Backup Exec 2010 v.13 Email Notifications

Hi Community,

I am helping support a local non-profit running Backup Exec 2010 on a Windows 2008 R2 server.  I have tried to set up the email notifications without success. 

We do not use Microsoft Exchange and run our email through a third party.  Is there anyway to setup email notifications without a local email server?

I ran SGMon and sent a test notification using a hotmail account in the SMTP.  It returned message

800e0004, batch: 7, index: 0

All help will be appreciated.