EXHIBIT 10.02

OPSWARE INC.
TRANSITIONAL EMPLOYMENT AND SEPARATION AGREEMENT

This Transitional Employment and Separation Agreement (“ Agreement ” ) is entered into as of June 7, 2007, by and between James E. Adkins (“ Employee ”) and Opsware Inc. (“ Opsware ” or the “ Company ”) (collectively referred to as the “ Parties ”).

RECITALS

WHEREAS , Employee has been employed by the Company as its Executive Vice President, Products;

WHEREAS , Employee will be terminating employment with the Company following a transitional period of employment, and the Parties wish to agree upon the terms and conditions applicable to such transitional period of employment and upon Employee’s termination of employment with the Company;

NOW THEREFORE , in consideration of the promises made herein, the Parties hereby agree as follows:

AGREEMENT

1.     Transitional Employment .  Employee shall continue in active full-time employment with the Company for the “ Transitional Period ”, which shall commence on the date hereof (the “ Transitional Date ”) and which shall continue until June 29, 2007, unless earlier terminated as set forth herein or extended by the mutual agreement of the Parties (in any case, the “ Termination Date ”).  Notwithstanding the foregoing, Employee’s employment with the Company during the Transitional Period will be at-will and may be terminated by Employee or by the Company at any time for any reason.

2.     Resignation of Titles and Positions .  Effective as of the Termination Date, Employee will terminate employment with the Company, and, if requested earlier during the Transitional Period, relinquish all titles and positions then held by Employee with the Company or any subsidiary of the Company.

3.     Compensation and Benefits During Transitional Period .  During the Transitional Period, Employee will continue to receive payment of his current base salary and will continue to participate in applicable Company employee benefit plans to the extent of his participation and on the terms and conditions in effect immediately prior to the commencement of the Transitional Period.  During the Transitional Period, Employee’s stock options and shares of restricted stock will continue to vest in accordance with their terms; provided, however, that Employee shall not receive any additional options or other rights to purchase shares of the Company’s common stock following the Transitional Date.  Any contributions that Employee has made in the currently effective purchase period of the Company’s Employee Stock Purchase Plan shall be remitted back to Employee.

4.     Payments and Benefits .

(a)           Accrued Payments and Benefits .  Upon the termination of Employee’s employment with the Company for any reason, the Company shall pay to Employee all amounts and benefits that have accrued or were earned but remain unpaid through the Termination Date in respect of salary, and unreimbursed expenses, including accrued and unused vacation.  Employee shall not be entitled to any pro-rata payment of his annual target bonus.

(b)           Separation Payments .  Upon the earlier of the conclusion of the Transitional Period or the Company’s termination of Employee’s employment other than for Cause (as defined in below), and subject to Employee’s delivery to the Company of a signed general release of claims in favor of the Company, in a form acceptable to the Company, which shall be substantially in the form attached hereto as Exhibit 1 (the “ Release ”), following expiration of the statutory rescission period without any rescission of the Release the Company will provide Employee with the following (hereinafter referred to collectively as the “ Separation Payments ”):

(i)    A simple lump sum payment of $83,333.33 (equal to four (4) months of Employee’s base salary in effect on the Termination Date) less applicable taxes and standard deductions; and

(ii)   Payment of Employee’s COBRA insurance premiums should Employee timely elect to continue group health coverage under COBRA for four (4) months following the Termination Date; provided, however, that the Company’s obligation to pay Employee’s COBRA insurance premiums is conditioned on Employee remaining eligible for such coverage.

Notwithstanding the foregoing, Employee acknowledges and agrees that in the event that, prior to the Termination Date, the Company terminates Employee’s employment for Cause (as defined in below and as determined in its sole discretion by the Board acting in good faith) or Employee resigns for any reason, Employee will not be entitled to the Separation Payments.

For purposes of this Agreement, “Cause” shall have the meaning ascribed to it in Employee’s Stock Option Agreement dated March 21, 2007.

(c)           Company Stock Options; Restricted Stock .

(i)    Vested Options .  Notwithstanding the post-termination of services expiration date specified in each governing written stock option agreement to purchase shares of the Company’s common stock (“ Options ”), Employee shall have one year following the Termination Date to exercise such Options that are vested, outstanding and not exercised as of the Termination Date.

(ii)   Unvested Options .  Any Options that are unvested as of the Termination Date shall expire effective as of the Termination Date.

(iii)  Restricted Stock .  The Company hereby provides Employee notice pursuant to the Restricted Stock Purchase Agreement, dated December 21, 2005, between Employee and Company (the “ Restricted Stock Purchase Agreement ”), that the Company shall exercise its right to repurchase any shares of the Company’s common stock held by Employee that are unvested and subject to the Company’s right of repurchase pursuant to the Restricted Stock Purchase Agreement (“ Restricted Stock ”) as of the Termination Date .  Upon the Termination Date, the Company shall pay to Employee the repurchase price for such repurchased shares of Restricted Stock as set forth in the Restricted Stock Purchase Agreement.  From and after this exercise of Opsware’s repurchase right, Employee shall no longer own or have any rights to the Restricted Shares.

(d)           Benefits . Employee’s health insurance benefits will cease on the Termination Date and Company shall pay Employee’s COBRA insurance premiums as set forth above in Section 4(b)(ii).  Employee’s participation in all other employee benefits and incidents of employment will cease on the Termination Date.  Employee will cease accruing employee benefits, including, but not limited to, vacation time and paid time off, as of the Termination Date.

5.     Consideration for Release .  The Parties agree that some of the payments and benefits provided to Employee pursuant to this Agreement, are over and above anything owed to Employee by law and are offered in exchange for and conditioned upon Employee’s execution of the Release.  Employee understands that if he does not sign the Release, or if he revokes the signed Release, the Company has no obligation to provide him the benefits listed in this Agreement other than as set forth in Section 4(a) (Accrued Payment and Benefits).

6.     No Mitigation Required .  Employee shall not be required to seek other employment or to attempt in any way to reduce amounts payable to him pursuant to this Agreement.  Further, the amount of benefits provided under this Agreement shall not be reduced by any compensation earned by or other benefits provided to Employee as a result of employment by another employer following the Termination Date.

7.     Confidential Information .  During the Transitional Period and following the Termination Date, Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Employment, Confidential Information, Invention Assignment Agreement between Employee and the Company.  Employee shall return all of the Company’s property and confidential and proprietary information in his possession to the Company on the Termination Date.

8.     No Cooperation .  Employee agrees that he will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so.  Employee further agrees both to immediately notify the Company upon receipt of any court order, subpoena, or any legal discovery device that seeks or might require the disclosure or production of the existence or terms of this Agreement, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or legal discovery device to the Company.

9.     Non-Solicitation .  Employee agrees that for a period of twelve (12) months immediately following the Termination Date, Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage, or take away employees of the Company, either for himself or any other person or entity.  Employee further agrees not to otherwise interfere with the relationship of the Company or any of its subsidiaries or affiliates with any person who, to the knowledge of Employee, is employed by or otherwise engaged to perform services for the Company or its subsidiaries or affiliates (including, but not limited to, any independent sales representatives or organizations) or who is, or was within the then most recent prior twelve-month period, a customer or client of the Company, or any of its subsidiaries.

10.   Costs .  The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement except as specifically set forth herein.

11.   Tax Consequences .  The Company makes no representations or warranties with respect to the tax consequences of the payment of any sums to Employee under the terms of this Agreement.  Employee agrees and understands that he is responsible for payment, if any, of local, state and/or federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon and that all such sums shall be paid less all applicable withholdings and deductions.  Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of Employee’s failure to pay federal or state taxes or damages sustained by the Company by reason of any such claims, including reasonable attorneys’ fees.

12.   Arbitration .  The Parties agree that any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be submitted to the American Arbitration Association (“ AAA ”) and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes.