstanding the foregoing, should the quantity of trash generated by Guest be substantially in excess of the amount customarily generated by an office tenant, Guest shall be responsible for the cost of removing said excess.

(b) Except as otherwise provided in the Paragraph hereof relating to Destruction and in the Paragraph hereof relating to Eminent Domain, there shall be no allowance, abatement of rental, or liability to Guest for diminution of rental value or interference with Guest’s business and no claim by Guest for eviction from said Premises by reason of inconvenience, annoyance or injury to Guest arising from any repairs, alterations, replacements or improvements made to said Premises, Building, Common Areas or any portion thereof by Host, its agents, employees or contractors, or by Host’s mortgagee. To the extent Host may be responsible for repairs under this Lease, Host shall not be liable to Guest for failure to make repairs to the Premises, Building, Common Areas or any portion thereof, unless Host has received from Guest written notice of the need for such repairs and has failed to commence and diligently complete such repairs within thirty (30) days of such notice or such greater length of time as is reasonably required by Host to make such repairs. Notwithstanding the foregoing, in the event of an emergency, in which case no notice shall be required, Guest shall have the right (but not the obligation) to perform such obligation on Host’s behalf and the reasonable cost thereof shall be due and payable to Guest within thirty (30) days after notice thereof.

(c) Guest acknowledges that the Building cooling system is designed for a maximum internally generated heat load per zone or room of 1 person per 100 square feet and 3 watts of lighting and equipment per square foot in the aggregate. Excluding the server/data room, should the heat load in the Premises exceed the aforesaid maximum, Guest shall be responsible for the cost of any consequent modification to the cooling system.

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15. Alterations by Guest. Except for improvements costing less than Twenty Five Thousand Dollars ($25,000.00) that do not affect the structural elements of the Building, Guest shall not make any alterations, additions and improvements to the Premises without the Host’s written consent, which consent shall not be unreasonably withheld, delayed, or conditioned, and all alterations, additions and improvements made by either of the parties hereto upon the Premises, except movable office furniture and trade fixtures put in at the expense of the Guest, shall be the property of the Host, and shall remain upon and be surrendered with the Premises at the termination of this Lease; provided, however, that the Guest shall have the option of removing additions made by it if the Premises are restored to good condition following such removal and any damages to the Premises resulting from such removal are repaired. Provided Host has given notice to Guest at the time Host approves the alteration or addition, Host may, at its option, require Guest to remove, at Guest’s sole expense, improvements made for or by Guest, other than the Initial Improvements and repair any damage resulting therefrom, upon the expiration or earlier termination of this Lease. Should Guest make any alterations to the Premises, Guest shall have the plans for the Premises revised to reflect such alterations and shall provide Host with a set of the revised plans. In no event shall Guest have the obligation to remove any improvements installed prior to Lease Commencement

16. Building Access. Prior to the Commencement Date, Building access shall be coordinated between Host and Guest; Host shall install and maintain at its expense a proximity card system on the main building entrance. After the Commencement Date, Guest shall have 24/7 access to the Premises. Guest will be given an adequate number of cards for current, future and guest employees. At Guest’s election, Guest may install its own building access system.

17. Insurance. Host shall maintain special form perils property insurance coverage on the Building in which the Premises are located. Guest shall maintain special form perils property insurance coverage on the contents of the Premises. In addition, Guest shall maintain a policy of commercial general liability insurance coverage with a combined single occurrence limit of not less than $1,000,000.00 [pending] insuring Host and Guest against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be issued by an insurance company acceptable to Host, with an A.M. Best rating of not less than A-, Guest shall provide Host with a certificate of insurance for said policy naming Host as an additional insured party; Host, although named as an additional insured, shall nevertheless be entitled to recover under said policy for any loss sustained by it as a result of the acts or omissions of Guest. No such policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days’ prior written notice to Lessor. Host and Guest and all other parties claiming under them hereby mutually release and discharge each other from all claims and liabilities to the extent covered by insurance, regardless of the cause of any damage, loss or injury to person or property, to the extent such waiver of liability is permitted by any applicable policies of insurance maintained by Host and/or Guest, as the case may be. Provided other Guests of Host waive subrogation against Guest, Guest waives any and all rights Guest may have against said other Guests for damage to or destruction of the demised Premises due to any casualty insurable by the customary form of special form perils property insurance coverage, whether such damage or destruction be due to said Guests’ negligence or otherwise. In the event that this Lease is in effect for longer than five years, the single limit of the aforesaid insurance which Guest is required to maintain shall be adjusted at the beginning of the sixth Lease Year and every fifth year thereafter to the amount then being required by new leases entered into by Host.

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18. Guests Personal Property. All personal property of Guest kept on the Premises shall be at Guests sole risk, and Guest hereby waives all right of recovery which it might otherwise have against Host for any loss, theft or damage to Guest’s personal property.

19. Destruction—Fire or Other Cause. If the Premises shall be rendered untenantable by fire or other casualty, then Host shall make the Premises tenantable as speedily as possible, and the rent shall be abated in whole or in part, according to the portion of the Premises which is rendered untenantable, during the period of untenantability, except that there shall be no such abatement if such fire or other casualty shall be caused by the gross negligence of Guest or its agents, employees, invitees or licensees, and further, there shall be no abatement for the time required for the replacement or repair of any property of Guest, in excess of the time required to make the Premises tenantable. In the event that the Premises cannot be made tenantable within ninety (90) days, then Guest may terminate this Lease by notification to Host of such termination within ten (10) days after Host shall have notified Guest of the time required to make them tenantable. Host shall, in its sole judgment, reasonably exercised, determine the length of time required to make the Premises tenantable, and shall notify Guest of such determination within ten (10) days after the occurrence of the fire or other casualty. Notwithstanding the foregoing, in the event that the Premises shall be so damaged by fire or other casualty that greater than 35% of the premises is rendered untenantable and the premises cannot be made tenantable within 180 days, then Host may terminate this Lease by notifying the Guest of such termination within thirty (30) days after the date of such damage.

20. Eminent Domain. In the event that all or a substantial portion of the Premises be lawfully condemned or taken in any manner for any public or quasipublic use, this Lease shall terminate as of the date of actual taking. In the event that any insubstantial part of the Premises be so condemned or taken, either party shall have the right to terminate this Lease as of the date of actual taking by giving written notice of such termination; but should this Lease not so terminate, this Lease shall cease as to the part taken and the rent adjusted so that Guest shall pay a pro rata portion of the rent determined by the amount of space (and rate therefor) remaining after the taking. Host shall be entitled to receive the entire award from any such condemnation or taking of the Premises or any part thereof without deduction therefrom for any estate or interest granted to Guest by this Lease, provided, that nothing herein contained shall be deemed to prevent Guest from claiming compensation for relocation costs or loss for interruption of business in the event an award with respect thereto is provided for by law or is fixed in the proceeding in which such taking shall occur. In the event of a partial taking insufficient in size to cause termination of the Lease, Host shall build, repair or replace any outer walls, floor, or roof necessary to make the Premises tenantable.

21. Assignment and Subletting.

(a) Guest shall not assign this Lease or sublet the Premises or any part thereof without the written consent of Host, which consent shall not be unreasonably withheld or delayed. Any other provision of this Paragraph to the contrary notwithstanding, Host shall not be required to give its consent to an assignment or subletting of the leased Premises, or any part thereof, if the

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effect of such assignment or subletting would be to create a profit of more than 50% of the Rental income for the Guest after deducting Guests costs to sublet. In such cases, any profit from the assignment or subletting shall be paid 50% to the Host after deducting Guest’s expenses related to the assignment or sublease including, but not limited to brokerage fees, improvements, attorney’s fees. Guest agrees that it shall not be unreasonable for Host to withhold its consent to a proposed assignment or subletting if: (1) Host believes that the proposed assignee or sublessee is not as financially responsible as Guest on the date hereof unless Guest remains liable under the lease in which case there shall be no such condition to assignment or sublease; (ii) the proposed assignee or sublessee will not conduct on the Premises a business of a quality equal to that conducted by Guest. Host’s consent to one assignment or sublease shall not waive the requirement of its consent to any subsequent assignment or sublease. In the event Host consents to Guest’s subletting, Guest shall include in such sublease all of the pertinent terms contained herein, and Guest shall furnish Host with a certified copy of any and all subleases affecting the demised Premises prior to such consent; and in case of default by Guest giving Host right of entry for breach of condition subsequent, Guest, at Host’s option, shall assign all of Guest’s right, title and interest in any subleases to Host, and Guest shall incorporate such provision in any and all subleases made by Guest. Host’s consent to an assignment shall not be effective until Host has received a written document in which the assignee has assumed and agreed to perform all of Guest’s obligations in the Lease. Host’s consent to an assignment or sublease shall not release the Guest from the payment and performance of its obligations in the Lease, but rather the Guest and its assignee shall be jointly and severally primarily liable for such payment and performance. Guest shall reimburse Host for all reasonable costs not to exceed $1,000.00 incurred by Host in connection with a sublease or assignment (including a proposed sublease or assignment which is not consummated).

(b) Host’s prior consent shall not be required for any assignment, sublease or other transfer of Guest’s interest in the Premises or the Lease to any corporation with which Guest may merge, transfer substantially all assets to or consolidate or become affiliated as a parent, subsidiary, holding company or otherwise, or to an entity in which Guest has a controlling interest.

(c) A subsequent public offering and sale of stock in Guest’s business, or a transfer of any amount of Guest’s stock shall not constitute a change in ownership of Guest or an assignment of the Lease.

22. Default, Eviction, Termination and Damages. If Guest shall fail to pay any rent or other charges due hereunder within fifteen (15) days of the date said charges are due on more than two occasions and Host has notified Guest in writing, or if Guest shall fail to comply with any details, provisions, or covenants of this Lease other than the payment of rent and shall not cure such failure within thirty (30) days after written notice thereof (unless Guest has attempted to cure and diligently pursues cure), or if Guest shall be adjudged bankrupt by a court of competent jurisdiction, or if a receiver or trustee shall be appointed for all or substantially all of the assets of Guest, then in any such event, Guest shall be deemed in default. When Guest is in default, Host, besides other rights or remedies it may have, shall have the right to declare this Lease terminated and the term ended, shall have the right to evict Guest under Summary Proceeding law, and shall have the additional and immediate right of reentry and may remove all persons and property from the leased Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of Guest, without evidence of notice or resort to legal process and

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without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. Should Host elect to reenter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may either terminate this Lease or it may from time to time, without terminating this Lease, make such alterations and repairs as it may deem appropriate in order to re-rent the Premises, and re-rent said Premises or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as Lessor in its sole discretion may deem advisable provided that Host shall use reasonable efforts to re-rent the Premises on behalf of Guest and all rental proceeds shall be deducted from the balance of rent owed by Guest under the Lease. Upon each such re-renting, all rentals and other sums received in any month by Host from such re-renting shall be applied, first to the payment of any indebtedness other than rent due hereunder from Guest to Host; second, to the payments of any costs and expenses of such re-renting, including reasonable brokerage fees and attorneys’ fees and of costs and repairs; third, to the payment of rent and other charges due and unpaid hereunder; and the residue, if any, shall be held by Host and applied in payment of future rent as the same may become due and payable hereunder. If such rentals and other sums received from such re-renting during any month be less than that to be paid during that month by Guest hereunder, Guest shall pay such deficiency to Host. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of said Premises by Host shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Guest or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such re-renting without termination, Host may at any time hereafter elect to terminate this Lease for such previous default. Should Host at any time terminate this Lease for any default, in addition to any other remedies it may have, it may recover from Guest all damages it may incur by reason of such default, including the cost of recovering the leased Premises, reasonable attorneys’ fees, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to the rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of the leased Premises for the remainder of the stated term, all of which amounts shall be immediately due and payable from Guest to Host, except as mitigated by any re-renting and adjusted for present value. In case suit shall be brought for recovery of possession of the leased Premises, for the recovery of rent or any other amount due under the provisions of this Lease, or because of the failure by Guest to abide by any other detail, provision, or covenant herein contained, the prevailing party shall be entitled to all expenses incurred therefore, including reasonable attorneys’ fees. Guest and Host hereby waive their rights to jury trial in any litigation that may arise relating to this Lease.

23. Surrender of Premises. Upon the expiration or the termination of the term of this Lease, Guest shall quit and surrender the Premises to Host in good order and condition, ordinary wear, damage by the elements, and damage which is the responsibility of Host excepted; and, except as otherwise provided herein, Guest shall remove all of its property and shall repair any damage to the Premises caused by such removal. Any personal property of Guest or of anyone claiming under Guest which shall remain on the Premises after the expiration or termination of the Lease term shall be deemed to have been abandoned by Guest, and either may be removed by Host as its property or may be disposed of in such manner as Host may see fit, and Host shall not be responsible for the same.

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24. Access to Premises. Host shall have the right to enter upon the Premises at all reasonable hours upon reasonable notice for the purpose of inspecting the same, preventing waste, loss, or destruction, removing obstructions, making such repairs or alterations as it is obligated to make under the terms of this Lease, or to enforce any of Host’s rights or powers under this instrument, and Host shall not be liable nor responsible for any loss that may accrue to Guest’s business by reason thereof provided Host uses reasonable care to ensure that Guests normal use and enjoyment of the Premises is not disturbed. The Host may show the Premises to prospective Guests at any time during the last three (3) months of the term of this Lease, provided it has given 24 hrs written notice.

25. Heirs and Assigns. The covenants, conditions, and agreements contained in this Lease shall bind and inure to the benefit of Host and Guest and their respective heirs, distributees, executors, administrators, successors, and, except as otherwise provided in this Lease, their assigns.

26. Confidentiality. Intentionally deleted.

27. Quiet Enjoyment. So long as Guest pays the rent and performs all of its obligations in this Lease, Guest’s possession of the Premises will not be disturbed by Host, its successors or assigns.

28. Signs. Guest shall not fasten to or paint upon any part of the Premises or Building any sign, advertisement, notice or handbill visible from the exterior of the building without the prior written consent of the Host. Host may, without notice to Guest, remove any such sign, advertisement, notice or handbill painted or affixed in violation of this clause without any liability whatsoever for damages or otherwise to Guest, and Guest shall be responsible for the cost of such removal. Notwithstanding the foregoing, Guest shall have the right to building and monument signage subject to Host’s reasonable approval and compliance with City ordinance.

29. Holding Over. In the event that Guest shall hold over after the term of the Lease, it is agreed that thereafter the tenancy shall be from month to month in the absence of a written agreement to the contrary on the same terms and conditions contained herein, with the exception that the rent shall increase to 125% of the rent in effect at the termination of the term of the Lease.

30. Parking. Per separate arrangement with local governmental entities and not part of this agreement.

31. Notices. Whenever any notice is required hereunder it shall be made in writing and served personally or by certified mail, return receipt requested, at the following addresses (or at such other addresses as the parties may hereafter designate in writing):

Host:	317 Maynard LLC c/o First Martin Corporation 115 Depot Street Ann Arbor, Michigan 48104
Guest:	Barracuda Networks, Inc. ATTN: David Faugno, CFO 3175 S. Winchester Blvd. Campbell, CA 95008

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If served personally, service shall be conclusively deemed made at the time of such service. If served by certified mail, service shall be conclusively deemed made forty-eight (48) hours after the deposit thereof in the United States Mail.

32. Host’s Liability.

(a) Guest shall indemnify, defend and hold harmless Host and Host’s officers, employees, agents and invitees from all losses, damage, claims or liability arising out of any and all injuries to or death of any person or damage to any property arising out of any occurrence in or about the Premises, or arising out of any occurrence in or about the Building arising from the act or neglect of Guest or its agents or invitees. Notwithstanding the foregoing, Guest shall have no obligation to indemnify Host against the negligence or willful misconduct of Host, its agents, representatives, invitees, independent contractors or employees. Except to the extent covered by Host’s insurance and paid or reimbursed to Guest by such insurance, Host shall indemnify, defend and hold Guest harmless from all claims, costs, attorneys fees, expenses and liabilities arising from any willful misconduct or negligence of Host or its agents, representatives, invitees, independent contractors or employees, from Guest’s reliance on any warranty or representation made by Host herein which is not true or accurate; or from Host’s failure to observe any of the terms and conditions of the Lease.

(b) The Host shall not be responsible or liable to the Guest for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying adjoining premises or any part of the premises adjacent to or connected with the Premises hereby leased or any part of the Building of which the leased Premises are a part or for any loss or damage resulting to the Guest or his property from bursting, stoppage or leaking of water, gas, sewer or steam pipes.

(c) Excluding any indemnification obligation hereunder, if Host shall fail to perform any provision of this Lease and if as a consequence of such default Guest shall recover a money judgment against Host, such judgment shall be satisfied only out of the proceeds of sale received upon execution of such judgment and levied against the interest of Host in the Building or the consideration received by Host from the sale of Host’s interest.

33. Rules and Regulations. Guest and its employees and invitees, shall faithfully observe and comply with the Rules and Regulations attached to this Lease, and all reasonable modifications of and additions thereto as may be from time to time put into effect by Host. Host shall not be responsible to Guest for the nonperformance of any of said Rules and Regulations by any other Guest or occupant of the Building. In the event of a conflict between the terms and provisions of this Lease and the referenced Rules and Regulations, this Lease shall control. Prior to the effective date of any intended modifications of or additions to the Rules and Regulations annexed hereto, Host shall furnish Guest with a written copy of same.

34. Environmental Law Compliance. The parties acknowledge that there are certain federal, state and local laws, regulations and guidelines now in effect, and that additional laws,

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regulations and guidelines may hereafter be enacted, concerning the impact on the environment of land use, the maintenance and operation of structures, and the conduct of business. Guest will not cause, or permit to be caused, any act or practice on or about the premises which would adversely affect the environment or violate any of such laws, regulations, or guidelines. In particular, without limiting the generality of the foregoing, Guest will not use the premises to produce, store, process or transport any hazardous waste or hazardous substance, as those terms are defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), or in the Resource Conservation Recovery Act of 1980, as amended (“RCRA”). Any violation of this covenant shall be an event of default under this Lease. Guest agrees to indemnify and hold Host harmless against all losses, costs, expense and liability whatsoever, including Host’s costs of defending against the foregoing, which will include reasonable attorney’s fees, and against any costs necessary in connection with the cleanup or removal of any hazardous waste or hazardous substance from the premises, caused, or permitted to be caused, by any act, practice or neglect of Guest with respect to the use of the premises. Guest shall have no claim against Host by reason of any changes which Host may be required to make to the premises pursuant to such laws, regulations, or guidelines.

Host represents to the best of Hosts knowledge that as of the Commencement Date, the Premises (and the area underneath the Premises) are free of hazardous materials. Host agrees that Guest shall have no liability or responsibility whatsoever for any hazardous materials or toxic wastes on or about the Premises or the Complex which were not created by Guest. Host shall indemnify, defend and hold Guest harmless against all claims, losses or liabilities arising out of or in connection with the presence, use, storage, disposal, removal or clean-up of any hazardous material or toxic waste in or about the Premises, the common areas, or any other part of the Building, unless caused or created by Guest.

35. Telecommunications. It is understood and agreed that Guest, in coordination with Host, intends to install or have installed communications cabling or other equipment in the Premises, requiring access for installation and maintenance to phone closets, wiring chases, mechanical rooms and the like. Guest shall indemnify and hold Host harmless for all losses, claims, demands, expenses and judgments against Host caused by or arising out of, either directly or indirectly, any acts or omissions by third party providers which operate in the Building at the request of Guest. In addition, Guest in coordination with Host shall have access at no cost to the roof of the building for the purposes of installing and maintaining non-third party communications equipment.

36. Intentionally deleted.

37. Option To Extend.

37.1 Extended Term. In consideration of Guest entering into the Lease, and provided that Guest is not then in default, Host hereby grants to Guest the option to extend the term of the Lease for an additional term of two (2) years from October 1, 2017 through September 30, 2019 (“Extended Term”). Guest shall give written notice to Host of Guest’s intent to exercise its option to extend at least one hundred twenty (120) days prior to expiration of the original term. The Extended Term shall be upon the same covenants, agreements, terms, provisions and conditions as are contained in the Lease, except that the rent payable shall be as provided in Section 4.2 below. If Guest has exercised its option to extend, the phrase “Lease Term” as used in the Lease shall mean the original term of the Lease and the Extended Term.

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37.2 Rent for Extended Term. The Base Rent for the Extended Term shall be at 95% of the then prevailing market rental value. The prevailing market rental value shall be determined as follows:

37.2.1 Host shall deliver to Guest written notice of Host’s determination of prevailing market rental value within ten business (10) days after Host receives notice from Guest that Guest has exercised its option to extend.

37.2.2 If Guest disputes Host’s determination of the prevailing market rental value as contained in Host’s notice, Guest shall notify Host in writing within ten (10) days of its receipt of Host’s determination, which notice shall set forth Guest’s determination of the prevailing market rental value. Should Guest timely notify Host as aforesaid, Host and Guest shall attempt to resolve their differences within ten (10) business days following Host’s receipt of Guest’s notice.

37.2.3 If Host and Guest cannot agree on prevailing market rental value during such ten (10) business day period, Host and Guest shall each appoint as an appraiser a real estate broker experienced in leasing office space in the county in which the Premises are located and give notice of such appointment to the other within ten (10) days after the foregoing ten (10) business day period. If either Host or Guest shall fail timely to appoint an appraiser, then the single appraiser appointed by one party shall proceed to make the determination of prevailing market rental value. Such appraisers shall, within fifteen (15) business days after the appointment of the last of them to be appointed, complete their written determinations of prevailing market rental value and furnish the same to Host and Guest. Each party shall pay the fees and costs of the appraiser appointed by it. If the valuations vary by ten percent (10%) or less of the higher value, the prevailing market rental value shall be the average of the two valuations.

37.2.4 If the valuations vary by more than ten percent (10%) of the higher value, the two appraisers shall, within ten (10) days after submission of the last appraisal report, appoint a third disinterested appraiser who shall be an M.A.I. If the two appraisers shall be unable to agree in a timely manner on the selection of the third appraiser, then either appraiser on behalf of both, may request appointment of such third disinterested M.A.I. appraiser by the presiding judge of the superior court of the county in which the Premises are located. Such third appraiser shall within twenty business days after appointment, make a determination of prevailing market rental value and submit an appraisal report to Host and Guest. The prevailing market rental value of the Premises shall be as determined by the third appraiser, unless is it (A) less than the valuation set forth in the lower prior appraisal, in which case the lower prior appraisal shall be controlling or (B) greater than the valuation set forth in the higher prior appraisal, in which case the valuation set forth in the higher prior appraisal shall be controlling. All fees and costs incurred in connection with the determination of prevailing market rental value by the third appraiser shall be paid one-half by Host and one-half by Guest.

37.2.5 For purposes of this Section 4.2, the prevailing market rental value of the Premises shall mean the rental rate that an unrelated party negotiating at arm’s length would pay

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for leasing the Premises for the period of the extension term with no brokerage commission payable, taking into account all then current market factors, including without limitation the quality, design, and location of the Building and the Premises within the Building, the terms and conditions of the Lease (including the permitted use provided in the Lease) and the value of the existing Guest improvements to such party (but excluding the value of any improvements installed at Guest’s expense) and also excluding any premium based on the size of the Premises.

37.2.6 Upon determination of the prevailing market rental value of the Premises (and the calculation of Base Rent as being 95% of that value) for an extension term, Tenant shall have the right to withdraw its exercise of its option to extend by giving Landlord notice of withdrawal within five (5) days of Tenant’s receipt of notice of the determination. In the event Tenant does withdraw its option exercise, Tenant shall pay all appraisal fees incurred by landlord and Tenant in determining the prevailing market rental value. In the event Tenant does not withdraw its option exercise, then upon determination of the Base Rent for the extension period as described above, the parties shall execute a certificate specifying the Base Rent and Triple Net Expenses for such extension period.

38. Miscellaneous.

(a) The failure of either party to enforce any covenant or condition of this Lease shall not be deemed a waiver thereof or of the right of either party to enforce each and every covenant and condition of this Lease. No provision of this Lease shall be deemed to have been waived unless such waiver be in writing.

(b) This Lease and the Exhibits attached hereto and forming a part hereof, set forth the entire agreements between Host and Guest concerning the leased Premises. Any amendment shall be in writing and signed by each party.

(c) Host acknowledges that Guest is represented by Colliers International in this transaction and is due a 5% commission equal to $176,729.25 payable by Host per the terms of a separate agreement between Host and Colliers International. Aside from the commission due to Colliers International each party represents and warrants that there are no claims for brokerage commissions or finder’s fees in connection with the execution of this Lease, and each party agrees to indemnify the other against, and hold it harmless from, all liability arising from any such claim.

(d) Guest shall not record this Lease without the written consent of Host. Upon the request of either party the other party shall join in the execution of a memorandum of this Lease for recording which shall describe the parties, the leased Premises, the term and any special provisions.

(e) In the event of any transfer of Host’s interest in the Premises, the transferor shall be automatically relieved of all obligations and liabilities on the part of Host accruing from and after the date of such transfer. The release of Host from such obligations and liabilities shall be expressly conditioned upon an assumption by any transferee of all of the unperformed terms, covenants and conditions of this Lease arising after the date of such transfer, including the application of Guest’s security deposit in accordance with the provisions of Paragraph 9 hereof.

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(f) Any amount due from Guest to Host or from Host to Guest which is not paid when due shall bear interest at an annual rate of prime plus three (3%) percent from the date due until paid, unless otherwise specifically provided herein, but the payment of such interest shall not excuse or cure any default by Guest.

(g) No payment by Guest of a lesser amount than the monthly rent shall be deemed to be other than on account of the earliest rent, nor shall any endorsement or statement on any check or any letter accompanying any payment be deemed an accord and satisfaction, and Host shall accept such payment without prejudice to Host’s right to recover the balance of such rent or pursue any other remedy.

(h) This Lease shall be governed by, and construed in accordance with the laws of the State of Michigan. If any provision of this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease shall not be affected and each provision shall be valid and enforceable to the fullest extent permitted by law.

39. Depot Lease. Pursuant to a lease between API Properties LLC (as landlord) and Guest (as tenant) the “API Lease”), Guest has leased certain office space at 201 Depot Street, Ann Arbor, Michigan through March 31, 2014. Host hereby agrees to indemnify and hold Guest harmless against any claims asserted by API Properties against Guest for termination fees, rent, utilities or other monetary obligations relating to the API Lease and arising on or after the Commencement Date of the term of this Lease. Guest may vacate the Premises in its “as-is” condition with no obligation to restore, repair, or replace.

Intentional Page Break

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This agreement is hereby signed on behalf of the parties effective as of the date first written above.

Host:
317 MAYNARD LLC,
a Michigan LLC
By:	First Martin Corporation, Manager
By:	/s/ Mike Martin
Its:	Vice President
Guest:
BARRACUDA NETWORKS, INC.
a Delaware Corporation
By:	/s/ David Faugno
Its:	CFO

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ACKNOWLEDGEMENT OF CORPORATE GUEST

STATE OF

ss.

COUNTY OF

The foregoing instrument was acknowledged before me this          day of             , 2012 by              the              of             , a              corporation, on behalf of the corporation.

Notary Public

County

My commission expires:

Revised: 5/1/08

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RULES AND REGULATIONS

1. The sidewalks and grounds of the Building are not for the use of the general public, and Host shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Host shall be prejudicial to the safety, character, reputation and interests of the Building and its Guests, provided that nothing herein contained shall be construed to prevent such access to employees or other persons with whom any Guest normally deals in the ordinary course of its business, unless such persons are engaged in illegal activities. No Guests and no employee, agent or invitee of any Guest shall go upon the roof of the Building.

2. No awnings or other projection shall be attached to the outside walls of the Building. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises without prior written consent of Host. All electric ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent, of a quality, type, design and bulb color approved by Host. Neither the interior nor exterior of any windows shall be coated or otherwise unscreened without the written consent of the Host.

3. No vehicles, birds or animals of any kind shall be brought into or kept in or about the Premises. Any preparation of food or beverages in the Premises shall be done only with equipment approved by Host which does not overload the electrical wiring of the Premises. No Guest shall cause or permit any unusual or objectionable odors to be produced or permeate the Premises.

4. Except with the prior written consent of Host, no Guest shall occupy or permit any portion of his Premises to be occupied as an office for a public stenographer or typist, or for the manufacture or sale of liquor, narcotics or tobacco in any form, or as a barber or manicure shop, in or on the Premises. No Guest shall engage or pay any employees on the Premises, except those actually working for Guest on the Premises, nor advertise for laborers giving an address at the Premises. The Premises shall not be used for lodging or sleeping or for any illegal purposes.

5. No Guest shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or those having business with them, whether by the use of any musical instrument, radio, phonograph, unusual noise, or any other way. No Guest shall throw anything out of door, windows or skylights or down the passageways.

6. Guest shall provide Host with a key for any exterior doors installed by Guest in the Premises. Each Guest must, upon the termination of its tenancy, restore to the Host all keys of stores, offices, and toilet rooms, either furnished to, or otherwise procured by, such Guest and in the event of the loss of any keys so furnished, such Guest shall pay to the Host the cost of replacing the same lock or locks opened by such lost key if Host shall deem it necessary to make such change.

7. Host shall have the right to prohibit any advertising by any Guest which, in Host’s opinion, tends to impair the reputation of the Building or its desirability as an office/research building and upon written notice from Host any Guest shall refrain from or discontinue such advertising.

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8. Each guest shall see that the doors of its Premises are closed and securely locked and must observe strict care and caution that all water faucets, water apparatus and utilities are shut off before employees leave the Premises, so as to prevent waste or damage, and for any default or carelessness Guest shall make good all injuries sustained by other Guests or occupants of the Building or Host. On multiple-tenancy floors, all Guests shall keep all doors to the Building corridors closed at all times except for ingress and egress.

9. The requirements of Guest will be attended to only upon application to Host. Employees and agents of Host shall not perform any work or do anything outside of their regular duties unless under special instruction from Host.

10. Canvassing, soliciting and peddling in the Building are prohibited and each Guest shall cooperate to prevent the same.

11. Guest shall not cause any noise, odor, vibration or light disturbing or annoying to other Guests of the Building or to Guests of neighboring buildings.

12. No air conditioning unit or other similar apparatus shall be installed or used by any Guest without the written consent of Host, not to be unreasonably withheld.

13. Subject to the provisions of Paragraph 35 of the Lease, no Guest shall install any radio or television antenna, loudspeaker or other device on the roof or exterior walls of the Building.

14. Each Guest shall store all its recycling, trash and garbage within its Premises. No material shall be placed in the trash boxes or receptacles if such materials is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in the City of Ann Arbor without being in violation of any law or ordinance governing such disposal. All recycling, garbage and refuse disposal shall be made only through entryways provided for such purposes and at such times as Host shall designate. Should the amount of trash generated by Guest exceed the amount typically generated by users of office space, Guest shall be responsible for the cost of disposing of such excess. All boxes shall be broken down before being placed in the Building recycling or trash receptacles.

15. Host may waive any one or more of these Rules and Regulations for the benefit of any particular Guest or Guests, but no such waiver by Host shall be construed as a waiver of such Rules and Regulations in favor of any other Guest or Guests, nor prevent Host from thereafter enforcing any such Rules and Regulations against any or all of the Guests of the Building.

16. These Rules and Regulations are in addition to and shall not be construed to in any way modify, alter or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Building.

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17. Guest shall not operate any equipment that disrupts equipment elsewhere in the building.

18. Smoking is prohibited in the Building restrooms, hallways, lobbies, lunchrooms, stairwells and other common areas and on the Building grounds except in those areas designated by Host. Host shall not be obligated to designate any such areas.

19. [reserved]

20. Notwithstanding the provisions of Paragraph 1 of these Rules and Regulations, Host shall have the right to bar from the Building any moving company or vendor of spring water, soda pop, candy, janitorial, construction or other goods or services which has or may, in Host’s reasonable judgment, (i) cause damage to the Building, (ii) violate these Rules and Regulations (as same may be amended from time to time or (iii) create any nuisance, noise or other disturbance which in any way impairs the peace, quietness, comfort or security of the Building.

21. Guest shall not occupy in any manner, including storage of Guest’s property, any electrical or mechanical rooms in or about the Premises. Host shall have the right to remove and dispose of any property placed by Guest in such electrical or mechanical rooms without notice to Guest.

22. Host reserves the right to make such other and reasonable rules and regulations as in its judgment may from time to time be needed for the safety, care and cleanliness of the Building, and for the preservation of good order therein.

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Exhibit A

page 1 of 3

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Exhibit A

page 2 of 3

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Exhibit A

page 3 of 3

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Exhibit B

page 1 of 4

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Exhibit B

page 2 of 4

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Exhibit B

page 3 of 4

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page 4 of 4

Host shall complete the following at its sole expense:

1. Reconfigure layout per Exhibit B, pages 1-3

2. Any interior walls constructed by Host to be drywall with a painted finish, all new walls will be insulated for sound with fiberglass insulation

3. Paint all painted walls

4. Replace/repair as necessary building standard lighting (mix of 2’x4’ and 2’x2’ T8), on-going bulb replacement is the responsibility of Host

5. Rework light switching in areas changed from private offices to open office

6. Replace all carpeted areas with $25/sq yard material allowance

7. Replace all ceiling tile, existing grid to remain

8. Upgrade/replace main entry doors card access system with a new Key Scan controller

9. Millwork to remain

10. Install fire alarm with pull stations and one smoke detector

11. Separate utilities from “retail” Borders space

12. Construct 8’ insulated block wall demising the Premises from the “retail” Borders space, drywall finish on Barracuda side

13. Separate mechanical systems from “retail” space

14. Replace building cooling tower

15. Repair VAV boxes

16. Replace compressor for pneumatic VAV box controls

17. Repair humidifier

18. Install chemical feed/treatment system to HVAC water

19. Replace dishwashers in break areas

20. Install new Trade Tracer panel and computer to manage and operate building HVAC

21. Modify building electrical equipment to provide 800 amps of power to panel in server room, branch circuit distribution in server room by Guest

22. Server room HVAC, Host’s contribution capped at $70,000

23. Install storefront glass system in the areas fronted Maynard and shown on the floor plan

24. Install 2’ high clerestory windows along east (alley) wall in areas shown on the floor plan, glass to be tinted bronze, non-operable

Guest’s work to be completed by Host at Guest’s sole expense:

1. Electrical wiring for furniture/power poles

2. Data cabling

3. Server room HVAC any cost in excess of $70,000

4. Install refrigerators in break areas as desired

5. Window treatments by Guest

6. Signage by Guest

7. Branch electrical circuit distribution from panel in server room

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EX-10.18

Exhibit 10.18

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made by and between Barracuda Networks, Inc., a Delaware corporation (the “Company”) and the undersigned individual (the “Employee”), effective as of April 13, 2012.

RECITALS

A. Reference is hereby made to the Stand-Alone Restricted Stock Unit Agreement by and between the Company and the Employee, dated as of March 1, 2009 (the “RSU Agreement”).

B. Whereas in connection with the waiver of certain terms in the RSU Agreement, the Employee will become entitled to receive certain payments of shares pursuant to the terms of RSU Agreement (the “Shares”).

C. Whereas, the parties desire to enter into this agreement to provide mutual assurances that the Employee will be free from undue concern for claims for damages arising out of or related to the Employee’s Shares that he received as an officer of the Company and will be indemnified for certain claims or losses relating the Shares, if applicable.

AGREEMENT

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows, and in consideration for the Shares:

1. Indemnification by Company. The Company hereby agrees to indemnify and hold harmless the Employee from and against any and all income, payroll, withholding and other taxes and any and all penalties and interest resulting from a determination by an Internal Revenue Service audit or any court or other applicable governmental entity relating to the taxation or tax reporting of the Shares.

2. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of the Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

3. Modification and Waiver. No supplement, modification, waiver or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

4. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (a) if delivered by hand and receipted for by the party addressee or (b) on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

5. Counterparts; Governing Law. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument. This Agreement shall be governed exclusively by and construed according to the laws of the State of California without reference to principles of conflict of laws.

	THE COMPANY:
	BARRACUDA NETWORKS, INC.
Date: April 13, 2013	By:	/s/ Michael Perone
	Name:	Michael Perone
	Title:	CMO & EVP
	Address:
	3175 Winchester Blvd
	Campbell, California 95008
	EMPLOYEE:
Date: April 13, 2013	/s/ David Faugno
	David Faugno
	Address:

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EX-21.1

Exhibit 21.1

SUBSIDIARIES OF BARRACUDA NETWORKS, INC.

Subsidiary	Jurisdiction
Barracuda Networks, KK	Japan
Third Iris Corp.	Cayman Islands
Barracuda Networks AG	Austria

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated July 29, 2013, in the Registration Statement (Form S-1) and related Prospectus of Barracuda Networks, Inc. for the registration of its common stock.

/s/ Ernst & Young LLP

San Jose, California

October 1, 2013

EX-99.1

Exhibit 99.1

August 6, 2013

David Faugno

Chief Financial Officer

Barracuda Networks, Inc.

3175 Winchester Blvd,

Campbell, CA 95008

RE: Consent of Compass Intelligence

Dear Mr. Faugno,

Barracuda Networks, Inc. (“Barracuda” or the “Company”) has requested that Compass Intelligence (“Compass”) execute this consent in connection with a proposed initial public offering by the Company (the “Offering”). In connection with the Offering, Barracuda has prepared a prospectus included in the registration statement on Form S-1, including all amendments thereto (the “Registration Statement”), as filed with the Securities and Exchange Commission.

This consent serves as confirmation by Compass to Barracuda that Compass hereby:

1. consents to the use of, and references to, Compass’ name, in connection with Compass’ research data on enterprises with less than 5,000 employees entitled “Barracuda Networks Number of Firms Demographics, 2013,” dated July, 2013 and “IT Security & Storage TAM for Barracuda Networks, 2013” dated July, 2013 (collectively, the “Research”), in the Registration Statement; and

2. grants the Company permission to include references to the Research, substantially in the form furnished hereto as Exhibit A, as part of the Registration Statement (the “Statement”).

This consent further confirms that the references from the Registration Statement quoted in Exhibit A are an accurate depiction of the Research and that Compass provides its consent to the inclusion of this letter as an exhibit to the Registration Statement. The Company agrees to indemnify Compass against any and all claims arising from the use of the , substantially in the form furnished hereto as Exhibit A.

We understand the need for confidentially with respect to Barracuda’s planned initial public offering, and we agree to not discuss the planned offering with any third parties.

Sincerely,
Compass Intelligence
Name:	/s/ Stephanie Atkinson
Title:	Managing Partner

EXHIBIT A

Statement in Registration Statement

“The market for the above security and storage segments for companies with less than 5,000 employees was $14.8 billion in 2012, according to a study we commissioned from Compass Intelligence. Compass Intelligence further estimates there were 20.8 million companies worldwide with less than 5,000 employees in 2012.”

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