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Contacts purged from Exchange2007SP3

I believe our Managed Folder Policy is deleting our contacts but I'm not sure of the solution.

I have a Managed Folder Mailbox policy called 'retention policy' which has my managed default folders added Inbox/Sent and, "Entire Mailbox" which I think is the problem.

Under Managed Default Folders I have Managed Content Settings only under Inbox / Sent / Entire Mailbox to delete after 365 days.

The reason I have been using "Entire mailbox" is because I want all subfolders under the Inbox to be covered, to my understanding if I just have a Managed Content Setting under inbox it will literally only cover the inbox and no subfolders is this correct?

I basically want all (email only) older than 365days deleted.

Thanks in advance.
Brett.
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Haresh Nikumbh
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found solution to problem myself and posted