Document:

10.25.1

     

    

      THIS
        SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
        1933,
        AS AMENDED ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
        NOT
        BE OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE
        PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS UNLESS AN EXEMPTION FROM
        SUCH
        REGISTRATION OR QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF
        THIS
        SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER OF THIS SECURITY SHALL
        BE
        VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH
        TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE
        SECURITIES ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES
        LAWS, OR (B) THE ISSUER HAS FIRST RECEIVED AN OPINION OF COUNSEL SATISFACTORY
        TO
        IT THAT SUCH REGISTRATION QUALIFICATION OR APPROVAL IS NOT
        REQUIRED.

       

      SECURED
        PROMISSORY NOTE

       

      $
        375,000

      San
        Diego, California

      May
        25,
        2006 ("Effective
        Date")

       

      For
        value
        received, the undersigned ("Borrower")
        promises to pay to the order of BeeBird Beheer B.V. ("Holder")
        at
        Strawinskylaan 3107 - 1077 ZX Amsterdam, the Netherlands, or such other place
        as
        Holder may from time to time designate in writing, in lawful money of the
        United
        States, the principal sum of three hundred and seventy five thousand ($
        375,000), or so much thereof as Holder may advance from time to time to Borrower
        hereunder, with interest at the rate and due and payable, as
        follows:

       

      ARTICLE
        1 -
        INTEREST AND PAYMENTS

       

      1.1  Dates.
        As used
        herein, "Maturity
        Date"
        means
        six (6) months from the Effective Date.

       

      1.2  Origination
        Fee. Subject
        to Section
        1.9
        hereof,
        at the time of each advance from Holder to Borrower hereunder, an origination
        fee equal to two percent (2.0%) of such advance ("Origination
        Fee")
        shall
        be due and payable by Borrower to Holder and Holder may deduct the Origination
        Fee from the corresponding advance prior to delivery thereof to
        Borrower.

       

      1.3  Payments.
        On the
        last day of each month, interest accruing on the outstanding principal balance
        shall be due and payable. On the Maturity Date, the entire unpaid outstanding
        principal balance and any accrued and unpaid interest shall be due and
        payable.

       

      1.4  Default
        in Payment if Interest or Late Payment Charges or any other Amounts
        Overdue.
        Any
        interest or other amounts not paid when due hereunder shall be added to the
        outstanding principal balance (which shall not cure the default in payment)
        and
        shall thereafter bear like interest as principal.

       

      1.5  Rate
        of Interest.
        The
        amount of outstanding principal shall bear interest from and after the date
        of
        each advance at the rate ("Interest
        Rate")
        of
        twelve percent (12.0%) per annum, which shall be adjusted to eighteen percent
        (18.0%) per annum after the occurrence of any default (as defined
        herein).

       

      1.6  Computation
        of Interest.
        Interest
        hereunder shall be computed on the basis of a 360-day year, with interest
        accruing as of the last day of each month.

       

      1.7  Payment
        on Business Days.
        Whenever any payment to be made under this Secured Promissory Note (the
        "Note")
        is
        stated to be due on a date that falls on a Saturday, Sunday, public holiday
        or
        bank holiday or the equivalent for banks generally under the laws of the
        State
        of California, such payment shall be due on the next succeeding business
        day.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.8  Optional
        Prepayment.
        This
        Note may be prepaid by Borrower in full at any time on or after the date
        hereof
        (the "Prepayment
        Date"),
        at a
        price equal to the principal amount to be prepaid plus all accrued interest
        on
        such prepaid amount to the Prepayment Date. Prepayments will be made in
        increments of Fifty Thousand Dollars ($50,000.00), except that a prepayment
        may
        be made which repays the entire outstanding principal of the Note, including
        all
        accrued and unpaid interest thereunder. 

       

      1.9  Reborrowings.
        Borrower may from time to time during the terms of this Note borrow, partially
        or wholly repay the outstanding principal balance and accrued interest without
        premium or penalty, and reborrow without payment of an additional Origination
        Fee on the reborrowed funds (and, with respect thereto, any advance made
        after
        any repayment of principal shall first be considered to be a reborrowing
        of
        principal without an additional Origination Fee), subject to all the terms
        and
        conditions of this Note. 

       

      1.10  "Common
        Stock"
        shall
        mean the par value voting common stock of Borrower. 

       

      ARTICLE
        2 -
        ADDITIONAL TERMS AND CONDITIONS

       

      2.1  Issuance
        of Warrants.
        As an
        additional inducement for Holder to make the loan as contemplated herein,
        Borrower will grant a warrant (the "Warrant")
        to
        Holder to purchase eighteen thousand five hundred (18,750) shares of Common
        Stock - at a price equal to the last sales price of the shares before Maturity
        Date as reported on the OTC BB or such other primary market on which the
        shares
        are traded, or of the shares are not traded at such market, at the fair value
        of
        the shares as determined in good faith by the Board of Directors of Borrower
        -
        and on the terms as set forth in detail in the Common Stock Purchase Warrant,
        a
        copy of which is attached hereto as Exhibit A.

       

      2.2  Investment
        Representations of Holder.
        In
        order to induce Borrower to accept this Note and to issue the Warrant and
        as
        further consideration for such acceptance and issuance, Holder hereby makes
        the
        following acknowledgments, representations and warranties with the full
        knowledge that Borrower will expressly rely on the following acknowledgments,
        representations and warranties in making a decision to accept or reject the
        loan
        to be made hereunder and to issue the Warrant:

       

      2.2.1  Holder
        hereby represents and warrants that Holder is an "accredited investor" as
        defined in Rule 501(a) of Regulation D promulgated under the Securities Act
        of
        1933, as amended (the "Securities Act"),
        in
        that Holder (i)
        is a
        corporation, partnership, Massachusetts or similar business trust with total
        assets of at least $5,000,000 as of the Effective Date (the "Asset
        Amount"),
        not
        formed for the purpose of acquiring the securities offered or issuing the
        indebtedness evidenced by this Note, whose purchase of the securities and
        issuance of the indebtedness evidenced by this Note is directed by a person
        who
        has such knowledge and experience in financial and business matters that
        he is
        capable of evaluating the merits and risks of the prospective investment,
        or
(ii)
        is a
        natural person (x) whose individual net worth, or joint net worth with that
        person’s spouse, at the time of his purchase exceeds $1,000,000, (y) who had an
        individual income in excess of $200,000 in each of the two most recent years
        and
        has a reasonable expectation of reaching the same income level in the current
        year, or (z) who had joint income with that person’s spouse in excess of
        $300,000 in each of those years and has a reasonable expectation of reaching
        the
        same income level in the current year or (iii)
        that
        Holder is an entity, all of whose equity owners are accredited
        investors.

       

      2.2.2  In
        order
        for Borrower to ascertain the availability of a transactional exemption under
        the California Corporate Securities Laws and for purposes of an exception
        from
        the California usury provisions, Holder represents and warrants, in addition
        to
        the other representations and warranties contained herein (including without
        limitation the representations set forth in Section
        2.2.1)
        that
        Holder qualifies under the following categories:

       

      (a)  
        By
        reason of Holder's business or financial experience or the business or financial
        experience of Holder's professional advisor, Holder or Holder's advisor on
        behalf of Holder has the capacity to protect the interests of Holder in
        connection with the purchase of the securities and the issuance of the evidence
        of indebtedness hereunder.

       

      (b)  Holder
        has a preexisting personal or business relationship with Borrower, or one
        of its
        officers or directors, of a nature and duration as would allow Holder to
        be
        aware of the character, business acumen, general business and financial
        circumstances of the person with whom such relationship exists.

       

      
        
          
          

        

        
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      (c)  Holder
        or
        Holder's professional advisors, including without limitation its counsel,
        has
        sufficient knowledge and experience in financial and business matters so
        that
        Holder or he/she is on Holder's behalf capable of evaluating the merits and
        risks of investment in the restricted securities and the issuance of the
        evidence of indebtedness hereunder and can reasonably be assumed to have
        the
        capacity to protect Holder's interests in connection with the
        transaction.

       

      (d)  The
        Asset
        Amount is according to Holder's most recent financial statements, which
        financial statements are as of a date not more than ninety (90) days prior
        to
        the Effective Date, prepared in accordance with generally accepted accounting
        principles and in accordance with the rules and requirements of the Securities
        and Exchange Commission (whether or not required by law to be prepared in
        accordance with those rules and requirements).

       

      2.2.3  This
        issuance of securities pursuant to this Note and the issuance of indebtedness
        hereunder has not been accompanied by the publication of any
        advertisement.

       

      2.3  Advances.
        Advances hereunder shall be made in such amounts, up to the total amount
        of the
        principal sum stated above, and at such times, as Borrower shall request
        in
        writing to Holder. All requests for advances under this Note shall be
        irrevocable and made at least five (5) business days prior to the date the
        requested advance is to be made. Advances will be made in increments of fifty
        Thousand Dollars ($50,000.00). The obligation of Holder to make advances
        hereunder is conditioned upon the following: From the Effective Date to the
        Maturity Date, no default under this Note nor any act, event or condition
        which
        would, with or without notice, the passage of time or both, constitute a
        default
        under this Note, shall exist or have occurred. Holder shall not incur any
        liability to Borrower in acting upon advances requested which Holder believes
        in
        good faith to have been given by a person duly authorized to borrow on behalf
        of
        Borrower. All advances made by Holder hereunder and all payments received
        on
        account of the principal balance hereof and/or interest and/or late charges
        shall be evidenced by the internal records of Holder which shall be prima
        facie
        evidence of such matters.

       

      2.4  Application
        of Payment.
        All
        payments received, irrespective of how they may be designated by Borrower,
        shall
        be applied first to charges other than interest and principal, if any, owing
        hereunder, then to accrued interest, then to principal, except that, after
        the
        occurrence the occurrence and during the continuation of any default under
        this
        Note, all amounts received shall be applied in such order as Holder, in its
        sole
        discretion, may elect. Borrower waives the application of Sections 1479 and
        2822(a) of the California Civil Code and any other Statute or rule of law
        that
        would otherwise direct, or permit Borrower to direct, the order of application
        of payment made by Borrower or amounts otherwise received by
        Holder.

       

      2.5  No
        Waiver.
        The
        acceptance by Holder of any payment under this Note after the date such payment
        is due shall not constitute a waiver of Holder's right to require prompt
        payment
        when due of future or succeeding payments or to declare a default as herein
        provided for any failure to pay. 

       

      2.6  Security
        Interest.
        The loan
        evidenced by this Note is made for the express purpose of providing Borrower
        with working capital for its operations. As security for Borrower's obligations
        under this Note, subject to and only effective upon obtaining the written
        consent of Camel Financial, Inc. and/or its successors and assigns (including
        without limitation US Bank National Association, Union Bank of California,
        N.A.
        and Pacific Century Bank, N.A.) to the security interest granted under this
        Section
        2.6.
        Borrower grants Holder a security interest in all of Borrower's goods, accounts,
        documents, instruments, money, deposit accounts, chattel paper, investment
        property, letter-of-credit rights and general intangibles, and all proceeds,
        replacements, substitutions, products, accessions and increases of the
        foregoing. The foregoing security interest shall not be effective until such
        consent referred to in this Section
        2.6 shall
        be
        obtained. Such security interest, when effective, shall be of equal priority
        as
        the security interest granted to the Other Lender under the Other Note (each
        as
        defined in Section
        2.22
        below).

       

      2.7  Default.
        The
        following shall constitute a "default"
        under
        this Note:

       

      2.7.1  Borrower
        shall fail to make payment of any amount due hereunder and such failure in
        not
        cured within ten (10) calendar days of Borrower's receiving written notice
        from
        Holder that such failure occurred or is continuing;

       

      
        
          
          

        

        
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      2.7.2  Borrower
        shall fail to satisfy or perform any other covenant or provision of this
        Note
        and such failure is not cured within ten (10) calendar days of Borrower's
        receiving written notice from Holder that such failure occurred or is
        continuing;

       

      2.7.3  Borrower:
        (i)
        voluntarily suspends the transaction of business; (ii)
        becomes
        insolvent or unable to pay its debts as they mature; (iii)
        makes an
        assignment for the benefit of creditors; (iv)
        becomes
        the subject of a bankruptcy, reorganization or similar debtor relief proceeding
        unless, in the case of an involuntary petition filed against Borrower, the
        petition is dismissed within sixty (60) calendar days; (v)
        becomes,
        or any of its property becomes, the subject of appointment of a receiver,
        trustee or conservator, unless, in the case of such appointment without
        Borrower's consent, the appointment is vacated within sixty (60) calendar
        days;
(vi)
        has any
        material portion of its property become subject to attachment, execution,
        sequestration or other judicial seizure not discharged within sixty (60)
        calendar days; (vii)
        fails to
        pay or discharge any judgment against it, singly or in the aggregate, in
        the
        excess of Fifty Thousand Dollars ($50,000.00), or to appeal such judgment
        and
        obtain a stay thereof within ten (10) calendar days of entry; or (viii)
        is
        dissolved or terminated.

       

      2.8  Enforcement
        Fees and Costs.
        Borrower
        shall immediately reimburse Holder for all fees and costs, including reasonable
        attorneys' and expert witness fees and costs, incurred by Holder for
(i)
        enforcement of this Note or any of its terms, or the exercise of any rights
        or
        remedies hereunder and/or at law, in equity or otherwise, whether or not
        any
        action or proceeding is filed; and (ii)
        representation of Holder in any bankruptcy, insolvency, reorganization or
        other
        debtor-relief or similar proceeding of or relating to Borrower or any person
        liable (by guaranty, assumption, endorsement or otherwise) upon any of the
        provisions of this Note. All fees and costs shall bear interest until paid
        at
        the rate applicable from time to time under this Note.

       

      2.9  Waivers.
        The
        makers, endorsers, guarantors and sureties of this Note hereby waive diligence,
        demand, presentment, notice of non-payment or dishonor, protest and notice
        of
        protest, and expressly agree that this Note or any obligation or term hereunder
        or the time for performance of any obligation under this Note may be renewed,
        modified, postponed or extended from time to time and at any time without
        notice, consent to the release without notice of any party or guarantor liable
        (primarily or secondarily) hereon or herefor, consent to the addition without
        notice of parties liable hereon or herefor, consent to the acceptance, release
        or substitution without notice of security for this Note, including other
        types
        of security, all without in any way affecting their liability, and waive
        all
        defenses based upon suretyship or impairment of collateral.

       

      2.10  Full
        Payment.
        All
        amounts payable under this Note shall be paid in full without setoff, deduction
        or counterclaim. All amounts payable under this Note shall be free and clear
        of
        and without any deduction or withholding for or on account of any taxes,
        levies,
        duties, charges, fees, restrictions or conditions of any nature now or hereafter
        imposed by federal, state county or local government or any political
        subdivision or taxing authority thereof or therein. Borrower shall indemnify
        Holder against such taxes, levies, imposts, duties, charges and fees (other
        than
        taxes on the income of Holder imposed by any taxing authority) which may
        be
        assessed against Holder or claimed or demanded from Holder in respect of
        any
        amount payable by Borrower hereunder, and against any cost, charges, expenses
        or
        liability arising out of or in respect of such assessment, claim or demand,
        to
        the full extent permitted by law.

       

      2.11  Time
        of the Essence.
        Time is
        of the essence with respect to the payment and performance of the obligations
        of
        this Note.

       

      2.12  No
        Oral Waivers or Modifications.
        No
        provision of this Note may be waived or modified orally, but only in a writing
        signed by Holder and Borrower.

       

      2.13  Governing
        Law. This
        Note
        shall be governed by and construed under the laws of the State of California,
        without regard to conflict of law provision.

       

      2.14  Severability.
        Every
        provision hereof is intended to be several. If any provision of this Note
        is
        determined by a court of competent jurisdiction to be illegal, invalid or
        unenforceable, such illegality, invalidity or unenforceability shall not
        affect
        the other provisions hereof, which shall remain binding and
        enforceable.

       

      2.15  Limitation
        Upon Interest.
        All
        agreements between Borrower and Holder, now existing or hereafter arising,
        are
        expressly limited so that no event whatsoever shall the amount paid, or agreed
        to be paid, to Holder hereof for the use, forbearance or detention of money
        to
        be loaned hereunder or otherwise, or for the performance or payment of any
        covenant or obligation contained herein, exceed the maximum amount permissible
        under applicable law. If from any circumstance whatsoever fulfillment of
        any
        provision hereof exceeds the limit or validity prescribed by law, then, ipso
        facto, the obligation to be fulfilled shall be reduced to the limit of such
        validity, and if from any such circumstance Holder hereof shall ever receive
        as
        interest under this Note or otherwise an amount that would exceed the highest
        lawful rate, such amount that would be excessive interest shall be applied
        to
        the reduction of the principal amount owing hereunder (without charge for
        prepayment) and not to the payment of interest, or if such excessive interest
        exceeds the unpaid balance of principal, such excess shall be refunded to
        Borrower.

       

      
        
          
          

        

        
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      2.16  Authority
        to Bind.
        Each
        person signing this Note on behalf of Borrower represents and warrants that
        he
        has full authority to do so and that this Note binds the
        corporation.

       

      2.17  Notice.
        All
        notices, demands and other communications required or permitted hereunder
        shall
        be in writing and shall be delivered by letter, facsimile, e-mail or other
        documentary form. Notice by facsimile, e-mail or hand delivery shall be deemed
        to have been received by the close of the business day on which it was
        transmitted or hand delivered (unless transmitted or hand delivered after
        6:00
        PM at the recipient's location in which case it will be deemed received at
        the
        close of the next business day). Notice by overnight mail or courier shall
        be
        deemed to have been received two (2) business days after it was sent. For
        purposes of notice, the addresses of Borrower and Holder shall be as set
        forth
        below; provided, however, that any party shall have the right to change its
        address for notice hereunder to any other location by giving notice to the
        other
        party in the manner set forth above.

       

      Address
        of Borrower:

      

      St.
        Bernard Software, Inc.

      15015
        Avenue of Science

      San
        Diego, California 92128

      Attention:
        Alfred Riedler

      Telephone:
        858-524-2050

      e-mail:
        ariedler@stbernard.com

      

      Address
        of Holder:

      

      BeeBird
        Beheer B.V.

      Strawinskylaan
        3107

      1077
        ZX
        Amsterdam

      Att.
        Bart
        A.M. van Hedel

      Fax:
        +31.20.471.2497

      Email:
        info@beebird.nl

      

      2.18  Remedies
        Cumulative.
        Each and
        every right, remedy and power hereby granted to Holder or allowed it by law
        or
        other agreement shall be cumulative and not exclusive and may be exercised
        by
        Holder from time to time. No failure or delay by Holder in exercising any
        right
        or remedy shall operate as a waiver of any such right or remedy, nor shall
        any
        single or partial exercise of any right or remedy preclude further exercise
        of
        such right or remedy or any other right or remedy.

       

      2.19  Representations.
        Borrower
        and Holder each represent and warrant to the other that it is not relying
        upon
        any legal advice from the other party or any of its agents or employees,
        it has
        been represented by an attorney of its own choosing in connection with this
        Note
        and the transactions contemplated herein, it fully understands the terms
        and
        contents if this Note and the Warrant and it freely signs
        hereunder.

       

      2.20  Headings.
        Headings used herein are for convenience of reference only and do not define
        or
        limit the scope of provisions of this Note.

       

      2.21  Successors
        and Assigns.
        This
        Note binds Borrower and its successors and assigns, it inures to the benefit
        of
        Holder and its successors, assigns and participants. Holder may not transfer
        nor
        assign its rights or obligations under this Note or the Warrant, in whole
        or in
        part.

       

      
        
          
          

        

        
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      2.22  Related
        Note.
        This
        Note is being executed and delivered simultaneously with the execution and
        delivery by Borrower of the Secured Promissory Note (the "Other
        Note")
        of
        even date in the original principal balance of $ 125,000 in favor
        of the Broomfield Family Trust (the "Other
        Lender").
        Advances under this Note shall be requested simultaneously with advance requests
        under the Other Note and shall be requested by Borrower on a pro rata basis;
        and
        all prepayments and payments of principal under this Note and the Other Note
        shall be made by Borrower (if not paid in full) to Holder and the Other Lender
        on a pro rata basis (and if Holder shall receive more than its pro rata share,
        it shall be deemed to hold such excess in trust for the benefit of the Other
        Lender).

       

      
        	
                BORROWER:

              	 
	 	 
	 	 
	
                ST.
                  BERNARD SOFTWARE, INC.

              	 
	
                a
                  Delaware corporation

              	 
	 	 
	 	 
	
                By: 
                  /s/ Alfred F.
                  Riedler                                         
                  

              	 
	
                Alfred
                  F. Riedler, Chief Financial Officer

              	 
	 	 

      

      

      

      The
        undersigned accepts and agrees to the foregoing Note and its terms, acknowledges
        and makes the representations, warranties and covenants of Holder contained
        therein, and agrees to make advances to Borrower as provided therein.

       

      
        	 	
                HOLDER:

              
	 	 
	 	 
	 	
                BeeBird
                  Beheer B.V.

              
	 	 
	 	/s/ Bart
                A.M. van
                Hedel
	 	
                By:
                  Bart A.M. van Hedel 

              
	 	
                Its:
                  managing director

              

      

      Read
        and
        approved:

       

      Other
        Lender: Broomfield Family Trust

       

      By:
        /s/
        Scott Broomfield

      
 

      
        
          
          

        

        
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      EXHIBIT
        A

      

      

      FORM
        OF
        COMMON STOCK PURCHASE WARRANT

       

       

      

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
        OR
        HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
        ACT
        COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
        THE
        ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
        SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
        TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
        PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

       

      Void
        after 5:00 p.m., San Diego, California Time, on May __, 2011.

       

      

      ST.
        BERNARD SOFTWARE, INC.

      COMMON
        STOCK PURCHASE WARRANT

      

      
        	
                No.
                  BN-____

              	
                _________
                  shares

              
	
                May
                  __, 2006

              	
                of
                  Common Stock

              

      

      

      THIS
        CERTIFIES THAT, for value received, ______________, a ________________(the
        "Holder"), is entitled to purchase __________ (________) shares of Common
        Stock
        of ST. BERNARD SOFTWARE, INC., a Delaware corporation (the “Company”), at a
        price of $____ per share (the "Warrant Price"), subject to adjustments and
        all
        other terms and conditions set forth in this Warrant. 

       

      Definitions.
        As
        used
        herein, the following terms, unless the context otherwise requires, shall
        have
        the following meanings:

       

      "Act"
        shall mean the Securities Act of 1933, as amended, or any successor federal
        statute, and the rules and the rules and regulations promulgated thereunder,
        all
        as the same shall be in effect at the time.

       

      "Common
        Stock" shall mean shares of the Company's presently or subsequently authorized
        common stock, and any stock into which such common stock may hereafter be
        exchanged.

       

      "Company"
        shall mean ST. BERNARD SOFTWARE, INC., a Delaware corporation, and any
        corporation which shall succeed to or assume the obligations of ST. BERNARD
        SOFTWARE, INC., under this Warrant.

       

      "Date
        of
        Grant" shall be deemed May __, 2006.

       

      "Exercise
        Date" shall mean the effective date of the delivery of the Notice of Exercise
        pursuant to Sections 0
        and
0
        below.

       

      "Holder"
        shall mean any person who shall at the time be the registered holder of this
        Warrant.

       

      "Shares"
        shall mean shares of the Company's Common Stock, as described in the Company's
        articles of incorporation.

       

      "Warrant
        Shares" shall mean _______ shares of the Company's Common Stock which the
        Warrant entitles the Holder to purchase.

       

      Term.   
        The
        purchase right represented by this Warrant is exercisable only during the
        period
        commencing upon the Date of Grant and ending the earlier of (i)
        May __,
        2011, or (ii)
        concurrently with the closing date of: a sale of all or substantially all
        of the
        Company's assets; a merger of the Company with or into another entity or
        of an
        entity with or into the Company following which the voting control of the
        surviving entity in the merger is ultimately controlled by persons who presently
        do not own beneficially or otherwise ten percent (10%) or more of the issued
        and
        outstanding voting stock of the Company; or sale by existing shareholders
        of at
        least fifty-one percent (51%) of the presently issued and outstanding stock
        of
        the Company. The foregoing events are collectively referred to as a "change
        of
        control." After May __, 2011 or a change of control, this Warrant shall be
        of no
        further force or effect.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      Method
        of Exercise and Payment. 

       

      Method
        of Exercise.
        Subject
        to compliance with all applicable Federal and state securities laws, the
        purchase right represented by this Warrant may be exercised during its term
        (as
        provided in Section (i)),
        in
        whole or in part and from time to time, by the Holder by (i)
        surrender of this Warrant and delivery of the Notice of Exercise (the form
        of
        which is attached as Exhibit A), duly executed, at the principal office of
        the
        Company and (ii)
        payment
        to the Company of an amount equal to the product of the then applicable Warrant
        Price multiplied by the number of Shares then being purchased.

       

      Method
        of Payment.
        Payment
        shall be made either (1)
        by cash,
        or (2)
        by wire
        transfer of United States funds for the account of the Company.

       

      Delivery
        of Certificate.
        In the
        event of any exercise of the purchase right represented by this Warrant,
        certificates for the Shares so purchased shall be delivered to the Holder
        within
        thirty (30) calendar days of delivery of the Notice of Exercise and, unless
        this
        Warrant has been fully exercised or has expired, a new warrant representing
        the
        portion of Shares with respect to which this Warrant shall not have been
        exercised shall also be issued to the Holder within such thirty (30) day
        period.

       

      No
        Fractional Shares.
        No
        fractional shares shall be issued on connection with any exercise hereunder,
        but
        in lieu of such fractional shares the Company shall make a cash payment therefor
        upon the basis of the fair market value per Share as of the date of the
        exercise.

       

      Adjustment
        of Warrant Price and Number of Shares.
        

       

      Adjustment
        Upon Subdivision, Combination, or Reclassification.
        In case
        the Company shall at any time after the Date of Grant (i)
        subdivide the outstanding shares of its Common Stock, (ii)
        combine
        the outstanding shares of its Common Stock into a smaller number of shares
        of
        Common Stock, or (iii)
        issue by
        reclassification of its shares of Common Stock other securities of the Company
        (including any such reclassification in connection with a consolidation or
        merger in which the Company is the surviving person), the number and kind
        of
        shares purchasable upon exercise of this Warrant outstanding immediately
        prior
        thereto shall be adjusted so that the Holder shall be entitled to receive
        at the
        same aggregate Warrant Price the kind and number of shares of Common Stock
        or
        other securities of the Company which the Holder would have owned or have
        been
        entitled to receive after the happening of any events described above had
        such
        warrant been exercised in full immediately prior to the earlier of the happening
        of such event or any record date with respect thereto. In the event of any
        adjustment of the total number of shares of Common Stock purchasable upon
        the
        exercise of this Warrant, the Warrant Price shall be adjusted to be the amount
        resulting from dividing the number of shares of Common Stock (including
        fractional shares of Common Stock) covered by this Warrant immediately after
        such adjustment into the total amount payable upon the exercise of this Warrant
        in full immediately prior to such adjustment. An adjustment made pursuant
        to
        this Section 4 shall become effective immediately after the effective date
        of
        such event retroactive to the record date, if any, for such event. Such
        adjustment shall be made successively whenever any event listed above shall
        occur.

       

      Adjustment
        Upon Certain Issuances of Common Stock Prior to May __, 2011.
        In the
        event the Company, at any time from the date hereof through May __, 2011,
        shall
        issue shares of Common Stock for consideration per share less than $____
        per
        share (the "Lower Issuance Price"), then, in such event, the Warrant Price
        shall
        be reduced to the Lower Issuance Price. Notwithstanding the foregoing, no
        reduction shall be made in connection with shares of Common Stock (i)
        issued
        upon exercise and/or conversion of warrants, options and other convertible
        securities currently outstanding as of the date hereof; (ii)
        issued
        in connection with the 1992 Stock Option Plan, the St. Bernard Software,
        Inc.
        2000 Stock Option Plan and the St. Bernard Software, Inc. 2005 Stock Option
        Plan; (iii)
        issued
        as compensation for the Company's officers, directors or consultants;
(iv)
        issued
        under this antidilution provision or similar antidilution provisions contained
        in other warrants; (v)
        issued
        in connection with a transaction resulting in a change of control of the
        Company; or (vi)
        issued
        in connection with the Company's collaboration with a corporate
        partner.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Compliance
        with Act; Transferability and Negotiability of Warrant; Investment
        Intent. 

       

      Compliance
        with Act.
        The
        Holder, by acceptance hereof, agrees that this Warrant and the Shares to
        issued
        upon the exercise hereof are being acquired solely for its own account and
        not
        as a nominee for any other party and not with a view toward the resale or
        distribution thereof and that it will not offer, sell or otherwise dispose
        of
        this Warrant or any Shares to be issued upon the exercise hereof except under
        circumstances which will not result in a violation of the Act. Upon the exercise
        of this Warrant, the Holder shall confirm in writing, in a form satisfactory
        to
        the Company, that the Shares so issued are being acquired solely for its
        own
        account and not as a nominee for any other party and not with a view toward
        resale or distribution thereof. This Warrant and the Shares to be issued
        upon
        the exercise hereof (unless registered under the Act) shall be imprinted
        with a
        legend substantially in the following form:

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") AND ARE "RESTRICTED SECURITIES"
        AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT
        BE SOLD
        OR OTHERWISE DISTRIBUTED EXCEPT (i)
        IN
        CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER
        THE
        ACT OR (ii)
        IN
        COMPLIANCE WITH RULE 144, OR (iii)
        PURSUANT
        TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

       

      In
        addition, this Warrant and the Shares to be issued upon the exercise hereof
        shall bear any legends required by the securities laws of applicable
        states.

       

      Any
        legend referring to the Act endorsed on a certificate pursuant to this Section
        0
        shall be
        removed, and the Company shall issue a certificate without such legend to
        the
        Holder of such securities if (i)
        such
        securities are registered and sold under the Act and a prospectus meeting
        the
        requirements of Section 10 of the Act is available, (ii)
        such
        securities are sold or may be sold in compliance with Rule 144(k), or
(iii)
        at the
        request of the Holder, if the Holder shall have obtained an opinion of counsel
        at such Holder's expense (which counsel may be counsel to the Company)
        reasonably acceptable to the Company to the effect that the securities proposed
        to be disposed of may lawfully be so disposed of without registration,
        qualification or legend.

       

      No
        Transfer.
        Holder
        will not dispose of the Warrant or the Shares to be issued upon exercise
        of the
        Warrant other than (i)
        in
        conjunction with an effective registration statement for the Warrant and/or
        Shares under the Act, (ii)
        in
        compliance with Rule 144 promulgated under the Act or (iii)
        in
        compliance with any applicable exemption from registration under the Act,
        and in
        compliance with applicable state, local or foreign securities laws.

       

      Knowledge
        and Experience.
        Holder
(i)
        has such
        knowledge and experience in financial and business matters as to be capable
        of
        evaluating the merits and risks of such Holder's prospective investment in
        the
        Warrant and the Shares to issued upon exercise of the Warrant; (ii)
        has the
        ability to bear the economic risk of such Holder's prospective investment;
        (iii)
        has been
        furnished with and has access to such information as such Holder has considered
        necessary to make a determination as to the purchase of the Warrant and the
        Shares to be issued upon the exercise of the Warrant together with such
        additional information as is necessary to verify the accuracy of the information
        supplied; (iv)
        has had
        all questions which have been asked by the Holder satisfactorily answered
        by the
        Company; and (v)
        has not
        been offered the Warrant and the Shares to be issued upon exercise of the
        Warrant by any form of advertisement, article, notice or other communication
        published in any newspaper, magazine, or similar media or broadcast over
        television or radio, or any seminar or meeting whose attendees have been
        invited
        by any such media.

       

      Rights
        of Holder.
        No
        Holder
        shall be entitled to vote or receive dividends or be deemed the holder of
        Shares
        or any other securities of the Company which may at any time be issuable
        on the
        exercise of this Warrant for any purpose, nor shall anything contained herein
        be
        construed to confer upon the Holder, as such, any rights of a shareholder
        of the
        Company or any right to vote for the election of directors or upon any matter
        submitted to shareholders at any meeting thereof, or to give or withhold
        consent
        to any corporate action (whether upon any recapitalization, issuance of stock,
        reclassification of stock, consolidation, merger, transfer of assets or
        otherwise) or to receive notice of meetings, or to receive dividends or
        subscription rights or otherwise until this Warrant shall have been exercised
        and the Shares issuable upon exercise hereof shall have become deliverable,
        as
        provided herein.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Piggy
        Back Registration.
        If
        at any
        time Company shall determine to register under the Securities Act of 1933,
        as
        amended (the “Securities Act”) (including, without limitation, pursuant to a
        demand of any stockholder of Company exercising registration rights) any
        of its
        securities, other than in connection with a registration effected solely
        to
        implement an employee benefit plan or a transaction to which Rule 145 or
        any
        other similar rule of the Securities and Exchange Commission (the “Commission”)
        under the Securities Act is applicable, it shall send to the Holder, written
        notice of such determination. If within thirty (30) calendar days after receipt
        of such notice, the Holder shall so request in writing, Company shall use
        its
        best efforts to include in such registration statement all or any part of
        the
        shares issuable under the Warrant which the Holder requests to be registered
        therein, except that if, in connection with any offering involving an
        underwriting of Common Stock to be issued by Company, the managing underwriter
        shall impose a limitation on the number of shares of such Common Stock which
        may
        be included in any such registration statement because, in its reasonable
        judgment, such limitation is necessary to effect an orderly public distribution,
        and such limitation is imposed pro rata with respect to all securities whose
        holders have a contractual, incidental ("piggy back") right to include such
        securities in the registration statement and as to which inclusion has been
        requested pursuant to such right and there are first excluded from such
        registration statement all shares of Common Stock sought to be included therein
        by (i) any director, officer or employee of Company or any subsidiary of
        Company, (ii) any holder thereof not having any such contractual, incidental
        registration rights, and (iii) any holder thereof having contractual, incidental
        registration rights subordinate and junior to the rights of the Holder, then
        Company shall be obligated to include in such registration statement only
        such
        limited portion of the shares issuable under the Warrant with respect to
        which
        the Holder has requested inclusion hereunder.

       

      Market
        Stand-Off Agreement.
        During
        the period of duration specified by the Company and an underwriter of Common
        Stock or other securities of the Company, following the effective date of
        a
        registration statement of the Company filed under the Act, the Holder or
        any
        future transferee will not, to the extent requested by the Company and such
        underwriter, directly or indirectly sell, offer to sell, contract to sell
        (including without limitation, any short sale), grant any option to purchase
        or
        otherwise transfer or dispose of (other than to transferees or donees who
        agree
        to be similarly bound) any securities of the Company held by it at any time
        during such period except Common Stock included in such registration;
provided,
        however,
        that:

       

      Such
        agreement shall not exceed one hundred eighty (180) calendar days for the
        first
        registration statement of the Company which covers the Common Stock (or other
        securities) to be sold on its behalf in an underwritten public offering;
        and

       

      Such
        agreement shall not continue to apply to, and shall not exceed ninety (90)
        calendar days for the two subsequent registration statements of the Company
        which cover Common Stock (or other securities) to be sold on its behalf to
        the
        public in an underwritten public offering.

       

      In
        order
        to enforce the foregoing covenant, the Company may impose stop-transfer
        instructions with respect to the Common Stock of the Holder or any future
        transferee (and the shares or securities of every other person subject to
        the
        foregoing restriction) until the end of such period.

      

      Replacement
        of Warrant.
        On
        receipt of evidence reasonably satisfactory to the Company of the loss, theft,
        destruction or mutilation of this Warrant and, in the case of loss, theft
        or
        destruction, on delivery of an indemnity agreement reasonably satisfactory
        to
        the Company or, in the case of a mutilation, on surrender and cancellation
        of
        this Warrant, the Company at its expense shall execute and deliver, in lieu
        of
        this Warrant, a new warrant of like tenor.

       

      Exchange
        of Warrants.
        Subject
        to the provisions of the Warrant, on surrender of this Warrant for exchange,
        properly endorsed and in compliance Act, the Company at its expense shall
        issue
        to or on the order of the Holder a new warrant or warrants of like tenor,
        in the
        name of the Holder or as the Holder (on payment by the Holder of any applicable
        transfer taxes) may direct, for the number of Shares issuable upon exercise
        thereof.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Stock
        Fully paid; Reservation of Warrant Shares.
        The
        Warrant Shares will, upon issuance, be fully paid and nonassessable, and
        free
        from all taxes, liens and charges with respect to the issue thereof. During
        the
        period within which the rights represented by this Warrant may be exercised,
        the
        Company will use its best efforts to cause to be authorized, and thereafter
        at
        all times have authorized, and reserve for purposes of the issue upon exercise
        of the purchase rights evidenced by this Warrant, a sufficient number of
        shares
        of its Common Stock (or such other security as to which this Warrant may
        be
        exercised) to provide for the exercise rights represented by this
        Warrant.

       

      Governing
        Law.
        This
        Warrant shall be governed in all respects by the laws of the State of California
        as such laws are applied to agreements between California residents entered
        into
        and to be performed entirely within California. 

       

      Survival.
        The
        representations, warranties, covenants and agreements made herein shall survive
        the execution of this Warrant and the closing transactions contemplated
        hereby.

       

      Successors
        and Assigns.
        Except
        as
        otherwise expressly provided herein, the provisions hereof shall inure to
        the
        benefit of, and be binding upon, the successors, assigns, heirs, executors
        and
        administrators of the parties hereto.

       

      Notices,
        etc.
        All
        notices and other communications required or permitted hereunder shall be
        in
        writing and shall be sent by facsimile, overnight courier or mailed by certified
        or registered mail, postage prepaid, return receipt requested, to the facsimile
        number or address shown on the signature pages to this Warrant or to such
        other
        facsimile number address provided to the parties to this Warrant in accordance
        with this Section 0.
        Such
        notices or other communications shall be deemed received upon receipt of
        a
        confirmation of facsimile receipt or three calendar days after deposit in
        the
        mail.

       

      Severability.
        In
        the
        case any provision of this Warrant shall be declared invalid, illegal or
        unenforceable, the validity, legality and enforceability of the remaining
        provisions shall not in any way be affected or impaired thereby.

       

      Titles
        and Subtitles.
        The
        titles of the sections of this Warrant are for convenience of reference only
        and
        are not to be considered in construing the terms of this Warrant.

       

      Counterparts.
        This
        Warrant may be executed in any number of counterparts, each of which shall
        be an
        original, but all of which together shall constitute on instrument.

       

      
 

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      Dated:
        May __, 2006

      

      

      THE
        COMPANY

      

      ST.
        BERNARD SOFTWARE, a Delaware corporation

      

      

      By:
        ________________________________     

      John
        Jones, President/ CEO

      

      THE
        HOLDER

      

      _____________,
        a _____________

      

      

      By:
        ________________________________    

      Name:

      

      Title:

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

       

      NOTICE
        OF
        EXERCISE

       

      

      To: ST.
        BERNARD SOFTWARE, INC.:

      

      	1.  	
              The
                undersigned Holder of the attached original, executed Common Stock
                Purchase Warrant hereby elects to exercise its purchase right under
                such
                Warrant with respect to Shares, as defined in the Warrant, of St,
                Bernard
                Software, Inc. (the "Company").

            

       

      	2.  	
              The
                undersigned Holder elects to pay the aggregate Warrant Price, as
                defined
                in the Warrant, for such shares (the "Exercise Shares") in the following
                manner:

            

       

      
        
          	 	
                  [
                    ]

                	
                  by
                    the enclosed cash in the amount of $  ;
                    or

                

        

         

      

      
        	 	
                [
                  ]

              	
                by
                  wire transfer of U.S. funds to the account of the Company on the
                  amount of
                  $______ which transfer has been made before or simultaneously with
                  the
                  delivery of this notice pursuant to the instructions of the Company.
                  

              

      

      

      	3.  	
              The
                Holder represents and warrants that the Exercise Shares so issued
                are
                being acquired solely for its own account and not as a nominee for
                any
                other party and not with a view toward resale or distribution
                thereof.

            

       

      	4.  	
              Please
                issue a stock certificate or certificates representing the appropriate
                number of shares in the name of the undersigned or in such other
                name as
                specified below:

            

       

      

      

      [ADDRESS]

      _______________________

      _______________________

      _______________________

      

      

      

      HOLDER:

       

       

                                      ___________________________________________

      

       

      

      Date: _______________________________________     

      

      

       

       

      
        
          
          

        

        
          1410.25.2

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
      NOT
      BE OFFERED OR SOLD UNLESS REGISTERED AND QUALIFIED PURSUANT TO THE APPLICABLE
      PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS UNLESS AN EXEMPTION FROM SUCH
      REGISTRATION OR QUALIFICATION APPLIES. THEREFORE, NO SALE OR TRANSFER OF THIS
      SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER OF THIS SECURITY SHALL
      BE
      VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH
      TRANSACTION UNLESS (A) SUCH TRANSACTION HAS BEEN DULY REGISTERED UNDER THE
      SECURITIES ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES
      LAWS, OR (B) THE ISSUER HAS FIRST RECEIVED AN OPINION OF COUNSEL SATISFACTORY
      TO
      IT THAT SUCH REGISTRATION QUALIFICATION OR APPROVAL IS NOT
      REQUIRED.

     

    SECURED
      PROMISSORY NOTE

     

    $125,000

    San
      Diego, California

    May
      25,
      2006 ("Effective
      Date")

     

    For
      value
      received, the undersigned ("Borrower")
      promises to pay to the order of the Broomfield Family Trust ("Holder")
      at
      3000 Sand Hill Road, Building I, Suite 240, Menlo Park, California 94025, or
      such other place as Holder may from time to time designate in writing, in lawful
      money of the United States, the principal sum of one hundred twenty five
      thousand dollars ($125,000), or so much thereof as Holder may advance from
      time
      to time to Borrower hereunder, with interest at the rate and due and payable,
      as
      follows:

     

    ARTICLE
      1
      - INTEREST AND PAYMENTS

     

    1.1  Dates.
      As used
      herein, "Maturity
      Date"
      means
      six (6) months from the Effective Date.

     

    1.2  Origination
      Fee. Subject
      to Section
      1.9
      hereof,
      at the time of each advance from Holder to Borrower hereunder, an origination
      fee equal to two percent (2.0%) of such advance ("Origination
      Fee")
      shall
      be due and payable by Borrower to Holder and Holder may deduct the Origination
      Fee from the corresponding advance prior to delivery thereof to
      Borrower.

     

    1.3  Payments.
      On the
      last day of each month, interest accruing on the outstanding principal balance
      shall be due and payable. On the Maturity Date, the entire unpaid outstanding
      principal balance and any accrued and unpaid interest shall be due and
      payable.

     

    1.4  Default
      in Payment if Interest or Late Payment Charges or any other Amounts
      Overdue.
      Any
      interest or other amounts not paid when due hereunder shall be added to the
      outstanding principal balance (which shall not cure the default in payment)
      and
      shall thereafter bear like interest as principal.

     

    1.5  Rate
      of Interest.
      The
      amount of outstanding principal shall bear interest from and after the date
      of
      each advance at the rate ("Interest
      Rate")
      of
      twelve percent (12.0%) per annum, which shall be adjusted to eighteen percent
      (18.0%) per annum after the occurrence of any default (as defined
      herein).

     

    1.6  Computation
      of Interest.
      Interest
      hereunder shall be computed on the basis of a 360-day year, with interest
      accruing as of the last day of each month.

     

    1.7  Payment
      on Business Days.
      Whenever any payment to be made under this Secured Promissory Note (the
      "Note")
      is
      stated to be due on a date that falls on a Saturday, Sunday, public holiday
      or
      bank holiday or the equivalent for banks generally under the laws of the State
      of California, such payment shall be due on the next succeeding business
      day.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.8  Optional
      Prepayment.
      This
      Note may be prepaid by Borrower in full at any time on or after the date hereof
      (the "Prepayment
      Date"),
      at a
      price equal to the principal amount to be prepaid plus all accrued interest
      on
      such prepaid amount to the Prepayment Date. Prepayments will be made in
      increments of Fifty Thousand Dollars ($50,000.00), except that a prepayment
      may
      be made which repays the entire outstanding principal of the Note, including
      all
      accrued and unpaid interest thereunder. 

     

    1.9  Reborrowings.
      Borrower may from time to time during the terms of this Note borrow, partially
      or wholly repay the outstanding principal balance and accrued interest without
      premium or penalty, and reborrow without payment of an additional Origination
      Fee on the reborrowed funds (and, with respect thereto, any advance made after
      any repayment of principal shall first be considered to be a reborrowing of
      principal without an additional Origination Fee), subject to all the terms
      and
      conditions of this Note. 

     

    1.10  "Common
      Stock"
      shall
      mean the par value voting common stock of Borrower. 

     

    ARTICLE
      2 -
      ADDITIONAL TERMS AND CONDITIONS

     

    2.1  Issuance
      of Warrants.
      As an
      additional inducement for Holder to make the loan as contemplated herein,
      Borrower will grant a warrant (the "Warrant")
      to
      Holder to purchase six thousand two hundred and fifty (6,250) shares of Common
      Stock at a price equal to the last sales price of the shares before Maturity
      Date as reported on the OTC BB or such other primary market on which the shares
      are traded, or of the shares are not traded at such market, at the fair value
      of
      the shares as determined in good faith by the Board of Directors of Borrower
      -
      and on the terms as set forth in detail in the Common Stock Purchase Warrant,
      a
      copy of which is attached hereto as Exhibit A.

     

    2.2  Investment
      Representations of Holder.
      In
      order to induce Borrower to accept this Note and to issue the Warrant and as
      further consideration for such acceptance and issuance, Holder hereby makes
      the
      following acknowledgments, representations and warranties with the full
      knowledge that Borrower will expressly rely on the following acknowledgments,
      representations and warranties in making a decision to accept or reject the
      loan
      to be made hereunder and to issue the Warrant:

     

    2.2.1  Holder
      hereby represents and warrants that Holder is an "accredited investor" as
      defined in Rule 501(a) of Regulation D promulgated under the Securities Act
      of
      1933, as amended (the "Securities Act"),
      in
      that Holder (i)
      is a
      corporation, partnership, Massachusetts or similar business trust with total
      assets of at least $5,000,000 as of the Effective Date (the "Asset
      Amount"),
      not
      formed for the purpose of acquiring the securities offered or issuing the
      indebtedness evidenced by this Note, whose purchase of the securities and
      issuance of the indebtedness evidenced by this Note is directed by a person
      who
      has such knowledge and experience in financial and business matters that he
      is
      capable of evaluating the merits and risks of the prospective investment, or
      (ii)
      is a
      natural person (x) whose individual net worth, or joint net worth with that
      person’s spouse, at the time of his purchase exceeds $1,000,000, (y) who had an
      individual income in excess of $200,000 in each of the two most recent years
      and
      has a reasonable expectation of reaching the same income level in the current
      year, or (z) who had joint income with that person’s spouse in excess of
      $300,000 in each of those years and has a reasonable expectation of reaching
      the
      same income level in the current year or (iii)
      that
      Holder is an entity, all of whose equity owners are accredited
      investors.

     

    2.2.2  In
      order
      for Borrower to ascertain the availability of a transactional exemption under
      the California Corporate Securities Laws and for purposes of an exception from
      the California usury provisions, Holder represents and warrants, in addition
      to
      the other representations and warranties contained herein (including without
      limitation the representations set forth in Section
      2.2.1)
      that
      Holder qualifies under the following categories:

     

    (a)  
      By
      reason of Holder's business or financial experience or the business or financial
      experience of Holder's professional advisor, Holder or Holder's advisor on
      behalf of Holder has the capacity to protect the interests of Holder in
      connection with the purchase of the securities and the issuance of the evidence
      of indebtedness hereunder.

     

    (b)  Holder
      has a preexisting personal or business relationship with Borrower, or one of
      its
      officers or directors, of a nature and duration as would allow Holder to be
      aware of the character, business acumen, general business and financial
      circumstances of the person with whom such relationship exists.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (c)  Holder
      or
      Holder's professional advisors, including without limitation its counsel, has
      sufficient knowledge and experience in financial and business matters so that
      Holder or he/she is on Holder's behalf capable of evaluating the merits and
      risks of investment in the restricted securities and the issuance of the
      evidence of indebtedness hereunder and can reasonably be assumed to have the
      capacity to protect Holder's interests in connection with the
      transaction.

     

    (d)  The
      Asset
      Amount is according to Holder's most recent financial statements, which
      financial statements are as of a date not more than ninety (90) days prior
      to
      the Effective Date, prepared in accordance with generally accepted accounting
      principles and in accordance with the rules and requirements of the Securities
      and Exchange Commission (whether or not required by law to be prepared in
      accordance with those rules and requirements).

     

    2.2.3  This
      issuance of securities pursuant to this Note and the issuance of indebtedness
      hereunder has not been accompanied by the publication of any
      advertisement.

     

    2.3  Advances.
      Advances hereunder shall be made in such amounts, up to the total amount of
      the
      principal sum stated above, and at such times, as Borrower shall request in
      writing to Holder. All requests for advances under this Note shall be made
      at
      least five (5) business days prior to the date the requested advance is to
      be
      made. Advances will be made in increments of Fifty Thousand Dollars
      ($50,000.00). The obligation of Holder to make advances hereunder is conditioned
      upon the following: From the Effective Date to the Maturity Date, no default
      under this Note nor any act, event or condition which would, with or without
      notice, the passage of time or both, constitute a default under this Note,
      shall
      exist or have occurred. Holder shall not incur any liability to Borrower in
      acting upon advances requested which Holder believes in good faith to have
      been
      given by a person duly authorized to borrow on behalf of Borrower. All advances
      made by Holder hereunder and all payments received on account of the principal
      balance hereof and/or interest and/or late charges shall be evidenced by the
      internal records of Holder which shall be prima facie evidence of such
      matters.

     

    2.4  Application
      of Payment.
      All
      payments received, irrespective of how they may be designated by Borrower,
      shall
      be applied first to charges other than interest and principal, if any, owing
      hereunder, then to accrued interest, then to principal, except that, after
      the
      occurrence the occurrence and during the continuation of any default under
      this
      Note, all amounts received shall be applied in such order as Holder, in its
      sole
      discretion, may elect. Borrower waives the application of Sections 1479 and
      2822(a) of the California Civil Code and any other Statute or rule of law that
      would otherwise direct, or permit Borrower to direct, the order of application
      of payment made by Borrower or amounts otherwise received by
      Holder.

     

    2.5  No
      Waiver.
      The
      acceptance by Holder of any payment under this Note after the date such payment
      is due shall not constitute a waiver of Holder's right to require prompt payment
      when due of future or succeeding payments or to declare a default as herein
      provided for any failure to pay. 

     

    2.6  Security
      Interest.
      The loan
      evidenced by this Note is made for the express purpose of providing Borrower
      with working capital for its operations. As security for Borrower's obligations
      under this Note, subject to and only effective upon obtaining the written
      consent of Camel Financial, Inc. and/or its successors and assigns (including
      without limitation US Bank National Association, Union Bank of California,
      N.A.
      and Pacific Century Bank, N.A.) to the security interest granted under this
      Section
      2.6.
      Borrower grants Holder a security interest in all of Borrower's goods, accounts,
      documents, instruments, money, deposit accounts, chattel paper, investment
      property, letter-of-credit rights and general intangibles, and all proceeds,
      replacements, substitutions, products, accessions and increases of the
      foregoing. The foregoing security interest shall not be effective until such
      consent referred to in this Section
      2.6 shall
      be
      obtained. Such security interest, when effective, shall be of equal priority
      as
      the security interest granted to the Other Lender under the Other Note (each
      as
      defined in Section
      2.22
      below).

     

    2.7  Default.
      The
      following shall constitute a "default"
      under
      this Note:

     

    2.7.1  Borrower
      shall fail to make payment of any amount due hereunder and such failure in
      not
      cured within ten (10) calendar days of Borrower's receiving written notice
      from
      Holder that such failure occurred or is continuing;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.7.2  Borrower
      shall fail to satisfy or perform any other covenant or provision of this Note
      and such failure is not cured within ten (10) calendar days of Borrower's
      receiving written notice from Holder that such failure occurred or is
      continuing;

     

    2.7.3  Borrower:
      (i)
      voluntarily suspends the transaction of business; (ii)
      becomes
      insolvent or unable to pay its debts as they mature; (iii)
      makes an
      assignment for the benefit of creditors; (iv)
      becomes
      the subject of a bankruptcy, reorganization or similar debtor relief proceeding
      unless, in the case of an involuntary petition filed against Borrower, the
      petition is dismissed within sixty (60) calendar days; (v)
      becomes,
      or any of its property becomes, the subject of appointment of a receiver,
      trustee or conservator, unless, in the case of such appointment without
      Borrower's consent, the appointment is vacated within sixty (60) calendar days;
      (vi)
      has any
      material portion of its property become subject to attachment, execution,
      sequestration or other judicial seizure not discharged within sixty (60)
      calendar days; (vii)
      fails to
      pay or discharge any judgment against it, singly or in the aggregate, in the
      excess of Fifty Thousand Dollars ($50,000.00), or to appeal such judgment and
      obtain a stay thereof within ten (10) calendar days of entry; or (viii)
      is
      dissolved or terminated.

     

    2.8  Enforcement
      Fees and Costs.
      Borrower
      shall immediately reimburse Holder for all fees and costs, including reasonable
      attorneys' and expert witness fees and costs, incurred by Holder for
(i)
      enforcement of this Note or any of its terms, or the exercise of any rights
      or
      remedies hereunder and/or at law, in equity or otherwise, whether or not any
      action or proceeding is filed; and (ii)
      representation of Holder in any bankruptcy, insolvency, reorganization or other
      debtor-relief or similar proceeding of or relating to Borrower or any person
      liable (by guaranty, assumption, endorsement or otherwise) upon any of the
      provisions of this Note. All fees and costs shall bear interest until paid
      at
      the rate applicable from time to time under this Note.

     

    2.9  Waivers.
      The
      makers, endorsers, guarantors and sureties of this Note hereby waive diligence,
      demand, presentment, notice of non-payment or dishonor, protest and notice
      of
      protest, and expressly agree that this Note or any obligation or term hereunder
      or the time for performance of any obligation under this Note may be renewed,
      modified, postponed or extended from time to time and at any time without
      notice, consent to the release without notice of any party or guarantor liable
      (primarily or secondarily) hereon or herefor, consent to the addition without
      notice of parties liable hereon or herefor, consent to the acceptance, release
      or substitution without notice of security for this Note, including other types
      of security, all without in any way affecting their liability, and waive all
      defenses based upon suretyship or impairment of collateral.

     

    2.10  Full
      Payment.
      All
      amounts payable under this Note shall be paid in full without setoff, deduction
      or counterclaim. All amounts payable under this Note shall be free and clear
      of
      and without any deduction or withholding for or on account of any taxes, levies,
      duties, charges, fees, restrictions or conditions of any nature now or hereafter
      imposed by federal, state county or local government or any political
      subdivision or taxing authority thereof or therein. Borrower shall indemnify
      Holder against such taxes, levies, imposts, duties, charges and fees (other
      than
      taxes on the income of Holder imposed by any taxing authority) which may be
      assessed against Holder or claimed or demanded from Holder in respect of any
      amount payable by Borrower hereunder, and against any cost, charges, expenses
      or
      liability arising out of or in respect of such assessment, claim or demand,
      to
      the full extent permitted by law.

     

    2.11  Time
      of the Essence.
      Time is
      of the essence with respect to the payment and performance of the obligations
      of
      this Note.

     

    2.12  No
      Oral Waivers or Modifications.
      No
      provision of this Note may be waived or modified orally, but only in a writing
      signed by Holder and Borrower.

     

    2.13  Governing
      Law. This
      Note
      shall be governed by and construed under the laws of the State of California,
      without regard to conflict of law provision.

     

    2.14  Severability.
      Every
      provision hereof is intended to be several. If any provision of this Note is
      determined by a court of competent jurisdiction to be illegal, invalid or
      unenforceable, such illegality, invalidity or unenforceability shall not affect
      the other provisions hereof, which shall remain binding and
      enforceable.

     

    2.15  Limitation
      Upon Interest.
      All
      agreements between Borrower and Holder, now existing or hereafter arising,
      are
      expressly limited so that no event whatsoever shall the amount paid, or agreed
      to be paid, to Holder hereof for the use, forbearance or detention of money
      to
      be loaned hereunder or otherwise, or for the performance or payment of any
      covenant or obligation contained herein, exceed the maximum amount permissible
      under applicable law. If from any circumstance whatsoever fulfillment of any
      provision hereof exceeds the limit or validity prescribed by law, then, ipso
      facto, the obligation to be fulfilled shall be reduced to the limit of such
      validity, and if from any such circumstance Holder hereof shall ever receive
      as
      interest under this Note or otherwise an amount that would exceed the highest
      lawful rate, such amount that would be excessive interest shall be applied
      to
      the reduction of the principal amount owing hereunder (without charge for
      prepayment) and not to the payment of interest, or if such excessive interest
      exceeds the unpaid balance of principal, such excess shall be refunded to
      Borrower.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    2.16  Authority
      to Bind.
      Each
      person signing this Note on behalf of Borrower represents and warrants that
      he
      has full authority to do so and that this Note binds the
      corporation.

     

    2.17  Notice.
      All
      notices, demands and other communications required or permitted hereunder shall
      be in writing and shall be delivered by letter, facsimile, e-mail or other
      documentary form. Notice by facsimile, e-mail or hand delivery shall be deemed
      to have been received by the close of the business day on which it was
      transmitted or hand delivered (unless transmitted or hand delivered after 6:00
      PM at the recipient's location in which case it will be deemed received at
      the
      close of the next business day). Notice by overnight mail or courier shall
      be
      deemed to have been received two (2) business days after it was sent. For
      purposes of notice, the addresses of Borrower and Holder shall be as set forth
      below; provided, however, that any party shall have the right to change its
      address for notice hereunder to any other location by giving notice to the
      other
      party in the manner set forth above.

     

    Address
      of Borrower:

    

    St.
      Bernard Software, Inc.

    15015
      Avenue of Science

    San
      Diego, California 92128

    Attention:
      Alfred Riedler

    Telephone:
      858-524-2050

    e-mail:
      ariedler@stbernard.com

    

    Address
      of Holder:

    c/o
      Scott
      Broomfield

    3000
      Sand
      Hill Road, Building I

    Suite
      240

    Menlo
      Park, California 94025

    ____________________

     

    2.18  Remedies
      Cumulative.
      Each and
      every right, remedy and power hereby granted to Holder or allowed it by law
      or
      other agreement shall be cumulative and not exclusive and may be exercised
      by
      Holder from time to time. No failure or delay by Holder in exercising any right
      or remedy shall operate as a waiver of any such right or remedy, nor shall
      any
      single or partial exercise of any right or remedy preclude further exercise
      of
      such right or remedy or any other right or remedy.

     

    2.19  Representations.
      Borrower
      and Holder each represent and warrant to the other that it is not relying upon
      any legal advice from the other party or any of its agents or employees, it
      has
      been represented by an attorney of its own choosing in connection with this
      Note
      and the transactions contemplated herein, it fully understands the terms and
      contents if this Note and the Warrant and it freely signs
      hereunder.

     

    2.20  Headings.
      Headings used herein are for convenience of reference only and do not define
      or
      limit the scope of provisions of this Note.

     

    2.21  Successors
      and Assigns.
      This
      Note binds Borrower and its successors and assigns, it inures to the benefit
      of
      Holder and its successors, assigns and participants. Holder may not transfer
      nor
      assign its rights or obligations under this Note or the Warrant, in whole or
      in
      part.

     

    2.22  Related
      Note.
      This
      Note is being executed and delivered simultaneously with the execution and
      delivery by Borrower of the Secured Promissory Note (the "Other
      Note")
      of
      even date in the original principal balance of $375,000 in favor of Beebird
      Beheer B. V. (the "Other
      Lender").
      Advances under this Note shall be requested simultaneously with advance requests
      under the Other Note and shall be requested by Borrower on a pro rata basis;
      and
      all prepayments and payments of principal under this Note and the Other Note
      shall be made by Borrower (if not paid in full) to Holder and the Other Lender
      on a pro rata basis (and if Holder shall receive more than its pro rata share,
      it shall be deemed to hold such excess in trust for the benefit of the Other
      Lender).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              BORROWER:

            	 
	 	 
	 	 
	
              ST.
                BERNARD SOFTWARE, INC.

            	 
	
              a
                Delaware corporation

            	 
	 	 
	 	 
	
              By:
                /s/ Alfred F.
                Riedler                                                   
                

            	 
	
              Alfred
                F. Riedler, Chief Financial Officer

            	 
	 	 

    

    

    

    The
      undersigned accepts and agrees to the foregoing Note and its terms, acknowledges
      and makes the representations, warranties and covenants of Holder contained
      therein, and agrees to make advances to Borrower as provided therein.

     

    
      	 	
              HOLDER:

            
	 	 
	 	 
	 	
              The
                Broomfield Family Trust

            
	 	 
	 	 
	 	
              By:
                /s/ Scott
                Broomfield                             
                

            
	 	
              Its:
                Co-trustee                                               
                

            

    

    

     

    
 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    

    FORM
      OF
      COMMON STOCK PURCHASE WARRANT

    

     

     

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
10.25.2

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
      OR
      HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
      ACT
      COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
      THE
      ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
      SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
      TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
      PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

     

    Void
      after 5:00 p.m., San Diego, California Time, on May __, 2011.

     

    

    ST.
      BERNARD SOFTWARE, INC.

    COMMON
      STOCK PURCHASE WARRANT

    

    
      	
              No.
                BN-____

            	
              _________
                shares

            
	
              May
                __, 2006

            	
              of
                Common Stock

            

    

    

    THIS
      CERTIFIES THAT, for value received, ______________, a ________________(the
      "Holder"), is entitled to purchase __________ (________) shares of Common Stock
      of ST. BERNARD SOFTWARE, INC., a Delaware corporation (the “Company”), at a
      price of $____ per share (the "Warrant Price"), subject to adjustments and
      all
      other terms and conditions set forth in this Warrant. 

     

    Definitions.
      As
      used
      herein, the following terms, unless the context otherwise requires, shall have
      the following meanings:

     

    "Act"
      shall mean the Securities Act of 1933, as amended, or any successor federal
      statute, and the rules and the rules and regulations promulgated thereunder,
      all
      as the same shall be in effect at the time.

     

    "Common
      Stock" shall mean shares of the Company's presently or subsequently authorized
      common stock, and any stock into which such common stock may hereafter be
      exchanged.

     

    "Company"
      shall mean ST. BERNARD SOFTWARE, INC., a Delaware corporation, and any
      corporation which shall succeed to or assume the obligations of ST. BERNARD
      SOFTWARE, INC., under this Warrant.

     

    "Date
      of
      Grant" shall be deemed May __, 2006.

     

    "Exercise
      Date" shall mean the effective date of the delivery of the Notice of Exercise
      pursuant to Sections 0
      and
0
      below.

     

    "Holder"
      shall mean any person who shall at the time be the registered holder of this
      Warrant.

     

    "Shares"
      shall mean shares of the Company's Common Stock, as described in the Company's
      articles of incorporation.

     

    "Warrant
      Shares" shall mean _______ shares of the Company's Common Stock which the
      Warrant entitles the Holder to purchase.

     

    Term.  
      The
      purchase right represented by this Warrant is exercisable only during the period
      commencing upon the Date of Grant and ending the earlier of (i)
      May __,
      2011, or (ii)
      concurrently with the closing date of: a sale of all or substantially all of
      the
      Company's assets; a merger of the Company with or into another entity or of
      an
      entity with or into the Company following which the voting control of the
      surviving entity in the merger is ultimately controlled by persons who presently
      do not own beneficially or otherwise ten percent (10%) or more of the issued
      and
      outstanding voting stock of the Company; or sale by existing shareholders of
      at
      least fifty-one percent (51%) of the presently issued and outstanding stock
      of
      the Company. The foregoing events are collectively referred to as a "change
      of
      control." After May __, 2011 or a change of control, this Warrant shall be
      of no
      further force or effect.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    Method
      of Exercise and Payment. 

     

    Method
      of Exercise.
      Subject
      to compliance with all applicable Federal and state securities laws, the
      purchase right represented by this Warrant may be exercised during its term
      (as
      provided in Section (i)),
      in
      whole or in part and from time to time, by the Holder by (i)
      surrender of this Warrant and delivery of the Notice of Exercise (the form
      of
      which is attached as Exhibit A), duly executed, at the principal office of
      the
      Company and (ii)
      payment
      to the Company of an amount equal to the product of the then applicable Warrant
      Price multiplied by the number of Shares then being purchased.

     

    Method
      of Payment.
      Payment
      shall be made either (1)
      by cash,
      or (2)
      by wire
      transfer of United States funds for the account of the Company.

     

    Delivery
      of Certificate.
      In the
      event of any exercise of the purchase right represented by this Warrant,
      certificates for the Shares so purchased shall be delivered to the Holder within
      thirty (30) calendar days of delivery of the Notice of Exercise and, unless
      this
      Warrant has been fully exercised or has expired, a new warrant representing
      the
      portion of Shares with respect to which this Warrant shall not have been
      exercised shall also be issued to the Holder within such thirty (30) day
      period.

     

    No
      Fractional Shares.
      No
      fractional shares shall be issued on connection with any exercise hereunder,
      but
      in lieu of such fractional shares the Company shall make a cash payment therefor
      upon the basis of the fair market value per Share as of the date of the
      exercise.

     

    Adjustment
      of Warrant Price and Number of Shares.
      

     

    Adjustment
      Upon Subdivision, Combination, or Reclassification.
      In case
      the Company shall at any time after the Date of Grant (i)
      subdivide the outstanding shares of its Common Stock, (ii)
      combine
      the outstanding shares of its Common Stock into a smaller number of shares
      of
      Common Stock, or (iii)
      issue by
      reclassification of its shares of Common Stock other securities of the Company
      (including any such reclassification in connection with a consolidation or
      merger in which the Company is the surviving person), the number and kind of
      shares purchasable upon exercise of this Warrant outstanding immediately prior
      thereto shall be adjusted so that the Holder shall be entitled to receive at
      the
      same aggregate Warrant Price the kind and number of shares of Common Stock
      or
      other securities of the Company which the Holder would have owned or have been
      entitled to receive after the happening of any events described above had such
      warrant been exercised in full immediately prior to the earlier of the happening
      of such event or any record date with respect thereto. In the event of any
      adjustment of the total number of shares of Common Stock purchasable upon the
      exercise of this Warrant, the Warrant Price shall be adjusted to be the amount
      resulting from dividing the number of shares of Common Stock (including
      fractional shares of Common Stock) covered by this Warrant immediately after
      such adjustment into the total amount payable upon the exercise of this Warrant
      in full immediately prior to such adjustment. An adjustment made pursuant to
      this Section 4 shall become effective immediately after the effective date
      of
      such event retroactive to the record date, if any, for such event. Such
      adjustment shall be made successively whenever any event listed above shall
      occur.

     

    Adjustment
      Upon Certain Issuances of Common Stock Prior to May __, 2011.
      In the
      event the Company, at any time from the date hereof through May __, 2011, shall
      issue shares of Common Stock for consideration per share less than $____ per
      share (the "Lower Issuance Price"), then, in such event, the Warrant Price
      shall
      be reduced to the Lower Issuance Price. Notwithstanding the foregoing, no
      reduction shall be made in connection with shares of Common Stock (i)
      issued
      upon exercise and/or conversion of warrants, options and other convertible
      securities currently outstanding as of the date hereof; (ii)
      issued
      in connection with the 1992 Stock Option Plan, the St. Bernard Software, Inc.
      2000 Stock Option Plan and the St. Bernard Software, Inc. 2005 Stock Option
      Plan; (iii)
      issued
      as compensation for the Company's officers, directors or consultants;
(iv)
      issued
      under this antidilution provision or similar antidilution provisions contained
      in other warrants; (v)
      issued
      in connection with a transaction resulting in a change of control of the
      Company; or (vi)
      issued
      in connection with the Company's collaboration with a corporate
      partner.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Compliance
      with Act; Transferability and Negotiability of Warrant; Investment
      Intent. 

     

    Compliance
      with Act.
      The
      Holder, by acceptance hereof, agrees that this Warrant and the Shares to issued
      upon the exercise hereof are being acquired solely for its own account and
      not
      as a nominee for any other party and not with a view toward the resale or
      distribution thereof and that it will not offer, sell or otherwise dispose
      of
      this Warrant or any Shares to be issued upon the exercise hereof except under
      circumstances which will not result in a violation of the Act. Upon the exercise
      of this Warrant, the Holder shall confirm in writing, in a form satisfactory
      to
      the Company, that the Shares so issued are being acquired solely for its own
      account and not as a nominee for any other party and not with a view toward
      resale or distribution thereof. This Warrant and the Shares to be issued upon
      the exercise hereof (unless registered under the Act) shall be imprinted with
      a
      legend substantially in the following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") AND ARE "RESTRICTED SECURITIES"
      AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE
      SOLD
      OR OTHERWISE DISTRIBUTED EXCEPT (i)
      IN
      CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
      ACT OR (ii)
      IN
      COMPLIANCE WITH RULE 144, OR (iii)
      PURSUANT
      TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

     

    In
      addition, this Warrant and the Shares to be issued upon the exercise hereof
      shall bear any legends required by the securities laws of applicable
      states.

     

    Any
      legend referring to the Act endorsed on a certificate pursuant to this Section
      0
      shall be
      removed, and the Company shall issue a certificate without such legend to the
      Holder of such securities if (i)
      such
      securities are registered and sold under the Act and a prospectus meeting the
      requirements of Section 10 of the Act is available, (ii)
      such
      securities are sold or may be sold in compliance with Rule 144(k), or
(iii)
      at the
      request of the Holder, if the Holder shall have obtained an opinion of counsel
      at such Holder's expense (which counsel may be counsel to the Company)
      reasonably acceptable to the Company to the effect that the securities proposed
      to be disposed of may lawfully be so disposed of without registration,
      qualification or legend.

     

    No
      Transfer.
      Holder
      will not dispose of the Warrant or the Shares to be issued upon exercise of
      the
      Warrant other than (i)
      in
      conjunction with an effective registration statement for the Warrant and/or
      Shares under the Act, (ii)
      in
      compliance with Rule 144 promulgated under the Act or (iii)
      in
      compliance with any applicable exemption from registration under the Act, and
      in
      compliance with applicable state, local or foreign securities laws.

     

    Knowledge
      and Experience.
      Holder
(i)
      has such
      knowledge and experience in financial and business matters as to be capable
      of
      evaluating the merits and risks of such Holder's prospective investment in
      the
      Warrant and the Shares to issued upon exercise of the Warrant; (ii)
      has the
      ability to bear the economic risk of such Holder's prospective investment;
      (iii)
      has been
      furnished with and has access to such information as such Holder has considered
      necessary to make a determination as to the purchase of the Warrant and the
      Shares to be issued upon the exercise of the Warrant together with such
      additional information as is necessary to verify the accuracy of the information
      supplied; (iv)
      has had
      all questions which have been asked by the Holder satisfactorily answered by
      the
      Company; and (v)
      has not
      been offered the Warrant and the Shares to be issued upon exercise of the
      Warrant by any form of advertisement, article, notice or other communication
      published in any newspaper, magazine, or similar media or broadcast over
      television or radio, or any seminar or meeting whose attendees have been invited
      by any such media.

     

    Rights
      of Holder.
      No
      Holder
      shall be entitled to vote or receive dividends or be deemed the holder of Shares
      or any other securities of the Company which may at any time be issuable on
      the
      exercise of this Warrant for any purpose, nor shall anything contained herein
      be
      construed to confer upon the Holder, as such, any rights of a shareholder of
      the
      Company or any right to vote for the election of directors or upon any matter
      submitted to shareholders at any meeting thereof, or to give or withhold consent
      to any corporate action (whether upon any recapitalization, issuance of stock,
      reclassification of stock, consolidation, merger, transfer of assets or
      otherwise) or to receive notice of meetings, or to receive dividends or
      subscription rights or otherwise until this Warrant shall have been exercised
      and the Shares issuable upon exercise hereof shall have become deliverable,
      as
      provided herein.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Piggy
      Back Registration.
      If
      at any
      time Company shall determine to register under the Securities Act of 1933,
      as
      amended (the “Securities Act”) (including, without limitation, pursuant to a
      demand of any stockholder of Company exercising registration rights) any of
      its
      securities, other than in connection with a registration effected solely to
      implement an employee benefit plan or a transaction to which Rule 145 or any
      other similar rule of the Securities and Exchange Commission (the “Commission”)
      under the Securities Act is applicable, it shall send to the Holder, written
      notice of such determination. If within thirty (30) calendar days after receipt
      of such notice, the Holder shall so request in writing, Company shall use its
      best efforts to include in such registration statement all or any part of the
      shares issuable under the Warrant which the Holder requests to be registered
      therein, except that if, in connection with any offering involving an
      underwriting of Common Stock to be issued by Company, the managing underwriter
      shall impose a limitation on the number of shares of such Common Stock which
      may
      be included in any such registration statement because, in its reasonable
      judgment, such limitation is necessary to effect an orderly public distribution,
      and such limitation is imposed pro rata with respect to all securities whose
      holders have a contractual, incidental ("piggy back") right to include such
      securities in the registration statement and as to which inclusion has been
      requested pursuant to such right and there are first excluded from such
      registration statement all shares of Common Stock sought to be included therein
      by (i) any director, officer or employee of Company or any subsidiary of
      Company, (ii) any holder thereof not having any such contractual, incidental
      registration rights, and (iii) any holder thereof having contractual, incidental
      registration rights subordinate and junior to the rights of the Holder, then
      Company shall be obligated to include in such registration statement only such
      limited portion of the shares issuable under the Warrant with respect to which
      the Holder has requested inclusion hereunder.

     

    Market
      Stand-Off Agreement.
      During
      the period of duration specified by the Company and an underwriter of Common
      Stock or other securities of the Company, following the effective date of a
      registration statement of the Company filed under the Act, the Holder or any
      future transferee will not, to the extent requested by the Company and such
      underwriter, directly or indirectly sell, offer to sell, contract to sell
      (including without limitation, any short sale), grant any option to purchase
      or
      otherwise transfer or dispose of (other than to transferees or donees who agree
      to be similarly bound) any securities of the Company held by it at any time
      during such period except Common Stock included in such registration;
provided,
      however,
      that:

     

    Such
      agreement shall not exceed one hundred eighty (180) calendar days for the first
      registration statement of the Company which covers the Common Stock (or other
      securities) to be sold on its behalf in an underwritten public offering; and
      

     

    Such
      agreement shall not continue to apply to, and shall not exceed ninety (90)
      calendar days for the two subsequent registration statements of the Company
      which cover Common Stock (or other securities) to be sold on its behalf to
      the
      public in an underwritten public offering.

     

    In
      order
      to enforce the foregoing covenant, the Company may impose stop-transfer
      instructions with respect to the Common Stock of the Holder or any future
      transferee (and the shares or securities of every other person subject to the
      foregoing restriction) until the end of such period.

    

    Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of loss, theft or
      destruction, on delivery of an indemnity agreement reasonably satisfactory
      to
      the Company or, in the case of a mutilation, on surrender and cancellation
      of
      this Warrant, the Company at its expense shall execute and deliver, in lieu
      of
      this Warrant, a new warrant of like tenor.

     

    Exchange
      of Warrants.
      Subject
      to the provisions of the Warrant, on surrender of this Warrant for exchange,
      properly endorsed and in compliance Act, the Company at its expense shall issue
      to or on the order of the Holder a new warrant or warrants of like tenor, in
      the
      name of the Holder or as the Holder (on payment by the Holder of any applicable
      transfer taxes) may direct, for the number of Shares issuable upon exercise
      thereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Stock
      Fully paid; Reservation of Warrant Shares.
      The
      Warrant Shares will, upon issuance, be fully paid and nonassessable, and free
      from all taxes, liens and charges with respect to the issue thereof. During
      the
      period within which the rights represented by this Warrant may be exercised,
      the
      Company will use its best efforts to cause to be authorized, and thereafter
      at
      all times have authorized, and reserve for purposes of the issue upon exercise
      of the purchase rights evidenced by this Warrant, a sufficient number of shares
      of its Common Stock (or such other security as to which this Warrant may be
      exercised) to provide for the exercise rights represented by this
      Warrant.

     

    Governing
      Law.
      This
      Warrant shall be governed in all respects by the laws of the State of California
      as such laws are applied to agreements between California residents entered
      into
      and to be performed entirely within California. 

     

    Survival.
      The
      representations, warranties, covenants and agreements made herein shall survive
      the execution of this Warrant and the closing transactions contemplated
      hereby.

     

    Successors
      and Assigns.
      Except
      as
      otherwise expressly provided herein, the provisions hereof shall inure to the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and
      administrators of the parties hereto.

     

    Notices,
      etc.
      All
      notices and other communications required or permitted hereunder shall be in
      writing and shall be sent by facsimile, overnight courier or mailed by certified
      or registered mail, postage prepaid, return receipt requested, to the facsimile
      number or address shown on the signature pages to this Warrant or to such other
      facsimile number address provided to the parties to this Warrant in accordance
      with this Section 0.
      Such
      notices or other communications shall be deemed received upon receipt of a
      confirmation of facsimile receipt or three calendar days after deposit in the
      mail.

     

    Severability.
      In
      the
      case any provision of this Warrant shall be declared invalid, illegal or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

     

    Titles
      and Subtitles.
      The
      titles of the sections of this Warrant are for convenience of reference only
      and
      are not to be considered in construing the terms of this Warrant.

     

    Counterparts.
      This
      Warrant may be executed in any number of counterparts, each of which shall
      be an
      original, but all of which together shall constitute on instrument.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    Dated:
      May __, 2006

    

    

    THE
      COMPANY

    

    ST.
      BERNARD SOFTWARE, a Delaware corporation

    

    

    By: 
      ________________________________   

    John
      Jones, President/ CEO

    

    THE
      HOLDER

    

    _____________,
      a _____________

    

    

    By:
      ________________________________

    Name:
      

    

    Title:

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    NOTICE
      OF
      EXERCISE

     

    

    To: ST.
      BERNARD SOFTWARE, INC.:

    

    
      	1.  	
              The
                undersigned Holder of the attached original, executed Common Stock
                Purchase Warrant hereby elects to exercise its purchase right under
                such
                Warrant with respect to Shares, as defined in the Warrant, of St,
                Bernard
                Software, Inc. (the "Company").

            

    

     

    
      	2.  	
              The
                undersigned Holder elects to pay the aggregate Warrant Price, as
                defined
                in the Warrant, for such shares (the "Exercise Shares") in the following
                manner:

            

    

     

    
      
        	 	
                [
                  ]

              	
                by
                  the enclosed cash in the amount of $ _______;
                  or

              

      

       

    

    
      	 	
              [
                ]

            	
              by
                wire transfer of U.S. funds to the account of the Company on the
                amount of
                $______ which transfer has been made before or simultaneously with
                the
                delivery of this notice pursuant to the instructions of the Company.
                

            

    

    

    
      	3.  	
              The
                Holder represents and warrants that the Exercise Shares so issued
                are
                being acquired solely for its own account and not as a nominee for
                any
                other party and not with a view toward resale or distribution
                thereof.

            

    

     

    
      	4.  	
              Please
                issue a stock certificate or certificates representing the appropriate
                number of shares in the name of the undersigned or in such other
                name as
                specified below:

            

    

     

    

    

    

    [ADDRESS]

    _______________________

    _______________________

    _______________________

    

    

    

    HOLDER:

    

    

                                 
      _______________________________________

    

    

    

    Date:
      ________________________________________

    

    

     

    

    
      
        
        

      

      
        14

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