Disclosed is a system and method for distributing software updates to terminal nodes in a network. The system includes a network administration server configured to: receive from security applications installed on a plurality of terminal nodes in the network criteria characterizing the terminal nodes and identifiers of other terminal nodes in broadcast domains of the terminal nodes; based on the criteria, select terminal nodes to be used as active and passive update agents for each broadcast domain; and transmit to the security applications of the selected active update agents for each broadcast domain, one or more software updates for further distribution of the software updates by the active update agents to one or more passive update agents and the plurality of terminal nodes in the same broadcast domain.