-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FmKf1UUr82+herhkEsBX8JWwI4bIMPs8ejsMj+NYYY/7lUNYkFG/wq3x+ydUI+uI aD2Tw+zO9MaSLdjgIiXMAw== 0001104659-05-057084.txt : 20051121 0001104659-05-057084.hdr.sgml : 20051121 20051121173114 ACCESSION NUMBER: 0001104659-05-057084 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20051121 DATE AS OF CHANGE: 20051121 GROUP MEMBERS: SILVER LAKE TECHNOLOGY INVESTORS II, L.L.C. GROUP MEMBERS: SPYGLASS MERGER CORP. FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SILVER LAKE PARTNERS II L P CENTRAL INDEX KEY: 0001277090 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2725 SAND HILL RD STREET 2: SUITE 150 CITY: MENLO STATE: CA ZIP: 94025 BUSINESS PHONE: 650-233-8120 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SERENA SOFTWARE INC CENTRAL INDEX KEY: 0001073967 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 942669809 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-58055 FILM NUMBER: 051219118 BUSINESS ADDRESS: STREET 1: 2755 CAMPUS DRIVE STREET 2: 3RD FLOOR CITY: SAN MATEO STATE: CA ZIP: 94403-2538 BUSINESS PHONE: 6505226600 MAIL ADDRESS: STREET 1: 2755 CAMPUS DRIVE STREET 2: 3RD FLOOR CITY: SAN MATEO STATE: CA ZIP: 94403-2538 SC 13D 1 a05-20673_1sc13d.htm BENEFICIAL OWNERSHIP OF 5% OR MORE

	UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D (Rule 13d-101)

Under the Securities Exchange Act of 1934
(Amendment No. )*

Serena Software, Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

817492101

(CUSIP Number)

Alan K. Austin

Silver Lake Partners
2725 Sand Hill Road, Suite 150
Menlo Park, CA 94025
(650) 233-8120

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

November 11, 2005

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 817492101

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Silver Lake Partners II, L.P.

	2.	Check the Appropriate Box if a Member of a Group*
		(a)			ý
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds* OO, BK, SC

	5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power -0-

			8.	Shared Voting Power 11,747,787**

			9.	Sole Dispositive Power -0-

			10.	Shared Dispositive Power 11,747,787**

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 11,747,787**

	12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13.	Percent of Class Represented by Amount in Row (11) 28.5%**

	14.	Type of Reporting Person* PN

**See Item 5 below

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Silver Lake Technology Investors II, L.L.C.

	2.	Check the Appropriate Box if a Member of a Group*
		(a)			ý
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds* OO, BK, SC

	5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power -0-

			8.	Shared Voting Power 11,747,787**

			9.	Sole Dispositive Power -0-

			10.	Shared Dispositive Power 11,747,787**

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 11,747,787**

	12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13.	Percent of Class Represented by Amount in Row (11) 28.5%**

	14.	Type of Reporting Person* OO

**See Item 5 below

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Spyglass Merger Corp.

	2.	Check the Appropriate Box if a Member of a Group*
		(a)			ý
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds* OO, BK, SC

	5.	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power -0-

			8.	Shared Voting Power 11,747,787**

			9.	Sole Dispositive Power -0-

			10.	Shared Dispositive Power 11,747,787**

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 11,747,787**

	12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares* o

	13.	Percent of Class Represented by Amount in Row (11) 28.5%**

	14.	Type of Reporting Person* CO

**See Item 5 below

Item 1.	Security and Issuer
This Schedule 13D relates to the Common Stock, par value $0.001 per share (the “Common Stock”), of Serena Software, Inc., a Delaware corporation (“Serena” or the “Issuer”), having its principal executive offices at 2755 Campus Drive, 3^rd Floor, San Mateo, California 94403-2538.
Item 2.	Identity and Background
This Schedule 13D is filed jointly on behalf of Silver Lake Partners II, L.P. (“SLP II”), Silver Lake Technology Investors II, L.L.C. (“SLTI II”) and Spyglass Merger Corp. (“Merger Sub,” and together with the SLP II and SLTI II, the “SLP Entities” or the “Reporting Persons”). SLP II is a Delaware limited partnership whose principal business is investing in securities. SLTI II is a Delaware limited liability company whose principal business is investing in securities. The principal office of each of SLP II and SLTI II is 2725 Sand Hill Road, Suite 150, Menlo Park, California 94025. Silver Lake Technology Associates II, L.L.C. (“SLTA II”) is the general partner of SLP II. Silver Lake Technology Management, L.L.C. (“SLTM”) is the managing member of Silver Lake Management Company, L.L.C. (“SLMC”), which is the manager of SLTI II. SLTA II is a Delaware limited liability company whose principal business is serving as the sole general partner of SLP II and certain of its related investment vehicles. SLMC is a Delaware limited liability company whose principal business is serving as the investment adviser to SLP II certain of its related investment vehicles. SLTM is a Delaware limited liability company whose principal business is serving as the investment adviser to certain affiliates of SLP II. The principal office of each of SLTA II, SLTM and SLMC is 2725 Sand Hill Road, Suite 150, Menlo Park, California 94025. The managing members of SLTA II and SLTM are Alan K. Austin, James A. Davidson, Glenn H. Hutchins, John R. Joyce and David J. Roux (collectively, the “Managing Members”). Each of the Managing Directors is a United States citizen. The present principal occupation of each of the Managing Directors is serving as a managing member of SLTA II, SLTM and affiliated entities. The principal office of each of the Managing Members is 2725 Sand Hill Road, Suite 150, Menlo Park, California 94025. Merger Sub is a Delaware corporation newly formed by SLP II. The principal business of Merger Sub is to engage in the transactions contemplated by the Merger Agreement (as defined in Item 3 below). The sole director of Merger Sub is David J. Roux. The President of Merger Sub is Hollie Moore, who is a United States citizen and whose principal occupation or employment is as a Director of Silver Lake Partners. The Vice President, Treasurer and Assistant Secretary of Merger Sub is Todd Morgenfeld, who is a United States citizen and whose principal occupation or employment is as a Principal of Silver Lake Partners. The Vice President, Secretary and Assistant Treasurer of Merger Sub is Alan K. Austin. The principal business office address of Messrs. Roux, Austin and Morgenfeld, Ms. Moore and Merger Sub is 2725 Sand Hill Road, Suite 150, Menlo Park, California 94025.

The information as set forth below related to Douglas D. Troxel, the Chief Technology Officer and Chairman of the Board of Directors of the Issuer (the “Founder”), and the Douglas D. Troxel Living Trust (the “DT Trust”) have been provided to the Reporting Persons by the Founder.

(a) Douglas D. Troxel

(b) 3755 Campus Drive, 3rd Floor
San Mateo, CA 94403-2538

(d)-(e) None

(f) United States.

The DT Trust is a trust organized under the laws of California, with the Founder serving as trustee of the DT Trust.

To the best knowledge of the Reporting Persons, none of the entities or persons identified in the previous paragraphs of this Item 2 has, during the past five years, been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors), nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.

Source and Amount of Funds or Other Consideration

The information set forth or incorporated by reference in Items 2, 4, 5 and 6 is hereby incorporated herein by reference.

(a) – (b) Pursuant to an Agreement and Plan of Merger, dated as of November 11, 2005 (the “Merger Agreement”), between Serena and Merger Sub, and subject to the conditions set forth therein (including, among other things, adoption of the Merger Agreement by the stockholders of Serena, consummation of the debt financing and receipt of applicable regulatory approvals), Merger Sub will merge with and into Serena (such events constituting the “Merger”). At the effective time of the Merger the separate corporate existence of Merger Sub shall cease and Serena shall continue its existence as the surviving corporation (sometimes referred to herein as the “Surviving Corporation”).

As more fully described below, Merger Sub has received equity commitments and debt commitments to finance the consummation of the transactions contemplated by the Merger Agreement, including to pay the Merger Consideration (as defined in Item 4 below) to holders of Common Stock (other than certain holders described in Item 4), pay the either the as-converted cash amount or the principal and accrued but unpaid interest on the outstanding $220 million in aggregate principal amount of Serena’s 1½% Convertible Subordinated Notes due 2023 (“Convertible Notes”) to those holders of Convertible Notes who exercise their right respectively, to convert their Convertible Notes into the right to receive an amount in cash equal to the Merger Consideration on an as-converted basis or who exercise the right to have the Company purchase their Convertible Notes for 100% of the principal amount thereof plus accrued but unpaid interest, in each case at the times and subject to the conditions set forth in the indenture governing the Convertible Notes, and pay related fees and expenses. In addition, it is anticipated that a portion of the cash and cash equivalents of Serena will be used to fund payment in part of the Merger Consideration.

In connection with the Merger Agreement, SLP II, SLTI II and Merger Sub have entered into a Contribution and Voting Agreement, dated as of November 11, 2005 (the “Contribution and Voting Agreement”), with the Founder and the DT Trust. Pursuant to the Contribution and Voting Agreement, the DT Trust has agreed to contribute 7,518,483 shares of Common Stock (the “Contributed Common Stock”) it beneficially owns to Merger Sub immediately prior to the closing of the Merger in exchange for 30,825,780 shares of common stock, par value $0.01 per share, of Merger Sub (“Merger Sub Common Stock”). Such shares of Common Stock contributed by the DT Trust will be cancelled and cease to exist at the effective time of the Merger and no payment shall be made or consideration delivered in respect thereof. In addition, concurrent with such

contributions of Common Stock to Merger Sub by the DT Trust, SLP II and SLTI II have agreed to contribute to Merger Sub $348,027,372 and $972,628, respectively, of cash, subject to certain adjustments set forth in the Contribution and Voting Agreement (such amounts as adjusted, the “Contributed Amounts”), in exchange for a number of shares of Merger Sub Common Stock equal to, in each case, the quotient of such cash contribution amount divided by $5.

Pursuant to the letter agreement, dated November 11, 2005, between Merger Sub and Mark E. Woodward, the Chief Executive Officer and a member of the Board of Directors of the Issuer (the “Woodward Letter Agreement”) (attached hereto as Exhibit 8), and the letter agreement, dated November 11, 2005, between Merger Sub and Robert I. Pender Jr., the Senior Vice President, Finance and Administration, Chief Financial Officer and a member of the Board of Directors of the Issuer (the “Pender Letter Agreement” (attached hereto as Exhibit 9) and together with the Pender Letter Agreement, the “Management Letter Agreements”), Messrs. Woodward and Pender agreed to contribute certain shares of Common Stock beneficially owned by them to Merger Sub prior to the Merger in exchange for Merger Sub Common Stock, which shares will be converted into shares of common stock of the Surviving Corporation by virtue of the Merger, and to exchange options to acquire Common Stock beneficially owned by them, for options to acquire common stock of the Surviving Corporation.

In addition, Lehman Commercial Paper Inc.; Lehman Brothers Inc.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Merrill Lynch Capital Corporation; UBS Loan Finance LLC; and UBS Securities LLC (collectively, the “Lenders”) have provided Merger Sub with a commitment letter (the “Debt Commitment Letter”) (attached hereto as Exhibit 3) with respect to debt financing in connection with the Merger. Subject to the terms and conditions of the Debt Commitment Letter, certain of the Lenders have committed to provide $450 million of senior secured credit facilities (consisting of a $375 million term loan facility and a $75 million revolving facility) and a $225 million unsecured senior subordinated interim loan (collectively, the “Financings”). The Lenders’ commitment to provide the Financings are subject to the execution of definitive agreements with respect thereto and other conditions as set forth in the Debt Commitment Letter. The Debt Commitment Letter has been obtained, subject to the terms and conditions thereof, to pay, together with the proceeds received pursuant to the Contribution and Voting Agreement, the aggregate merger consideration pursuant to the Merger, to pay the as-converted cash amount or the principal and accrued but unpaid interest on the Convertible Notes for which holders exercise such rights, to pay all related fees and expenses and to provide additional financing for future working capital and general corporate needs of Serena and its subsidiaries.

The information set forth in response to this Item 3 is qualified in its entirety by reference to the Agreement and Plan of Merger (Exhibit 1 hereto), the Contribution and Voting Agreement (Exhibit 2 hereto), the Debt Commitment Letter (Exhibit 3 hereto), the Woodward Letter Agreement (Exhibit 8 hereto) and the Pender Letter Agreement (Exhibit 9 hereto), each of which is incorporated herein by reference.

Item 4.

Purpose of Transaction

The information set forth or incorporated by reference in Items 2, 3, 5 and 6 is hereby incorporated herein by reference.

Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Serena, and at the effective time of the Merger, the separate corporate existence of Merger Sub will cease and Serena will continue as the Surviving Corporation. By virtue of the Merger, each of the outstanding shares of Common Stock, except for any shares of Common Stock held by Merger Sub (which will be cancelled and cease to exist at the effective time of the Merger with no payment made or consideration delivered in respect thereof) and except for any shares held by Serena or any of its subsidiaries (which will remain outstanding), will be converted into the right to receive $24 in cash (the “Merger Consideration”).

Prior to the effective time of the Merger, pursuant to the Contribution and Voting Agreement, Merger Sub will issue Merger Sub Common Stock to the DT Trust in exchange for the contribution by the DT Trust of the Contributed Common Stock and will issue Merger Sub Common Stock to SLP II and SLTI II in exchange for the contribution by SLP II and SLTI II of

the Contributed Amounts. Also pursuant to the Contribution and Voting Agreement, Merger Sub will issue to SLP II one share of Series A Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”) of Merger Sub. Each share of Merger Sub Common Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into and become one fully paid and nonassessable share of common stock of the Surviving Corporation. Each share of Series A Preferred Stock issued and outstanding immediately prior to the effective time of the Merger will be converted into and become one fully paid and nonassessable share of Series A Preferred Stock of the Surviving Corporation.

Pursuant to the Contribution and Voting Agreement, each of the Founder and the DT Trust have agreed to vote all of the shares of Common Stock beneficially owned or held of record by him or it or to which he or it has, directly or indirectly, the right to vote or direct the voting (the “Subject Shares”) in favor of the Merger and any other matter required to effect the transactions contemplated by the Stockholders Agreement, Merger Agreement and the Debt Commitment Letter (the “Transactions”), and has granted SLP II an irrevocable proxy to vote all the Subject Shares in favor of the Transactions and any other matter required to effect the Transactions at any meeting of stockholders of Serena called to consider such matters. The Founder and the DT Trust may vote their shares of Common Stock on all other matters submitted to the stockholders of Serena for their approval. The Contribution and Voting Agreement automatically terminates if at any time before the closing of the contributions contemplated by the Contribution and Voting Agreement, the Merger Agreement shall have been terminated in accordance with its terms.

Pursuant to the Management Letter Agreements, Messrs. Woodward and Pender agreed to contribute certain shares of Common Stock beneficially owned by them to Merger Sub prior to the Merger in exchange for Merger Sub Common Stock, which shares will be converted into shares of common stock of the Surviving Corporation by virtue of the Merger, and to exchange options to acquire Common Stock beneficially owned by them, for options to acquire common stock of the Surviving Corporation. The Woodward Letter Agreement also provides for, among other things, that Mark E. Woodward will be the Chief Executive Officer of Serena after the Merger. The Pender Letter Agreement also provides for, among other things, that Robert I. Pender, Jr. will be the Chief Financial Officer of Serena after the Merger.

The Merger Agreement provides that Merger Sub’s directors at the effective time of the Merger will be Serena’s Directors at the effective time of the Merger and officers of Serena immediately prior to the effective time of the Merger will be the officers of Serena at the Effective Time. Pursuant to the Merger Agreement, Serena will use its commercially reasonable efforts to obtain and deliver to Merger Sub at the closing of the Merger evidence reasonably satisfactory to Merger Sub of the resignation, effective at the effective time of the Merger, of all the members of the Board of Directors of Serena, except for those individuals designated in

writing by Merger Sub at least 10 business days before the closing of the Merger. Pursuant to the Stockholders Agreement, a form of which is an exhibit to the Contribution and Voting Agreement and which will be entered into by Merger Sub, SLP II, SLTI II, the DT Trust, the Founder and other parties thereto upon closing of the transactions contemplated by the Contribution and Voting Agreement (the “Stockholders Agreement”) (attached hereto as Exhibit 5), the board of directors of directors of the Surviving Corporation immediately after the effective time of the Merger will consist of (a) two directors designated by the DT Trust, one of whom will generally be the Founder and the other of which will be a director that is not an affiliate of the Company, the DT Trust, the Founder or the Issuer and that is reasonably acceptable to SLP II, (b) the Chief Executive Officer of the Surviving Corporation, and (c) the remainder to be designated by SLP II and/or its permitted transferees.

Pursuant to the Restated Certificate Incorporation of Merger Sub, a form of which is an exhibit to the Contribution and Voting Agreement and which will be executed and filed with the Secretary of State of the State of Delaware prior to the closing of the Merger, one share of Series A Preferred Stock is authorized and will be issued, pursuant to the Contribution and Voting Agreement, to SLP II. Until the occurrence of certain events specified in the Restated Certificate of Incorporation, the holder of the share of Series A Preferred Stock has the power to appoint one director (the “Series A Director”) who shall have the voting rights and powers that entitle such Series A Director to exercise one vote more than all votes entitled to be cast by all other directors at such time.

In connection with the Merger Agreement, subsequent to the Merger, the Reporting Persons intend to delist the Common Stock from the NASDAQ National Market and to deregister the Common Stock pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Other than described above, the Reporting Persons have no plans or proposals which relate to, or may result in, any of the matters listed in Items 4(a)-(i) of Schedule 13D, inclusive, although the Reporting Persons reserves the right to develop such plans.

The information set forth in response to this Item 4 is qualified in its entirety by reference to the Merger Agreement (Exhibit 1 hereto), the Contribution and Voting Agreement (Exhibit 2 hereto), the Stockholders Agreement (Exhibit 5 hereto), the Restated Certificate of Incorporation (Exhibit 6 hereto), and the Management Letter Agreements (Exhibits 8 and 9 hereto), each of which is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer

The information set forth or incorporated by reference in Items 2, 3, 4 and 6 is hereby incorporated herein by reference.

(a), (b) The following disclosure assumes that there are 41,227,379 shares of Common Stock outstanding, which the Issuer represented in the Agreement and Plan of Merger was the number of outstanding shares of Common Stock as of November 9, 2005. The following disclosure also assumes that the Founder may be deemed to beneficially own 11,747,787, which

the Founder represented in the Contribution and Voting Agreement that he may beneficially own as of November 11, 2005.

As a result of the matters described in Items 2, 3 and 4 above, the Reporting Persons and the Founder and the DT Trust, may be deemed constitute a group within the meaning of Section 13(d)(3) of the Exchange Act and, as a result, the Reporting Persons may be deemed to beneficially own 11,747,787 shares of Common Stock as of November 11, 2005. Such Common Stock constitutes approximately 28.5% of the issued and outstanding shares of Common Stock. Pursuant to the Contribution and Voting Agreement, the Founder has represented that he may be deemed to beneficially own 11,747,787 shares of Common Stock. The Contribution and Voting Agreement requires the Founder and the DT Trust, upon the terms and subject to the conditions set forth therein, to vote the Common Stock beneficially owned by them in favor of the Transactions and grants SLP II a limited proxy to vote such shares in favor of the Transactions and requires the Founder and the DT Trust to vote against any competing acquisition proposals and restricts the ability of the Founder and DT Trust to transfer any shares of Common Stock beneficially owned by him or it. As a result of such provisions, SLP II, SLTI II and Merger Sub may be deemed to have shared voting power and shared dispositive power with respect to the such shares of Common Stock beneficially owned by the Founder and the DT Trust. SLP II, SLTI II and Merger Sub (a) are not entitled to any rights as a stockholder of the Issuer (other than as described herein) and (b) disclaim beneficial ownership of the shares of Common Stock which are covered by the Contribution and Voting Agreement.

As the sole general partner of SLP II, SLTA II may be deemed to be the beneficial owner of the shares of Common Stock over which SLP II has voting or dispositive power. The investment decisions of SLTA II are made by the Managing Members. Each of the members of SLTA II and the Managing Members disclaims beneficial ownership of the shares of Common Stock which SLTA II may be deemed to beneficially own.

As the managing members of SLTM, which is the managing member of the manager of SLTI II, the managing members may be deemed to beneficially own the shares of Common Stock over which SLTI II has voting or dispositive power. Each of the Managing Members disclaims beneficial ownership of such shares.

The information set forth in response to this Item 5 is qualified in its entirety by reference to the Merger Agreement (Exhibit 1 hereto) and the Contribution and Voting Agreement (Exhibit 2 hereto), each of which is incorporated herein by reference.

(c) Each of the Reporting Persons reports that neither it, nor to its knowledge, any person named in Item 2 of this Schedule 13D, other than the Founder and the DT Trust, has effected any transaction in Common Stock during the past 60 days, except as disclosed herein.

The Reporting Persons have been advised by the Founder and the DT Trust that neither the Founder nor the DT Trust has effected any transactions in Common Stock during the past 60 days, except as disclosed herein.

(d) None of the Reporting Persons have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, any of the securities of the Issuer beneficially owned by the Reporting Persons as described in Item 5.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth or incorporated by reference in Items 2, 3, 4 and 5 is hereby incorporated herein by reference.

As described in Items 3 and 4 hereof, Merger Sub has entered into the Merger Agreement (Exhibit 1 hereto) with the Issuer dated as of November 11, 2005, whereby, among other things, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Issuer. In connection with the Merger Agreement, each share of Common Stock (other than as described in Item 4) will be converted into the right to receive the Merger Consideration.

As described in Items 3 and 4 hereof, on November 11, 2005, the Founder and the DT Trust entered into the Contribution and Voting Agreement with SLP II, SLTI II and Merger Sub, whereby the Founder and the DT Trust agreed, among other things, (a) to vote the Subject Shares in favor of the Transactions and certain related matters, and has granted an irrevocable proxy to SLP II to vote the Subject Shares in favor of the Transactions and certain related matters, (b) not to make, participate in, agree to or initiate, solicit, encourage or knowingly facilitate any inquiries in connection with or the making of a competing acquisition proposal, (c) to vote the shares of Common Stock beneficially owned by them against any competing acquisition proposal, (d) not to directly or indirectly, sell, transfer, pledge, hypothecate, distribute or otherwise dispose of any shares of Common Stock beneficially owned by them, and (e) to contribute 7,518,483 shares of Common Stock held by the DT Trust to Merger Sub in exchange for 30,825,780 shares of Merger Sub Common Stock immediately prior to the effective time of the Merger (which shares of Merger Sub Common Stock will be converted into shares of common stock the Surviving Corporation at the effective time of the Merger).

As described in Item 4 hereof, the Stockholders Agreement, when executed, will provide certain rights to certain parties thereto to appoint directors of the Surviving Corporation. The Stockholders Agreement will also provide for certain transfer restrictions and registration rights applicable to the shares of common stock of the Surviving Corporation.

In addition, the Restated Certificate of Incorporation, when executed and filed with the Secretary of State of the State of Delaware, and the certificate of incorporation of the Surviving Corporation, from and after the effective time, will provide for a share of preferred stock which will allow SLP II to appoint a director who shall have the voting rights and powers that entitle such director to exercise one vote more than all votes entitled to be cast by all other directors at such time.

In connection with the execution and delivery of the Contribution and Voting Agreement, Merger Sub and SLMC entered into a Management Agreement, dated as of November 11, 2005 (the “SLP Management Agreement”) (attached hereto as Exhibit 11), which provides for, among other things, (a) the payment to SLMC of a fee of $10 million in connection with the closing of the Merger, (b) the payment to SLMC of a periodic fee of $1 million per year after completion of the Merger and (c) the reimbursement by Merger Sub of fees and expenses incurred by SLMC and its affiliates in connection with the performance of services pursuant to the SLP Management Agreement.

As described in Item 4 hereof, pursuant to the Management Letter Agreements, Messrs. Woodward and Pender agreed to contribute certain shares of Common Stock to Merger Sub in exchange for Merger Sub Common Stock, which will be converted into shares of common stock of the Surviving Corporation by virtue of the Merger, and to exchange options to acquire Common Stock for options to acquire common stock of the Surviving Corporation.

As described in Items 3 and 4 hereof, the Lenders have provided Merger Sub with the Debt Commitment Letter (attached hereto as Exhibit 3) with respect to the Financings. The Financings will be used, together with the proceeds received by holding pursuant to the Contribution Agreement, to pay the Merger Consideration to the holders of Common Stock (other than as described in Item 4), to pay the as-converted cash amount or the principal and accrued but unpaid interest on the Convertible Notes for which holders exercise such rights, to pay all related fees and expenses and to provide additional financing for future working capital and general corporate needs of the issuer and its subsidiaries.

In connection with the negotiation of the transactions contemplated by the Merger Agreement, the Issuer entered into a Non-Disclosure Agreement, dated June 24, 2005, with SLMC (the “Confidentiality Agreement”) (attached hereto as Exhibit 10). Pursuant to the Confidentiality Agreement, the signatories thereto have made certain agreements with respect to, among other things, restrictions on (a) the acquisition of securities of Serena or any of its subsidiaries by SLMC, its affiliates and representatives, (b) the influencing or controlling the management or policies of Serena by SLMC, its affiliates and representatives, the solicitation of proxies to vote any voting securities of Serena or any of its subsidiaries by SLMC, its affiliates and representatives, and the influencing of or advising by SLMC, its affiliates and representatives of any person or entity with respect to voting of securities of Serena or any of its subsidiaries, (c) the making of any public announcement by SLMC, its affiliates and representatives with respect to, or submitting any proposal for or offer of any merger, recapitalization, reorganization, business combination or other extraordinary transaction involving the Company or any subsidiary thereof or any of their securities or assets, and (d) the entering into any discussions, negotiations, arrangements or understandings by SLMC, its affiliates and representatives with any third party with respect to the foregoing, or otherwise form, join or in any way engage in discussions relating to the formation of, or participate in, a “group” within the meaning of Section 13(d)(3) of the Exchange Act in connection with any of the foregoing.

In connection with the signing of the Merger Agreement, SLP II entered into a letter agreement, dated November 11, 2005 (the “Sponsor Guarantee”) (attached hereto as Exhibit 4), pursuant to which, among other things, SLP II guaranteed the payment to the Issuer

of any amounts which are finally judicially determined to be due to the Issuer from Merger Sub by reason of the willful breach of the terms of the Merger Agreement by Merger Sub, subject to a maximum of all such payments to the Issuer from SLP II of $52,350,000. In connection with the acquisition of Serena by Merger Sub, Merger Sub entered into an engagement letter, dated September 13, 2005, with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) (such engagement letter, the “Engagement Letter”) (attached hereto as Exhibit 12). Pursuant to the Engagement Letter, Merger Sub has agreed to, among other things, pay certain fees and expenses to Merrill Lynch if Merger Sub acquires Serena. Other than the Merger Agreement and the exhibits thereto, the Contribution and Voting Agreement, the Stockholders Agreement, the Restated Certificate of Incorporation, the SLP Management Agreement, the Management Letter Agreements, the Engagement Letter, the Debt Commitment Letter, the Confidentiality Agreement and the Sponsor Guarantee, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 of this Schedule 13D other than the Founder and the DT Trust and between such persons and any person with respect to any securities of the Issuer, including, but not limited to transfer or voting of any of the class of securities reported on this Statement, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. The Reporting Persons have been advised by the Founder and the DT Trust that, except as disclosed herein, neither the Founder nor the DT Trust is a party to any contract, arrangement, understanding or relationship with respect to any securities of the Issuer, including, but not limited to transfer or voting of any of the class of securities reported on this Statement, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. The information set forth in response to this Item 6 is qualified in its entirety by reference to the Merger Agreement (Exhibit 1 hereto), the Contribution and Voting Agreement (Exhibit 2 hereto), the Debt Commitment Letter (Exhibit 3 hereto), the Sponsor Guarantee (Exhibit 4 hereto), the Stockholders Agreement (Exhibit 5 hereto), the Restated Certificate of Incorporation (Exhibit 6 hereto), the Management Letter Agreements (Exhibits 8 and 9 hereto), the Confidentiality Agreement (Exhibit 10 hereto), the SLP Management Agreement (Exhibit 11 hereto) and the Engagement Letter (Exhibit 12 hereto), each of which is incorporated herein by reference.

Item 7.	Material to Be Filed as Exhibits
1. Agreement and Plan of Merger, dated November 11, 2005, between Spyglass Merger Corp. and Serena Software, Inc. (incorporated by reference to Exhibit 2.1 of the Issuer’s Current Report on Form 8-K filed on November 14, 2005). 2. Contribution and Voting Agreement, dated as of November 11, 2005, among Silver Lake Partners II, L.P., Silver Lake Technology Investors II, L.L.C., Douglas D. Troxel Living Trust, Douglas D. Troxel and Spyglass Merger Corp. 3. Project Spyglass – Credit Facilities Commitment Letter, dated November 11, 2005, among Lehman Brothers Inc.; Lehman Commercial Paper Inc.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Merrill Lynch Capital Corporation; UBS Securities LLC; UBS Loan Finance LLC; and Spyglass Merger Corp. 4. Letter Agreement (Sponsor Guarantee), dated November 11, 2005, between Silver Lake Partners II, L.P. and Serena Software, Inc. 5. Form of Stockholders Agreement (Exhibit A to the Contribution and Voting Agreement). 6. Form of Restated Certificate of Incorporation (Exhibit B to the Contribution and Voting Agreement).

7. Joint Filing Agreement, dated November 21, 2005, by and among Silver Lake Partners II, L.P.; Silver Lake Technology Investors II, L.L.C.; and Spyglass Merger Corp.

8. Letter Agreement (Woodward Letter Agreement), dated November 11, 2005, between Spyglass Merger Corp. and Mark E. Woodward.

9. Letter Agreement (Pender Letter Agreement), dated November 11, 2005, between Spyglass Merger Corp. and Robert I. Pender Jr.

10. Non-Disclosure Agreement, dated June 24, 2005, between Serena Software, Inc. and Silver Lake Management Company, L.L.C.

11. Management Agreement, dated as of November 11, 2005, between Spyglass Merger Corp. and Silver Lake Management Company, L.L.C.

12. Engagement Letter, dated September 13, 2005, between Spyglass Merger Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: November 21, 2005


	SILVER LAKE PARTNERS II, L.P.

	By:		SILVER LAKE TECHNOLOGY ASSOCIATES II, L.L.C., its General Partner


			By:	/s/ Alan K. Austin
				Name:	Alan K. Austin
				Title:	Managing Director and
					Chief Operating Officer


	SILVER LAKE TECHNOLOGY INVESTORS II, L.L.C.

	By:		SILVER LAKE MANAGEMENT COMPANY, L.L.C., its Manager


	By:	/s/ Alan K. Austin
		Name:		Alan K. Austin
		Title:		Managing Director and
				Chief Operating Officer


	SPYGLASS MERGER CORP.


	By:	/s/ Alan K. Austin
		Name:		Alan K. Austin
		Title:		Vice President, Secretary and
				Assistant Treasurer

EX-2 2 a05-20673_1ex2.htm EXHIBIT 2

Exhibit 2

CONTRIBUTION AND VOTING AGREEMENT

CONTRIBUTION AND VOTING AGREEMENT, dated as of November 11, 2005 (this “Agreement”), among (i) (A) Silver Lake Partners II, L.P., a Delaware limited partnership, (“SLP II”), and (B) Silver Lake Technology Investors II, L.L.C., a Delaware limited liability (“SLTI II,” and together with SLP II, the “Silver Lake Investors”), (ii) (A) Douglas D. Troxel, as Trustee of the Douglas D. Troxel Living Trust (the “Co-Investor”) and (B) Douglas D. Troxel, an individual (the “Co-Investor Founder”), and (iii) Spyglass Merger Corp., a Delaware corporation (“Newco”). The Silver Lake Investors and the Co-Investor are herein collectively referred to as the “Investors.” Unless expressly provided otherwise in this Agreement, capitalized terms defined in the Merger Agreement when used in this Agreement shall have the same meanings set forth in the Merger Agreement (defined below).

WHEREAS, concurrently with the execution and delivery of this Agreement, Newco has entered into an Agreement and Plan of Merger, dated as of the date hereof (as may be amended from time to time, the “Merger Agreement”), with SERENA Software, Inc., a Delaware corporation (the “Company”), pursuant to which, upon the terms and subject to the conditions set forth therein, Newco will merge with and into the Company, with the Company being the surviving corporation (the “Merger”);

WHEREAS, in connection with the consummation of the Merger and the receipt by the Investors of common stock of the Company (as the surviving corporation of the Merger), each of the Investors shall become parties to a stockholders’ agreement in the form attached hereto as Exhibit A (the “Stockholders Agreement”);

WHEREAS, in connection with the execution of the Merger Agreement, Newco has received certain financing commitments and agreements from Merrill Lynch Capital Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Commercial Paper Inc., Lehman Brothers Inc., UBS Loan Finance LLC and UBS Securities LLC (collectively, the “Lenders”) with respect to the provision of debt financing to effect the Merger (the “Debt Financing Commitments”); and

WHEREAS, the parties hereto desire to make certain agreements, representations, warranties and covenants in connection with the Merger, the Merger Agreement, the Stockholders Agreement, the Debt Financing Commitments and the transactions contemplated hereby and thereby (collectively, the “Transactions”).

NOW, THEREFORE, in consideration of the mutual covenants and conditions as hereinafter set forth, the parties hereto do hereby agree as follows:

I CONTRIBUTIONS

1.1. Silver Lake Investors Contributions. At the Contribution Closing (as defined below), upon the terms and subject to the conditions of this Agreement, each of the Silver Lake Investors hereby agrees, severally and not jointly, to transfer, contribute and deliver to Newco the cash amount set forth opposite its name on Schedule I hereto (the “Silver Lake Contributions”); provided, however that the Silver Lake Contributions will be reduced on a pro

rata basis (based on the cash amounts set forth in Schedule I) with respect to the aggregate Value (as defined below) of any Company equity that members of the Company’s management agree to “roll over” in connection with the Merger; and provided, further that in the event the Closing occurs after March 31, 2006 and the aggregate debt financing borrowed on the Closing Date to finance the Merger and related transactions (including fees and expenses related thereto) is less than $600,000,000, the Silver Lake Contributions will be increased on a pro rata basis (based on the cash amounts set forth on Schedule I) by such amount up to $20,000,000 in the aggregate as may be required to finance the Merger and related transactions (it being understood that in no event will the aggregate Silver Lake Contribution be increased by more than $20,000,000 pursuant to this proviso). For purposes of this Agreement, “Value” shall mean, (i) with respect to each share of Common Stock, $0.001 par value per share (the “Company Common Stock”), of the Company, the Merger Consideration (as defined in the Merger Agreement) and (ii) with respect to any option to acquire Company Common Stock, the product of (x) the excess, if any, of the Merger Consideration over the per share exercise price of such option and (y) the number of shares of Company Common Stock subject to such option. In consideration for the Silver Lake Contributions, Newco hereby agrees to issue at the Contribution Closing (a) to SLP II, one share of Series A Preferred Stock, par value $0.01 per share (“Newco Preferred Stock”), and (b) to each of the Silver Lake Investors, a number of shares of Common Stock, par value $0.01 per share (“Newco Common Stock”), of Newco (the “Silver Lake Shares”) equal to the quotient of (i) the Silver Lake Contribution of such Silver Lake Investor divided by (ii) $5.00.

1.2. Co-Investor Contribution. At the Contribution Closing, upon the terms and subject to the conditions of this Agreement, the Co-Investor hereby agrees, severally and not jointly, to transfer, contribute and deliver to Newco the number of shares of Company Common Stock opposite its name on Schedule II hereto (the “Co-Investor Contribution”). In consideration for the Co-Investor Contribution, Newco hereby agrees to issue at the Contribution Closing to the Co-Investor the number of shares of Newco Common Stock set forth opposite its name on Schedule III hereto (the “Co-Investor Shares”).

1.3. Delivery of Funds and Certificates. Subject to the satisfaction (or waiver by the parties entitled to the benefit thereof) of the conditions set forth in Section 1.4 of this Agreement, the closing of the transactions contemplation hereby (the “Contribution Closing”) will take place at the offices of Simpson Thacher & Bartlett LLP, 3330 Hillview Avenue, Palo Alto, California 94304, or at such other location as the parties may mutually agree, immediately prior to the Closing (as defined in the Merger Agreement). At the Contribution Closing, Newco will deliver to each of (a) the Silver Lake Investors duly executed certificates, registered in the Silver Lake Investors’ respective names, representing the Silver Lake Shares, against the transfer, contribution and payment to Newco of the Silver Lake Contributions, which shall represent payment in full for the Silver Lake Shares, and (b) the Co-Investor duly executed certificates, registered in the Co-Investor’s name, representing the Co-Investor Shares, against the transfer, contribution and payment to Newco of the Co-Investor Contribution (including the delivery of certificates evidencing the applicable number of shares of Company Common Stock with respect to the Co-Investor duly endorsed to Newco), which shall represent payment in full for the Co-Investor Shares.

1.4. Conditions to the Obligations of the Parties Hereunder. The respective obligations of the Investors to consummate the transactions contemplated by this Agreement

shall be subject to the satisfaction or waiver by Newco and/or the Company, as applicable, of all of the conditions to the consummation of the Merger (as set forth in the Merger Agreement). In addition, the obligations of each of the Investors shall be subject to the termination of all waiting periods (and any extensions thereof) applicable to such Investor under the HSR Act. Upon the satisfaction or waiver of such condition, the parties shall have an unconditional and absolute obligation to consummate the transactions contemplated by this Agreement, whether or not there is a breach of any representation or warranty set forth herein or whether or not the parties have complied with their respective obligations to execute and deliver the Stockholders Agreement as provided in Section 4.9 hereto.

1.5. Termination. This Agreement shall automatically terminate and the Transactions shall be abandoned if at any time prior to the Contribution Closing the Merger Agreement shall have been terminated in accordance with its terms. In the event of any termination of this Agreement as provided in this Section 1.5, this Agreement shall forthwith become wholly void and of no further force or effect (except Section 4.6 and Article V) and there shall be no liability on the part of any parties hereto or their respective officers or directors, except as provided in such Section 4.6 and Article V. Notwithstanding the foregoing, no party hereto shall be relieved from liability for any willful breach of this Agreement.

II REPRESENTATIONS AND WARRANTIES

2.1. Representations and Warranties of Newco. Newco represents and warrants to the Investors and the Co-Investor Founder as follows:

(a) Newco is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware and has all requisite corporate power and authority to execute and deliver this Agreement and the agreements contemplated hereby and to perform its obligations hereunder and thereunder. The execution and delivery by Newco of this Agreement and the Management Agreement and the agreements contemplated hereby and thereby, the performance by Newco of its obligations hereunder and thereunder, and the consummation by Newco of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action. Each of this Agreement and the Management Agreement has been duly executed and delivered by Newco and, assuming the due authorizations, executions and deliveries thereof by the other parties hereto, constitutes a legal, valid and binding obligation of Newco, enforceable against Newco in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law).

(b) The execution, delivery and performance by Newco of this Agreement and the Management Agreement and the agreements contemplated hereby and thereby and the consummation by Newco of the transactions contemplated hereby and thereby do not and will not, with or without the giving of notice or the passage of time or both, (i) violate the provisions of any law, rule or regulation applicable to Newco or its properties or assets; (ii) violate the provisions of the certificate of

incorporation or bylaws of Newco, as amended to date; or (iii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to Newco or their properties or assets.

(c) Except to the extent required pursuant to (i) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”) and (ii) any similar applicable competition or antitrust laws, no consent, approval, exemption or authorization is required to be obtained from, no notice is required to be given to and no filing is required to be made with any third party (including, without limitation, governmental and quasi-governmental agencies, authorities and instrumentalities of competent jurisdiction) by Newco, in order (x) for each of this Agreement and the Management Agreement to constitute a legal, valid and binding obligation of Newco or (y) to authorize or permit the consummation by Newco of the issuance of the Silver Lake Shares and the Co-Investor Shares.

(d) As of the date hereof, the authorized capital stock of Newco consists of 1,000 shares of Newco Common Stock, 10 of which are issued and outstanding and held by SLP II as of the date hereof (each such share having been purchased by SLP II for a cash price of $5.00 per share). Newco has no obligation, and shall not undertake any obligation, to issue any shares of its capital stock, options, warrants or other rights to purchase common stock prior to the Contribution Closing, except pursuant to this Agreement. Newco has delivered to the Investors true and complete copies of its charter and bylaws as in effect on the date hereof.

(e) The Silver Lake Shares and the Co-Investor Shares, when issued and delivered in accordance with the terms hereof and upon receipt of payment required to be made hereunder, will be duly authorized, validly issued, fully paid and nonassessable and free and clear of any mortgage, pledge, security interest, claim, encumbrance, lien or charge of any kind (each, a “Lien”), except as may be otherwise set forth in the Stockholders Agreement.

(f) Newco has delivered to the Co-Investor Founder and each of the Co-Investor a true and correct copy of the Management Agreement, dated as of the date hereof (the “Management Agreement”), between Silver Lake Management Company, L.L.C. and Newco.

(g) Newco was organized solely for the purpose of effecting the Transactions and has engaged in no activity other than in connection therewith.

2.2. Representations and Warranties of the Investors. Each of the Silver Lake Investors represents and warrants, severally and not jointly, to Newco, the Co-Investor and the Co-Investor Founder that:

(a) The execution and delivery by such Silver Lake Investor of this Agreement and the Stockholders Agreement and the documents contemplated hereby and thereby, the performances by such Silver Lake Investor of its obligations hereunder

and thereunder and the consummations by such Silver Lake Investor of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of such Investor. This Agreement has been duly executed and delivered by such Silver Lake Investor and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes a legal, valid and binding obligation of such Investor, enforceable against such Silver Lake Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law). At the Contribution Closing, the Stockholders Agreement will have been duly executed and delivered by such Silver Lake Investor and, assuming the due authorization, execution and delivery thereof by the other parties thereto, will constitute a legal, valid and binding obligation of such Silver Lake Investor, enforceable against such Silver Lake Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law).

(b) The execution, delivery and performance by such Silver Lake Investor of this Agreement and the Stockholders Agreement and the agreements contemplated hereby and thereby and the consummation by such Silver Lake Investor of the transactions contemplated hereby and thereby does not and will not, with or without the giving of notice or the passage of time or both, (i) subject to receipt of any required antitrust approvals, violate in any material manner the provisions of any law, rule or regulation applicable to such Silver Lake Investor or its properties or assets; (ii) violate the provisions of the constituent organizational documents or other governing instruments applicable to such Silver Lake Investor, as amended to date; or (iii) violate in any material manner any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to such Silver Lake Investor or its properties or assets.

(c) Such Silver Lake Investor (i) is an “accredited investor” within the definition of Regulation D promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), (ii) is experienced in evaluating and investing in private placement transactions of securities of companies in a similar stage of development and acknowledges that it is able to fend for itself, can bear the economic risk of such Silver Lake Investor’s investment in Newco, and has such knowledge and experience in financial and business matters that such Silver Lake Investor is capable of evaluating the merits and risks of the investment in the Newco Common Stock and can afford a complete loss of its investment, (iii) has not been organized for the purpose of acquiring the Newco Common Stock, (iv) understands that no public market now exists for the Newco Common Stock and there is no assurance that a pubic market will ever exist for the Newco Common Stock and (v) understands that the Newco Common Stock may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and

that in the absence of an effective registration statement covering the Newco Common Stock or an available exemption from registration under the Securities Act, the Newco Common Stock must be held indefinitely.

2.3. Representations and Warranties of the Co-Investor. The Co-Investor represents and warrants to Newco and each of the Silver Lake Investors that:

(a) The execution and delivery by the Co-Investor of this Agreement and the Stockholders Agreement and the documents contemplated hereby and thereby, the performances by the Co-Investor of its obligations hereunder and thereunder and the consummations by the Co-Investor of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of such Investor. This Agreement has been duly executed and delivered by the Co-Investor and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes a legal, valid and binding obligation of such Investor, enforceable against the Co-Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law). At the Contribution Closing, the Stockholders Agreement will have been duly executed and delivered by the Co-Investor and, assuming the due authorization, execution and delivery thereof by the other parties thereto, will constitute a legal, valid and binding obligation of the Co-Investor, enforceable against the Co-Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law).

(b) The execution, delivery and performance by the Co-Investor of this Agreement and the Stockholders Agreement and the agreements contemplated hereby and thereby and the consummation by the Co-Investor of the transactions contemplated hereby and thereby does not and will not, with or without the giving of notice or the passage of time or both, (i) subject to receipt of any required antitrust approvals, violate in any material manner the provisions of any law, rule or regulation applicable to the Co-Investor or its properties or assets; (ii) violate the provisions of the constituent organizational documents or other governing instruments applicable to the Co-Investor, as amended to date; or (iii) violate in any material manner any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to the Co-Investor or its properties or assets. True and complete copies of the constituent organizational documents or other governing instruments applicable to the Co-Investor, each as amended through the date hereof, have been made available to Newco prior to the date hereof.

(c) The Co-Investor (i) is an “accredited investor” within the definition of Regulation D promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), (ii) is

experienced in evaluating and investing in private placement transactions of securities of companies in a similar stage of development and acknowledges that it is able to fend for itself, can bear the economic risk of the Co-Investor’s investment in Newco, and has such knowledge and experience in financial and business matters that the Co-Investor is capable of evaluating the merits and risks of the investment in the Newco Common Stock and can afford a complete loss of its investment, (iii) has not been organized for the purpose of acquiring the Newco Common Stock, (iv) understands that no public market now exists for the Newco Common Stock and there is no assurance that a pubic market will ever exist for the Newco Common Stock and (v) understands that the Newco Common Stock may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Newco Common Stock or an available exemption from registration under the Securities Act, the Newco Common Stock must be held indefinitely.

(d) The Co-Investor’s total beneficial ownership of shares of outstanding Company Common Stock as of the date hereof is accurately set forth opposite the Co-Investor’s name on Schedule IV hereto, and each of such shares representing Co-Investor Contribution when transferred and delivered to Newco, upon the terms and subject to the conditions set forth herein, will be free and clear of all Liens.

(e) The Co-Investor acknowledges that it has received a copy of the Management Agreement.

(f) The Co-Investor has no liability of obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement or the Merger Agreement.

(g) The Co-Investor is a Family Affiliate (as defined in the Stockholders Agreement) of the Co-Investor Founder.

2.4. Representations and Warranties of the Co-Investor Founder. The Co-Investor Founder represents and warrants to Newco and each of the Silver Lake Investors that:

(a) The Co-Investor Founder is competent to execute and deliver this Agreement and to perform his obligations hereunder. This Agreement has been duly executed and delivered by the Co-Investor Founder and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes a legal, valid and binding obligation of such Investor, enforceable against the Co-Investor Founder in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by the effect of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or in law).

(b) The execution, delivery and performance by the Co-Investor Founder of this Agreement and the agreements contemplated hereby and the consummation by the Co-Investor Founder of the transactions contemplated hereby does not and will not, with or without the giving of notice or the passage of time or both, (i) subject to receipt of any required antitrust approvals, violate the provisions of any law, rule or regulation applicable to the Co-Investor Founder or its properties or assets; or (ii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to such Co-Investor or his properties or assets.

(c) Schedule IV hereto sets forth the shares of Company Common Stock with respect to which the Co-Investor Founder may be deemed to have beneficial ownership. The Co-Investor Founder does not beneficially own any shares of Company Common Stock or any securities exerciseable for, or convertible or exchangeable into, shares of Company Common Stock, other than as set forth in Schedule IV.

(d) The Co-Investor Founder acknowledges that he has received a copy of the Management Agreement.

(e) The Co-Investor Founder has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement or the Merger Agreement.

(f) The Co-Investor is a Family Affiliate (as defined in the Stockholders Agreement) of the Co-Investor Founder.

III VOTING AND EXCLUSIVITY

3.1. Voting. Each of the Co-Investor and the Co-Investor Founder agrees to vote or consent (or cause to be voted or consented), in person or by proxy, any shares of Company Common Stock beneficially owned or held of record by it or him or to which it or he has, directly or indirectly, the right to vote or direct the voting (the “Subject Shares”) in favor of the Transactions and any other matter required to effect the Transactions at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of stockholders of the Company called to consider such matters. In order to effectuate this section 3.1, each of the Co-Investor and the Co-Investor Founder hereby grants to SLP II an irrevocable proxy, which proxy is coupled with an interest, to vote all of the Subject Shares owned by the Co-Investor or Co-Investor Founder, as applicable, in favor of the Transactions and any other matter required to effect the Transactions at any meeting of stockholders of the Company called to consider such matters.

3.2. Exclusivity. Prior to the earlier of the Contribution Closing or the termination of this Agreement, unless otherwise mutually agreed in writing by the Silver Lake Investors and the Co-Investor, each of the Co-Investor and the Co-Investor Founder (in his individual capacity as the beneficial owner of shares of Company Common Stock and not in his capacity as an officer or director of the Company) will (i) not, directly or indirectly, make, participate in or agree to, or initiate, solicit, encourage or knowingly facilitate any inquiries or the making of, any proposal or

offer with respect to, or a transaction to effect, a merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its subsidiaries, or any purchase or sale of 10% or more of the consolidated assets (including without limitation stock of its subsidiaries) of the Company and its subsidiaries, taken as a whole (any such proposal, offer or transaction (other than the Transactions) being hereinafter referred to as a “Competing Acquisition Proposal”), (ii) engage, or participate in, any discussions or negotiations regarding a Competing Acquisition Proposal, (iii) vote or consent (or cause to be voted or consented), in person or by proxy, any Subject Shares against any Competing Acquisition Proposal at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) of stockholders of the Company, (iv) not, directly or indirectly, sell, transfer, pledge, hypothecate, distribute or otherwise dispose of any shares of Company Common Stock beneficially owned by it or him and (iv) not enter into any agreement, commitment or arrangement that is inconsistent with any of the foregoing

3.3. Fiduciary Duties. For the avoidance of doubt, if at any time prior to the termination of this Agreement, the Co-Investor Founder is a member of the Board of Directors of the Company (“Director”) or an officer of the Company (“Officer”), nothing in this Agreement shall limit or restrict the Co-Investor Founder in acting in his capacity as a Director or Officer, as the case may be, and exercising his fiduciary duties and responsibilities as such, it being agreed and understood by the parties hereto that this Agreement shall apply to the Co-Investor Founder solely in his capacity as a stockholder of the Company and shall not apply to his actions, omissions, judgments or decisions as a Director or Officer, as the case may be.

IV OTHER COVENANTS

4.1. Merger Agreement. The parties hereto acknowledge and agree that Newco will have sole discretion with respect to (a) determining whether the conditions set forth in the Merger Agreement have been satisfied by the appropriate parties thereto and/or whether to waive any of such conditions pursuant to the terms of the Merger Agreement, and (b) the manner and timing of the Company’s compliance with the covenants applicable to the Company under the Merger Agreement.

4.2. Amendment of Certificate of Incorporation of Newco. Newco agrees to amend, and SLP II agrees to cause Newco to amend, the certificate of incorporation of Newco at or prior to the Contribution Closing to conform to Exhibit B hereto.

4.3. No Amendments of Co-Investor Organizational Documents. The Co-Investor agrees not to amend, and the Co-Investor Founder agrees not to permit to be amended, any of the constituent organizational documents or other governing instruments applicable to the Co-Investor between the date hereof and the Closing, except as contemplated hereby, without the prior written consent of Newco.

4.4. Financing Documents. The parties hereto acknowledge and agree that Newco will have sole discretion with respect to the negotiation of definitive debt financing documents with the Lenders (or any other debt financing sources) and any supporting lenders based upon the Debt Financing Commitments, so long as none of such lenders or financing sources are affiliates of the Silver Lake Investors.

4.5. Agreement to Cooperate; Further Assurances. Each of the parties hereto shall use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Transactions, including providing information and using reasonable best efforts to obtain all necessary or appropriate waivers, consents and approvals, and effecting all necessary registrations and filings.

4.6. Fees and Expenses.

(a) In the event that this Agreement is terminated prior to the Closing (as defined in the Merger Agreement), the costs incurred by any party hereto in preparing this Agreement and in pursuing and negotiating the Transactions (including all attorneys’ fees and costs relating thereto and any antitrust filing fees not previously paid by the Company) will be paid by the party incurring such expenses; provided that the Co-Investor may accept reimbursement for such expenses from the Company.

(b) In the event that the Closing (as defined in the Merger Agreement) occurs, Newco shall, simultaneously with the Closing, reimburse each of the Investors and the Co-Investor Founder for its and his reasonable out-of-pocket fees and expenses incurred in connection with entering into and effecting the transaction (including all fees of attorneys, accountants, consultants and other advisors).

4.7. Notification of Certain Matters. Each party to this Agreement shall give prompt notice to each other party of (a) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which is likely to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate at or prior to the Contribution Closing and (b) any failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 4.7 shall not limit or otherwise affect any remedies available to the party receiving such notice. No disclosure by any party pursuant to this Section 4.7 shall prevent or cure any misrepresentations, breach of warranty or breach of covenant.

4.8. Public Statements. Before the Co-Investor Founder or the Co-Investor shall release any statements concerning this Agreement, the Merger Agreement, the Stockholders Agreement, the Debt Financing Documents, the Transactions or any of the matters contemplated hereby and thereby and before the Silver Lake Investors shall release any statements concerning the Co-Investor or Co-Investor Founder, in each case which is intended for or may result in public dissemination thereof, such party shall cooperate with the other parties and provide the other parties the reasonable opportunity to review and comment upon any such statements and, unless otherwise required by law or as may be required to be disclosed by any party in any Schedule 13D filing, shall not release or permit release of any such information without the consent of the other parties, which shall not be unreasonably withheld.

4.9. Execution of Stockholders’ Agreement. At the Contribution Closing, each of the Investors agrees to execute and deliver to the other parties thereto the Stockholders Agreement.

4.10. Actions Prior to Contribution Closing.

(a) Newco will not take any action prior to the Contribution Closing that after the Contribution Closing would require the prior written consent of a Co-Investor Designee (as defined in the Stockholders Agreement) after the Contribution Closing pursuant to Section 2.3 of the Stockholders Agreement, unless Newco has obtained the prior written consent of the Co-Investor.

(b) No later than five (5) business days after the date hereof, the Co-Investor shall cause (i) the Douglas D. Troxel Living Trust Agreement to be amended to prohibit distribution of the Co-Investor Contribution to the beneficiaries named therein under any circumstances (including, without limitation, the death of the trustor named therein) prior to the earlier of the Contribution Closing or the termination of this Agreement and (ii) a co-trustee, to be appointed under the Douglas D. Troxel Living Trust Agreement, to accept such appointment and become a party to the Douglas D. Troxel Living Trust Agreement in such capacity and to become a party to this Agreement in the same manner as the Co-Investor.

4.11. Tax Treatment. Newco and the Investors agree that, for federal and applicable state income tax purposes, (a) Newco shall be treated as a transitory entity the existence of which is disregarded, (b) the contributions and share issuances described in Section 1 hereof shall be treated as transactions occurring between the Investors and the Company contemporaneously with the Merger and (c) the contribution of shares of Company Common Stock by the Co-Investor and the receipt of shares of the Company by the Co-Investor pursuant to the Merger shall be treated collectively as a transaction governed by Section 1036(a) of the Internal Revenue Code of 1986, as amended.

V MISCELLANEOUS

5.1. Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy, telegraph or telex), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, or, in the case of telegraphic notice, when delivered to the telegraph company, or, in the case of telex notice, when sent, answerback received, addressed as follows to Newco and the Investors, or to such other address as may be hereafter notified by the parties hereto:

(a) If to Newco, to it at the following address:

c/o Silver Lake Partners

2725 Sand Hill Road, Suite 150

Menlo Park, California 94025

Attn: David Roux

Telephone: (650) 233-8120

Telecopy: (650) 233-8125

with a copy to:

Simpson Thacher & Bartlett LLP

3330 Hillview Avenue

Palo Alto, California 94304

Attn: Richard Capelouto

Telephone: (650) 251-5060

Telecopy: (650) 251-5002

(b) If to an Investor, to it at its address set forth in the Stockholders Agreement.

5.2. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts executed and to be performed entirely within that state. Each of the parties by its execution hereof hereby (i) irrevocably submits to the jurisdiction of the federal and state courts located in the County of Santa Clara in the State of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement or any other agreement contemplated hereby or relating to the subject matter hereof or thereof and (ii) waives to the extent not prohibited by applicable law, and agrees not to assert by way of motion, as a defense or otherwise, that its property is exempt or immune from attachment or execution, that any such proceeding brought in one of the above-named courts is improper, or that any right or remedy relating to this Agreement or any other agreement contemplated hereby, or the subject matter hereof or thereof, may not be enforced in or by such court. Each of the parties hereby consents to service of process in any such proceeding in any manner permitted by the laws of the state of California, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 5.2 hereof is reasonably calculated to give actual notice.

5.3. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

5.4. Successors and Assigns. All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors.

5.5. Successors and Assigns; Limitation on Assignment. This Agreement may not be assigned by any party hereto, except that the rights and obligations of the Silver Lake Investors to provide the Silver Lake Contributions may be assigned by the Silver Lake Investors to the following Persons (provided that no such assignment will relieve any of such Silver Lake Investors of any of their respective obligations hereunder): (a) in whole or in part to any of its Affiliates and (b) with respect to all of the Silver Lake Investors, taken together, an aggregate of up to $81,920,000 of Silver Lake Contributions to Persons that are not Affiliates of the Silver

Lake Investors. Any assignment or delegation in derogation of this provision shall be null and void.

5.6. Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.7. Interpretation. The article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

5.8. Survival. The representations and warranties contained herein will survive the Contribution Closing.

5.9. Amendments and Waivers. No amendment, modification or supplement to the Agreement shall be enforced against any party unless such amendment, modification or supplement is in writing and signed by Newco and each of the Investors. Any waiver by any party of any term of this Agreement shall not operate as or be construed to be a waiver of any other term of this Agreement. Any waiver must be in writing and signed by the Party charged therewith.

5.10. Integration. This Agreement, the Merger Agreement, the Stockholders Agreement and the documents referred to herein and therein or delivered pursuant hereto or thereto contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no agreements, representations, warranties, covenants or undertakings with respect to the subject matter hereof and thereof other than those expressly set forth herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to this subject matter. There are no third party beneficiaries having rights under or with respect to this Agreement.

5.11. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.

5.12. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in addition to any other remedy to which they are entitled at law or in equity.

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IN WITNESS WHEREOF, Newco and the Investors have executed this Agreement as of the day and year first above written.

SILVER LAKE PARTNERS II, L.P.

By:	Silver Lake Technology Associates II, L.L.C., its General Partner


	By:	/s/ ALAN K. AUSTIN
		Name: Alan K. Austin
		Title: Managing Director and Chief Operating Officer

SILVER LAKE TECHNOLOGY INVESTORS II, L.L.C.

By:	Silver Lake Management Company, L.L.C., its Manager

	By:	Silver Lake Technology Management, L.L.C., its Managing Member


		By:	/s/ ALAN K. AUSTIN
			Name: Alan K. Austin
			Title: Managing Director and Chief Operating Officer

DOUGLAS D. TROXEL LIVING TRUST


	By:	/s/ DOUGLAS D. TROXEL
		Name: Douglas D. Troxel
		Title: Trustee

CO-INVESTOR FOUNDER

	/s/ DOUGLAS D. TROXEL
	Douglas D. Troxel

SPYGLASS MERGER CORP.

	By:	/s/ ALAN K. AUSTIN
		Name: Alan K. Austin
		Title: Vice President

Schedule I

	Silver Lake Contributions

Silver Lake Partners II, L.P.	$	348,027,372

Silver Lake Technology Investors II, L.L.C.	972,628

Schedule II

		Co-Investor Contribution (shares of Company Common Stock)

Douglas D. Troxel Living Trust		7,518,483

Schedule III

		Co-Investor Shares

Douglas D. Troxel Living Trust		30,825,780

Schedule IV

		Beneficial Ownership (Shares of Company Common Stock

Douglas D. Troxel Living Trust		10,178,12

Troxel Investments, L.P.		974,600

Troxel Investments, LLC		125,000

Change Happens Foundation		430,000

Shares held in Wells Fargo Exchange Fund		38,062

Kenneth D. Troxel Trust		2,000

Total		11,747,787

Exhibit A

Exhibit B

EX-3 3 a05-20673_1ex3.htm EXHIBIT 3

Exhibit 3

Lehman Commercial Paper Inc. 745 Seventh Avenue New York, New York 10019		Lehman Brothers Inc. 745 Seventh Avenue New York, New York 10019

Merrill Lynch Capital Corporation 4 World Financial Center 250 Vesey Street New York, New York 10080		Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center 250 Vesey Street New York, New York 10080

UBS Loan Finance LLC 677 Washington Boulevard Stamford, Connecticut 06901		UBS Securities LLC 299 Park Avenue New York, New York 10171

November 11, 2005

Spyglass Merger Corp.
c/o Silver Lake Partners
2725 Sand Hill Road, Suite 150
Menlo Park, California 94025

Attention: David J. Roux, Managing Director
Hollie Moore, Director

Re: Project Spyglass — Credit Facilities Commitment Letter

Ladies and Gentlemen:

Spyglass Merger Corp. (“you” or “Newco”) has advised Lehman Commercial Paper Inc. (“LCPI”), Merrill Lynch Capital Corporation (“MLCC”), UBS Loan Finance LLC (“UBS”, and together with LCPI and MLCC, the “Underwriters” and each an “Underwriter”), Lehman Brothers Inc. (“LBI”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”) and UBS Securities LLC (“UBSS”, and together with LBI and MLPFS, the “Arrangers”) that (i) Newco has been newly formed by Silver Lake Partners (“Sponsor”) and intends to enter into an agreement and plan of merger (the “Merger Agreement”) with Serena Software, Inc. (“Target” or “Borrower”) pursuant to which Newco will merge with and into Target, with Target being the surviving entity (the “Merger”); (ii) immediately prior to the consummation of the Merger, Sponsor and one or more other investors reasonably satisfactory to us (together, the “Investors”) will purchase for cash (the “Equity Financing”) common equity of Newco in an aggregate amount which when combined with the debt financings referred to below shall be sufficient to consummate the Merger; and (iii) pursuant to agreements entered into in connection with the Merger Agreement, members of the management of Target will rollover certain of their equity interests in Target (the “Rollover Equity Investment”).

In addition, you have advised the Underwriters and the Arrangers that in connection with the Merger, (a) Borrower will raise in an offering (the “Notes Offering”) gross cash proceeds of not less than $225.0 million from either (i) the issuance by it of unsecured

senior subordinated notes (the “Notes”) or (ii) the draw-down under an unsecured senior subordinated interim loan (the “Interim Loan”), which would be anticipated to be refinanced with debt securities substantially similar to the Notes (the “Take-out Securities”); and (b) Borrower will enter into senior secured credit facilities in the amount of $450.0 million (the “Senior Credit Facilities” and, together with the Interim Loan, the “Credit Facilities”). Each term loan facility or revolving facility comprised by the Credit Facilities may be referred to herein as a “Facility”, and the loans thereunder may be referred as “Loans”.

In addition, you have advised us that, on the closing date of the Merger (the “Closing Date”), Target’s existing convertible subordinated securities, to the extent not already converted, will become convertible into cash upon the terms and subject to the conditions set forth in the indenture with respect to such securities (the “Conversion”).

The Merger, the Equity Financing, the Note Offering (if consummated), the Rollover Equity Investment, the Conversion, the entering into and initial borrowings under the Credit Facilities by the parties herein described and the other transactions contemplated hereby entered into and consummated in connection with the Merger are herein referred to as the “Transactions”.

You have requested that the Underwriters commit to provide the Credit Facilities to finance the Merger and the Conversion and to pay certain related fees and expenses.

Accordingly, subject to the terms and conditions set forth below, the Underwriters and the Arrangers hereby agrees with you as follows:

1. Commitment. LCPI hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 40% of the Senior Credit Facilities, MLCC hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 40% of the Senior Credit Facilities and UBS hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 20% of the Senior Credit Facilities, in each case, upon the terms and subject to the conditions set forth or referred to herein (including Annex I hereto), in the Fee Letter (the “Fee Letter”) dated the date hereof and delivered to you, and in the Senior Credit Facilities Summary of Terms and Conditions attached hereto (and incorporated by reference herein) as Exhibit A (the “Senior Term Sheet”). MLCC hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 40% of the Interim Loan, LCPI hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 40% of the Interim Loan and UBS hereby commits on a several basis to provide or cause one or more of its affiliates to provide to Borrower 20% of the Interim Loan, in each case, upon the terms and subject to the conditions set forth or referred to herein, in the Fee Letter and in the Interim Loan Summary of Terms and Conditions attached hereto (and incorporated by reference herein) as Exhibit B (the “Interim Loan Term Sheet” and, together with the Senior Term Sheet, the “Term Sheets”). The commitments of the Underwriters hereunder are subject to the negotiation, execution and delivery of definitive documents governing the Credit Facilities (together, the “Credit Documents”) that are reasonably satisfactory to the Underwriters and the Borrower reflecting, among other things, the terms and conditions set forth herein and in the Term Sheets and the Fee Letter.

2. Syndication. We reserve the right and intend, prior to or after the execution of the Credit Documents, to syndicate all or a portion of our commitments to one or more financial institutions (together with the Underwriters, the “Lenders”). Upon the issuance by any additional Lender of its commitment with respect to any Facility, which Lender shall be reasonably acceptable to you (such consent not to be unreasonably withheld), the Underwriters’ commitment with respect to such Facility shall be reduced by an equal amount (in a manner to be agreed among them). You shall appoint the Arrangers (or their affiliates) to act as sole and exclusive joint lead arrangers and bookrunners of the Credit Facilities, LCPI as sole and exclusive administrative agent for the Senior Credit Facilities holding the physical books therefor (the “Senior Administrative Agent”), and MLCC as sole and exclusive administrative agent for the Interim Loan holding the physical books therefor. It is agreed that the names of the Arrangers (and/or affiliates designated by any of them) shall appear on any marketing materials in connection with the Credit Facilities, with LBI’s name receiving “top left” placement, MLPFS’ name receiving “top center” placement, and UBSS’ name receiving “top right” placement on any such marketing materials in connection with the Senior Credit Facilities, and with MLPFS’ name receiving “top left” placement, LBI’s name receiving “top center” placement, and UBSS’ name receiving “top right” placement on any such marketing materials in connection with the Interim Loan. We (or our affiliates) will manage all aspects of the syndication in consultation with you, including decisions as to the selection of potential Lenders to be approached and when they will be approached, when their commitments will be accepted, which Lenders (which shall be reasonably acceptable to you, such consent not to be unreasonably withheld) will participate and the final allocations of the commitments among the Lenders (which are likely not to be pro rata across facilities among Lenders), and we will exclusively perform all functions and exercise all authority as customarily performed and exercised in such capacities, including selecting counsel for the Lenders and negotiating the Credit Documents. Any agent or arranger titles (including co-agents) awarded to other Lenders are subject to our prior approval and shall not entail any role with respect to the matters referred to in this paragraph without our prior consent. You agree that no Lender will receive compensation outside the terms contained herein and in the Fee Letter in order to obtain its commitment to participate in the Credit Facilities.

You understand that we intend to commence the separate syndication of each of the Senior Credit Facilities and the Interim Loan promptly, and you agree actively to assist us in achieving a timely syndication that is satisfactory to us. The syndication efforts will be accomplished by a variety of means, including your using commercially reasonable efforts to ensure direct contact during the syndication between senior management, advisors and affiliates of Sponsor and Target on the one hand and the proposed Lenders on the other hand, and your hosting with the Arrangers, at least one meeting with prospective Lenders at such times and places as mutually agreed. You agree to, upon our request, (a) provide, and to use commercially reasonable efforts to cause the Sponsor and your advisors to provide, and use your commercially reasonable efforts to have Target provide, to us all information reasonably requested by us to successfully complete the syndication (including after the Closing Date), including the Information and Projections (including updated projections) covering a customary period, (b) assist, and to use commercially reasonable efforts to cause the Sponsor and your advisors to assist, and use your commercially reasonable efforts to have Target assist, us in the preparation of a Confidential Information Memorandum and other marketing materials to be used in connection with the syndication, including using commercially reasonable efforts to make available representatives of Sponsor and Target and (c) using commercially reasonable efforts to

obtain, at your expense, monitored public ratings of each of the Credit Facilities and the Notes from Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) and to participate actively in the process of securing such ratings. You also agree to use commercially reasonable efforts to ensure that our syndication efforts benefit materially from your and Target’s existing lending relationships. Without limiting your obligations to assist with syndication efforts as set forth above, each of the Underwriters agrees that completion of such syndication is not a condition to its commitments hereunder.

At our request, you agree to prepare a version of the Confidential Information Memorandum and other marketing materials to be used in connection with the syndication that do not contain material non-public information concerning Newco, Target, their respective affiliates or their securities.

3. Fees. As consideration for our commitments hereunder and our agreement to arrange, manage, structure and syndicate the Credit Facilities, you agree to pay to us (or our affiliates, as the case may be) the fees as set forth in the Fee Letter.

4. Conditions. The commitments of the Underwriters hereunder are subject to the conditions set forth elsewhere herein, in Annex I to this Commitment Letter and in the Term Sheets. For purposes of this Commitment Letter and the Term Sheets, the “subsidiaries” of Newco include those who will become subsidiaries of Newco in connection with the Transactions.

Our commitments hereunder are also subject to the following conditions: (a) we shall be satisfied that, after the date hereof and during the syndication of the Credit Facilities, there shall be no competing issues of debt securities or commercial bank or other credit facilities of you or any of your subsidiaries being offered, placed, arranged or announced by you or any of your subsidiaries (other than the Notes); (b) you and the Arrangers shall have executed and delivered an engagement letter (the “Engagement Letter”); (c) we shall have been afforded a period of not less than 20 days following the date hereof to syndicate the Credit Facilities; and (d) the representations and warranties set forth in Section 5 of this Commitment Letter shall be true and accurate.

5. Information and Investigations. You hereby represent and covenant that (a) to the best knowledge of Newco, all information and data (excluding financial projections) that have been or will be made available by the Sponsor, you or any of your representatives or advisors to us or any Lender (whether prior to or on or after the date hereof) in connection with the Transactions, taken as a whole (the “Information”), is and will be complete and correct in all material respects and does not and will not, taken as a whole, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statements are made, and (b) all financial projections concerning Newco and its subsidiaries and the transactions contemplated hereby (the “Projections”) that have been made or will be prepared by or on behalf of the Sponsor, you or any of your representatives or advisors and that have been or will be made available to us or any Lender in connection with the transactions contemplated hereby have been and will be prepared in good faith based upon assumptions believed by you to be reasonable. You agree to supplement the Information and the Projections from time to time until the Closing Date so that the representation and covenant in the preceding sentence remain correct in

all material respects. In syndicating the Credit Facilities we will be entitled to use and rely primarily on the Information and the Projections without responsibility for independent check or verification thereof.

6. Indemnification. You agree to indemnify and hold harmless the Underwriters, the Arrangers, each other Lender and their respective affiliates, and each such person’s respective officers, directors, employees, agents and controlling persons (each of the Underwriters and the Arrangers, and each such other person being an “Indemnified Party”) from and against any and all losses, claims, damages, costs, expenses and liabilities, joint or several, to which any Indemnified Party may become subject under any applicable law, or otherwise related to or arising out of or in connection with this Commitment Letter, the Fee Letter, the Term Sheets, the Credit Facilities, the loans under the Credit Facilities, the use of proceeds of any such loan, any of the Transactions or any related transaction and the performance by any Indemnified Party of the services contemplated hereby, and will reimburse each Indemnified Party for any and all expenses (including counsel fees and expenses) as they are incurred in connection with the investigation of or preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by or on behalf of you, Seller, or any of your or Seller’s respective affiliates and whether or not any of the Transactions are consummated or this Commitment Letter is terminated, except to the extent such losses, claims, damages, costs, expenses, liabilities resulted primarily from such Indemnified Party’s gross negligence, bad faith or willful misconduct, or the gross negligence, bad faith or willful misconduct of such Indemnified Party’s affiliates, officers, directors, employees, agents or controlling persons. You also agree not to assert any claim against any Indemnified Party for consequential, punitive or exemplary damages on any theory of liability in connection in any way with this Commitment Letter, the Fee Letter, the Term Sheets, the Credit Facilities, the loans under the Credit Facilities, the use of proceeds of any such loan, any of the Transactions or any related transaction and the performance by any Indemnified Party of the services contemplated hereby.

7. Expenses. You agree to reimburse us for our reasonable expenses (and expenses of any of our affiliates through which we are permitted to perform our services hereunder) upon our request made from time to time (including, without limitation, all reasonable due diligence investigation expenses, syndication expenses (including printing, distribution, and bank meetings), travel expenses, duplication expenses, search fees, filing and recording fees and the reasonable fees, disbursements and other charges of one counsel (including one local counsel per jurisdiction) related to any of the foregoing) incurred in connection with the negotiation, preparation, execution and delivery, waiver or modification, enforcement of this Commitment Letter, the Term Sheets, the Fee Letter and the Credit Facilities and the security arrangements in connection therewith, and whether or not such fees and expenses are incurred before or after the date hereof or any loan documentation is entered into or the Transactions are consummated or any extensions of credit are made under the Credit Facilities or this Commitment Letter is terminated or expires; provided that your reimbursement obligation under this paragraph shall apply only (i) if the Closing Date occurs or (ii) if the Merger is not consummated and you or any of your affiliates shall receive any break-up, termination, topping, expense reimbursement or similar fees (collectively, the “Break-Up Fee”), in which case you shall not be required to reimburse for any amount in excess of the Break-Up Fee and, to the extent that the sum of our expenses (as set forth above) and your and Sponsor’s

out-of-pocket expenses exceeds the amount of the Break-Up Fee, such reimbursement shall be on a pro rata basis with the payment of your and Sponsor’s out-of-pocket expenses).

8. Confidentiality. This Commitment Letter is delivered to you on the understanding that none of the Fee Letter and its terms or substance, or, prior to your acceptance hereof, this Commitment Letter and the Term Sheets and their terms or substance, or the activities of the Underwriters and the Arrangers pursuant hereto or to the Fee Letter shall be disclosed, directly or indirectly, to any other person or entity (including other lenders, underwriters, placement agents, advisors or any similar persons) except (a) to the Sponsor and to your and its officers, directors, employees, attorneys, accountants and advisors on a confidential and need-to-know basis, (b) if the Underwriters and the Arrangers consent to such proposed disclosure or (c) pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process based on the reasonable advice of your legal counsel (in which case you agree, to the extent permitted by law, to inform us promptly thereof); provided that (i) you may disclose this Commitment Letter, the Term Sheets and the contents hereof and thereof to the Target and its officers, directors, employees, attorneys, accountants and advisors, on a confidential and need-to-know basis, and (ii) you may disclose the Commitment Letter and its contents in any prospectus or other offering memorandum relating to the Notes.

The Underwriters and the Arrangers and their affiliates will use all confidential information provided to it or such affiliates by or on behalf of you hereunder solely for the purpose of providing the services which are the subject of this Commitment Letter and the Term Sheets and shall treat confidentially all such information; provided that nothing herein shall prevent any Underwriter or Arranger from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal process (in which case such Underwriter or Arranger, to the extent permitted by law, agrees to inform you promptly thereof), (b) upon the request or demand of any regulatory authority having jurisdiction over such Underwriter or Arranger or any of its affiliates, (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by such Underwriter or Arranger or any of its affiliates, (d) to the extent that such information is received by such Underwriter or Arranger from a third party that is not to the knowledge of such Underwriter or Arranger or any of its affiliates subject to confidentiality obligations to the Borrower, (e) to the extent that such information is independently developed by such Underwriter or Arranger, (f) to such Underwriter’s or Arranger’s affiliates and their employees, legal counsel, independent auditors and other experts or agents who need to know such information in connection with the Transactions and are informed of the confidential nature of such information, (g) to potential Lenders, participants or assignees who agree to be bound by the terms of this paragraph (or language substantially to the same effect of this paragraph) or (h) for purposes of establishing a “due diligence” defense or otherwise to establish in connection with actual or threatened legal proceedings any of such Underwriter’s or Arranger’s or its affiliates’ rights or remedies hereunder. The obligations of the Underwriters and the Arrangers under this paragraph shall automatically terminate and be superseded by the confidentiality provisions in the definitive documentation relating to the Credit Facilities upon the initial funding thereunder.

You agree that you will permit us to review and approve any reference to any of us or any of our respective affiliates in connection with the Credit Facilities or the transactions

contemplated hereby contained in any press release or similar public disclosure prior to public release. You agree that we and our respective affiliates may share information concerning you, Sponsor, Target and your, Sponsor’s and Target’s respective subsidiaries and affiliates among ourselves solely in connection with the performance of our services hereunder and the evaluation and consummation of financings and Transactions contemplated hereby.

You also acknowledge that we or our affiliates may be providing financing or other services to parties whose interests may conflict with yours. Each of the Underwriters and the Arrangers agrees that it will not furnish confidential information obtained from you, Sponsor or Target to any of its other customers and that it will treat confidential information relating to you, Sponsor or Target and your and their respective affiliates with the same degree of case as it treats its own confidential information. Each of the Underwriters and the Arrangers further advises you that it will not make available to you confidential information that it has obtained or may obtain from any other customer.

9. Termination. The commitments of the Underwriters hereunder shall terminate in their entirety on the earliest to occur of (A) April 30, 2006, if the Credit Documents are not executed and delivered by Borrower and the Lenders on or prior to such date, (B) the date of termination of the Merger Agreement in accordance with its terms, (C) the date of effectiveness of the Credit Documents by Borrower and the Lenders and (D) the consummation of the Merger with or without the funding of the Credit Facilities. Notwithstanding the foregoing, the provisions of Sections 6, 7, 8, 11 and 14 hereof shall survive any termination pursuant to this Section 9.

10. Assignment; etc. This Commitment Letter and our commitment hereunder shall not be assignable by any party hereto without the prior written consent of the other parties hereto, and any attempted assignment shall be void and of no effect; provided, however, that nothing contained in this Section 10 shall prohibit us from (i) in our sole discretion, performing any of our duties hereunder through any of our affiliates, and you will owe any related duties (including those set forth in Section 2 above) to any such affiliate, and (ii) subject to the limitations of Section 2 hereof, granting participations in, or selling assignments of all or a portion of, the commitments or the loans under the Credit Facilities pursuant to arrangements satisfactory to us. This Commitment Letter is solely for the benefit of the parties hereto and does not confer any benefits upon, or create any rights in favor of, any other person.

11. Governing Law; Jurisdiction; Waiver of Jury Trial. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State court or Federal court sitting in the County of New York in respect of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter or the Fee Letter and irrevocably agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court. The parties hereto hereby waive any objection that they may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of any of the Transactions or the other

transactions contemplated hereby, or the performance by us or any of our affiliates of the services contemplated hereby.

12. Amendments; Counterparts; etc. No amendment or waiver of any provision hereof or of the Term Sheets shall be effective unless in writing and signed by the parties hereto and then only in the specific instance and for the specific purpose for which given. This Commitment Letter, the Engagement Letter, the Term Sheets and the Fee Letter are the only agreements between the parties hereto with respect to the matters contemplated hereby and thereby and set forth the entire understanding of the parties with respect thereto. This Commitment Letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by telecopier or Adobe “.pdf” file shall be effective as delivery of a manually executed counterpart.

13. Patriot Act. We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), the Lenders may be required to obtain, verify and record information that identifies Sponsor, Borrower and Target, which information includes the name, address and tax identification number and other information regarding them that will allow such Lender to identify them in accordance with the Patriot Act.

14. Independent Contractor. You also acknowledge and agree that (i) each transaction contemplated by this Commitment Letter is an arm’s-length commercial transaction, between Newco, on the one hand, and the Underwriters and the Arrangers, on the other hand, (ii) in connection with each such transaction and the process leading thereto, the Underwriters and the Arrangers will act solely as a principal and not as agent (except as otherwise provided herein) or fiduciary of Newco or its stockholders, creditors, employees or any other party, (iii) none of the Underwriters or Arrangers will assume an advisory or fiduciary responsibility in favor of Newco with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether any of the Underwriters or Arrangers has advised or is currently advising Newco on other matters) and the Underwriters and the Arrangers will not have any obligation to Newco with respect to the transactions contemplated in this Commitment Letter except the obligations expressly set forth herein, (iv) the Underwriters and the Arrangers may be engaged in a broad range of transactions that involve interests that differ from those of Newco, and (v) none of the Underwriters or Arrangers has provided nor will any of them provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and Newco has consulted and will consult their own legal, accounting, regulatory, and tax advisors to the extent they deem appropriate.

15. Public Announcements; Notices. We may, subject to your prior consent (not to be unreasonably withheld, delayed or conditioned) at our expense, publicly announce as we may choose the capacities in which we or our affiliates have acted hereunder. Any notice given pursuant hereto shall be mailed or hand delivered in writing, if to (i) you, at your address set forth on page one hereof, with a copy to Jay Ptashek, Esq., at Simpson Thacher & Bartlett LLP; (ii) if to MLCC or MLPFS, at 4 World Financial Center, 250 Vesey Street, New York, New York 10080, Attention: Michael Barrish; (iii) if to LCPI or LBI, at 745 Seventh Avenue, New York, New York 10019, Attention: Laurie Perper; and (iv) if to UBS or UBSS, at 299 Park Avenue,

New York, New York 10171, Attention: Doug Lane, in each case, with a copy to Jonathan A. Schaffzin, Esq., at Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005.

Please confirm that the foregoing correctly sets forth our agreement of the terms hereof and the Fee Letter by signing and returning to the Arrangers the duplicate copy of this letter, the Fee Letter and Engagement Letter enclosed herewith. Unless we receive your executed duplicate copies hereof and thereof by 5:00 p.m., New York City time, on
November 14, 2005, our commitment hereunder will expire at such time.

(Signature Pages Follow)

We are pleased to have this opportunity and we look forward to working with you on this transaction.

	Very truly yours,

	LEHMAN BROTHERS INC.

	By:	/s/ JEFFREY ABT
		Name: Jeffrey Abt
		Title: Senior Vice President

	LEHMAN COMMERCIAL PAPER INC.

	By:	/s/ JEFFREY ABT
		Name: Jeffrey Abt
		Title: Authorized Signatory

	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

	By:	/s/ MICHAEL BARRISH
		Name: Michael Barrish
		Title: Vice President

	MERRILL LYNCH CAPITAL CORPORATION

	By:	/s/ GREGORY MARGOLIES
		Name: Gregory Margolies
		Title: Vice President

	UBS SECURITIES LLC

	By:	/s/ AMANDA J. MONTGOMERY
		Name: Amanda J. Montgomery
		Title: Managing Director

	By:	/s/ WARREN JERVEY
		Name: Warren Jervey
		Title: Director and Counsel, Region Americas Legal

	UBS LOAN FINANCE LLC

	By:	/s/ AMANDA J. MONTGOMERY
		Name: Amanda J. Montgomery
		Title: Managing Director

	By:	/s/ WARREN JERVEY
		Name: Warren Jervey
		Title: Director and Counsel, Region Americas Legal

Accepted and agreed to as of
the date first written above:

SPYGLASS MERGER CORP.


By:	/s/ ALAN K. AUSTIN
	Name: Alan K. Austin
	Title: Vice President

Annex I

Project Spyglass
Summary of Additional Conditions Precedent

Except as otherwise set forth below, the initial borrowing under each of the Credit Facilities shall be subject to the following conditions precedent;

1. The Merger shall have been consummated in accordance with the terms of the Merger Agreement without any waiver, modification or amendment thereof that is materially adverse to the Lenders (as determined by the Arrangers), unless consented to by the Arrangers.

2. The Equity Financing shall have been consummated in an aggregate amount of not less than 25% of the total of the capitalization of the Borrower and the costs related to the Transactions, which to the extent constituting other than common equity interests shall be on terms and conditions and pursuant to documentation reasonably satisfactory to the Arrangers to the extent material to the interests of the Lenders. The Rollover Equity Investment shall have been consummated, which to the extent constituting other than common equity interests shall be on terms and conditions and pursuant to documentation reasonably satisfactory to the Arrangers to the extent material to the interests of the Lenders.

3. With respect to the Interim Loan, the Arrangers shall have received, not later than 15 days prior to the Closing Date, a complete printed preliminary offering memorandum or preliminary prospectus suitable for use in a customary “high-yield road show” relating to the Notes, which shall contain all financial statements and other data to be included therein (including all audited financial statements, all unaudited financial statements (which shall have been reviewed by the independent accountants for Borrower as provided in Statement on Auditing Standards No. 100) and all appropriate pro forma financial statements prepared in accordance with, or reconciled to, generally accepted accounting principles in the United States and prepared in accordance with Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”)), and all other data (including selected financial data) that the Securities and Exchange Commission would require in a registered offering of the Notes (except as otherwise agreed) or that would be necessary for the Arrangers to receive customary “comfort” (including “negative assurance” comfort) from independent accountants in connection with the offering of the Notes (either document, an “Offering Document”). Notwithstanding the foregoing, such Offering Document shall only be required to contain financial statements referenced in paragraph 6 below. Upon delivery of such offering memorandum or private placement memorandum Borrower will cause its senior management personnel to participate in a customary road show for the sale of the Notes. The Arrangers shall have been afforded a period of at least 15 days following receipt of the material described in the first sentence of this paragraph to seek to place the Notes with qualified purchasers thereof.

4. Simultaneously with the making of the initial loans, Borrower shall have complied with its obligations under the indenture with respect to Target’s existing convertible subordinated securities in relation to the conversion rights of the holders thereof.

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5. Except as set forth in the disclosure schedules to the Merger Agreement, there shall not have occurred or become known, since July 31, 2005, any change, event, circumstance or development that, individually or in the aggregate, has had or is reasonably likely to result in a material adverse change, event, circumstance or development with respect to, or material adverse effect on (any of the foregoing an “Effect”), the business, assets, liabilities, financial condition or results of operations of the Target and its subsidiaries, taken as a whole, or any event that would materially impede the ability of the Target to effect the consummation of the transactions contemplated by the Merger Agreement (a “Material Adverse Effect”); provided, however, that none of the following, to the extent occurring after the date hereof, shall constitute, or shall be considered in determining whether there has occurred, a Material Adverse Effect: (i) any Effect resulting from general national or world economic conditions and any acts of war or terrorism, except to the extent that such Effects disproportionately affect the Target and its subsidiaries in any significant respect relative to other participants in the industries or markets in which they operate; (ii) any Effect resulting from the announcement of the execution of the Merger Agreement or the pendency of the Merger; (iii) any Effect resulting from changes in law, rule or regulations or generally accepted accounting principles or the interpretation thereof, except to the extent that such Effects disproportionately affect the Target and its subsidiaries in any significant respect relative to other participants in the industries or markets in which they operate; (iv) any Effect resulting from any action (or failure to act) outside the ordinary course of business of the Target and its subsidiaries required to be taken pursuant to the Merger Agreement (other than consummation of the Merger); (v) a decline in the price of the Target’s common stock on The NASDAQ National Market (it being understood that the facts and circumstances giving rise to such decline may be deemed to constitute and shall be taken into account in determining whether there has been a Material Adverse Effect); (vi) any failure by the Target to meet published financial projections, in and of itself (it being understood that the facts and circumstances giving rise to such failure to meet published financial projections may be considered and shall be taken into account in determining whether there has been a Material Adverse Effect); and (vii) any litigation relating to an alleged breach of fiduciary duty in connection with the Merger Agreement or any Effect resulting from such litigation.

6. The Arrangers and the Lenders shall have received (i) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of Target for the three years ended January 31, 2005, and, to the extent that the Closing Date has not occurred prior to March 31, 2006, for the year ended January 31, 2006, and (ii) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of Target for each fiscal quarter ended after the most recently received audited financial statements and ended 45 days before the Closing Date. The Lenders shall have received a pro forma consolidated balance sheet of Borrower as of the date of the most recent consolidated balance sheet delivered pursuant to the immediately preceding sentence, after giving effect to the Transactions.

7. The Arrangers shall have received reasonably satisfactory evidence (including satisfactory supporting schedules and other data) that the ratio (the “Consolidated Leverage Ratio”) of pro forma consolidated total debt to pro forma adjusted consolidated EBITDA (to be defined to include adjustments required or permitted by Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”), and related non-recurring charges, and

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such other adjustments as are customary for similar financings by affiliates of the Sponsors or particular to the Target as are mutually agreed, but in any event excluding any investment gains or losses resulting from the liquidation or other disposition of corporate bonds and other investments the proceeds of which will be used to finance the Acquisition) of Borrower and its subsidiaries, and calculated in a manner reasonably acceptable to the Arrangers and after giving effect to the Transactions, for the immediately preceding four fiscal quarter period ended at least 60 days prior to the Closing Date was not greater than 6.6:1. The total amount of funded consolidated debt of Borrower and its subsidiaries on the Closing Date may be adjusted up or down proportionately if the Consolidated Leverage Ratio for such period would be less than or would exceed (as the case may be) 6.6:1 prior to giving effect to any such adjustment; provided that unless the Arrangers otherwise agree, any such downward adjustments shall be applied proportionately (based on the principal amounts thereof) to the Term Loan Facility, on the one hand, and the Interim Loans or Notes (as applicable), on the other hand.

8. The Lenders shall have received the Credit Documents (executed where applicable) reflecting the terms hereof and otherwise customary and appropriate for facilities of this type for transactions with affiliates of the Sponsor to the reasonable satisfaction of the Arrangers and Borrower, including delivery of customary legal opinions and customary solvency certificates; receipt of collateral as described in the Term Sheets (subject to grace periods to be agreed in the case of certain collateral that cannot be provided by the Closing Date); and delivery of customary documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the USA Patriot Act.

9. To the extent then due and payable and invoiced reasonably in advance, all accrued fees and expenses (including the reasonable fees and expenses of counsel to the Arrangers) of the Arrangers in connection with the Credit Documents shall have been paid.

Notwithstanding anything in the Commitment Letter, this Annex I, the Term Sheets, the Fee Letter or the Credit Documents or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (x) the only representations and warranties contained in the Credit Documents relating to the Target the making of which shall be a condition to availability of the Credit Facilities on the Closing Date shall be (i) such of the representations made in respect of the Target in the Merger Agreement as are material to the interests of the Lenders and (ii) the representations and warranties of Borrower set forth in the Term Sheets relating to corporate power and authority, the enforceability, due authorization, execution and delivery of the Credit Documents, Federal Reserve margin regulations, the Investment Company Act and validity, priority and perfection of security interests in the Collateral and status of the Senior Credit Facilities as senior debt and (y) the terms of the Credit Documents shall be in a form such that they do not impair availability of the Credit Facilities on the Closing Date if the conditions set forth in the Commitment Letter, on this Annex I and in the Term Sheets are satisfied.

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CONFIDENTIAL

EXHIBIT A

SENIOR SECURED CREDIT FACILITIES

SUMMARY OF TERMS AND CONDITIONS(a)

Borrower:	Spyglass Merger Corp., to be merged with and into the Target with the Target as the surviving corporation (“Borrower”).

Joint Lead Arrangers:	Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC (collectively, the “Lead Arrangers”).

Administrative Agent:	Lehman Commercial Paper Inc. (in such capacity, the “Administrative Agent”).

Lenders:	Lehman Commercial Paper Inc. (or one of its affiliates) and a syndicate of financial institutions (the “Lenders”), including Merrill Lynch Capital Corporation and UBS Loan Finance LLC, arranged by the Lead Arrangers which shall be reasonably acceptable to Borrower (such consent not to be unreasonably withheld).

Credit Facilities:	Senior secured credit facilities (the “Senior Credit Facilities”) in an aggregate principal amount of up to $450.0 million, comprising:

	(A) Term Loan Facility. A term loan facility in an aggregate principal amount of $375.0 million (the “Term Loan Facility”). Loans under the Term Loan Facility are herein referred to as “Term Loans”.

	(B) Revolving Credit Facility. A revolving credit facility in an aggregate principal amount of $75.0 million (the “Revolving Facility”). Loans under the Revolving Facility are herein referred to as “Revolving Loans”; the Term Loans and the Revolving Loans are herein referred to collectively as “Loans”. An amount to be agreed of the Revolving Facility will be available as a letter of credit subfacility and as a swing line subfacility.

(a) Capitalized terms used herein and not defined shall have the meanings assigned to such terms in the attached Credit Facilities Commitment Letter (the “Commitment Letter”).

Availability/Purpose:	(A) Term Loan Facility. Term Loans will be available to finance the Merger and the Conversion and to pay related fees and expenses, subject to the terms and conditions set forth in the Credit Documents, on the date of consummation of the Merger in one draw (the “Closing Date”). Term Loans repaid or prepaid may not be reborrowed.

	(B) Revolving Facility. The Revolving Facility will be available on and after the Closing Date for working capital and general corporate purposes on a fully revolving basis, subject to the terms and conditions set forth in the Credit Documents, in the form of revolving loans, swing line loans and letters of credit on and after the Closing Date until the R/C Maturity Date (as defined below).

Guarantors:	Each of Borrower’s direct and indirect domestic subsidiaries existing on the Closing Date or thereafter created or acquired shall unconditionally guarantee, on a joint and several basis, all obligations of Borrower under the Senior Credit Facilities and (to the extent relating to the Loans) under each interest rate protection agreement entered into with a person that is or was a Lender or an affiliate of a Lender at the time such agreement was entered into. Each guarantor of any of the Senior Credit Facilities is herein referred to as a “Guarantor” and its guarantee is referred to herein as a “Guarantee”. Borrower and the Guarantors are herein referred to as the “Credit Parties” and individually referred to as a “Credit Party”.

Security:	The Senior Credit Facilities, the Guarantees, and (to the extent relating to the Loans) the obligations of Borrower under each interest rate protection agreement entered into with a person that is or was a Lender or any affiliate of a Lender at the time such agreement was entered into will be secured by (A) a perfected lien on, and pledge of, all of the capital stock and intercompany notes of each of the direct and indirect subsidiaries of Borrower existing on the Closing Date or thereafter created or acquired and all of the intercompany notes of the Borrower (provided that with respect to non-U.S. subsidiaries, such lien and pledge will be limited to 65% of the capital stock of “first tier” non-U.S. subsidiaries) and (B) a perfected first priority lien (subject to exceptions customary for similar financings

	for affiliates of the Sponsor to be agreed) on, and security interest in, all of the tangible and intangible properties and assets (including all contract rights, material owned real property interests, trademarks, trade names, equipment and proceeds of the foregoing but expressly excluding cash advanced by customers in the ordinary course of business and all deposit accounts or other bank or securities accounts) of each Credit Party customarily provided as collateral in similar transactions for affiliates of the Sponsor (collectively, the “Collateral”), except in each case for those properties and assets as to which the Administrative Agent shall determine in its reasonable discretion that the costs of obtaining such security interest are excessive in relation to the value of the security to be afforded thereby (it being understood that none of the foregoing shall be subject to any other liens or security interests, except for exceptions customary for similar financings by affiliates of the Sponsor to be agreed upon). All such security interests will be created pursuant to documentation customary for transactions with affiliates of the Sponsor. To the extent certain Collateral cannot be provided by the Closing Date after commercially reasonable efforts to do so, such Collateral shall be required to be delivered after the Closing Date pursuant to arrangements to be mutually agreed.

Documentation:	Usual for financings of this type by affiliates of Sponsor. The documentation for the Senior Credit Facilities will include, among others, a credit agreement (the “Credit Agreement”), guarantees and appropriate pledge, security interest, mortgage and other collateral documents (collectively, the “Credit Documents”).

Incremental Facility:	The Credit Documents will permit Borrower to add one or more incremental term loan facilities to the Senior Credit Facilities (each, an “Incremental Term Facility”) and/or increase commitments under the Revolving Facility (any such increase, an “Incremental Revolving Facility”; the Incremental Term Facilities and the Incremental Revolving Facilities are collectively referred to as “Incremental Facilities”) in an aggregate amount of up to $150 million; provided that (i) no Lender will be required to participate in any such Incremental Facility, (ii) no event of default or default exists or would exist after giving effect thereto, (iii) all

	financial covenants would be satisfied on a pro forma basis on the date of incurrence and for the most recent determination period, after giving effect to such Incremental Facility and other customary and appropriate pro forma adjustment events, including any acquisitions or dispositions or repayment of indebtedness after the beginning of the relevant determination period but prior to or simultaneous with the borrowing under such Incremental Facility, (iv) the maturity date of any such Incremental Term Facility shall be no earlier than the maturity dates of the Term Loan Facility, (v) the interest rates and amortization schedule applicable to any Incremental Term Facility shall be determined by Borrower and the lenders thereunder and (vi) any Incremental Revolving Facility shall be on terms and pursuant to documentation applicable to the Revolving Facility and any Incremental Term Facility shall be on terms and pursuant to documentation to be determined, provided that, to the extent such terms and documentation are not consistent with the Term Loan Facility (except to the extent permitted by clause (iv) or (v) above), they shall be reasonably satisfactory to the Administrative Agent.

Termination of Commitments:	The commitments in respect of the Senior Credit Facilities (including pursuant to the Commitment Letter) will terminate in their entirety on April 30, 2006, if the initial funding under the Senior Credit Facilities does not occur on or prior to such date.

Final Maturity:	(A) Term Loan Facilities. The Term Loan Facility will mature on the seventh anniversary of the Closing Date (the “Term Loan Maturity Date”).

	(B) Revolving Facility. The Revolving Facility will mature on the sixth anniversary of the Closing Date (the “R/C Maturity Date”).

Amortization Schedule:	The Term Loan Facility will amortize at a rate of 1.00% per annum on a quarterly basis (beginning with the first full fiscal quarter after the Closing Date) for the first six and three-quarters years after the Closing Date, with the balance paid on the final maturity thereof.

Letters of Credit:	Letters of credit under the Revolving Facility (“Letters of Credit”) will be issued by a Lender to be agreed by the Administrative Agent and Borrower (in such

	capacity, the “L/C Lender”). The issuance of all Letters of Credit shall be subject to the customary procedures of the L/C Lender.

Letter of Credit Fees:	Letter of Credit fees will be payable for the account of the Revolving Facility Lenders on the daily average undrawn face amount of each Letter of Credit at a rate per annum equal to the applicable margin for Revolving Loans that are LIBOR rate loans in effect at such time, which fees shall be paid quarterly in arrears. In addition, an issuing fee on the face amount of each Letter of Credit at a rate per annum to be agreed shall be payable to the L/C Lender for its own account, which fee shall also be payable quarterly in arrears.

Interest Rates and Fees:	Interest rates and fees in connection with the Senior Credit Facilities will be as specified on Annex I attached hereto.

Default Rate:	Overdue principal, interest and other amounts shall bear interest at a rate per annum equal to 2% in excess of the applicable interest rate (including applicable margin).

Mandatory Prepayments/ Reductions in Commitments:	Subject to the next paragraph, the Term Loans and, to the extent required by the terms thereof, the Incremental Term Facilities will be required to be prepaid with (a) 50% of annual Excess Cash Flow (to be defined) with step-downs to be agreed, (b) 100% of the net cash proceeds (including condemnation and insurance proceeds) of asset sales and other asset dispositions by the Borrower or any of its subsidiaries (subject to the right of Borrower to reinvest if such proceeds are reinvested (or committed to be reinvested) within 15 months and, if so committed to reinvestment, reinvested within 180 days thereafter, and other exceptions to be agreed upon), and (c) 100% of the net cash proceeds of the issuance or incurrence of debt by the Borrower or any of its subsidiaries (subject to baskets and exceptions to be agreed upon).

	The proceeds of the Notes shall be applied to reduce to zero the commitments in respect of or, if after the Closing Date, to reduce to zero the funded amount of the Interim Loans.

	Any application to the Term Loan Facility shall be applied first to scheduled payments due in the two years

	following the date of such prepayment, with the excess, if any, applied pro rata to the remaining amortization payments thereunder.

Voluntary Prepayments/ Reductions in Commitments:	(A) Term Loan Facility. Term Loans may be prepaid at any time in whole or in part at the option of Borrower, in a minimum principal amount and in multiples to be agreed upon, without premium or penalty (except, in the case of LIBOR borrowings, breakage costs related to prepayments not made on the last day of the relevant interest period). Any application to the Term Loan Facility shall be applied to the remaining scheduled amortization payments in a manner elected by the Borrower.

	(B) Revolving Facility. The unutilized portion of the commitments under the Revolving Facility may be reduced and loans under the Revolving Facility may be repaid at any time, in each case, at the option of Borrower, in a minimum principal amount and in multiples to be agreed upon, without premium or penalty (except, in the case of LIBOR borrowings, breakage costs related to prepayments not made on the last day of the relevant interest period).

Conditions to Effectiveness and to Initial Loans:	Those specified in the Commitment Letter and the Summary of Additional Conditions Precedent attached thereto as Annex I.

Conditions to All Extensions of Credit:	Each extension of credit under the Senior Credit Facilities will be subject to the (i) absence of any Default or Event of Default (to be defined), and (ii) continued accuracy of representations and warranties in all material respects (to the extent not already subject to a materiality qualifier).

Representations and Warranties:	Customary for financings of this type by affiliates of Sponsor (including with respect to materiality qualifiers) and limited to the following (with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries):

	1.	Corporate status and authority, ownership of property and rights to material intellectual property.

	2.	Execution, delivery and performance of loan documents do not violate law or other agreements.

	3.	No consents or approvals required, other than those in effect.

	4.	No litigation which would have a Material Adverse Effect (such definition to be modified in a manner consistent with facilities of this type with affiliates of the Sponsor insofar as a representation or warranty has effect after the Closing Date) or a material adverse effect on the legality, validity and enforceability of the loan documents.

	5.	After the Closing Date, no Material Adverse Effect or a material adverse effect on the ability of Borrower or the Guarantors to perform their respective payment obligations under the Credit Documents or the ability of the Administrative Agent, the Collateral Agent and the Lenders to enforce the Credit Documents.

	6.	Accuracy of financial statements and other information.

	7.	Material compliance with laws and regulations, including ERISA, labor, margin regulations and all applicable environmental laws and regulations.

	8.	Power and authority, due authorization, due execution, legality, validity, binding effect and enforceability of the loan documents.

	9.	Inapplicability of the Investment Company Act and Public Utility Holding Company Act.

	10.	Closing Date solvency.

	11.	Payment of taxes.

	12.	Validity, priority and perfection of security interests in collateral.

	13.	Status of senior debt.

	14.	No Default or Event of Default.

Affirmative Covenants:	Customary for financings of this type by affiliates of Sponsor (to be applicable to Borrower and its subsidiaries) and limited to the following, subject, in each case, to exceptions customary for affiliates of

	Sponsor and others to be agreed (with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries):

	1.	Preservation of corporate existence; material compliance with laws (including ERISA and applicable environmental laws).

	2.	Payment of taxes; delivery of audited annual consolidated financial statements (with the accompanying accountants’ opinion), unaudited quarterly consolidated financial statements, budgets and customary quarterly officers’ certificates.

	3.	Other reporting requirements and notices of default, litigation and other material events.

	4.	Visitation rights; inspection of books and records.

	5.	Maintenance of properties.

	6.	Maintenance of insurance.

	7.	Use of proceeds.

	8.	Further assurances with respect to the Collateral and pledge of after-acquired property.

	9.	Interest rate protection on terms reasonably acceptable to the Administrative Agent.

Negative Covenants:	Customary for financings of this type by affiliates of Sponsor (to be applicable to the Borrower and its subsidiaries) and limited to the following, subject in each case to exceptions and baskets customary for affiliates of Sponsor and others to be agreed (with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries):

	1.	Limitation on indebtedness and related guarantee obligations.

	2.	Limitation on liens and further negative pledges.

	3.	Limitation on investments (including loans).

	4.	Limitation on dividends, redemptions and repurchases of equity interests.

	5.	Limitation on mergers, acquisitions and asset sales (including issuance and sale of capital stock of subsidiaries), with an exception for permitted acquisitions to be agreed.

	6.	Limitation on capital expenditures.

	7.	Limitation on sale-leaseback transactions.

	8.	Limitation on transactions with affiliates.

	9.	Limitation on dividend and other payment restrictions affecting subsidiaries.

	10.	Limitation on amendment of documents relating to the Interim Loans or the Notes in a manner materially adverse to the Lenders.

	11.	Limitation on prepayment or repurchase of the Interim Loans or the Notes.

	12.	Limitation on changes in fiscal year.

	13.	Limitation on businesses conducted by Borrower and its subsidiaries.

Financial Covenants:	The Senior Credit Facilities will contain the following financial covenants (definitions and numerical calculations to be set forth in the Credit Agreement consistent with definitions for transactions with affiliates of the Sponsor, but eliminating any items from such definitions that were specific to the relevant precedent transactions): minimum ratio of trailing four quarter EBITDA (to be defined) to total interest expense for the same period (the “Interest Coverage Ratio”); and maximum ratio (the “Total Leverage Ratio”) of total debt to trailing four quarter EBITDA. The financial covenants contemplated above will be tested on a quarterly basis beginning with the quarter ending July 31, 2006, and will apply to Borrower and its subsidiaries on a consolidated basis.

	For purposes of determining compliance with the financial covenants, an equity contribution by the Sponsor in the Borrower after the Closing Date and on or prior to the day that is 10 days after the day on which financial statements are required to be delivered for a fiscal quarter will, at the request of Borrower, be

	included in the calculation of consolidated EBITDA for the purposes of determining compliance with financial covenants at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of consolidated EBITDA, a “Specified Equity Contribution”); provided that (a) in each four fiscal quarter period, there shall be a period of at least one fiscal quarter in which no Specified Equity Contribution is made, (b) in each eight fiscal quarter period there shall be a period of at least four consecutive fiscal quarters during which no Specified Equity Contribution is made, (c) the amount of any Specified Equity Contribution with respect to a financial covenant shall be no greater than the amount required to cause Borrower to be in compliance with such financial covenant and shall not exceed 10% of EBITDA, (d) no debt repaid with proceeds of any Specified Equity Contributions shall be deemed repaid for purposes of calculating the Total Leverage Ratio, the Interest Coverage Ratio or the Fixed Charge Coverage Ratio for the period in respect of which such contribution was made and (e) the proceeds from any Specified Equity Contribution shall be utilized by the Borrower solely in the ordinary course of its business.

Interest Rate Management:	An amount of not less than 50% of the Term Loan Facility for no less than two years following the Closing Date with any Lender.

Events of Default:	Customary for facilities of affiliates of Sponsor similar to the Senior Credit Facilities with thresholds adjusted for the relative size of Borrower and its subsidiaries.

Yield Protection and Increased Costs:	Usual for facilities and transactions of this type for affiliates of the Sponsor.

Assignments and Participations:	Each assignment (unless to another Lender or its affiliates) shall be in a minimum amount of $1.0 million in the case of the Term Loan Facility and $5.0 million in the case of the Revolving Facility (unless Borrower and the Administrative Agent otherwise consent or unless the assigning Lender’s exposure is thereby reduced to zero). Assignments (which may be non-pro rata among loans and commitments) shall be permitted with Borrower’s and the Administrative Agent’s consent (such consent not to be unreasonably withheld,

	delayed or conditioned), except that no such consent of Borrower need be obtained to effect an assignment to any Lender (or its affiliates) if any payment default or bankruptcy event of default has occurred and is continuing. Participations shall be permitted without restriction. Voting rights of participants will be subject to customary limitations.

Required Lenders:	Lenders having a majority of the outstanding credit exposure (the “Required Lenders”), subject to amendments of certain provisions of the Credit Documents requiring the consent of Lenders having a greater share (or all) of the outstanding credit exposure. Certain amendments consistent with transactions for affiliates of the Sponsor will require class voting.

Expenses and Indemnification:	In addition to those out-of-pocket expenses reimbursable under the Commitment Letter, all reasonable out-of-pocket expenses of the Administrative Agent (and the Lenders for enforcement costs and documentary taxes) associated with the preparation, execution and delivery of any waiver or modification (whether or not effective) of, and the enforcement of, any Credit Document (including the reasonable fees, disbursements and other charges of counsel for the Administrative Agent) are to be paid by the Credit Parties.

	The Credit Parties will indemnify the Administrative Agent and the other Lenders (and their respective directors, officers, employees, investment advisors and agents) and hold them harmless from and against all costs, expenses (including fees, disbursements and other charges of counsel) and liabilities arising out of or relating to any litigation or other proceeding (regardless of whether the Administrative Agent or any such other indemnified person is a party thereto) that relate to the Transactions or any transactions related thereto, except to the extent arising primarily from such person’s gross negligence, bad faith, willful misconduct or breach of the Credit Documents.

Governing Law and Forum:	New York.

Waiver of Jury Trial:	All parties to the Credit Documents waive the right to trial by jury.

Special Counsel for Lead Arrangers:

Cahill Gordon & Reindel, LLP (and such local counsel as may be selected by the Administrative Agent).

ANNEX I

Interest Rates and Fees:	Borrower will be entitled to make borrowings based on the ABR plus the Applicable Margin or LIBOR plus the Applicable Margin. The “Applicable Margin” shall be (a) if the Senior Credit Facilities receive ratings of B1 (stable) or higher and B+ (stable) or higher from Moody’s and S&P, respectively, (i) 2.25% per annum with respect to LIBOR Loans and (ii) 1.25% per annum with respect to ABR Loans, and (b) otherwise, (i) 2.50% per annum with respect to LIBOR Loans and (ii) 1.50% per annum with respect to ABR Loans.

	Notwithstanding the foregoing, on and after the first date after the Closing Date on which Borrower delivers financial statements and a computation of the Total Leverage Ratio for the first full fiscal quarter ended after the Closing Date in accordance with the Credit Agreement (the “Trigger Date”), the Applicable Margins shall be subject to a grid based on the most recent Total Leverage Ratio to be negotiated (with the grid applicable to the Term Loans being more limited than that applicable to the Revolving Loans).

	“ABR” means the higher of (i) the corporate base rate of interest announced by the Administrative Agent from time to time, changing effective on the date of announcement of said corporate base rate changes, and (ii) the Federal Funds Rate plus 0.50% per annum. The corporate base rate is not necessarily the lowest rate charged by the Administrative Agent to its customers.

	“LIBOR” means the rate (adjusted for statutory reserve requirements for eurodollar liabilities) for eurodollar deposits for the relevant interest period appearing on Page 3750 of the Dow Jones Markets Screen.

	Borrower may select interest periods of one, two, three or six (or, if acceptable to all of the Lenders, nine or twelve) months for LIBOR borrowings. Interest will be payable in arrears (i) in the case of ABR Loans, at the end of each quarter and (ii) in the case of LIBOR Loans, at the end of each interest period and, in the case of any interest period longer than three months, no less frequently than every three months. Interest on all

borrowings shall be calculated on the basis of the actual number of days elapsed over (x) in the case of LIBOR Loans, a 360-day year, and (y) in the case of ABR Loans, a 365- or 366-day year, as the case may be.

Commitment fees accrue on the undrawn amount of the Revolving Facility, commencing on the date of the execution and delivery of the Credit Documents. The commitment fee in respect of the Revolving Facility will be 0.50% per annum; provided that on and after the Trigger Date, the commitment fee shall be subject to a grid to be agreed based on the Total Leverage Ratio.

All commitment fees will be payable in arrears at the end of each quarter and upon any termination of any commitment, in each case for the actual number of days elapsed over a 360-day year.

CONFIDENTIAL

EXHIBIT B

INTERIM LOAN

SUMMARY OF TERMS AND CONDITIONS^*

Borrower:	Spyglass Merger Corp., to be merged with and into the Target with the Target as the surviving corporation (“Borrower”).

Joint Lead Arrangers:	Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc. and UBS Securities LLC(collectively, the “Lead Arrangers”).

Administrative Agent:	Merrill Lynch Capital Corporation (the “Administrative Agent”).

Lenders:	Merrill Lynch Capital Corporation (or one of its affiliates) and a syndicate of financial institutions (the “Lenders”), including Lehman Commercial Paper Inc. and UBS Loan Finance LLC, arranged by the Lead Arrangers which shall be reasonably acceptable to Borrower (such consent not to be unreasonably withheld).

Interim Loan:	Senior Subordinated Interim Loan (the “Interim Loan”).

Principal Amount:	Up to $225.0 million.

Documentation:	Usual for financings of this type by affiliates of Sponsor. The documentation for the Interim Loan will include, among others, a credit agreement (the “Interim Loan Agreement”), guarantees and other appropriate documents (collectively, the “Interim Loan Documents”).

Use of Proceeds:	Together with proceeds derived from the Senior Credit Facilities, to finance the Merger and the Conversion and to pay the fees and expenses related to the Transactions.

Termination of Commitments:	The commitment in respect of the Interim Loan (including pursuant to the Commitment Letter) will automatically and permanently terminate on April 30, 2006, if not drawn down on or prior to such date. In addition, the commitments in respect of the Interim Loan will automatically and permanently terminate on

* Capitalized terms used herein and not defined shall have the meanings assigned to such terms in the attached Credit Facilities Commitment Letter (the “Commitment Letter”).

	the date of the consummation of the Merger to the extent not drawn down on such date.

Maturity:	The Interim Loan will mature on the date (the “Initial Maturity Date”) that is twelve months after the initial funding date (the “Funding”). Upon the satisfaction of the terms and conditions described under “Exchange Feature; Rollover Securities and Rollover Loans”, the Interim Loan will be exchanged for, at the option of each Lender, either (i) unsecured senior subordinated debt securities (“Rollover Securities”), evidenced by an indenture in a form attached to the Interim Loan Agreement and maturing on the ninth anniversary of the Initial Maturity Date, or (ii) unsecured senior subordinated loans maturing on the ninth anniversary of the Initial Maturity Date (the “Rollover Loans”), evidenced by the Interim Loan Agreement.

Interest Rate:	(A) Interim Loan. The Interim Loan will bear interest at a rate per annum expressed as a basis point spread over, at Borrower’s option, one-month or three-month LIBOR (as adjusted every one or three months, as applicable, and adjusted for all applicable reserve requirements):

From the Beginning of Month	To the End of Month	Spread
1	6	587.5 bps
7	9	637.5 bps
10	12	687.5 bps

	Interest Cap - 12.25% per annum (or 12.50% per annum if the Interim Loan is rated CCC+ or lower by S&P or Caa1 or lower by Moody’s), with any interest in excess of 12.00% being payable at the option of the Borrower in the form of additional Interim Loans (exclusive of any additional interest payable due to an event of default).

	To the extent that LIBOR cannot be determined or any Lender is unable to maintain a LIBOR loan, the Interim Loan shall bear interest at a rate per annum equal to the higher of (x) the Federal Funds Rate plus 0.50% per annum or (y) the Prime Rate (as determined by the Administrative Agent), plus in each case the spread as indicated above (minus 100 bps).

	(B) Rollover Securities and Rollover Loans. The Rollover Loans and Rollover Securities (other than Fixed Rate Rollover Securities) will bear interest at a rate equal to the Initial Rate (as defined below) plus the Exchange Spread (as defined below). Notwithstanding the foregoing, the interest rate per annum payable on the Rollover Loans and any Rollover Securities shall not exceed the Interest Cap (including the cash cap) set forth above with respect to the Interim Loan.

	“Exchange Spread” means 0 basis points during the three-month period commencing on the Initial Maturity Date and shall increase by 50 basis points at the beginning of each subsequent three-month period.

	“Initial Rate” shall be determined on the Initial Maturity Date and shall equal the interest rate borne by the Interim Loan on the day immediately preceding the Initial Maturity Date plus 50 basis points.

Default Rate:	Overdue principal, interest and other amounts shall bear interest at a rate per annum equal to 2% in excess of the applicable interest rate (including applicable margin).

Interest Payment Dates:	(A) Interim Loan. At the end of each interest period, in arrears.

	(B) Rollover Securities and Rollover Loans. Semi-annually, in arrears.

Security:	None (including in respect of the Rollover Securities and Rollover Loans).

Guarantee:	The Interim Loan will be guaranteed on an unsecured senior subordinated basis by each subsidiary of Borrower that guarantees the Senior Credit Facilities. Each such guarantee is herein referred to as a “Guarantee” and each such guarantor, a “Guarantor”. The Guarantors and Borrower are herein referred to as the “Credit Parties”.

Ranking:	The Interim Loan (and the Rollover Securities and Rollover Loans) will be a senior subordinated obligation of Borrower ranking subordinated to all Senior Indebtedness of Borrower (as defined), pari passu with other senior subordinated indebtedness of Borrower, and senior to all subordinated indebtedness of Borrower which is not pari passu therewith.

Optional Prepayment:	The Interim Loan will be prepayable at par at any time upon three business days’ prior notice at Borrower’s option, in whole or in part, plus accrued and unpaid interest. Breakage costs, if any, will be paid by Borrower.

Mandatory Prepayment:	Prior to the Initial Maturity Date, to the extent not prohibited by the Senior Credit Facilities, upon the receipt by Borrower or any of its subsidiaries of the net cash proceeds from (i) the issuance of any debt securities and any asset securitization transactions (other than under the Senior Credit Facilities); (ii) any capital contribution or the sale or issuance of any capital stock or any securities convertible into or exchangeable for capital stock or any warrants, rights or options to acquire capital stock, other than contributions by, or issuances or sales to, Sponsor or any of its affiliates; and (iii) asset sales and other asset dispositions (subject to baskets and exceptions customary for transactions with affiliates of the Sponsor, including those comparable to the Senior Credit Facilities, including the reinvestment rights under the Senior Credit Facilities, with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries), Borrower will prepay the Interim Loan in an amount equal to such net proceeds at par, together with accrued interest thereon. Breakage costs, if any, will be paid by Borrower.

	The occurrence of a “Change of Control” (to be defined in a manner customary for transactions with affiliates of the Sponsor) prior to the Initial Maturity Date will constitute in “Event of Default” under the Interim Loan.

Exchange Feature; Rollover Securities and Rollover Loans:	On the Initial Maturity Date, unless Borrower is in bankruptcy or there has been a payment default under the Interim Loan, each Lender shall have its interest in the Interim Loan exchanged for, at the option of each Lender, either Rollover Securities or Rollover Loans, and each Lender may at any time exchange its Rollover Loans for Rollover Securities; provided that Rollover Securities shall not be issued until Borrower receives requests to issue at least $25.0 million in aggregate principal amount thereof. In addition, at the time of such exchange, Borrower shall pay in immediately available funds all accrued and unpaid interest with respect to the Interim Loan.

Following compliance with the Senior Credit Facilities, upon the receipt by Borrower or any of its subsidiaries after the Initial Maturity Date of the net cash proceeds from asset sales and other asset dispositions (subject to baskets and exceptions customary for transactions with affiliates of the Sponsor, including those comparable to the Senior Credit Facilities, including the reinvestment rights under the Senior Credit Facilities, with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries), Borrower shall be required to make offers to repay or repurchase (as applicable) the Rollover Loans and Rollover Securities at par plus accrued interest with such proceeds. The Rollover Loans and the Rollover Securities will be optionally redeemable or repayable (as applicable) at par plus accrued and unpaid interest, subject to the provisions relating to Fixed Rate Rollover Securities. All mandatory offers to repurchase shall be made pro rata between the Rollover Securities (including Fixed Rate Rollover Securities) and the Rollover Loans, and all optional redemptions and repayments shall be made pro rata between the Rollover Securities (excluding Fixed Rate Rollover Securities) and the Rollover Loans and shall be accompanied by a pro rata offer to repurchase Fixed Rate Rollover Securities.

Upon the occurrence of a Change of Control, Borrower will be required to offer to prepay or repurchase (as applicable) the entire aggregate principal amount of the Rollover Securities and Rollover Loans in cash for a purchase price equal to 100% of the principal amount thereof (101% in the case of Fixed Rate Rollover Securities), plus accrued and unpaid interest.

Breakage costs, if any, will be paid by Borrower.

The Rollover Securities (including any Fixed Rate Rollover Securities) will be evidenced by an indenture in form for qualification under the Trust Indenture Act of 1939, as amended, and will otherwise contain provisions customary for public debt securities for transactions with affiliates of the Sponsor and the Rollover Loans will be evidenced by the Interim Loan Agreement. Upon issuance of the Rollover Securities, Borrower will appoint a trustee reasonably acceptable to the Administrative Agent. The holders of the Rollover Securities will be entitled to exchange offer

	and other registration rights to permit resale by the holders of Rollover Securities without restriction under applicable securities laws no less favorable to holders than those customarily applicable to an offering pursuant to Rule 144A.

Fixed Rate Rollover Securities:	Each holder of Rollover Loans or Rollover Securities shall have the right, upon a sale to a third party, to fix the interest rate on such Rollover Security or to exchange such Rollover Loan for a fixed rate Rollover Security (each a “Fixed Rate Rollover Security”) at a rate not higher than the then applicable rate of interest.

	Each Fixed Rate Rollover Security will be non-callable for five years from the Closing Date (subject to 35% clawback provisions with the proceeds of customary equity offerings at par plus accrued interest plus a premium equal to the coupon) and will be callable thereafter at par plus accrued interest plus a premium equal to one-half the coupon in effect on the date of sale of the Fixed Rate Rollover Securities, which premium shall decline ratably on each anniversary of the Initial Maturity Date to zero two years before the maturity of the Fixed Rate Rollover Securities; provided, however, that any Fixed Rate Rollover Securities will be callable prior to such fifth anniversary at a redemption price equal to par plus accrued interest plus a make whole premium calculated on the basis of a discount rate equal to the then Treasury Rate plus one-half of one percent (0.50%).

Conditions to Effectiveness and to Interim Loan:	Those specified in the Commitment Letter and the Summary of Additional Conditions Precedent attached thereto as Annex I.

Representations and Warranties:	Such representation and warranties as are substantially similar to those set forth in the Senior Term Sheet (other than with respect status of senior debt), with additional representations and warranties usual and customary for bridge financings of affiliates of Sponsor.

Affirmative Covenants:	Such affirmative covenants as are substantially similar to those set forth in the Senior Term Sheet, with modifications and additions as are usual and customary for bridge financings of affiliates of Sponsor.

	Upon issuance of the Rollover Securities and the Rollover Loans, the affirmative covenants shall conform to affirmative covenants customary in a high-yield indenture.

Negative Covenants:	Such covenants with respect to Borrower and restricted subsidiaries as are usual and customary for recent indentures governing high-yield senior subordinated debt securities issued by affiliates of Sponsor, with certain provisions being more restrictive until the Initial Maturity Date (in a manner to be mutually agreed), with thresholds and baskets adjusted for the relative size of Borrower and its subsidiaries.

Events of Default:	Customary for bridge financings of affiliates of Sponsor.

Refinancing of Interim Loan:	Borrower shall on and after the Trigger Date (as defined in the Fee Letter (i) cooperate with the investment banks party to the Engagement Letter (the “Take-out Banks”) and provide the Take-out Banks with information required by the Take-out Banks in connection with the offering of debt securities (the “Debt Offering”) or other means of refinancing the Interim Loan and the Rollover Securities and the Rollover Loans, (ii) assist the Take-out Banks in connection with the marketing of the Take-out Securities (including promptly providing to the Take-out Banks any information reasonably requested to effect the issue and sale of the Take-out Securities and making available senior management of Borrower for investor meetings) and (iii) cooperate with the Take-out Banks in the timely preparation of any registration statement or private placement memorandum relating to the Debt.

Yield Protection and Increased Costs:	Usual for facilities and transactions of this type, substantially identical to the Senior Credit Facilities.

Required Lenders:	Lenders having a majority of the outstanding credit exposure, subject to amendments of certain provisions of the Interim Loan Documents requiring the consent of Lenders having a greater share (or all) of the outstanding credit exposure.

Assignments and Participations:	Each assignment (unless to another Lender or its affiliates) shall be in a minimum amount of $1.0 million

	(unless Borrower and the Administrative Agent otherwise consent or unless the assigning Lender’s exposure is thereby reduced to zero); provided, however, that prior to the Initial Maturity Date, the consent of the Borrower shall be required with respect to any assignment if, subsequent thereto, entities that shall have been Lenders on the Closing Date would hold, in the aggregate, less than 50.1% of the outstanding Interim Loan. Assignments shall be permitted with the Administrative Agent’s consent (such consent not to be unreasonably withheld, delayed or conditioned). Participations shall be permitted without restriction. Voting rights of participants will be subject to customary limitations.

Expenses and Indemnification:	In addition to those out-of-pocket expenses reimbursable under the Commitment Letter, all reasonable out-of-pocket expenses of the Administrative Agent (and the Lenders for enforcement costs and documentary taxes) associated with the preparation, execution and delivery of any waiver or modification (whether or not effective) of, and the enforcement of, any Interim Loan Document (including the fees, disbursements and other charges of counsel for the Administrative Agent) are to be paid by the Credit Parties.

	The Credit Parties will indemnify the Administrative Agent and the other Lenders and hold them harmless from and against all costs, expenses (including reasonable fees, disbursements and other charges of counsel) and liabilities arising out of or relating to any litigation or other proceeding (regardless of whether the Administrative Agent or any such other Lender is a party thereto) that relates to the Transactions or any transactions related thereto, except to the extent arising primarily from such person’s gross negligence, bad faith or willful misconduct.

Governing Law and Forum:	New York.

Waiver of Jury Trial:	All parties to the Interim Loan Documents waive right to trial by jury.

Special Counsel for Lead Arrangers:	Cahill Gordon & Reindel, LLP (and such local counsel as may be selected by the Administrative Agent).

EX-4 4 a05-20673_1ex4.htm EXHIBIT 4

Exhibit 4

Execution Copy

Silver Lake Partners II, L.P.
2725 Sand Hill Road, Suite 150
Menlo Park, California 94025

November 11, 2005

Board of Directors

Serena Software, Inc.

2755 Campus Drive, 3^rd Floor

San Mateo, California 94403-2538

Ladies and Gentlemen:

Concurrently herewith Serena Software, Inc., a Delaware corporation (the “Company”) is entering into an Agreement and Plan of Merger, dated as of the date hereof (as may be amended from time to time, the “Agreement”), by and between the Company and Spyglass Merger Corp., a Delaware corporation (“Buyer”). Capitalized terms in this letter shall have the meaning ascribed thereto in the Agreement.

In exchange for good and valuable consideration and in order to induce the Company to enter into the Agreement, Silver Lake Partners II, L.P. (“SLP”), an affiliate of Buyer, hereby irrevocably guarantees (the “Guarantee”) the payment to the Company of any and all amounts which are finally judicially determined to be due to the Company from Buyer by reason of the willful breach of the terms of the Agreement by Buyer (any such amount so due, an “Obligation”), up to a maximum of $52,350,000 in the manner set forth in the following paragraph of this letter. For the purposes of this Guarantee, the term “finally judicially determined” shall mean the entry of a judgment by a court or other tribunal of competent jurisdiction, which judgment has become final and non-appealable, that Buyer is in willful breach of the terms of the Agreement or, in the event Buyer becomes the subject of a case under any chapter of title 11 of the United States Code, the allowance by order of the bankruptcy court or other court of competent jurisdiction, of the Company’s proof of claim against Buyer based on its willful breach of the Agreement, which order has become final and non-appealable. For the avoidance of doubt, any failure to complete the Merger as a result of any breach of the Contribution Agreement by the Co-Investor will not be deemed to be a willful breach by Buyer.

If Buyer shall have been finally judicially determined to have been in willful breach of the Agreement, then SLP, promptly upon, and in no event less than ten Business Days after, the Company’s written demand, shall be obligated to pay to the Company an amount equal to the unpaid Obligation then due and owing, up to a maximum of $52,350,000. Any Obligation paid by SLP shall be paid in lawful currency of the United States of America and in immediately available funds.

This Guarantee shall terminate upon the earlier of (i) the Closing or (ii) the termination of the Agreement pursuant to the provisions of Section 8.1 thereof under circumstances which can not give rise to any Obligation.

This Guarantee is unconditional. SLP II hereby waives all notices (including notice of acceptance of the Guarantee, of default or nonperformance, demands and protests in connection with the enforcement of the obligations hereunder).

NO REMEDIES OTHER THAN AS PROVIDED BY THIS GUARANTEE SHALL BE AVAILABLE AGAINST SLP II OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE STOCKHOLDERS, PARTNERS, MEMBERS, DIRECTORS OFFICERS OR AGENTS (OTHER THAN BUYER), DIRECTLY OR INDIRECTLY (INCLUDING THROUGH A CLAIM AGAINST BUYER), WITH RESPECT TO THE AGREEMENT OR THE CONTEMPLATED TRANSACTIONS. IT IS UNDERSTOOD AND AGREED THAT THE COMPANY WILL RECOVER ANY RECOVERABLE AMOUNTS ARISING OUT OF THE AGREEMENT SOLELY FROM BUYER UNDER THE AGREEMENT OR FROM SLP II HEREUNDER (AS PROVIDED HEREIN). THE COMPANY COVENANTS NOT TO SUE SLP II OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE STOCKHOLDERS, PARTNERS, MEMBERS, DIRECTORS OFFICERS OR AGENTS (OTHER THAN BUYER) FOR ANY MATTER ARISING OUT OF THE AGREEMENT OR OUT OF THE CONTEMPLATED TRANSACTIONS, OTHER THAN ANY CLAIM AGAINST SLP II FOR BREACH OF, OR TO ENFORCE THE TERMS OF, THIS AGREEMENT. THIS GUARANTEE CONSTITUTES THE SOLE REMEDY OF THE COMPANY AGAINST SLP II OR ITS AFFILIATES OR ANY OF THEIR RESPECTIVE STOCKHOLDERS, PARTNERS, MEMBERS, DIRECTORS OFFICERS OR AGENTS (OTHER THAN BUYER) WITH RESPECT TO THE AGREEMENT OR WITH RESPECT TO THE CONTEMPLATED TRANSACTIONS.

SLP II hereby represents and warrants to the Company as to the following: (a) it has all requisite legal capacity, power and authority to enter into this Guarantee and to perform its obligations hereunder; (b) this Guarantee has been duly authorized, executed and delivered by SLP II and constitutes a valid and binding obligation of SLP II enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; (c) the execution and delivery of this Guarantee do not, and the compliance by SLP II with the terms hereof will not, conflict with or result in any violation of, or default (with or without notice or lapse of time or both) under, permit the termination of any provision of or result in the termination of or the acceleration of the maturity or performance of, or result in the creation or imposition of any lien upon any of the assets or properties of SLP II under, (i) any provision of any agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such undersigned party or its property or assets, (ii) the organizational documents of SLP II or (iii) any mortgage, lease, franchise, license, permit, agreement, instrument, law, order, arbitration award, judgment or decree to which SLP II is a party or by which it is bound, except to the extent that any such events would not reasonably be expected to have a material adverse effect on SLP II’s ability to perform under this Guarantee.

Neither this Guarantee nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Guarantee will be binding upon, inure to the benefit of

and be enforceable only by the parties hereto and their respective permitted assigns. Any attempted assignment in violation of the terms of this paragraph shall be null and void.

This Guarantee constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties with respect thereto. The waiver by any party of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision. Any term or provision of this Guarantee which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Guarantee in any other jurisdiction.

This Guarantee shall be governed by and construed in accordance with the law of the State of Delaware applicable to contracts and executed and to be performed entirely within such State.

		Sincerely,

		SILVER LAKE PARTNERS II, L.P.

		By:	Silver Lake Technology Associates II, L.L.C., its general partner


		By:	/s/ HOLLIE J. MOORE
			Name: Hollie J. Moore
			Title: Director


Agreed to and accepted as of the
date first set forth above:

SERENA SOFTWARE, INC.


By:	/s/ ROBERT PENDER
	Name: Robert Pender
	Title: CFO

EX-5 5 a05-20673_1ex5.htm EXHIBIT 5

Exhibit 5

SPYGLASS MERGER CORP.

STOCKHOLDERS AGREEMENT

Dated as of , 2006

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

Section 1.1.	Definitions	1
Section 1.2.	Definitions Cross References	6
Section 1.3.	General Interpretive Principles	7

ARTICLE II

GOVERNANCE

Section 2.1.	Board of Directors	8
Section 2.2.	Voting	11
Section 2.3.	Protective Provisions	11
Section 2.4.	Benefits of Article II	12

ARTICLE III

TRANSFER RESTRICTIONS

Section 3.1.	General Restrictions on Transfers	12
Section 3.2.	Permitted Transfers	13
Section 3.3.	Restrictions on Transfers by Stockholders	14
Section 3.4.	Tag-Along Rights	14
Section 3.5.	Drag-Along Rights	15
Section 3.6.	Right of First Offer	16
Section 3.7.	Rule 144 Sales	17

ARTICLE IV

REGISTRATION RIGHTS

Section 4.1.	Certain Definitions	19
Section 4.2.	Shelf Registration	20
Section 4.3.	Demand Registration	25
Section 4.4.	Piggyback Registration	27
Section 4.5.	Expenses of Registration	28
Section 4.6.	Obligations of the Company	28
Section 4.7.	Indemnification	31
Section 4.8.	Information by Holder	33
Section 4.9.	Transfer of Registration Rights	33
Section 4.10.	Delay of Registration	33
Section 4.11.	Limitations on Subsequent Registration Rights	33

Section 4.12.	Rule 144 Reporting	33
Section 4.13.	“Market Stand Off” Agreement	34
Section 4.14.	Termination of Registration Rights	34

ARTICLE V

RIGHT OF PARTICIPATION

Section 5.1.	Right of Participation	35
Section 5.2.	Excluded Transactions	37
Section 5.3.	Termination of Article V	38

ARTICLE VI

ADDITIONAL AGREEMENTS OF THE PARTIES

Section 6.1.	Further Assurances	38
Section 6.2.	Freedom to Pursue Opportunities	38
Section 6.3.	Legend on Share Certificates	39

ARTICLE VII

ADDITIONAL PARTIES

Section 7.1.	Additional Parties	39

ARTICLE VIII

INDEMNIFICATION

Section 8.1.	Indemnification of Stockholders	40

ARTICLE IX

MISCELLANEOUS

Section 9.1.	Entire Agreement	41
Section 9.2.	Specific Performance	41
Section 9.3.	Governing Law	41
Section 9.4.	Arbitration	41
Section 9.5.	Obligations	42
Section 9.6.	Consent of the SLP Investors and the Co-Investors	42
Section 9.7.	Amendment and Waiver	42
Section 9.8.	Binding Effect	43
Section 9.9.	Termination	43
Section 9.10.	Notices	43
Section 9.11.	Severability	43
Section 9.12.	Counterparts	43
Section 9.13.	Assumption of Obligations	43

STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT is made as of , 2006, by and among Spyglass Merger Corp., a Delaware corporation (together with its successors and assigns, “Newco”), and each of the following (hereinafter severally referred to as a “Stockholder” and collectively referred to as the “Stockholders”): (i) (a) Silver Lake Partners II, L.P., a Delaware limited partnership, (together with its successors and assigns, “SLP II”), and (b) Silver Lake Technology Investors II, L.L.C., a Delaware limited liability (together with its successors and assigns, “SLTI II,” and together with SLP II, the “Initial SLP Investors”); (ii) (a) the Troxel Living Trust (together with its successors and assigns, the “Initial Co-Investor”) and (b) Douglas D. Troxel (the “Co-Investor Founder”); and (iii) any other Person who becomes a party hereto pursuant to Article VII.

WHEREAS, the Initial SLP Investors, the Initial Co-Investor, the Co-Investor Founder, and Newco have entered into the Contribution and Voting Agreement, dated as of November 11, 2005, (as may be amended from time to time, the “Contribution and Voting Agreement”) pursuant to which, upon the terms and subject to the conditions set forth therein, the Initial SLP Investors agreed to contribute cash to Newco and the Initial Co-Investor agreed to contribute shares of common stock of the Company to Newco and, in consideration for such contributions, Newco agreed to issue to the Initial SLP Investors and the Initial Co-Investor shares of the common stock, par value $0.01 per share (“Newco Common Stock”), of Newco;

WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of November 11, 2005, between Newco and SERENA Software, Inc., a Delaware corporation (“Serena”), upon the closing of the merger of Newco with and into Serena pursuant to the terms and subject to the conditions set forth therein (the “Merger”), each share of Newco Common Stock shall be converted into and become one fully paid and nonassessable share of common stock, par value $0.01 per share, of the surviving corporation of the Merger (the “Common Stock” and together with any Common Stock hereinafter issued by the Company, the “Shares”);

WHEREAS, pursuant to the Contribution and Voting Agreement, each recipient of Shares thereunder is obligated to become a party to this Agreement; and

WHEREAS, the Stockholders and the Company desire to set forth the respective rights and obligations of the Stockholders generally.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties mutually agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“Adverse Disclosure” means public disclosure of material non-public information which, in the Board’s good faith judgment, after consultation with independent outside counsel

to the Company, (i) would be required to be made in any report or Registration Statement filed with the SEC by the Company so that such report or Registration Statement would not be materially misleading; (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such report or Registration Statement; and (iii) the Company has a bona fide business purpose for not disclosing publicly.

“Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person. The term “control”, as used with respect to any Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. “Controlled” and “controlling” have meanings correlative to the foregoing. Notwithstanding the foregoing, (i) the Company, its Subsidiaries and the Company’s other controlled Affiliates shall not be considered Affiliates of any Stockholder and (ii) none of the SLP Investors shall be considered Affiliates of any portfolio company in which the SLP Investors or any of their investment fund Affiliates have made a debt or equity investment.

“Affiliated Officer” means an officer of the Company affiliated with the SLP Investors.

“Agreement” means this Stockholders Agreement, as the same may be amended, supplemented, restated or modified.

“Beneficial ownership” and “beneficially own” and similar terms have the meaning set forth in Rule 13d-3 under the Exchange Act; provided, however that no Stockholder shall be deemed to beneficially own any securities of the Company held by any other Stockholder solely by virtue of the provisions of this Agreement (other than this definition).

“Board” means the Board of Directors of the Company.

“Business Day” means any day, other than a Saturday, Sunday or one on which banks are authorized by law to be closed in San Francisco, California.

“Closing” has the meaning set forth in the Merger Agreement.

“Co-Investors” means any of the Initial Co-Investor and any of its Permitted Transferees that hold Share Equivalents and have become parties to this Agreement pursuant to Article VII.

“Company” means the surviving corporation of the Merger.

“Competitor” means (a) any Person that sells products or services that are directly competitive with the products or services then sold by the Company or any of its Subsidiaries (as shall be reasonably determined in good faith by the Board) or (b) any Person that is a non-independent director or officer of any Person set forth in the foregoing clause (a).

“Control Event” means either (a) the SLP Investors, in the aggregate, no longer beneficially own at least twenty percent (20%) of the outstanding Share Equivalents or (b) the

SLP Investors, in the aggregate, no longer beneficially own at least twenty percent (20%) more of the outstanding Share Equivalents than the Co-Investors, in the aggregate, beneficially own.

“Disability” shall mean the inability to perform the duties of a director of the Company by reason of a significant physical or mental impairment, as determined in good faith by the Co-Investors or the Co-Investor Founder, for so long as such impairment shall exist.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

“Fair Market Value” means (i) with respect to cash consideration, the total amount of such cash consideration in United States dollars, (ii) with respect to non-cash consideration consisting of publicly-traded securities, the average daily closing sales price of such securities for the ten consecutive trading days preceding the date the Fair Market Value of such securities is required to be determined hereunder (with the closing price for each day being the last reported sales price regular way or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices regular way, in either case on the principal national securities exchange on which such securities are listed and admitted to trading, or, if not listed and admitted to trading on any such exchange on the NASDAQ National Market System, or if not quoted on the NASDAQ National Market System, the average of the closing bid and asked prices in the over-the-counter market as furnished by any New York Stock Exchange member firm selected from time to time by the Company for that purpose) and (iii) with respect to non-cash consideration not consisting of publicly-traded securities, such amount as is determined to be the fair market value of the non-cash consideration as of the date such Fair Market Value is required to be determined hereunder as determined (x) in good faith by the Board, including by the affirmative vote of the Co-Investor Designee, or (y) by a nationally recognized third party appraiser reasonably acceptable to the Board and the Co-Investor Designee.

“Family Affiliate” means, with respect to any natural Person, (a) any parent, grandparent, sibling or child (including any adopted sibling or child) of such natural Person, or any spouse or former spouse of such Person, (b) any trust (i) established solely for the benefit of (x) such natural Person, (y) any of the Persons set forth in the foregoing clause (a) and/or (z) any bona fide charity(ies) or charitable purpose(s) and (ii) with respect to which the trustee is such natural Person (unless such natural Person has died or become Disabled) or (c) any corporation, limited liability company, partnership, foundation or other Person (i) with respect to which all of the outstanding capital stock or other equity interests are beneficially owned solely by (x) such natural Person, (y) any of the Persons set forth in the foregoing clause (a) and/or (z) any bona fide charities and (ii) with respect to which such natural Person (unless such natural Person has died or become Disabled) is the majority stockholder (if a corporation), the sole manager or managing member (if a limited liability company), the sole general partner (if a limited partnership) or otherwise has the sole power to direct or cause the direction of the management and policies, directly or indirectly, of such Person, whether through the ownership of voting securities, by contract or otherwise (if any other type of Person).

“Initial Public Offering” means the consummation of an underwritten public offering of Shares registered under the Securities Act.

“Management Agreement” means the Management Agreement, dated as of November 11, 2005, by and between Newco and Silver Lake Technology Management, L.L.C., as may be amended from time to time.

“Non-SLP Stockholders” means each of the Stockholders other than the SLP Investors.

“Participation Portion” means, for each Participating Stockholder as of the date of the relevant Participation Notice, the product of (i) the total number of Participation Shares proposed to be issued by the Company in the Post-Closing Issuance as set forth in the Participation Notice, and (ii) a fraction, the numerator of which is the aggregate number of Share Equivalents owned by such Participating Stockholder as of the date of the relevant Participation Notice and the denominator of which is the total number of outstanding Share Equivalents as of the date of the relevant Participation Notice.

“Participation Shares” means the number of Share Equivalents or other equity securities proposed to be sold by the Company in the Post-Closing Issuance.

“Permitted Transferee” means with respect to (i) any SLP Investor or Stockholder (other than a Co-Investor), any Affiliate or Syndication Transferee of such SLP Investor or Stockholder (as applicable), and (ii) any Co-Investor, the Co-Investor Founder or any Family Affiliate of the Co-Investor Founder.

“Person” means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, limited liability company or any other entity of whatever nature, and shall include any successor (by merger or otherwise) of such entity.

“Qualified Purchaser” means any Person to whom the Co-Investor wishes to sell Share Equivalents pursuant to Section 3.6; provided that such Person shall not be a Competitor.

“Restricted Participation Period” means, with respect to any Co-Investor, any periods of time between the Initial Public Offering and the earlier of a Control Event and the three-year anniversary of the Initial Public Offering during which such Co-Investor has an effective 10b5-1 Plan that has not been terminated by such Co-Investor (regardless of the amount of sales being made pursuant to such 10b5-1 Plan during such period).

“Restricted Shares” means all Share Equivalents other than (a) Share Equivalents, the offer and sale of which have been registered under a registration statement pursuant to the Securities Act and sold thereunder, (b) Share Equivalents, with respect to which a sale or other disposition has been made in reliance on and in accordance with Rule 144 (or any successor provision) under the Securities Act, or (c) Share Equivalents, with respect to which the holder thereof shall have delivered to the Company either (i) an opinion of counsel in form and substance reasonably satisfactory to the Company, delivered by counsel reasonably satisfactory to the Company, or (ii) a “no action” letter from the SEC, to the effect that subsequent transfers of such Share Equivalents may be effected without registration under the Securities Act.

“ROFO Sale” means (a) if after the 5-year anniversary of the Closing and prior to the Initial Public Offering, then any transfer of Shares other than pursuant to Section 3.2, Section 3.4 or Section 3.5 and (b) if after the Initial Public Offering, then any transfer of Shares other than pursuant to Section 3.2, Section 3.4, Section 3.5, Section 3.7 or Article IV, in each case unless a Control Event has occurred, in which case no transfer of Shares shall be a ROFO Sale.

“Rule 144” means Rule 144 under the Securities Act.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same may be amended from time to time.

“Series A Preferred Stock” means the Series A Preferred Stock, par value $0.01 per share, of the Company.

“Share Equivalents” means (i) Shares and (ii) the number of Shares issuable upon exercise, conversion or exchange of any security that is currently exercisable for, convertible into or exchangeable for, on any such date of determination, Shares without payment to the Company of any additional consideration.

“SLP Investors” means any of the Initial SLP Investors that hold Share Equivalents and any of their Affiliates that hold Share Equivalents and have become parties to this Agreement pursuant to Article VII.

“Stockholders” means each of the Stockholders specified in the preamble and each additional Person who becomes a party to this Agreement pursuant to Article VII hereof as a stockholder of the Company.

“Subsidiary“ means, with respect to any party, any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which such party (or another Subsidiary of such party) holds stock or other ownership interests representing (A) more that 50% of the voting power of all outstanding stock or ownership interests of such entity, (B) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity or (C) a general or managing partnership interest in such entity.

“Syndication Transferee” means any such Persons to whom any Initial SLP Investor transfers Share Equivalents; provided that (a) each such transfer is completed within six (6) months after the Closing, (b) the aggregate number of Share Equivalents transferred by the Initial SLP Investors to all such Persons does not exceed 16,384,000 (as adjusted for any stock dividend split, reverse split, combination recapitalization or reclassification) and (c) such transfers are for a cash price of no more than $5.00 per Share Equivalent (as adjusted for any stock dividend split, reverse split, combination recapitalization or reclassification).

“Transfer Offer” means the offer to sell the Transfer Securities owned by the Co-Investor to the SLP Investors or one or more of its assignees in accordance with Section 3.6(a).

“Transfer Restriction Period” means the period beginning on the date hereof and ending on the earlier of (a) a Control Event and (b) the three-year anniversary of the Initial Public Offering.

“Voting Securities” means (a) the Shares and (b) any other securities that are permitted by their terms to vote together with the Shares.

Section 1.2. Definitions Cross References.

Terms		Section

10b5-1 Plan		3.7(a)
Acceptance Notice		3.6(b)
Co-Investor Certificates		3.7(b)
Co-Investor Designated Directors		2.1(b)(i)(A)
Co-Investor Designee		2.1(b)(i)(A)
Co-Investor Founder		Preamble
Co-Investor Initiating Holders		4.1(g)
Co-Investor Observer		2.1(b)(iv)
Co-Investor Rule 144 Sales		3.7(a)
Co-Investors Nominee		2.1(c)(i)(A)
Common Stock		Recitals
Contribution and Voting Agreement		Recitals
Demand Period		4.3(c)
Demand Registration		4.3(a)
Dispute and Disputes		9.4
Drag-Along Notice		3.5(a)
Drag-Along Portion		3.5(a)
Drag-Along Sale		3.5(a)
Election Period		3.6(b)
Holder and Holders		4.1(e)
Indemnified Liabilities		8.1(a)
Indemnified Party		4.7(c)
Indemnifying Party		4.7(c)
Indemnitees		8.1(a)
Independent Co-Investor Designee		2.1(b)(i)(A)
Initial Co-Investor		Preamble
Initial SLP Investors		Preamble
Initiating Holders		4.3(a)
JAMS		9.4
Marketed Underwritten Shelf Take-Down		4.2(d)(ii)
Merger		Recitals
Newco		Preamble
Newco Common Stock		Recitals
Offer Notice		3.6(a)
Offer Price		3.6(a)
Participating Stockholder		5.1(b)(i)

Terms		Section

Participation Closing		5.1(e)
Participation Notice		5.1(a)
Post-Closing Issuance		5.1(a)
Pre-IPO Period		2.1(b)(i)
Pro Rata 144 Portion		3.7(b)
Pro Rata Portion		3.4(b)
Pro Rata Take-Down Portion		4.2(d)(i)
Prospective Subscriber		5.1(a)(i)
Prospectus		4.1(d)
register, registered and registration		4.1(a)
Registrable Securities		4.1(b)
Registration Statement		4.1(a)
Restricted Shelf Take-Down		4.2(d)(i)
Restricted Shelf Take-Down Notice		4.2(d)(i)
Rule 144 Selling SLP Investors		3.7(b)
Selling SLP Investors		3.4(a)
Shares		Recitals
Shelf Holder		4.2(a)
Shelf Period		4.2(b)
Shelf Registration Notice		4.2(a)
Shelf Registration Statement		4.1(c)
Shelf Suspension		4.2(c)
SLP Designated Directors		2.1(b)(i)(C)
SLP II		Preamble
SLP Initiating Holders		4.1(f)
SLP Nominees		2.1(c)(i)(B)
SLP Rule 144 Broker		3.7(b)
SLP Rule 144 Notice		3.7(b)
SLP Rule 144 Sales		3.7(b)
SLTI II		Preamble
transfer		3.1(a)
Transfer Consideration		3.6(a)
Transfer Notice		3.4(a)
Transfer Period		3.6(c)
Transfer Securities		3.6(a)
Underwritten Shelf Take-Down		4.2(d)(ii)
Underwritten Shelf Take-Down Notice		4.2(d)(ii)
Unrestricted Shelf Take-Down		4.2(e)(i)

Section 1.3. General Interpretive Principles. The name assigned to this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms “hereof,” “herein” and similar terms refer to this Agreement as a whole, and references herein to Articles or Sections refer to Articles or Sections of this Agreement. For purposes of this Agreement, the words, “include,” “includes” and “including,” when used herein, shall be

deemed in each case to be followed by the words “without limitation.” The terms “dollars” and “$” shall mean United States dollars. Except as otherwise set forth herein, Shares underlying unexercised options that have been issued by the Company shall not be deemed “outstanding” for any purposes in this Agreement. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

ARTICLE II

GOVERNANCE

Section 2.1. Board of Directors.

(a) Board Size. The size of the Board shall be determined in the manner set forth from time to time in the Company’s Articles of Incorporation and Bylaws.

(b) Board Representation Prior to Initial Public Offering.

(i) From the date hereof and until earlier of a Control Event and the consummation of an Initial Public Offering (the “Pre-IPO Period”), each Stockholder agrees that it will vote, or execute a written consent in lieu thereof with respect to, all of the Voting Securities beneficially owned or held of record by it, or cause all of the Voting Securities beneficially owned by it to be voted, or cause a written consent in lieu thereof to be executed, to elect and, during such period, to continue in office a Board consisting solely of the following (subject to the other provisions of this Section 2.1):

(A) subject to Section 2.1(b)(ii), two (2) designees of the Initial Co-Investor, who shall consist of (1) a designee that is not an Affiliate of the Company, the SLP Investors or the Co-Investors and that is reasonably acceptable to the SLP Investors (an “Independent Co-Investor Designee”) and (2) subject to Section 2.1(d), one other designee (the “Co-Investor Designee,” and together with the Independent Co-Investor Designee (if applicable), the “Co-Investor Designated Directors”);

(B) the Chief Executive Officer of the Company; and

(C) the designees of SLP II and/or its Permitted Transferees (to the extent such Permitted Transferees are assigned such rights by SLP II) with respect to all remaining members of the Board (collectively, the “SLP Designated Directors”).

(ii) If at any time during the Pre-IPO Period, the Initial Co-Investor and its respective Permitted Transferees no longer beneficially own, in the aggregate, at least (A) twenty percent (20%) of the outstanding Share Equivalents, then the director designation right of the Initial Co-Investor pursuant to Section 2.1(b)(i)(A) will reduce to one (1)

director, which shall be the Co-Investor Designee, or (B) ten percent (10%) of the outstanding Share Equivalents, then the director designation right of the Initial Co-Investor pursuant to Section 2.1(b)(i)(A) will reduce to zero (0) directors.

(iii) In the event that the Initial Co-Investor determines to remove a Co-Investor Designated Director or SLP II and/or its Permitted Transferees determines to remove an SLP Designated Director, each of the Stockholders will take any action that may be required in order to effect such removal and the appointment of a successor Co-Investor Designated Director or SLP Designated Director, as applicable. In the event that the director designation right of the Initial Co-Investor is reduced pursuant to Section 2.1(b)(ii), unless the SLP Investors otherwise agree in writing, the Initial Co-Investor shall cause such director or directors, as the case may be, to resign promptly from the Board.

(iv) If at any time during the Pre-IPO Period, the Initial Co-Investor and its Permitted Transferees beneficially own, in the aggregate, less than ten percent (10%) of the outstanding Share Equivalents, then the Initial Co-Investor shall be entitled to appoint one (1) non-voting board observer (the “Co-Investor Observer”) for so long as the Initial Co-Investor and its Permitted Transferees beneficially own, in the aggregate, at least five percent (5%), of the outstanding Share Equivalents. The Co-Investor Observer shall be entitled to attend all regular and special meetings (telephonic or in person) of the Board and receive all written materials provided to members of the Board prior to and at such meetings, except to the extent the receipt of such materials would prevent the Company from asserting attorney-client privilege with respect to such materials. The Co-Investor Observer may be required by the Board to temporarily leave a meeting of the Board if the presence of the Co-Investor Observer at such time would prevent the Company from asserting attorney-client privilege with respect to matters discussed before the Board at such time.

(c) Board Representation After an Initial Public Offering.

(i) On and after the occurrence of an Initial Public Offering, to the extent permitted by applicable law and the rules of the principal stock exchange or inter-dealer quotation system on which the Shares are then traded or listed, the Stockholders shall have the following rights in connection with each election of directors of the Company:

(A) subject to Section 2.1(d), the Initial Co-Investor shall have the right to nominate one individual for election to the Board of Directors for so long as the Initial Co-Investor and its Permitted Transferees beneficially own, in the aggregate, at least ten percent (10%) of the outstanding Share Equivalents (such individual, the “Co-Investors Nominee”); and

(B) SLP and/or its Permitted Transferees (to the extent such Permitted Transferees are assigned such rights by SLP II) shall have the right to nominate a number of individuals for election to the Board of Directors equal to the product of the following (such individuals,

the “SLP Nominees”): (i) the percentage of the outstanding Share Equivalents beneficially owned by the SLP Investors, taken together, and (ii) the number of directors then on the Board; provided that such product shall be rounded up to the nearest whole number.

(ii) For so long as the Initial Co-Investor or SLP II and/or its Permitted Transferees have the right to nominate a Co-Investor Nominee or SLP Nominee, as the case may be, for election pursuant to Section 2.1(c)(i), in connection with each election of directors, the Company shall nominate such Co-Investor Nominee or SLP Nominee, as the case may be, for election as a director as part of the management slate that is included in the proxy statement (or consent solicitation or similar document) of the Company relating to the election of directors, and shall provide the highest level of support for the election of such Co-Investor Nominee or SLP Nominee, as the case may be, as it provides to any other individual standing for election as a director of the Company as part of the Company’s management slate. Each Stockholder shall vote all of its Voting Securities in favor of the slate of directors nominated in accordance therewith.

(iii) In the event that the Co-Investor Nominee shall cease to serve as a director for any reason (other than the failure of the stockholders of the Company to elect such person as a director), the Initial Co-Investor shall have the right to appoint another Co-Investor Nominee to fill the vacancy resulting therefrom. In the event that a SLP Nominee shall cease to serve as a director for any reason (other than the failure of the stockholders of the Company to elect such person as a director), SLP II and/or its Permitted Transferees shall have the right to appoint another SLP Nominee to fill the vacancy resulting therefrom. For the avoidance of doubt, it is understood that the failure of the stockholders of the Company to elect any Co-Investor Nominee or SLP Nominee shall not affect the right of the Initial Co-Investor or SLP II and/or its Permitted Transferees, as the case may be, to designate a Co-Investor Nominee or SLP Nominee, as the case may be, for election pursuant to Section 2.1(c)(i) in connection with any future election of directors of the Company. In the event that Co-Investor determines to remove a Co-Investor Designated Director or SLP II and/or its Permitted Transferees determines to remove an SLP Designated Director, each of the Stockholders will take any action that may be required by the Company’s stockholders in order to effect such removal and appoint a successor Co-Investor Designated Director or SLP Designated Director, if applicable.

(d) Identity of Certain Designees and Nominees. The Co-Investor Designee, the Co-Investor Observer and the Co-Investor Nominee, as the case may be, may only be the Co-Investor Founder; provided, however, that in the event of the death or Disability of the Co-Investor Founder, the executor, administrator, testamentary trustee, legatee or beneficiary of the Co-Investor Founder may designate another individual to serve as such Co-Investor Designee, Co-Investor Observer or Co-Investor Nominee (in lieu of the Co-Investor Founder) pursuant to this Section 2.1 provided that such individual is not a Competitor.

(e) Termination. The provisions of this Section 2.1 shall terminate and be of no further force and effect after the earlier to occur of (i) a Control Event and (ii) the three-year anniversary of an Initial Public Offering.

Section 2.2. Voting.

(a) Subject to Section 2.3, prior to the earlier of (i) the occurrence of a Control Event, and (ii) the completion of an Initial Public Offering, each Non-SLP Stockholder agrees to vote at any stockholders meeting (or in any written consent in lieu thereof) all of the Voting Securities owned or held of record by it or cause all of the Voting Securities beneficially owned by it to be voted at any stockholders meeting (or in any written consent in lieu thereof), in the same manner as the SLP Investors vote the Voting Securities beneficially owned by them at such meeting (or in such written consent in lieu thereof); provided, however that nothing contained herein shall obligate a Co-Investor to vote at any stockholders meeting (or in any written consent in lieu thereof) any of the Voting Securities owned or held of record by it, or cause any of the Voting Securities beneficially owned by it to be voted at any stockholders meeting (or in any written consent in lieu thereof) or permit the SLP Investors to vote a Co-Investor’s Voting Securities by proxy in the same manner as the SLP Investors vote the Voting Securities beneficially owned by them at such meeting (or in such written consent in lieu thereof) with respect to any matter pursuant to which the affirmative vote or written consent of the Co-Investor Designee is required pursuant to this Agreement unless the Co-Investor Designee has affirmatively voted for, or provided written consent to, such matter concurrently with or prior to such stockholders meeting (or in any written consent in lieu thereof).

(b) In order to effectuate Section 2.2(a), each Co-Investor hereby grants to the SLP Investors an irrevocable proxy, coupled with an interest, to vote, during the period specified in Section 2.2(a), all of the Share Equivalents beneficially owned by the grantor of the proxy in the manner set forth in Section 2.2(a).

Section 2.3. Protective Provisions

(a) The Company shall not, without the affirmative vote or written consent of the Co-Investor Designee, amend any provision of its Certificate of Incorporation or Bylaws in a manner that adversely affects any Co-Investor relative to the SLP Investors. For the avoidance of doubt, none of the following would be deemed to adversely affect the Co-Investors relative to the SLP Investors: (A) an increase in the authorized capital stock of the Company, except an increase in the number of shares of Series A Preferred Stock, (B) the creation of any new class or series of equity interests (provided that the Company complies with Article V with respect to the issuance of any such new class or series of equity interests) or (C) amendments made in connection with any reorganization of the Company effected to facilitate an Initial Public Offering or the acquisition of the Company by merger or consolidation subject to the provisions of Section 3.5 (provided that in such reorganization or acquisition each share of each class or series of capital stock held by the Co-Investors is treated the same as each share of the same class or series of capital stock held by the SLP Investors and each other holder of a share of the same class or series).

(b) The Company shall not, without the affirmative vote or written consent of the Co-Investor Designee, enter into any transaction with the SLP Investors or any of its Affiliates, other than (i) any transaction or agreement between the Company or one if its Subsidiaries, on the one hand, and a portfolio company of the SLP Investors or any of their investment fund Affiliates, on the other hand, that is negotiated at arms length between the managements of the Company or such Subsidiary and such portfolio company (provided, if such transaction or agreement involves any transfer of shares by any Stockholder, then in such transaction or agreement each share of each class or series of capital stock held by the Co-Investors is treated the same as each share of the same class or series of capital stock held by the SLP Investors and each other holder of a share of the same class or series), (ii) issuances of securities to the SLP Investors or their Affiliates with respect to which the Co-Investors have pre-emptive rights hereunder, (iii) the performance of the transactions contemplated by the Management Agreement or (iv) the amendment or modification of the Management Agreement in any manner that would not adversely affect the Company or the Co-Investors.

(c) The foregoing protective provisions will terminate upon the earliest of (i) the Initial Co-Investor and its Permitted Transferees ceasing to beneficially own, in the aggregate, at least ten percent (10%), of the outstanding Share Equivalents, (ii) the occurrence of a Control Event and (iii) immediately prior to the completion of an Initial Public Offering.

Section 2.4. Benefits of Article II. The provisions of this Article II are solely for the benefit of the SLP Investors and the Co-Investors and only the SLP Investors and the Co-Investor shall have any rights or remedies in respect of Article II; provided, however, (a) that SLP II and its Permitted Transferees shall have the right to assign their right to designate any SLP Designated Director (other than any director that may be designated pursuant to the terms of the Series A Preferred Stock) or to nominate any SLP Nominee to any other Person to whom SLP II or such Permitted Transferee transfers Share Equivalents in accordance with Article III and (b) the SLP Investors shall have the right to assign any of their other rights and remedies in respect of Article II (including the right to designate a director pursuant to the terms of the Series A Preferred Stock) to any Person in connection with the consummation of any transaction subject to the provisions of Section 3.5, provided that, in the case of this clause (b), such Person also assumes the obligations set forth in Section 2.3

ARTICLE III

TRANSFER RESTRICTIONS

Section 3.1. General Restrictions on Transfers.

(a) No Stockholder may sell, exchange, assign, pledge, hypothecate, gift or otherwise transfer or dispose of (all of which acts shall be deemed included in the term “transfer” as used in this Agreement) any legal, economic or beneficial interest in any Share Equivalents (whether held in its own right or by its representative) unless (i) such transfer of Share Equivalents is made on the books of the Company and is not in violation of the provisions of this Article III and (ii) the transferee of such Share Equivalents (if other than (A) the Company or another Stockholder, (B) a transferee in a sale of Share Equivalents made under Rule 144 or any successor provision under the Securities Act, or (C) a transferee of Share Equivalents pursuant to

an offer and sale registered under the Securities Act) agrees to become a party to this Agreement pursuant to Article VII hereof and executes such further documents as may be necessary, in the opinion of the Company and the SLP Investors, to make him, her or it a party hereto.

(b) Any purported transfer of Share Equivalents other than in accordance with this Agreement by any Stockholder shall be null and void, and the Company shall refuse to recognize any such transfer for any purpose and shall not reflect in its records any change in record ownership of Share Equivalents pursuant to any such transfer.

(c) Each Stockholder acknowledges that the Restricted Shares have not been registered under the Securities Act and may not be transferred except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration under the Securities Act. Each Stockholder agrees that it will not transfer any Restricted Shares at any time if such action would constitute a violation of any securities laws of any applicable jurisdiction or a breach of the conditions to any exemption from registration of Restricted Shares under any such laws or a breach of any undertaking or agreement of such Stockholder entered into pursuant to such laws or in connection with obtaining an exemption thereunder. Each Stockholder agrees that any Restricted Shares to be held by it shall bear the restrictive legend set forth in Section 6.3.

(d) No Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to any Share Equivalents or enter into any agreements or arrangements of any kind with any Person with respect to any Share Equivalents inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements are with other Stockholders or holders of Share Equivalents who are not parties to this Agreement), including agreements or arrangements with respect to the acquisition, disposition or voting (if applicable) of any Share Equivalents, nor shall any Stockholder act, for any reason, as a member of a group or in concert with any other persons in connection with the acquisition, disposition or voting (if applicable) of any Share Equivalents in any manner that is inconsistent with the provisions of this Agreement.

Section 3.2. Permitted Transfers.

(a) A Stockholder may transfer any or all of the Share Equivalents held by it to any of its Permitted Transferees without complying with the provisions of this Article III other than Section 3.1; provided that (i) such Permitted Transferee shall have agreed in writing with all parties hereto that, except as otherwise required by law or governmental order, it will immediately transfer all Share Equivalents and all rights and obligations hereunder to such transferring Stockholder or another Permitted Transferee of such transferring Stockholder at such time that it ceases to be a Permitted Transferee of such transferring Stockholder and (ii) as a condition to such transfer, such Permitted Transferee shall become a party to this Agreement as provided in Section 3.1(a).

(b) In the event any Initial Co-Investor ceases to be a Family Affiliate of the Co-Investor Founder, such Initial Co-Investor shall be required, except as otherwise required by law or governmental order, to immediately transfer all of such Initial Co-Investor’s Share Equivalents and rights and obligations hereunder to the Co-Investor Founder or any Permitted

Transferee of such Initial Co-Investor in compliance with the requirements set forth in Section 3.2(a).

Section 3.3. Restrictions on Transfers by Stockholders. During the Transfer Restriction Period, the Non-SLP Stockholders shall not transfer any Share Equivalents to any Person, except transfers (a) to Permitted Transferees pursuant to Section 3.2, (b) pursuant to and in compliance with Section 3.4, Section 3.5, Section 3.6, Section 3.7 or Article IV or (c) upon receipt of the prior written consent of the SLP Investors. During the Transfer Restriction Period, the SLP Investors shall not transfer any Share Equivalents to any Person, except transfers (a) to Permitted Transferees pursuant to Section 3.2 or (b) pursuant to and in compliance with Section 3.4, Section 3.5, Section 3.7 or Article IV.

Section 3.4. Tag-Along Rights.

(a) Subject to Section 3.4(c), if one or more of the SLP Investors proposes to transfer Share Equivalents to another Person (other than to an Affiliate pursuant to Section 3.2), such SLP Investor or SLP Investors (hereinafter referred to as the “Selling SLP Investors”) shall give written notice (a “Transfer Notice”) of such proposed transfer to each of the Non-SLP Stockholders at least 10 Business Days prior to the consummation of such proposed transfer, setting forth (i) the number of Share Equivalents proposed to be transferred, (ii) the consideration to be received for such Share Equivalents by such Selling SLP Investors, (iii) the identity of the purchaser, (iv) any other material terms and conditions of the proposed transfer, (v) the date of the proposed transfer and (vi) that the Non-SLP Stockholder shall have the right, upon the terms and subject to the conditions set forth in this Section 3.4, to elect to sell up to its Pro Rata Portion (as defined below) of such Share Equivalents. If any transaction involving the transfer of Share Equivalents is subject to both this Section 3.4 and Section 3.5, only the provisions of Section 3.5 shall apply to such transaction so long as the SLP Investors have given a Drag-Along Notice to the Non-SLP Stockholders pursuant to Section 3.5 and such Drag-Along Notice has not been rescinded or otherwise terminated.

(b) Upon delivery of a Transfer Notice, each Non-SLP Stockholder may elect to sell up to its Pro Rata Portion of Share Equivalents, at the same price per Share Equivalent and pursuant to the same terms and conditions with respect to payment for the Share Equivalents as agreed to by the Selling SLP Investors, by sending written notice to each of the Selling SLP Investors within 5 Business Days after the date of the Transfer Notice, indicating its election to sell up to its Pro Rata Portion of Share Equivalents in the same transaction. Following such 5 Business-Day period, each of the Selling SLP Investors and the Non-SLP Stockholders that have delivered such written notices, concurrently with the Selling SLP Investors, shall be permitted to sell to the purchaser on the terms and conditions set forth in the Transfer Notice its Pro Rata Portion of Share Equivalents. All costs and expenses incurred by the Selling SLP Investors in connection with such sale shall be borne by the Selling SLP Investors and the Non-SLP Stockholders that have delivered such written notice on a pro rata basis in accordance with the number of Share Equivalents being sold by each. For purposes of this Section 3.4, “Pro Rata Portion” shall mean, with respect to Share Equivalents held by any Selling SLP Investor or Non-SLP Stockholder that delivered such written notice, a number equal to the product of (i) the total number of Share Equivalents proposed to be sold to a purchaser as set forth in a Transfer Notice and (ii) a fraction, the numerator of which shall be the total number of Share Equivalents

beneficially owned by such Selling SLP Investor or Non-SLP Stockholder, as applicable, and the denominator of which shall be the total number of Share Equivalents beneficially owned by all (x) Selling SLP Investors, (y) all Non-SLP Stockholders that delivered such written notices and (z) all other Persons who otherwise are transferring, or have the contractual or other right to transfer, Share Equivalents in such transaction. Notwithstanding anything to the contrary herein, the Co-Investors may allocate the Pro Rata Portion of all Co-Investors, in the aggregate, among the Co-Investors in any manner determined by the Co-Investors such that one or more Co-Investors may transfer the number of Share Equivalents that the Co-Investors, in the aggregate, are entitled to transfer pursuant to this Section 3.4.

(c) This Section 3.4 shall not apply to (i) a transfer or transfers by the SLP Investors completed within six (6) months of the Closing of an aggregate of up to 16,384,000 Share Equivalents (as adjusted for any stock dividend split, reverse split, combination recapitalization or reclassification) at a cash price of no more than $5.00 per Share Equivalent (as adjusted for any stock dividend split, reverse split, combination recapitalization or reclassification), (ii) any transfer to a Permitted Transferee pursuant to Section 3.2, (iii) any transfer in a public offering in accordance with Article IV or (iv) any transfer after an Initial Public Offering pursuant to Rule 144 in accordance with Section 3.7.

(d) This Section 3.4 shall terminate on the earlier of a Control Event and the three-year anniversary of the Initial Public Offering.

Section 3.5. Drag-Along Rights.

(a) The SLP Investors may give written notice (a “Drag-Along Notice”) to the Non-SLP Stockholders that the SLP Investors intend to enter into a transaction or a series of related transactions involving the transfer, of not less than fifty percent (50%) of the outstanding Share Equivalents (which Share Equivalents to be transferred may include Share Equivalents held by the Non-SLP Stockholders and/or other holders of Share Equivalents) to a Person or “group” of Persons (other than to the SLP Investors or an Affiliate of the SLP Investors), whether by merger, tender offer or otherwise (a “Drag-Along Sale”), and, that the SLP Investors desire to cause the Non-SLP Stockholders to participate in such transaction on the same terms and conditions as available to the SLP Investors; provided, however that no Non-SLP Stockholder shall be required to assume any liability or provide indemnification in connection with such transaction other than (i) liability or indemnification that relates to the ownership of, and the ability to transfer, the Share Equivalents being transferred by it and (ii) with respect to all other liabilities or indemnification in connection with such transaction, its pro rata share on the same terms and conditions as the SLP Investors (based on the number of Share Equivalents being transferred by each Stockholder in such transaction) and provided, further, any waivers by any third party after the consummation of the Drag-Along Sale of restrictions or obligations imposed on the SLP Investors and the Co-Investors by such third party pursuant to the terms and conditions of the Drag Along Sale shall extend to all SLP Investors and Co-Investors in the same manner. Such Drag-Along Notice shall also specify (1) the consideration, if any, to be received by the SLP Investors and the Non-SLP Stockholders and any other material terms and conditions of the proposed transaction (which price and other material terms and conditions shall be the same in all material respects for the SLP Investors and the Non-SLP Stockholders), (2) the identity of the other Person or Persons party to the transaction, (3) the date of completion of the

proposed transaction (which date shall be not less than ten (10) Business Days after the date of the notice) and (4) the action or actions required of each Non-SLP Stockholder in order to complete or facilitate such proposed transaction (including the sale of Share Equivalents held by the Non-SLP Stockholder, the voting of all such Share Equivalents in favor of any such merger, consolidation or sale of assets and the waiver of any related appraisal or dissenters’ rights). If the SLP Investors are transferring less than all of the Share Equivalents held by the SLP Investors, then each Non-SLP Stockholder will transfer a number of Share Equivalents equal to the product of the following (the “Drag-Along Portion”): (x) the number of Share Equivalents beneficially owned by such Non-SLP Stockholder multiplied by (y) a fraction, the numerator of which is the aggregate number of Share Equivalents being transferred by the SLP Investors and the denominator of which equals the aggregate number of Share Equivalents beneficially owned by the SLP Investors. Upon receipt of such Drag-Along Notice, each Non-SLP Stockholder shall be obligated to take the action or actions referred to in clause (4) above. Notwithstanding the foregoing, the Co-Investors may allocate the Drag-Along Portion among all Co-Investors as determined by the Co-Investors such that one or more Co-Investors transfer the number of Share Equivalents required to be transferred pursuant to this Section 3.5 by all Co-Investors as a group.

(b) This Section 3.5 shall terminate on the earlier of a Control Event and the three-year anniversary of the Initial Public Offering.

Section 3.6. Right of First Offer.

(a) Beginning on and after the earlier of (i) the end of such period following the effective date (which period shall in no event exceed one hundred and eighty (180) days) of a Registration Statement of the Company filed in connection with an Initial Public Offering as the SLP Investors may agree to with the underwriter or underwriters of such offering or (ii) 5 years following the Closing, if any Co-Investor intends in good faith to transfer in a ROFO Sale all or any portion of the Share Equivalents (the “Transfer Securities”) then beneficially owned by such Co-Investor to a Person that is not a Permitted Transferee of such Co-Investor, then the Co-Investor shall provide the SLP Investors with a written notice with respect to such ROFO Sale (the “Offer Notice”) setting forth: (i) the number of Share Equivalents proposed to be transferred in such ROFO Sale and (ii) the material terms and conditions of the proposed ROFO Sale including the minimum price (the “Offer Price”) at which such Co-Investor proposes to transfer such shares. The Offer Notice shall also constitute an irrevocable offer to sell the Transfer Securities to the SLP Investors or, at the SLP Investors’ option following receipt of the Offer Notice, to one or more assignees of the SLP Investors (subject to such assignees’ delivery of an executed copy of the Agreement in compliance with Section 7.1 hereof) (x) at the Offer Price and on the same terms and conditions as the Transfer Offer or (y) if the Transfer Offer includes any consideration other than cash, at the option of the SLP Investors or such assignees, at a cash price equal to the Fair Market Value of such non-cash consideration (the “Transfer Consideration”).

(b) If any of the SLP Investors or their assignees wishes to accept the offer set forth in the Offer Notice, the SLP Investors or such assignees shall deliver within 15 Business Days after receipt of the Offer Notice (such period, the “Election Period”) an irrevocable notice of acceptance to such Co-Investor (the “Acceptance Notice”), which Acceptance Notice shall indicate the form of Transfer Consideration chosen (to the extent that the Transfer Offer includes

any consideration other than cash). The SLP Investors or their assignee may accept such offer for all of the Transfer Securities. If the option to purchase the Transfer Securities represented by the Offer Notice is accepted on a timely basis by the SLP Investors or their assignee, no later than the later of (x) 25 Business Days after the date of the receipt by the SLP Investors of the Offer Notice or (y) the second Business Day after the receipt of any necessary governmental approvals (including the expiration or early termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended), the SLP Investors or their assignee, as applicable, shall deliver payment by wire transfer of immediately available funds, to the extent the Transfer Consideration is cash, and/or by delivery of the non-cash Transfer Consideration (to the extent chosen by the SLP Investors or their assignee), to such Co-Investor against delivery of certificates or other instruments representing the Share Equivalents so purchased, appropriately endorsed by such Co-Investor. The Co-Investor shall deliver its Share Equivalents to the SLP Investors or their assignee free and clear of all liens, claims, options, pledges, encumbrances and security interests.

(c) To the extent the SLP Investors or their assignee (i) has not given notice of its acceptance of the offer represented by the Offer Notice to purchase any of the Transfer Securities prior to the expiration of the Election Period or (ii) has not tendered the purchase price for the Transfer Securities in the manner and within the period set forth above in Section 3.7(b), the Co-Investor shall be free for a period of 120 days from the end of the Election Period (the “Transfer Period”) to transfer all of the Transfer Securities to a Qualified Purchaser in a ROFO Sale at a price equal to or greater than the Offer Price and otherwise on terms which are no more favorable in any respect to such Qualified Purchaser than the terms and conditions set forth in the Offer Notice (for the avoidance of doubt, it being understood that such Qualified Purchaser shall be required to comply with Section 3.1 in connection with such transfer). If for any reason the Co-Investor does not transfer all of the Transfer Securities to a Qualified Purchaser in a ROFO Sale on such terms and conditions or if the Co-Investor wishes to transfer the Transfer Securities in a ROFO Sale at a purchase price that is less than the Offer Price or on terms which are more favorable in any respect to a Qualified Purchaser than those set forth in the Offer Notice, the provisions of this Section 3.6 shall again be applicable to all of the Transfer Securities; provided that the Co-Investor may not deliver another Offer Notice until 150 days have elapsed since the end of the Transfer Period.

(d) This Section 3.6 shall terminate on the earlier of a Control Event and the three-year anniversary of the Initial Public Offering.

Section 3.7. Rule 144 Sales.

(a) Subject to the last sentence of this Section 3.7(a), beginning on the one-year anniversary of the completion of an Initial Public Offering, the Co-Investors, taken together, may sell Shares pursuant to Rule 144 (including the volume and manner of sale limitations set forth therein) (“Co-Investor Rule 144 Sales”); provided, however that (x) any such sales may only be made pursuant to Rule 10b5-1 of the Exchange Act (subject to compliance with any reasonable guidelines or limitations the Company may impose from time to time upon Rule 10b5-1 sales, whether pursuant to the Company’s insider trading policy, corporate governance guidelines or otherwise) (a “10b5-1 Plan”), (y) the implementation, modification or termination of any 10b5-1 Plan may only occur during any regularly scheduled “window period” under the

Company’s insider trading policy and (z) in no event may the aggregate amount of Shares sold by the Co-Investors, taken together, pursuant to Co-Investor Rule 144 Sales during any three-month period exceed the volume limitations set forth in Rule 144(e)(1)(ii) or Rule 144(e)(1)(iii) (whichever is greater), regardless of whether the volume limitation set forth in Rule 144(e)(1)(i) may be greater or whether any or all of the Co-Investors satisfy the conditions of Rule 144(k). If any Co-Investor either implements or terminates a 10b5-1 Plan during any regularly scheduled “window period” under the Company’s insider trading policy, the Company will promptly thereafter provide written notice to the SLP Investors of such implementation or termination (a “10b5-1 Plan Notice”).

(b) If one or more SLP Investors in good faith expects to transfer Shares pursuant to Rule 144 (“SLP Rule 144 Sales”), such SLP Investor or SLP Investors (hereinafter referred to as the “Rule 144 Selling SLP Investors”) shall provide written notice (a “SLP Rule 144 Notice”) of such SLP Rule 144 Sale to each Co-Investor as far in advance of such SLP Rule 144 Sale as shall be reasonably practicable in light of the circumstances applicable to such SLP Rule 144 Sale, which SLP Rule 144 Notice shall set forth (i) the number of Shares the Rule 144 Selling SLP Investors anticipate selling pursuant to such SLP Rule 144 Sale, (iii) that the Co-Investor shall have the right, upon the terms and subject to the conditions set forth in this Section 3.7(b), to elect to sell up to its Pro Rata 144 Portion (as defined below) with respect to such SLP Rule 144 Sale, (iv) the name, address and other appropriate contact information for the broker(s) (if any) selected by the Rule 144 Selling SLP Investors (the “SLP Rule 144 Broker”) and (v) the action or actions required (including the timing thereof) in connection with such SLP Rule 144 Sale with respect to each Co-Investor that elects to exercise such right (including the delivery to the SLP Rule 144 Broker of one or more stock certificates representing the Shares of such Co-Investor to be sold in such SLP Rule 144 Sale (the “Co-Investor Certificates”) and the delivery of such other certificates, instruments and documents as may be reasonably requested by the SLP Rule 144 Broker). Upon receipt of a SLP Rule 144 Notice, each Co-Investor may elect to sell up to its Pro Rata 144 Portion with respect to such SLP Rule 144 Sale, by taking such action or actions referred to in clause (v) above in a timely manner. Notwithstanding the delivery of any SLP Rule 144 Notice, all determinations as to whether to complete any SLP Rule 144 Sale and as to the timing, manner, price and other terms of any such SLP Rule 144 Sale shall be at the sole discretion of the Rule 144 Selling SLP Investors. For purposes of this Section 3.7(b), “Pro Rata 144 Portion” shall mean, with respect to a SLP Rule 144 Sale and each Rule 144 Selling SLP Investor and one or more Co-Investors delivering such notice (as determined by the Co-Investors), a number equal to the product of (i) the total number of Shares transferred in such SLP Rule 144 Sale, and (ii) a fraction, the numerator of which shall be the total number of Shares beneficially owned by such Rule 144 Selling SLP Investor or, in the case of the Co-Investors, the Co-Investors as a group, as applicable, and the denominator of which shall be the total number of Shares beneficially owned by (x) all Rule 144 Selling SLP Investors, (y) all Co-Investors delivering such notice and (z) all other stockholders or the Company that are not Affiliates of the SLP Investors that the Rule 144 Selling SLP Investors permit to participate in such SLP Rule 144 Sale. In the event that the SLP Investors shall elect not to complete an anticipated SLP Rule 144 Sale with respect to which one or more Co-Investors have exercised their right to sell Shares pursuant to this Section 3.7(b), the Rule 144 Selling SLP Investors shall cause any Co-Investor Certificates previously delivered to the SLP Rule 144 Broker to be returned to the applicable Co-Investors (except to the extent such Co-Investors elect to participate in any subsequent anticipated Rule 144 SLP Sale pursuant to a subsequent SLP Rule 144

Notice and, in connection with such election, instruct that the Co-Investor Certificates of such Co-Investors be retained by the SLP Rule 144 Broker for purposes of such subsequent anticipated Rule 144 SLP Sale). Each of the Rule 144 Selling SLP Investors agrees to reasonably cooperate with each of the Co-Investors (except during any Restricted Participation Period with respect to such Co-Investor) to establish notice, delivery and documentation procedures and measures to facilitate such Co-Investor’s participation in future potential Rule 144 SLP Sales pursuant to this Section 3.7(b). Notwithstanding anything to the contrary set forth in this Section 3.7(b), a Co-Investor shall not be entitled to participate in any Rule 144 SLP Sale during a Restricted Participation Period with respect to such Co-Investor and no Rule 144 Selling SLP Investor shall be obligated to deliver any SLP Rule 144 Notice to such Co-Investor during such Restricted Participation Period.

(c) This Section 3.7 shall terminate on the earlier of a Control Event and the three-year anniversary of the Initial Public Offering.

ARTICLE IV

REGISTRATION RIGHTS

The Company hereby grants to each of the Holders (as defined below) the registration rights set forth in this Article IV, with respect to the Registrable Securities (as defined below) owned by such Holders.

Section 4.1. Certain Definitions. As used in this Article IV:

(a) “register”, “registered” and “registration” refer to a registration effected by filing with the SEC a registration statement (the “Registration Statement”) in compliance with the Securities Act, and the declaration or ordering by the SEC of the effectiveness of such Registration Statement.

(b) “Registrable Securities” means (i) Shares held by Holders (as defined below) and (ii) any Shares issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, such Registrable Securities; provided, however, that Shares or other securities shall cease to be treated as Registrable Securities if (a) a registration statement covering such securities has been declared effective by the SEC and such security has been disposed of pursuant to such effective registration statement, (b) such security is sold pursuant to Rule 144, (c) such security ceases to be outstanding or (d) the Holder thereof, together with its Affiliates, beneficially owns less than 3% of the Shares that are outstanding at such time and such Holder is able to dispose of all of its Registrable Securities in any 90 day period pursuant to Rule 144 (or any similar or analogous rule promulgated under the Securities Act); provided, that if Article III would prevent the Co-Investors from disposing of Shares in the 90 day time period contemplated by this clause (d), this clause (d) shall not disqualify any Shares held by the Co-Investors from being Registrable Securities.

(c) “Shelf Registration Statement” means a Registration Statement of the Company filed with the SEC on Form S-3 or on Form S-1 (or any successor forms) for an

offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC) covering the Registrable Securities, as applicable.

(d) “Prospectus” means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus.

(e) “Holder” (collectively, “Holders”) means (i) any SLP Investor (and any of their respective transferees pursuant to Section 4.9 below), (ii) the Co-Investors (and any of their respective transferees pursuant to Section 4.9 below) and (iii) any other Stockholder that the SLP Investors designate in writing as a Holder, in each case to the extent holding Registrable Securities, securities exercisable or convertible into Registrable Securities or securities exercisable for securities convertible into Registrable Securities.

(f) “SLP Initiating Holders” means one or more SLP Investors and/or any assignee to whom they have transferred rights as an SLP Investor pursuant to Section 4.9 below.

(g) “Co-Investor Initiating Holders” means one or more Co-Investors that, collectively, beneficially own at least twenty-five percent (25%) of the aggregate Registrable Securities held by the Co-Investors, collectively.

Section 4.2. Shelf Registration

(a) Filing. Upon a demand by the SLP Initiating Holders (a “Shelf Registration Notice”), and subject to the Company’s rights under Section 4.2(c) and the limitations set forth in Section 4.2(d), the Company shall (i) promptly (but in any event no later than 10 days prior to the date such Shelf Registration Statement is declared effective) give written notice of the proposed registration to all other Holders; and (ii) use its reasonable best efforts to file as soon as possible with the SEC and cause to be declared effective under the Securities Act a Shelf Registration Statement as will permit or facilitate the sale and distribution of all or such portion of such SLP Initiating Holders’ Registrable Securities as are specified in such demand, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such demand as are specified in a written demand received by the Company within 10 days after such written notice is given (each such Holder, a “Shelf Holder”); provided, however, that if the Company is permitted by applicable law, rule or regulation to add selling stockholders to a Shelf Registration Statement without filing a post-effective amendment, a Holder may request the inclusion of such Holder’s shares in such Shelf Registration Statement at any time or from time to time, and the Company shall add such Registrable Securities to the Shelf Registration Statement as promptly as reasonably practicable (and in any event in time for such Holder to participate in any Self Take Down described in Section 4.2(d) if such Holder has requested for such Registrable Securities to be included in such Shelf Take Down within the applicable time periods required in Section 4.2(d)). If, on the date of any such demand, the Company does not qualify to file a Shelf Registration Statement, then the provisions of Section 4.3 hereof shall apply instead of this Section 4.2. In no event shall the Company be required to file, and maintain effectiveness pursuant to Section 4.2(b) of, more than one Shelf Registration Statement at any one time pursuant to this Section 4.2.

(b) Continued Effectiveness. Except as otherwise agreed by the SLP Initiating Holders, the Company shall use its reasonable best efforts to keep the Shelf Registration Statement filed pursuant to Section 4.2(a) hereof continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by Shelf Holders until the earlier of (i) the date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement and (ii) such shorter period as the SLP Initiating Holders may determine (such period of effectiveness, the “Shelf Period”).

(c) Suspension of Filing or Registration. If the Company shall furnish to the SLP Initiating Holders a certificate signed by the Chief Executive Officer or equivalent senior executive of the Company, stating that the filing, effectiveness or continued use of the Shelf Registration Statement would require the Company to make an Adverse Disclosure, then the Company shall have a period of not more than 30 days (or such longer period as the SLP Investors shall consent to in writing) within which to delay the filing or effectiveness of such Shelf Registration Statement or, in the case of a Shelf Registration Statement that has been declared effective, to suspend the use by Holders of such Shelf Registration Statement (in each case, a “Shelf Suspension”); provided, however, that, unless consented to in writing by the SLP Investors, the Company shall not be permitted to exercise a Shelf Suspension more than once during any 12-month period. In the case of a Shelf Suspension that occurs after the effectiveness of the Shelf Registration Statement, the Shelf Holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the Holders upon the termination of any Shelf Suspension, and (i) in the case of a Shelf Registration Statement that has not been declared effective, shall promptly thereafter file the Shelf Registration Statement and use its reasonable best efforts to have such Shelf Registration Statement declared effective under the Securities Act and (ii) in the case of an effective Shelf Registration Statement, shall amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission prior to the expiration of the Shelf Suspension and furnish to the Holders such numbers of copies of the Prospectus as so amended or supplemented as the Holders may reasonably request. The Company agrees, if necessary, to supplement or make amendments to the Shelf Registration Statement, if required by the registration form used by the Company for the Shelf Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the Holders of a majority of the Registrable Securities then outstanding.

(d) Restricted Shelf Take-Downs.

(i) Prior to the earlier of a Control Event and the three-year anniversary of an Initial Public Offering, no offering or sale of Registrable Securities pursuant to a Shelf Registration Statement (each, a “Restricted Shelf Take-Down”) may occur unless it has been initiated by SLP Initiating Holders. With respect to each Restricted Shelf Take-Down that is not a Marketed Underwritten Shelf Take-Down, the SLP Initiating Holders shall provide written notice (a “Restricted Shelf Take-Down Notice”) of such Restricted Shelf Take-Down to all other Shelf Holders as far in advance of such Restricted Shelf Take-Down as shall be reasonably practicable in light of the circumstances applicable to such Restricted Shelf Take-Down, which Restricted Shelf Take-Down Notice shall set

forth (A) the total number of Registrable Securities expected to be offered and sold in such Restricted Shelf Take-Down, (B) the expected plan of distribution of such Restricted Shelf Take-Down, (C) that the Shelf Holder shall have the right, upon the terms and subject to the conditions set forth in this Section 4.2(d), to elect to sell up to its Pro Rata Take-Down Portion (as defined below) and (D) the action or actions required (including the timing thereof) in connection with such Restricted Shelf Take-Down with respect to each Holder that elects to exercise such right (including the delivery of one or more stock certificates representing Shares of such Holder to be sold in such Restricted Shelf Take-Down). Upon receipt of such Restricted Shelf Take-Down Notice, each such Shelf Holder may elect to sell up to its Pro Rata Take-Down Portion with respect to each such Restricted Shelf Take-Down, by taking such action or actions referred to in clause (D) above in a timely manner; provided, however that, if such Restricted Shelf Take-Down is an Underwritten Shelf Take-Down, such right to sell shall be subject to such Holder’s compliance with Section 4.2(d)(iii). Notwithstanding the delivery of any Restricted Shelf Take-Down Notice, all determinations as to whether to complete any Restricted Shelf Take-Down and as to the timing, manner, price and other terms of any Restricted Shelf Take-Down shall be at the sole discretion of the SLP Initiating Holders, provided that, if such Restricted Shelf Take-Down is completed, the SLP Initiating Holders must include each such Shelf Holder’s Pro Rata Take Down Portion in such Restricted Shelf Take-Down if such Shelf Holder has complied with the immediately foregoing sentence. For purposes of this Section 4.2(d)(i), “Pro Rata Take-Down Portion” shall mean, with respect to a Restricted Shelf Take-Down and each SLP Initiating Holder and each other Shelf Holder delivering such notice with respect to such Restricted Shelf Take-Down, a number equal to the product of the following (subject to reduction pursuant to Section 4.2(d)(iii) if such Restricted Shelf Take-Down is an Underwritten Shelf Take-Down): (x) the total number of Registrable Securities transferred in such Restricted Shelf Take-Down, and (y) a fraction, the numerator of which shall be the total number of Registrable Securities beneficially owned by each SLP Initiating Holder or other Shelf Holder, as applicable, and the denominator of which shall be the total number of Registrable Securities beneficially owned by all SLP Initiating Holders and other Shelf Holders delivering such notice with respect to such Restricted Shelf Take-Down. Notwithstanding anything to the contrary herein, the Co-Investors may allocate the Pro Rata Take-Down Portion of all Shelf Holders that are Co-Investors among such Holders in any manner determined by the Co-Investors. Each of the SLP Initiating Holders agrees to reasonably cooperate with each of the other Shelf Holders (except during any Restricted Participation Period with respect to any Shelf Holder if such Shelf Holder is a Co-Investor) to establish notice, delivery and documentation procedures and measures to facilitate such Shelf Holder’s participation in future potential Restricted Shelf Take-Downs pursuant to this Section 4.2(d). Notwithstanding anything to the contrary set forth in this Section 4.2(d), a Shelf Holder that is a Co-Investor shall not be entitled to participate in any Restricted Shelf Take-Down (unless it is a Marketed Underwritten Shelf Take-Down) during a Restricted Participation Period with respect to such Co-Investor and no SLP Initiating Holder shall be obligated to deliver any Restricted Shelf Take-Down Notice to such Co-Investor during such Restricted Participation Period, except with respect to a Marketed Underwritten Shelf Take-Down.

(ii) If the SLP Initiating Holders so elect in a written demand delivered to the Company (an “Underwritten Shelf Take-Down Notice”), a Restricted Shelf Take-Down may be in the form of an underwritten offering (an “Underwritten Shelf Take-Down”), and the Company shall, if so requested, file and effect an amendment or supplement of the Shelf Registration Statement for such purpose as soon as practicable. The SLP Initiating Holders shall indicate in such Underwritten Shelf Take-Down Notice whether they intend for such Underwritten Shelf Take-Down to involve a customary “road show” (including an “electronic road show”) or other substantial marketing effort by the underwriters over a period of at least 48 hours (a “Marketed Underwritten Shelf Take-Down”). Upon receipt of an Underwritten Shelf Take-Down Notice indicating that such Underwritten Shelf Take-Down will be a Marketed Underwritten Shelf Take-Down, the Company shall promptly (but in any event no later than ten (10) days prior to the expected date of such Marketed Underwritten Shelf Take-Down) give written notice of such Marketed Underwritten Shelf Take-Down to all other Shelf Holders of Registrable Securities under such Shelf Registration Statement and any such Shelf Holders requesting inclusion in such Marketed Underwritten Shelf Take-Down must respond in writing within five (5) days after the receipt of such notice. The SLP Initiating Holders shall have the right to select the underwriter or underwriters to administer such Underwritten Shelf Take-Down; provided that such underwriter or underwriters shall be reasonably acceptable to the Company.

(iii) With respect to any Underwritten Shelf Take-Down, the right of any Shelf Holder to participate shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Shelf Holder’s Registrable Securities in the underwriting to the extent provided herein. The Company shall, together with all Shelf Holders of Registrable Securities of the Company proposing to distribute their securities through such Underwritten Shelf Take-Down, enter into an underwriting agreement in customary form with the underwriter or underwriters selected by the SLP Initiating Holders and reasonably satisfactory to the Company. Notwithstanding any other provision of this Section 4.2, if the underwriter shall advise the Company that marketing factors (including, without limitation, an adverse effect on the per share offering price) require a limitation of the number of shares to be underwritten in an Underwritten Shelf Take-Down, then the Company shall so advise all Shelf Holders of Registrable Securities that have requested to participate in such Underwritten Shelf Take-Down, and the number of shares of Registrable Securities that may be included in such Underwritten Shelf Take-Down shall be allocated pro rata among such Shelf Holders thereof in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Holders at the time of such Underwritten Shelf Take-Down (provided that the Co-Investors may allocate the pro rata portion of all Shelf Holders that are Co-Investors among such Shelf Holders in any manner determined by the Co-Investors). No Registrable Securities excluded from a Underwritten Shelf Take-Down by reason of the underwriter’s marketing limitation shall be included in such underwritten offering.

(e) Unrestricted Shelf Take-Downs.

(i) On and after the earlier of a Control Event and the third anniversary of the Initial Public Offering, either the SLP Initiating Holders or the Co-Investor Initiating Holders may initiate an offering or sale of Registrable Securities pursuant to a Shelf Registration Statement (an “Unrestricted Shelf Take-Down”) and, except as set forth in Section 4.2(e)(ii) with respect to Marketed Underwritten Shelf Take-Downs, such Initiating Holder shall not be required to permit the offer and sale of Registrable Securities by other Shelf Holders in connection with such Unrestricted Shelf Take-Down.

(ii) If the SLP Initiating Holders or the Co-Investor Initiating Holders so elect in an Underwritten Shelf Take-Down Notice, an Unrestricted Shelf Take-Down of Registrable Securities pursuant to the Shelf Registration Statement shall be in an Underwritten Shelf Take-Down, and the Company shall, if required, file and effect an amendment or supplement of the Shelf Registration Statement for such purpose as soon as practicable; provided, however that any such Underwritten Shelf Take-Down shall be deemed to be, for purposes of Section 4.3, a Demand Registration effected by the SLP Initiating Holders or the Co-Investor Initiating Holders, as the case may be, and subject to the limitations set forth in Section 4.3. The SLP Initiating Holders or the Co-Investor Initiating Holders, as the case may be, shall indicate in such Underwritten Shelf Take-Down Notice whether they intend for such Underwritten Shelf Take-Down to be a Marketed Underwritten Shelf Take-Down. Upon receipt of an Underwritten Shelf Take-Down Notice indicating that such Underwritten Shelf Take-Down will be a Marketed Underwritten Shelf Take-Down, the Company shall promptly (but in any event no later than ten (10) days prior to the expected date of such Marketed Underwritten Shelf Take-Down) give written notice of such Marketed Underwritten Shelf Take-Down to all other Shelf Holders of Registrable Securities under such Shelf Registration Statement and any such Shelf Holders requesting inclusion in such Marketed Underwritten Shelf Take-Down must respond in writing within five (5) days after the receipt of such notice. The Shelf Holders of a majority of the Registrable Securities included in an Underwritten Shelf Take-Down shall have the right to select the underwriter or underwriters to administer such Underwritten Shelf Take-Down; provided that such underwriter or underwriters shall be reasonably acceptable to the Company.

(iii) With respect to any Underwritten Shelf Take-Down, the right of any Shelf Holder to participate shall be conditioned upon such Shelf Holder’s participation in such underwriting and the inclusion of such Shelf Holder’s Registrable Securities in the underwriting to the extent provided herein. The Company shall, together with all Shelf Holders of Registrable Securities of the Company proposing to distribute their securities through such Underwritten Shelf Take-Down, enter into an underwriting agreement in customary form with the underwriter or underwriters selected by SLP Investors or the Co-Investors, as applicable, and reasonably satisfactory to the Company. Notwithstanding any other provision of this Section 4.2, if the underwriter shall advise the Company that marketing factors (including, without limitation, an adverse effect on the per share offering price) require a limitation of the number of shares to be underwritten in a Marketed Underwritten Shelf Take-Down, then the Company shall so advise all Shelf Holders of Registrable Securities that have requested to participate in

such Marketed Underwritten Shelf Take-Down, and the number of shares of Registrable Securities that may be included in such Marketed Underwritten Shelf Take-Down shall be allocated pro rata among such Shelf Holders thereof in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Shelf Holders at the time of such Marketed Underwritten Shelf Take-Down (provided that the Co-Investors may allocate the pro rata portion of all Holders that are Co-Investors among such Holders in any manner determined by the Co-Investors). No Registrable Securities excluded from a Marketed Underwritten Shelf Take-Down by reason of the underwriter’s marketing limitation shall be included in such underwritten offering.

Section 4.3. Demand Registration.

(a) Holders’ Demand for Registration. Subject to Section 4.3(d), if the Company shall receive from the SLP Initiating Holders or the Co-Investor Initiating Holders (the party so effecting a demand pursuant to this Section 4.3 being referred to as the “Initiating Holders”) a written demand that the Company effect any registration (a “Demand Registration”) of Registrable Securities held by such Holders having a reasonably anticipated net aggregate offering price (after deduction of underwriting commissions and offering expenses) of at least $10,000,000, the Company will:

(i) promptly (but in any event no later than 10 days prior to the date such registration becomes effective under the Securities Act) give written notice of the proposed registration to all other Holders; and

(ii) use its reasonable best efforts to effect such registration as soon as practicable as will permit or facilitate the sale and distribution of all or such portion of such Initiating Holders’ Registrable Securities as are specified in such demand, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such demand as are specified in a written demand received by the Company within 5 days after such written notice is given, provided that the Company shall not be obligated to take any action to effect any such registration pursuant to this Section 4.3 if the Company shall furnish to such Holders a certificate signed by the Chief Executive Officer or equivalent senior executive of the Company, stating that the filing or effectiveness of such Registration Statement would require the Company to make an Adverse Disclosure, in which case the Company shall have an additional period of not more than 30 days (or such longer period as may be agreed upon by the Initiating Holders) within which to file such Registration Statement; provided, however, that, unless otherwise agreed by the applicable Initiating Holders, the Company shall not use this right more than once in any 12-month period.

(b) Underwriting. If the Initiating Holders intend to distribute the Registrable Securities covered by their demand by means of an underwritten offer, they shall so advise the Company as part of their demand made pursuant to this Section 4.3; and the Company shall include such information in the written notice referred to in Section 4.3(a)(i). In such event, the right of any Holder to registration pursuant to this Section 4.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. The Company shall, together with

all holders of Registrable Securities of the Company proposing to distribute their securities through such underwriting, enter into an underwriting agreement in customary form with the underwriter or underwriters selected by a majority-in-interest of the Initiating Holders and reasonably satisfactory to the Company. Notwithstanding any other provision of this Section 4.3, if the underwriter shall advise the Company that marketing factors (including, without limitation, an adverse effect on the per share offering price) require a limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities that have requested to participate in such offering, and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated pro rata among such Holders thereof in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Holders at the time of filing the Registration Statement (provided that the Co-Investors may allocate the pro rata portion of all Holders that are Co-Investors among such Holders in any manner determined by the Co-Investors). No Registrable Securities excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration.

(c) Effective Registration. The Company shall be deemed to have effected a Demand Registration if the Registration Statement pursuant to such registration is declared effective by the SEC and remains effective for not less than 180 days (or such shorter period as will terminate when all Registrable Securities covered by such Registration Statement have been sold or withdrawn), or if such Registration Statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters, a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer (the applicable period, the “Demand Period”). No Demand Registration shall be deemed to have been effected if (i) during the Demand Period such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court or (ii) the conditions specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied other than by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement by a participating Holder.

(d) Restrictions on Registration. Notwithstanding the rights and obligations set forth in Section 4.3(a):

(i) in no event shall the Company be obligated to take any action to effect any Demand Registration at the request of the Co-Investor Initiating Holders after the Company has effected two (2) Demand Registrations at the request of the Co-Investor Initiating Holders (collectively) (including any Underwritten Shelf Take-Downs initiated by the Co-Investors);

(ii) in no event shall the Company be obligated to take any action to effect more than four (4) Demand Registrations (not including any Underwritten Shelf Take-Down that is not a Marketed Underwritten Shelf Take-Down) in any twelve (12)-month period; and

(iii) in no event shall the Company be obligated to take any action to effect any Demand Registration at the request of the Co-Investor Initiating Holders until the earlier

of a Control Event and the three-year anniversary of the consummation of the Initial Public Offering.

Section 4.4. Piggyback Registration.

(a) Company Registration. Subject to Section 4.4(d), if at any time or from time to time the Company shall determine to register any of its equity securities, either for its own account or for the account of security holders (other than (1) in a registration relating solely to employee benefit plans, (2) a registration on Form S-4 or S-8 (or such other similar successor forms then in effect under the Securities Act), (3) a registration pursuant to which the Company is offering to exchange its own securities, (4) a registration statement relating solely to dividend reinvestment or similar plans, (5) a shelf registration statement pursuant to which only the initial purchasers and subsequent transferees of debt securities of the Company or any Subsidiary that are convertible for Shares and that are initially issued pursuant to Rule 144A and/or Regulation S of the Securities Act may resell such notes and sell the Shares into which such notes may be converted or (6) a registration pursuant to Section 4.2 or 4.3 hereof), the Company will:

(i) promptly (but in no event less than 10 days before the effective date of the relevant Registration Statement) give to each Holder written notice thereof; and

(ii) include in such registration (and any related qualification under state securities laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 5 days after receipt of such written notice from the Company, by any Holder or Holders, except as set forth in Section 4.4(b) below.

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 4.4(a)(i). In such event the right of any Holder to registration pursuant to this Section 4.4 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall, together with the Company and the other parties distributing their securities through such underwriting, enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Section 4.4, if the underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the underwriter may limit the number of Registrable Securities to be included in the registration and underwriting, subject to the terms of this Section 4.4. The Company shall so advise all holders of the Company’s securities that would otherwise be registered and underwritten pursuant hereto, and the number of shares of such securities, including Registrable Securities, that may be included in the registration and underwriting shall be allocated first, to the Company and second, to the Holders on a pro rata basis based on the total number of Registrable Securities held by the Holders (provided that the Co-Investors may allocate the pro rata portion allocated to all Co-Investors among the Co-Investors as determined by the Co-Investors). No such reduction shall (i) reduce the securities being offered by the Company for its own account to be included in the registration and underwriting, or (ii) reduce the amount of securities of the selling Holders

included in the registration below twenty-five percent (25%) of the total amount of securities included in such registration, unless such offering does not include shares of any other selling shareholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding sentence. No securities excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration. For the avoidance of doubt, nothing in this Section 4.4(b) is intended to diminish the number of securities to be included by the Company in the underwriting.

(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 4.4 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

(d) Limitations. This Section 4.4 shall not apply to any Registration Statement under the Securities Act with respect to any Initial Public Offering unless one or more of the SLP Initiating Holders is selling Registrable Securities in such offering. Until the earlier of a Control Event or the three-year anniversary of the consummation of the Initial Public Offering, the Holders (other than the SLP Initiating Holders) may not elect to include Registrable Securities in a registration pursuant to this Section 4.4 unless one or more SLP Initiating Holders elects to include Registrable Securities in such registration.

Section 4.5. Expenses of Registration. All expenses incurred in connection with all registrations effected pursuant to Sections 4.2, 4.3 and 4.4, including all registration, filing and qualification fees (including state securities law fees and expenses), printing expenses, escrow fees, fees and disbursements of counsel for the Company (and the reasonable fees and disbursements of one separate counsel for the participating Holders chosen by the Holders of a majority of Registrable Securities being registered) and expenses of any special audits incidental to or required by such registration shall be borne by the Company; provided, however, that the Company shall not be required to pay stock transfer taxes or underwriters’ discounts or selling commissions relating to Registrable Securities.

Section 4.6. Obligations of the Company. Whenever required under this Article IV to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective, and keep such Registration Statement effective for the lesser of 180 days or until the Holder or Holders have completed the distribution relating thereto;

(b) prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement in accordance with the intended methods of disposition by sellers thereof set forth in such registration statement;

(c) permit any Holder which Holder, in the reasonable judgment, exercised in good faith, of such Holder, might be deemed to be a controlling person of the Company, to participate in good faith in the preparation of such Registration Statement and to cooperate in good faith to include therein material, furnished to the Company in writing, that in the reasonable judgment of such Holder and its counsel should be included;

(d) furnish to the Holders such numbers of copies of a prospectus, including all exhibits thereto and documents incorporated by reference therein and a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement;

(f) notify each Holder of Registrable Securities covered by such Registration Statement as soon as reasonably practicable after notice thereof is received by the Company of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such prospectus or for additional information;

(g) notify each Holder of Registrable Securities covered by such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(h) notify each Holder of Registrable Securities covered by such Registration Statement as soon as reasonably practicable after notice thereof is received by the Company of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final prospectus or the initiation or threatening of any proceedings for such purposes, or any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(i) use its reasonable best efforts to prevent the issuance of any stop order suspending the effectiveness of any Registration Statement or of any order preventing or suspending the use of any preliminary or final prospectus and, if any such order is issued, to obtain the withdrawal of any such order as soon as practicable;

(j) make available for inspection by each Holder including Registrable Securities in such registration, any underwriter participating in any distribution pursuant to such registration, and any attorney, accountant or other agent retained by such Holder or underwriter,

all financial and other records, pertinent corporate documents and properties of the Company, as such parties may reasonably request, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such Registration Statement;

(k) use its reasonable best efforts to register or qualify, and cooperate with the Holders of Registrable Securities covered by such Registration Statement, the underwriters, if any, and their respective counsel, in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or “blue sky” laws of each state and other jurisdiction of the United States as any such Holder or underwriters, if any, or their respective counsel reasonably request in writing, and do any and all other things reasonably necessary or advisable to keep such registration or qualification in effect for such period as required by Sections 4.2(b) and 4.3(c), as applicable; provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;

(l) obtain for delivery to the Holders of Registrable Securities covered by such Registration Statement and to the underwriters, if any, an opinion or opinions from counsel for the Company, dated the effective date of the Registration Statement or, in the event of an underwritten offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such holders or underwriters, as the case may be, and their respective counsel;

(m) in the case of an underwritten offering, obtain for delivery to the Company and the underwriters, with copies to the Holders of Registrable Securities included in such Registration, a cold comfort letter from the Company’s independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement;

(n) use its reasonable best efforts to list the Registrable Securities that are Shares covered by such Registration Statement with any securities exchange on which the Shares are then listed;

(o) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement;

(p) cooperate with Holders including Registrable Securities in such registration and the underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, such certificates to be in such denominations and registered in such names as such Holders or the managing underwriters may request at least two Business Days prior to any sale of Registrable Securities;

(q) use its reasonable best efforts to comply with all applicable securities laws and make available to its Holders, as soon as reasonably practicable, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder; and

(r) in the case of an underwritten offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the underwriters and otherwise to facilitate, cooperate with and participate in each proposed offering contemplated herein and customary selling efforts related thereto.

Section 4.7. Indemnification.

(a) The Company will, and does hereby undertake to, indemnify and hold harmless each Holder of Registrable Securities, each of such Holder’s officers, directors, employees, partners and agents, and each Person controlling such Holder, with respect to any registration, qualification or compliance effected pursuant to this Article IV, and each underwriter, if any, and each Person who controls any underwriter, of the Registrable Securities held by or issuable to such Holder, against all claims, losses, damages and liabilities (or actions in respect thereto) to which they may become subject under the Securities Act, the Exchange Act, or other federal or state law arising out of or based on (A) any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other similar document (including any related Registration Statement, notification, or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, (B) any violation or alleged violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with any such registration, qualification or compliance, or (C) any failure to register or qualify Registrable Securities in any state where the Company or its agents have affirmatively undertaken or agreed in writing that the Company (the undertaking of any underwriter chosen by the Company being attributed to the Company) will undertake such registration or qualification on behalf of the Holders of such Registrable Securities (provided that in such instance the Company shall not be so liable if it has undertaken its reasonable best efforts to so register or qualify such Registrable Securities) and will reimburse, as incurred, each such Holder, each such underwriter and each such director, officer, partner, agent and controlling person, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance and in conformity with written information furnished to the Company by such Holder or underwriter expressly for use therein.

(b) Each Holder will, and if Registrable Securities held by or issuable to such Holder are included in such registration, qualification or compliance pursuant to this Article IV, does hereby undertake to indemnify and hold harmless the Company, each of its directors, employees, agents and officers, and each Person controlling the Company, each underwriter, if any, and each Person who controls any underwriter, of the Company’s securities covered by such

a Registration Statement, and each other Holder, each of such other Holder’s officers, partners, directors and agents and each Person controlling such other Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such Registration Statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made, and will reimburse, as incurred, the Company, each such underwriter, each such other Holder, and each such director, officer, employee, agent, partner and controlling Person of the foregoing, for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) was made in such Registration Statement, prospectus, offering circular or other document, in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use therein; provided, however, that the liability of each Holder hereunder shall be limited to the net proceeds received by such Holder from the sale of securities under such Registration Statement. It is understood and agreed that the indemnification obligations of each Holder pursuant to any underwriting agreement entered into in connection with any Registration Statement shall be limited to the obligations contained in this subsection 4.7(b).

(c) Each party entitled to indemnification under this Section 4.7 (the “Indemnified Party”) shall give notice to the party required to provide such indemnification (the “Indemnifying Party”) of any claim as to which indemnification may be sought promptly after such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably withheld) and the Indemnified Party may participate in such defense at the Indemnifying Party’s expense if representation of such Indemnified Party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Article IV, except to the extent that such failure to give notice shall materially adversely affect the Indemnifying Party in the defense of any such claim or any such litigation. An Indemnifying Party, in the defense of any such claim or litigation, may, without the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that includes as an unconditional term thereof the giving by the claimant or plaintiff therein, to such Indemnified Party, of a release from all liability with respect to such claim or litigation.

(d) In order to provide for just and equitable contribution in case indemnification is prohibited or limited by law, the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified

Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such actions; provided, however, that, in any case, (i) no Holder will be required to contribute any amount in excess of the public offering price of all securities offered by it pursuant to such Registration Statement less all underwriting fees and discounts and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(e) The indemnities provided in this Section 4.7 shall survive the transfer of any Registrable Securities by such Holder.

Section 4.8. Information by Holder. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as the Company may reasonably request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Article IV.

Section 4.9. Transfer of Registration Rights. The rights, contained in Sections 4.2, 4.3 and 4.4 hereof, to cause the Company to register the Registrable Securities, may be assigned or otherwise conveyed by (a) a SLP Initiating Holder pursuant to a transfer permitted under Article III (so long as the rights of the Co-Investors contained in Sections 4.2, 4.3 and 4.4 hereof would not be adversely affected in such transfer relative to the rights of such SLP Initiating Holder) and (b) the other Holders pursuant to a transfer permitted pursuant to Section 3.2.

Section 4.10. Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article IV.

Section 4.11. Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the SLP Investors (and the Co-Investors, in the case of any such agreement that would adversely affect the rights of the Co-Investors relative to the rights of the SLP Investors), enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder to (i) require the Company to effect a registration or (ii) include any securities in any registration filed under Sections 4.2, 4.3 or 4.4 hereof, unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not diminish the amount of Registrable Securities that are included in such registration.

Section 4.12. Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC that may permit the sale of the

Registrable Securities to the public without registration, the Company, following an Initial Public Offering, agrees to use its reasonable best efforts to:

(a) make and keep current public information available, within the meaning of Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after it has become subject to the reporting requirements of the Exchange Act;

(b) file with the SEC, in a timely manner, all reports and other documents required of the Company under the Securities Act and Exchange Act (after it has become subject to such reporting requirements); and

(c) so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time commencing 90 days after the effective date of the first registration filed by the Company for an offering of its securities to the general public), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.

Section 4.13. “Market Stand Off” Agreement. Each Holder hereby agrees that during (i) such period following the effective date (which period shall in no event exceed one hundred and eighty (180) days) of a Registration Statement of the Company filed in connection with an Initial Public Offering as the SLP Investors may agree to with the underwriter or underwriters of such offering (to which all Stockholders must be subject if any are to be subject) and (ii) such period (which period shall in no event exceed ninety (90) days) following the effective date of a registration statement of the Company filed under the Securities Act subsequent to an Initial Public Offering as the Initiating Holders (or the Company if there is no Initiating Holder and the SLP Investors agree with the Company that this Section 4.13 will apply under such circumstances) may agree to with the underwriter or underwriters of such offering and/or the Company (if applicable) (to which all Holders must be subject if any are to be subject), it shall not, to the extent requested by the Company and/or any underwriter, sell, pledge, hypothecate, transfer, make any short sale of, loan, grant any option or right to purchase of, or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Shares held by it at any time during such period except Shares included in such registration. Each Holder agrees that it shall deliver to the underwriter or underwriters of any offering to which clause (i) or (ii) is applicable to such Holder a customary agreement reflecting its agreement set forth in this Section 4.13.

Section 4.14. Termination of Registration Rights. The rights of any particular Holder to cause the Company to register securities under Sections 4.2, 4.3 or 4.4 hereof shall terminate as to any Holder on the date such Holder, together with its Affiliates, beneficially owns less than 3% of the Shares that are outstanding at such time and such Holder is able to dispose of all of its Registrable Securities in any 90 day period pursuant to Rule 144 (or any similar or analogous rule promulgated under the Securities Act), provided, that if Article III would prevent the Co-Investors from disposing of Shares in the time period contemplated by this Section 4.14, the rights of any Co-Investor shall not be terminated pursuant to this Section 4.14.

ARTICLE V

RIGHT OF PARTICIPATION

Section 5.1. Right of Participation.

(a) Offer. Not less than 15 Business Days prior to the consummation of any issuance of Share Equivalents or other equity securities of the Company after the date of this Agreement (a “Post-Closing Issuance”), a notice (the “Participation Notice”) shall be furnished by the Company to each Stockholder. The Participation Notice shall include:

(i) the principal terms and conditions of the proposed Post-Closing Issuance, including (A) the number of Participation Shares to be included in the Post-Closing Issuance, (B) the maximum and minimum price per unit of the Participation Shares, including a description of any non-cash consideration sufficiently detailed to permit valuation thereof, (C) the proposed manner of disposition, (D) the name and address of the Person or Persons to whom the Participation Shares will be issued (the “Prospective Subscriber”) and (E) if known, the proposed date of Post-Closing Issuance; and

(ii) an offer by the Company to issue, at the option of each Stockholder, to such Stockholder such portion of the Participation Shares to be included in the Post-Closing Issuance as may be requested by such Stockholder (not to exceed such Stockholder’s Participation Portion of the total amount of Participation Shares to be included in the Post-Closing Issuance), on the same terms and conditions and at the same price per share, with respect to each Participation Share issued.

(b) Exercise.

(i) General. Each Stockholder desiring to accept the offer contained in the Participation Notice shall accept such offer by furnishing a written notice of such acceptance to the Company within 10 Business Days after the date of delivery of the Participation Notice specifying the number of Participation Shares (not to exceed such Stockholder’s Participation Portion of the total number of Participation Shares to be included in the Post-Closing Issuance) which such Stockholder desires to purchase (each a “Participating Stockholder”). Any Co-Investor may assign its right to purchase its Participation Portion to any other Co-Investor(s). Each Participating Stockholder who does not accept such offer in compliance with the above requirements, including the applicable time periods, shall be deemed to have waived all of such Stockholder’s rights to participate in such Post-Closing Issuance, and the Company shall thereafter be free to issue Participation Shares in such Post-Closing Issuance to the Prospective Subscriber and any Participating Stockholders, at a price no less than the minimum price set forth in the Participation Notice and on other principal terms and conditions not substantially more favorable than those set forth in the Participation Notice, without any further obligation to such non-accepting Stockholders pursuant to this Article V. If, prior to consummation, the terms of such proposed Post-Closing Issuance shall change with the result that the price shall be less than the minimum price set forth in the Participation Notice or the other principal terms shall be substantially more favorable to the

Prospective Subscriber than those set forth in the Participation Notice, it shall be necessary for a separate Participation Notice to be furnished, and the terms and provisions of this Section 5.1 separately complied with, in order to consummate such Issuance pursuant to this Section 5.1.

(ii) Irrevocable Acceptance. The acceptance of each Participating Stockholder shall be irrevocable except as hereinafter provided, and each such Participating Stockholder shall be bound and obligated to acquire in the Post-Closing Issuance on the same terms and conditions and at the same price per share with respect to the Participation Shares as such Participating Stockholder shall have specified in such Participating Stockholder’s written commitment.

(iii) Time Limitation. If at the end of the 120^th day after the date of the effectiveness of the Participation Notice the Company has not completed the Post-Closing Issuance, each Participating Stockholder shall be released from such holder’s obligations under the written commitment, the Participation Notice shall be null and void, and it shall be necessary for a separate Participation Notice to be furnished to all Stockholders, and the terms and provisions of this Section 5.1 separately complied with, in order to consummate such Post-Closing Issuance pursuant to this Section 5.1.

(c) Further Assurances. Each Participating Stockholder shall take or cause to be taken all such reasonable actions as may be necessary or reasonably desirable in order to consummate expeditiously each Post-Closing Issuance pursuant to this Section 5.1 and any related transactions, including executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Company and the Prospective Subscriber. Without limiting the generality of the foregoing, each such Participating Stockholder agrees to execute and deliver such subscription and other agreements specified by the Company to which the Prospective Subscriber will be party.

(d) Expenses. All costs and expenses incurred by the Company in connection with any proposed Post-Closing Issuance of Participation Shares (whether or not consummated), including all attorney’s fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company. The reasonable fees and charges of a single legal counsel for all Participating Stockholders (selected by Participating Stockholders purchasing a majority of the Participation Shares being purchased by all Participating Stockholders) in connection with such proposed Post-Closing Issuance of Participation Shares (whether or not consummated) shall be paid by the Company. Any other costs and expenses incurred by or on behalf of any holder of Share Equivalents in connection with such proposed Post-Closing Issuance of Participation Shares (whether or not consummated) shall be borne by such holder.

(e) Closing. The closing of a Post-Closing Issuance pursuant to this Section 5.1 (the “Participation Closing”) shall take place on (i) the proposed date of the Post-Closing Issuance, if any, set forth in the Participation Notice, (ii) if no proposed closing date was required to be specified in the Participation Notice, at such time as the Company shall specify by notice to each Participating Stockholder and (iii) at such place as the Company shall specify by

notice to each Participating Stockholder; provided, however that, if any waiting period pursuant to any antitrust or similar laws shall apply to the acquisition of any Participation Shares by any Participating Stockholder, then (x) the Company and such Participating Stockholder shall reasonably cooperate to structure the funding of such acquisition by such Participating Stockholder in a manner that will permit such acquisition to occur at the Participation Closing of such Post-Closing Issuance even if it shall otherwise occur prior to the expiration of such waiting period or any extension thereof (including, to the extent permitted by applicable law, rule or regulation, the issuance of convertible or exchangeable securities that would convert or exchange into such Participation Shares immediately upon such expiration or extension or the use of an escrow account providing for release of such Participation Shares upon such expiration or extension) and (y) in the event the Company and such Participating Stockholder are unable to reach agreement upon a structure that would permit the funding of such acquisition by such Participating Stockholder to occur at the Participation Closing of such Post-Closing Issuance, then, solely with respect to such Participating Stockholder, the Participation Closing shall occur upon the expiration of such waiting period or extension thereof. At any Participation Closing, each Participating Stockholder shall be delivered the certificates or other instruments evidencing the Participation Shares to be issued to such Participating Stockholder, registered in the name of such Participating Stockholder or such holder’s designated nominee, free and clear of all liens, claims, options, pledges, encumbrances and security interests, with any transfer tax stamps affixed, against delivery by such Participating Stockholder of the applicable consideration.

(f) Securities Law Matters. Notwithstanding anything to the contrary set forth herein, a Stockholder shall not be entitled to participate in a Post-Closing Issuance pursuant to this Section 5.1 unless at the time of such Post-Closing Issuance the Company shall be reasonably satisfied that (i) such Stockholder is an “accredited investor” as defined in Regulation D of the Securities Act or the Post-Closing Issuance, after giving effect to the participation of such Stockholder therein, would satisfy the requirements of any other exemption from registration available at such time under the Securities Act with respect to such Post-Closing Issuance and (ii) an exemption from registration or qualification under any state securities laws or foreign securities laws applicable to such Post-Closing Issuance due to the participation of such Stockholder therein would be available with respect to such Post-Closing Issuance.

Section 5.2. Excluded Transactions. The provisions of this Article V shall not apply to Post-Closing Issuances by the Company or any of its Subsidiaries as follows:

(a) any Post-Closing Issuance of Share Equivalents, options, warrants or convertible securities, in each case to the extent approved by the Board, to officers, employees, directors who are not Affiliates of any Stockholder or consultants of the Company in connection with such Person’s employment or consulting arrangements with the Company or the service of such person as a director;

(b) any Post-Closing Issuance of Share Equivalents, in each case to the extent approved by the Board, (i) in any business combination or acquisition transaction involving the Company or any of its Subsidiaries, (ii) in connection with any joint venture or strategic partnership or alliance or (iii) in connection with the incurrence or guarantee of indebtedness by the Company or any of its Subsidiaries, in each case so long as the Post-Closing Issuance of Share Equivalents is not to any Affiliate of any Stockholder;

(c) any Post-Closing Issuance of Shares pursuant to an Initial Public Offering;

(d) any Post-Closing Issuance of Share Equivalents in connection with any stock split, stock dividend or recapitalization approved by the Board (so long as all Holders of the same class or series of Share Equivalents is treated equally with all other Holders of such class or series of Share Equivalents); or

(e) any Post-Closing Issuance of Share Equivalents to any Person (or any Affiliate of a Person) that has or is entering into a strategic or commercial relationship with the Company or any of its Subsidiaries or provides other strategic or commercial benefits to the Company or its Subsidiaries as determined in good faith by the Board, in each case so long as the Post-Closing Issuance of Share Equivalents is not to any Affiliate of any Stockholder.

Section 5.3. Termination of Article V . Upon the consummation of an Initial Public Offering, this Article V shall terminate and be of no further force and effect.

ARTICLE VI

ADDITIONAL AGREEMENTS OF THE PARTIES

Section 6.1. Further Assurances. From time to time, at the reasonable request of any other party hereto and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary or appropriate to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

Section 6.2. Freedom to Pursue Opportunities. The parties expressly acknowledge and agree that: (i) each Stockholder, SLP Designated Director, Co-Investor Designated Director, SLP Nominee, Co-Investor Nominee, Co-Investor Observer and Affiliated Officer has the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly engage in the same or similar business activities or lines of business as the Company or any of its Subsidiaries, including those deemed to be competing with the Company or any of its Subsidiaries; and (ii) in the event that a Stockholder, SLP Designated Director, Co-Investor Designated Director, SLP Nominee, Co-Investor Nominee, Co-Investor Observer or Affiliated Officer of the Company acquires knowledge of a potential transaction or matter that may be a corporate opportunity for each of the Company and such Stockholder or any other Person, the Stockholder, SLP Designated Director, Co-Investor Designated Director, SLP Nominee, Co-Investor Nominee, Co-Investor Observer or Affiliated Officer of the Company shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company or any of its Subsidiaries, as the case may be, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company or its Affiliates or Stockholders for breach of any duty (contractual or otherwise) by reason of the fact that such Stockholder, SLP Designated Director, Co-Investor Designated Director, SLP Nominee, Co-Investor Nominee, Co-Investor Observer or Affiliated Officer, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Company of any of its Subsidiaries; provided, however, that this Section 6.2 shall not apply to any Stockholder or Co-Investor Designated Director, Co-Investor Observer or

Co-Investor Nominee who is also an officer or employee of the Company or any of its Subsidiaries (other than Affiliated Officers).

Section 6.3. Legend on Share Certificates.

(a) The certificates representing the Restricted Shares shall include an endorsement typed conspicuously thereon of the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE RESOLD OR TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS, AND HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED.

IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A STOCKHOLDERS AGREEMENT DATED AS OF , 2006 (AS MAY BE AMENDED FROM TIME TO TIME) AND MAY NOT BE VOTED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH AGREEMENT.”

In the event that any Securities shall cease to be Restricted Shares, the Company shall, upon the written request of the holder thereof, issue to such holder a new certificate representing such Share Equivalents without the first paragraph of the legend required by this Section 6.3. In the event that any Securities shall cease to be subject to the restrictions on transfer set forth in this Agreement, the Company shall, upon the request of the holder thereof, issue to such holder a new certificate representing such Share Equivalents without the second paragraph of the legend required by this Section 6.3.

(b) All certificates for Securities representing Restricted Shares hereafter issued, whether upon transfer or original issue, shall be endorsed with a like legend.

ARTICLE VII

ADDITIONAL PARTIES

Section 7.1. Additional Parties. Additional parties may be added to and be bound by and receive the benefits afforded by this Agreement upon the signing and delivery of a counterpart of this Agreement by the Company and the acceptance thereof by such additional parties and, to the extent permitted by Section 9.7, amendments may be effected to this Agreement reflecting such rights and obligations, consistent with the terms of this Agreement, of such Stockholder as the SLP Investors and such Stockholders may agree. Promptly after signing and delivering such a counterpart of this Agreement, the Company will deliver a conformed copy thereof to all of the parties.

ARTICLE VIII

INDEMNIFICATION

Section 8.1. Indemnification of Stockholders.

(a) The Company will indemnify, exonerate and hold the Stockholders and each of their respective partners, stockholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents and each of the partners, stockholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents of each of the foregoing (collectively, the “Indemnitees”) free and harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Indemnitees or any of them before or after the date of this Agreement (collectively, the “Indemnified Liabilities”), arising out of any action, cause of action, suit, arbitration or claim arising directly or indirectly out of, or in any way relating to, (i) such Stockholder’s or its Affiliates’ ownership of Share Equivalents or other securities of the Company or such Stockholder’s or its Affiliates’ control or ability to influence the Company or any of its Subsidiaries (other than any such Indemnified Liabilities to the extent such Indemnified Liabilities arise out of any breach of this Agreement by such Indemnitee or its Affiliates or other related Persons or the breach of any fiduciary or other duty or obligation of such Indemnitee to its direct or indirect equity holders, creditors or Affiliates) or (ii) the business, operations, properties, assets or other rights or liabilities of the Company or any of its Subsidiaries; provided that if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. For the purposes of this Section 8.1, none of the circumstances described in the limitations contained in the proviso in the immediately preceding sentence shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Company, then such payments shall be promptly repaid by such Indemnitee to the Company. The rights of any Indemnitee to indemnification hereunder will be in addition to any other rights any such Person may have under any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation or under the certificate of incorporation or bylaws of the Company or any of its Subsidiaries.

(b) Notwithstanding anything to the contrary contained in this Agreement, for purposes of this Section 8.1, the term Indemnitees shall not include any Stockholder or its any of its partners, stockholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents or any of the partners, stockholders, members, Affiliates, directors, officers, fiduciaries, managers, controlling Persons, employees and agents of each of the foregoing who is an officer, director or employee of the Company or any of the Company’s Subsidiaries solely in such capacity as officer, director or employee. Such officers, directors and employees will be subject to separate indemnification in such capacity through the Company’s certificate of incorporation, bylaws and other instruments.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Entire Agreement. This Agreement constitutes the entire understanding and agreement between the parties as to restrictions on the transferability of Shares and the other matters covered herein and supersedes and replaces any prior understanding, agreement or statement of intent, in each case, written or oral, of any and every nature with respect thereto. In the event of any inconsistency between this Agreement and any document executed or delivered to effect the purposes of this Agreement, including, without limitation, the by-laws of any company, this Agreement shall govern as among the parties hereto.

Section 9.2. Specific Performance. The parties hereto agree that the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that, in the event of breach by any party, damages would not be an adequate remedy and each of the other parties shall be entitled to specific performance and injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity; and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief.

Section 9.3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts entered into and performed entirely within such State.

Section 9.4. Arbitration. Any dispute, controversy or claim (each a “Dispute” and collectively, the “Disputes”) arising out of, relating to or in connection with this Agreement, including, without limitation, any Dispute regarding its validity or termination, or the performance or breach thereof under this Agreement shall be settled exclusively and finally by a panel of one arbitrator selected by the mutual agreement of the parties to such Dispute in an arbitration proceeding administered by Judicial Arbitration and Mediation Services (“JAMS”) under its Comprehensive Arbitration Rules and Procedure in effect at the time of such proceeding, and judgment on the award rendered by such arbitrator may be entered in any court having jurisdiction thereof. If the parties to any such Dispute are unable to select such arbitrator within 15 days after the first notice given by any party to such Dispute to the other party or parties to such Dispute requesting arbitration and the selection of such arbitrators, any party to such Dispute may request that JAMS select such arbitrator, which selection shall be binding on the parties to such Dispute. If (i) two or more Disputes arising out of or in connection with this Agreement are simultaneously pending, (ii) the subject matters of such Disputes involve common questions of law or fact and (iii) the independent resolution of each such Dispute could result in conflicting decisions or obligations, such Disputes may be consolidated in a single proceeding. If more than one arbitration proceeding involving any such Disputes are pending, such proceedings shall, at the request of any party to such Dispute, be consolidated and settled in a single arbitration proceeding; provided that the determination of whether such Disputes shall be consolidated shall be determined by the first panel of three arbitrators established to settle any such Dispute. If such Disputes are consolidated and more than one panel of three arbitrators has been established to settle any of such Disputes, the parties to such Dispute shall, within 20 days after such consolidation, select one panel of one arbitrator so established to settle the single

consolidated arbitration proceeding. Unless the parties to such Dispute otherwise agree to conduct any arbitration proceeding pursuant to this Section 9.4 elsewhere, such proceeding shall be conducted and any decision shall be rendered in San Francisco, California. Expenses and costs associated with the submission of any Dispute to arbitration shall be the responsibility of the party against whom a final decision is rendered with respect to that Dispute (provided that in the case of multiple Disputes that are consolidated into a single proceeding, the costs of such proceeding shall be borne on a Dispute-by-Dispute basis by the party against whom a final decision is rendered with respect to each particular Dispute). The award rendered by the arbitrator shall be final and binding on the parties to the Dispute; provided, however, that (i) by agreeing to arbitration, the parties do not intend to deprive any court with jurisdiction of its ability to issue a preliminary injunction, attachment or other form of provisional remedy in aid of the arbitration and a request for such provisional remedies by a party to a court shall not be deemed a waiver of this agreement to arbitrate, and (ii) in addition to the authority conferred upon the tribunal by the rules specified above, the tribunal shall also have the authority to grant provisional remedies, including injunctive relief.

Section 9.5. Obligations. All obligations hereunder shall be satisfied in full without set-off, defense or counterclaim.

Section 9.6. Consent of the SLP Investors and the Co-Investors.

(a) If any consent, approval or action of the SLP Investors is required at any time pursuant to this Agreement, such consent, approval or action shall be deemed given if the holders of a majority of the outstanding Shares held by the SLP Investors at such time provide such consent, approval or action in writing at such time.

(b) If any consent, approval or action of the Co-Investors is required at any time pursuant to this Agreement, such consent, approval or action shall be deemed given if the holders of a majority of the outstanding Shares held by the Co-Investors at such time provide such consent, approval or action in writing at such time.

(c) For purposes of clarity, the operation of Sections 9.6(a) and (b) shall not deprive any SLP Investor or any Co-Investor of their respective rights to designate directors pursuant to Section 2.1.

Section 9.7. Amendment and Waiver.

(a) This Agreement may be amended, modified or waived, in whole or in part, at any time pursuant to an agreement in writing executed by the Company and each SLP Investor; provided that (i) any amendment, modification or waiver of Article II that adversely affects the rights of the Initial Co-Investor to designate Co-Investor Designated Directors or a Co-Investor Observer or that adversely affects the rights of the Co-Investor Designated Directors or a Co-Investor Observer set forth in Article II will also require the written consent of the Initial Co-Investor, (ii) any amendment, modification or waiver of Article IV or V that adversely affects the rights of the Co-Investors relative to or in a manner different than it affects the SLP Investors shall also require the written consent of the Co-Investors and (iii) any amendment, modification or waiver of Articles III, VI, VII, VIII or IX shall also require the written consent of each

Stockholder adversely affected thereby (for the avoidance of doubt, it being understood that any such amendment, modification or waiver that permits a transferee of Share Equivalents or a recipient of any newly-issued Shares Equivalents to participate on a pro rata basis based on ownership of outstanding Share Equivalents in transactions pursuant to Section 3.4, Section 3.5 and/or Section 3.7 shall not be deemed adverse to any Stockholder). If requested by the SLP Investors, the Company agrees to execute and deliver any amendments to this Agreement to the extent so requested by the SLP Investors in connection with the addition of a transferee of Share Equivalents or a recipient of any newly-issued Shares Equivalents as a party hereto; provided that such amendments are in compliance with the proviso set forth in the immediately foregoing sentence. Any amendment, modification or waiver effected in accordance with the foregoing shall be effective and binding on the Company and each Stockholder.

(b) Any failure by any party at any time to enforce any of the provisions of this Agreement shall not be construed a waiver of such provision or any other provisions hereof.

Section 9.8. Binding Effect. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties’ successors and permitted assigns.

Section 9.9. Termination. This Agreement shall terminate only by written consent of each of the parties hereto or upon the dissolution of liquidation of the Company.

Section 9.10. Notices. Any and all notices, designations, offers, acceptances or other communications provided for herein shall be given in writing by registered or certified mail, which shall be addressed, in the case of the Company, to its principal office, and, in the case of any Stockholder, to such party’s address appearing on the stock books of the Company or to such other address as may be designated by such party in writing to the Company. Any demand, notice or other communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if given by facsimile, on the day of transmittal thereof if given during the normal business hours of the recipient, and on the Business Day during which such normal business hours next occur if not given during such hours on any day.

Section 9.11. Severability. If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such portion shall be deemed severable from the remainder of this Agreement, which shall continue in all respects valid and enforceable.

Section 9.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument.

Section 9.13. Assumption of Obligations. Upon consummation of the Merger, all rights and obligations of Newco will be assumed by Serena and Serena shall become a party to this Agreement.

[The remainder of this page intentionally left blank]

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused this Agreement to be executed on its behalf as of the date first written above.

	SPYGLASS MERGER CORP.


	By:
		Name:
		Title:

SILVER LAKE PARTNERS II, L.P.

By:	Silver Lake Technology Associates II, L.L.C., its General Partner


	By:
		Name:
		Title:

SILVER LAKE TECHNOLOGY INVESTORS II, L.L.C.

By:	Silver Lake Management Company, L.L.C.,
	its Manager

	By:	Silver Lake Technology Management, L.L.C., its Managing Member


		By:
			Name:
			Title:

DOUGLAS D. TROXEL LIVING TRUST


	By:
		Name: Douglas D. Troxel
		Title: Trustee


CO-INVESTOR FOUNDER


	Douglas D. Troxel

EX-5.9 6 a05-20673_1ex5d9.htm OPINION REGARDING LEGALITY

Exhibit 6

Exhibit B

RESTATED CERTIFICATE OF INCORPORATION

SPYGLASS MERGER CORP.

Spyglass Merger Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY:

1. The name of the corporation is Spyglass Merger Corp. The date of the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was November 7, 2005.

2. This Restated Certificate of Incorporation has been duly adopted in accordance with Sections 103, 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”). The Corporation has received payment for its stock.

3. The Board of Directors of the Corporation, pursuant to a unanimous written action in lieu of a meeting pursuant to Section 141(f) of the General Corporation Law of the State of Delaware, adopted resolutions proposing and declaring advisable that the Corporation restate its Certificate of Incorporation to read in its entirety as follows:

FIRST. The name of the corporation is Spyglass Merger Corp.

SECOND. The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

FOURTH.

A. The total number of shares of capital stock which the Corporation shall have authority to issue is two hundred ten million and one (210,000,001), consisting of ten million (10,000,000) shares of preferred stock, par value $0.01 par share (hereinafter referred to as “Preferred Stock”), one (1) share of Series A Preferred Stock, par value $0.01 per share (hereinafter referred to as “Series A Preferred Stock”) and two hundred million (200,000,000) shares of common stock, par value $0.01 per share (hereinafter referred to as “Common Stock”).

B. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board”) is hereby authorized to provide for the issuance of shares of Preferred Stock in one or more series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a “Preferred

Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board with respect to each series shall include, but not be limited to, determination of the following:

(1) The designation of the series, which may be by distinguishing number, letter or title.

(2) The number of shares of the series, which number the Board may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding).

(3) The amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative.

(4) Dates at which dividends, if any, shall be payable.

(5) The redemption rights and price or prices, if any, for shares of the series.

(6) The terms and amount of any sinking fund provided for the purchase or redemption of shares of the series.

(7) The amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(8) Whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made.

(9) Restrictions on the issuance of shares of the same series or of any other class or series.

(10) The voting rights, if any, of the holders of shares of the series.

C. Set forth below is a statement of the powers, preferences and rights of the share of Series A Preferred Stock, and the qualifications, limitations and restrictions with respect to such series:

(1) Dividends. The holder of the Series A Preferred Stock shall not be entitled to receive dividends.

(2) Preference on Liquidation.

(a) In the event of the Liquidation (as defined below) of the Corporation, the holder of the Series A Preferred Stock shall be entitled to have paid to it out of the assets of the Corporation available for distribution to stockholders before any distribution is made to or set apart for the holders of Common Stock or other Junior Securities (as defined below), an amount in cash equal to $1.00 per share (the “Series A Preferred Stock Liquidation Preference”).

(b) In the event of a Liquidation, the Corporation shall give, by certified mail, return receipt requested, postage prepaid, addressed to the holder of the share of Series A Preferred Stock at the address of such holder as shown on the books of the Corporation, at least 20 days prior written notice of the date on which the books of the Corporation shall close or a record shall be taken for determining rights to vote in respect of any such Liquidation and of the date when the same shall take place.

(3) Voting. The holder of the share of Series A Preferred Stock shall have the following voting rights:

(a) Except as otherwise required by law or pursuant to this Section 3, the holder of the share of Series A Preferred Stock shall not be entitled to vote on any matters submitted to a vote of the stockholders of the Corporation.

(b) Until a Voting Control Event has occurred, the holder of the Series A Preferred Stock shall have the right, voting separately as a class, at each meeting of the holder of the Series A Preferred Stock held for the purpose of electing one director of the Corporation (the “Series A Director”). No stockholders of the Corporation other than the holder of the Series A Preferred Stock shall be entitled to vote with respect to the election or the removal without cause of the Series A Director. At any meeting held for the purpose of electing directors, the presence in person or by proxy of the holder of the outstanding share of Series A Preferred Stock shall be required and be sufficient to constitute a quorum of such class for the election of the Series A Director by such class. At any such meeting or adjournment thereof, the absence of a quorum of the holder of Series A Preferred Stock shall not prevent the election of directors other than the Series A Director and the absence of a quorum or quorums of the holders of capital stock of the Corporation entitled to elect such other directors shall not prevent the election of the Series A Director. In the case of any vacancy occurring with respect to the Series A Director, such vacancy shall only be filled by the holder of the outstanding Series A Preferred Stock, voting separately as a class.

(c) The affirmative vote of the holder of the outstanding Series A Preferred Stock shall be required for any amendment, alteration or repeal (including by merger, consolidation or otherwise by operation of law) of any provisions of this Certificate of Incorporation or the By-Laws that would adversely affect the powers, preferences, privileges or rights of the Series A Preferred Stock or of the holder thereof in such capacity.

(d) Upon the occurrence of a Voting Control Event, the rights of the holder of the Series A Preferred Stock pursuant to this Section 3 shall immediately terminate and the

holder of the Series A Preferred Stock shall thereafter have no voting rights, except as otherwise required by applicable law.

(4) Redemption.

(a) Upon the occurrence of the Voting Control Event, to the extent the Corporation shall have funds legally available for such payment, the Corporation shall promptly redeem the share of Series A Preferred Stock at a redemption price per share in cash equal to the Series A Preferred Stock Liquidation Preference (the “Redemption Price”).

(b) If the Corporation shall redeem the share of Series A Preferred Stock pursuant to this Section 4, notice of such redemption shall be given by certified mail, return receipt requested, postage prepaid, mailed not less than two days nor more than 45 days prior to the redemption date, to the holder of record of the share to be redeemed at such holder’s address as the same appears on the stock books of the Corporation or its transfer agent. Any notice that was mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. Each such notice shall state: (i) the redemption date; and (ii) the place or places where the certificate for such share is to be surrendered for payment of the Redemption Price.

(c) Upon surrender in accordance with notice given pursuant to this Section 4 (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such share shall be redeemed by the Corporation at the Redemption Price.

(d) If notice has been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing for the payment of the Redemption Price of the share called for redemption), (i) said share shall no longer be deemed to be outstanding and (ii) all rights of the holder thereof as holder of the Series A Preferred Stock shall cease (except the right to receive from the Corporation the Redemption Price without interest thereon, upon surrender and endorsement of its certificates if so required).

(5) Merger or Consolidation. Unless a Voting Control Event has occurred, in the event of a merger or consolidation of the Corporation with or into any person pursuant to which the corporation shall not be the continuing person, the Series A Preferred Stock shall be converted into or exchanged for and shall become a preferred share of such successor or resulting company or, at the Corporation’s sole discretion, the parent of such successor or resulting company, having in respect of such successor or resulting company or parent of such successor or resulting company, substantially the same powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereon, that the Series A Preferred Stock had immediately prior to such transaction.

(6) Limitation and Rights Upon Insolvency. Notwithstanding any other provision of this Certificate of Designations, the Corporation shall not be required to pay any amount in respect to any redemption of the Series A Preferred Stock at a time when immediately after making such payment the Corporation is or would be rendered insolvent (as defined by

applicable law), provided that the obligation of the Corporation to make any such payment shall not be extinguished in the event the foregoing limitation applies.

(7) Share to be Retired. When the share of Series A Preferred Stock is redeemed, exchanged or otherwise acquired by the Corporation, it shall be retired and canceled.

(8) Transfer Restrictions. The holder of Series A Preferred Stock may not effect any offer, sale, pledge, transfer or other disposition or distribution (or enter into any agreement with respect to any of the foregoing) (a “Transfer”) of the share of Series A Preferred Stock, except (a) a Transfer to any SLP Investor or (b) a Transfer to any other person in connection with the consummation of a transaction pursuant to Section 3.5 of the Stockholders Agreement in which the holder of Series A Preferred Stock does not receive any consideration with respect to such Transfer of Series A Preferred Stock (for the avoidance of doubt, it being understood that this clause (b) shall in no manner limit the amount or type of consideration that the holder of Series A Preferred Stock may receive in connection with such transaction with respect to any other securities of the Company beneficially owned by such holder).

(9) Legends. The certificate representing the share of Series A Preferred Stock shall bear the following legend:

THE SHARE OF SERIES A PREFERRED STOCK, PAR VALUE $.01 PER SHARE, REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD OR TRANSFERRED BY THE HOLDER HEREOF, EXCEPT IN COMPLIANCE WITH THE CERTIFICATE OF INCORPORATION OF THE CORPORATION.

(10) Other Rights. Other than as may be prescribed by law, and except as set forth in this Certificate of Incorporation, the holder of the Series A Preferred Stock shall not have any other voting rights, conversion rights, preferences or special rights.

D. Except as may otherwise be provided in this Certification of Incorporation (including the any certificate of designations relating to any series of Preferred Stock) or by applicable law, each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote, and no holder of any series of Preferred Stock, as such, shall be entitled to any voting powers in respect thereof.

FIFTH.

A. The business and affairs of the Corporation shall be managed by, or under the direction of, the board of directors of the Corporation (the “Board of Directors”). The total number of directors constituting the entire Board shall be fixed from time to time by the Board of Directors. Elections of directors need not be by written ballot unless the By-Laws shall so provide.

B. Prior to a Voting Control Event, with respect to any determination, matter or action of or by the Board of Directors (other than an action by unanimous written consent in lieu of a meeting), the Series A Director shall have voting rights and powers that entitle such Series A Director to exercise one vote more than all votes entitled to be cast by all other directors at such time. All directors other than the Series A Director shall have one vote at all meetings of the Board of Directors.

C. Prior to a Voting Control Event, the Series A Director shall be a member of every committee of the Board of Directors and, with respect to any determination, matter or action of or by any committee of the Board of Directors (other than an action by unanimous written consent in lieu of a meeting), the Series A Director shall have voting rights and powers that entitle such Series A Director to exercise one vote more than all votes entitled to be cast by all other members of such committee of the Board of Directors at such time. All members of any committee of the Board of Directors other than the Series A Director shall have one vote at all meetings of such committee of the Board of Directors.

D. In addition to the requirements under applicable law and the By-Laws of the Corporation, prior to a Voting Control Event, for purposes of determining a quorum for transaction of business at any meeting of the Board of Directors or any committee of the Board of Directors, the Series A Director shall be deemed to be equal to a majority of the Board of Directors or the members of such committee, as the case may be.

E. The Corporation may not amend this Restated Certificate of Incorporation to increase the authorized number of shares of Series A Preferred Stock or to alter the powers, preferences or rights of the Series A Preferred Stock without the prior consent of the Co-Investors holding a majority of all shares of Common Stock held by the Co-Investors.

SIXTH. In furtherance of and not in limitation of the power conferred by the DGCL, the Board of Directors, acting by majority vote (after giving effect to ARTICLE FIFTH), is expressly authorized to adopt, amend or repeal the By-Laws.

SEVENTH. The Corporation is to have perpetual existence.

EIGHTH. To the maximum extent permitted from time to time under the laws of the State of Delaware, the Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to its officers, directors or stockholders or the affiliates of the foregoing, other than those officers, directors, stockholders, or affiliates who (a) are employees of the Corporation or any subsidiary of the Corporation and (b) are not affiliates of Silver Lake Partners II, L.P. No amendment or repeal of this ARTICLE EIGHTH shall apply to or have any effect on the liability or alleged liability of any such officer, director, stockholder or affiliate for or with respect to any business opportunities of which such officer, director, stockholder or affiliate becomes aware prior to such amendment or repeal.

NINTH. Meetings of stockholders may be held within or without the state of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject

to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the By-Laws.

TENTH. Except as otherwise provided by the DGCL as the same exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is hereafter amended to authorize, with the approval of a corporation’s stockholders, further reductions in the liability of a corporation’s directors for breach of fiduciary duty, then a director of the Corporation shall not be liable for any such breach to the fullest extent permitted by the DGCL as so amended. Any repeal or modification of this ARTICLE TENTH shall not adversely affect any right or protection of a director existing at the time of such repeal or modification.

ELEVENTH.

A. The Corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, his or her testator or intestate is or was a director, officer or employee of the Corporation or any subsidiary of the Corporation or any predecessor of the Corporation or serves or served at any other enterprise as a director, officer or employee at the request of the Corporation or any predecessor to the Corporation.

B. Neither any amendment nor repeal of this ARTICLE ELEVENTH, nor the adoption of any provision of this Restated Certificate of Incorporation inconsistent with this ARTICLE ELEVENTH, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this ARTICLE ELEVENTH, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision, shall adversely affect any right or protection of a director, officer or employee of the Corporation or any subsidiary of the Corporation or any predecessor of the Corporation or any person who serves or served at any other enterprise as a director, officer or employee at the request of the Corporation or any predecessor to the Corporation, existing at the time of such amendment, repeal or adoption of an inconsistent provision.

TWELFTH. For purposes of this Certificate of Incorporation:

A. “affiliate” means with respect to any specified person, means any other person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, such specified Person. For purposes of this definition, “control” (and its derivatives) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting equity interests, as trustee or executor, by contract or credit arrangements or otherwise.

B. “beneficially own” and similar terms have the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended; provided, however that (1) none of the SLP Investors shall be deemed to beneficially own any securities of the Company held by

any of the Co-Investors solely by virtue of the provisions of the Stockholders Agreement and (2) none of the Co-Investors shall be deemed to beneficially own any securities of the Company held by the SLP Investors solely by virtue of the provisions of the Stockholders Agreement.

C. “Co-Investors” has the meaning set forth in the Stockholders Agreement.

D. “Junior Securities” means any class or series of stock or equity securities of the Corporation that by its terms is junior to the Series A Preferred Stock as to the distribution of assets upon Liquidation.

E. “Liquidation” shall be deemed to include any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. For the avoidance of doubt, “Liquidation” shall not be deemed to include (i) a consolidation or merger of the Corporation into or with any other entity or entities, (ii) a transaction or series of related transactions that results in the transfer of more than 50% of the voting power of the Corporation and (iii) unless in connection with a plan of liquidation, dissolution or winding up of the Corporation, the sale, lease, abandonment, transfer or other disposition by the Corporation of all or substantially all its assets.

F. “person” means any natural person, corporation, general or limited partnership, limited liability company, joint venture, trust, association or entity of any kind.

G. “Share Equivalents” means (i) the outstanding shares of Common Stock and (ii) the number of shares of Common Stock issuable upon exercise, conversion or exchange of any security that is currently exercisable for, convertible into or exchangeable for, on any such date of determination, shares of Common Stock without payment to the Corporation of any additional consideration.

H. “SLP Investors” means Silver Lake Partners II, L.P. and its affiliates, collectively.

I. “Stockholders Agreement” means the Stockholders Agreement, dated as of , 2006, by and among the Corporation, the SLP Investors and the other parties thereto, as the same may from time to time be amended, supplemented or otherwise modified.

J. “Voting Control Event” means the earliest to occur of the following: (i) the SLP Investors, in the aggregate, no longer beneficially own at least 20% of the outstanding Share Equivalents, (ii) the SLP Investors, in the aggregate, no longer beneficially own at least twenty percent (20%) more of the outstanding Share Equivalents than the Co-Investors, in the aggregate, beneficially own or (iii) the consummation of an underwritten public offering of Common Stock, registered under the Securities Act of 1933, as amended.

4. In lieu of a meeting and vote of the stockholders, the stockholders have given written consent to such restatement of the Certificate of Incorporation of the Corporation in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on , 2006.


	Hollie Moore
	President

EX-7 7 a05-20673_1ex7.htm EXHIBIT 7

Exhibit 7

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock, par value $0.001 per share, of Serena Software, I nc., and that this Joint Filing Agreement be included as an Exhibit to such joint filing.

This Joint Filing Agreement may be executed in one or more counterparts, and each such counterpart shall be an original but all of which, taken together, shall constitute but one and the same agreement.

[The remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of this 21^st day of November 2005.

SILVER LAKE PARTNERS II, L.P.

By:		SILVER LAKE TECHNOLOGY ASSOCIATES II, L.L.C., its General Partner


		By:	/s/ Alan K. Austin
			Name:		Alan K. Austin
			Title:		Managing Director and
					Chief Operating Officer


SILVER LAKE TECHNOLOGY INVESTORS II, L.L.C.

By:		SILVER LAKE MANAGEMENT COMPANY, L.L.C., its Manager


		By:	/s/ Alan K. Austin
			Name:		Alan K. Austin
			Title:		Managing Director and
					Chief Operating Officer


SPYGLASS MERGER CORP.


By:	/s/ Alan K. Austin
	Name:			Alan K. Austin
	Title:			Vice President, Secretary and
				Assistant Treasurer

EX-8 8 a05-20673_1ex8.htm EXHIBIT 8

Exhibit 8

November 11, 2005

Mark E. Woodward

1425 Newport Avenue

San Jose, CA 95125-3330

Dear Mark:

As you know, pursuant to an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), Spyglass Merger Corp., a Delaware corporation (“MergerCo”), and a company controlled by Silver Lake Partners II, L.P., has agreed, subject to the terms and conditions of the Merger Agreement, to merge with and into Serena Software, Inc. (the “Company”).

We desire that you continue as the Company’s President and Chief Executive Officer following the “Closing” (as defined in the Merger Agreement). To confirm our mutual agreement to that end, we request that you sign and return a copy of this letter indicating your agreement to serve as the President and Chief Executive Officer of the Company following the Closing, and your agreement to contribute certain shares of Company common stock into MergerCo in exchange for common stock of MergerCo and to exchange certain options to acquire Company common stock for options in the recapitalized Company, pursuant to the terms and conditions set forth in the Summary of Employment Terms and the exhibits thereto (collectively, the “Executive Arrangements”). Prior to the Closing, you and MergerCo agree to execute the necessary documents so long as they reflect and set forth in all material respects the business terms and conditions set forth in the Executive Arrangements and address other customary provisions associated with your services as President and Chief Executive Officer of the Company and your status as a stockholder of the Company.

If the Merger Agreement is terminated for any reason prior to the Closing, this letter agreement will automatically terminate and neither you nor MergerCo will have any liability or obligation under this letter agreement. For the avoidance of doubt, none of the terms set forth in the Executive Arrangements or otherwise will take effect unless and until the Closing occurs.

The terms of this letter agreement will be governed by the laws of the State of California.

[Remainder of Page Intentionally Left Blank]

	Very truly yours,

	Spyglass Merger Corp.

	By:	/s/ ALAN K. AUSTIN
	Name: Alan K. Austin
	Title: Vice President

Acknowledged and Agreed:

/s/ MARK E. WOODWARD
Mark E. Woodward

EXHIBIT A

EXECUTIVE ARRANGEMENT

Execution Copy

SUMMARY OF EMPLOYMENT TERMS

Executive		Mark E. Woodward (“Executive”)

Title		President and Chief Executive Officer of Serena Software, Inc. (the “Company”) Member of the Board of Directors of the Company so long as Executive remains CEO of the Company.

Term		A period commencing on the closing of the proposed acquisition (the “Closing”) and continuing for an indefinite term.

Base Salary		$400,000 per annum, subject to annual review for increases, and payable in accordance with the Company’s usual payment practices.

Annual Performance Bonus		Executive shall be eligible to earn an annual performance bonus award of up to 100% of Executive’s base salary, based upon the achievement of annual performance targets established by the Board of Directors of the Company (the “Board”). The annual performance targets and annual performance bonus awards shall be divided into quarterly targets and corresponding quarterly awards. Each quarterly award shall be earned for each quarter in which the corresponding quarterly target is achieved. No quarterly award shall be earned for any quarter in which the quarterly target is not achieved, however, any quarterly award not earned in such quarter will be earned upon the achievement of either cumulative quarterly performance targets year to date or that year’s annual performance target.

Business Expenses		Reasonable business expenses shall be reimbursed by the Company in accordance with Company policy (not less favorable than current practice).

Vacation		4 weeks per year

New Options to Acquire Company Common Stock		Effective at the Closing, Executive will be granted an option (the “Option”) to acquire common stock of the Company. The Option will be granted pursuant to the 2005 Company Stock Incentive Plan (see “Summary of Management Equity Terms” attached as Exhibit A (the “Equity Terms”)), which will be established as soon as practicable following the Closing. A portion of the Option will be granted as a “Time Option” (as

defined in the Equity Terms) and a portion of the Option will be granted as a “Performance Option” (as defined in the Equity Terms).

The general terms and conditions applicable to the Option and the additional “Rollover Equity” are summarized in the Equity Terms.

Termination Without Cause or if Executive Resigns with Good Reason:

Severance and Accrued Compensation:

The Base Salary through the date of termination (including accrued but unused vacation), any earned but unpaid portion of Executive’s Annual Performance Bonus for the quarter preceding the quarter in which such termination occurs (which amount shall be “earned” as determined by the Company based on the achievement of the relevant performance criteria for the entire quarter, and earlier quarters if relevant), reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination, and such employee benefits, if any, as to which Executive may be entitled under employee benefit plans in accordance with their terms (the amounts described in this paragraph, reduced by any amounts owed to the Company by Executive, being referred to as the “Accrued Rights”).

Continuation of base salary for a period of 24 months following termination (payable in accordance with usual and customary payroll practices).

Continued coverage for a period of 24 months following termination of employment under the Company’s health insurance plans in accordance with the terms thereof, as required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or similar provisions of state law, at the same cost to Executive immediately prior to the date of termination; provided, however, that in the event that such continued health care coverage cannot be provided under COBRA or the similar provisions of state law beyond the end of the 18^th month following Executive’s termination of employment, then such health care coverage will be provided under a comparable health plan.

Six months of additional vesting credit for any Time Options.

In order to comply with section 409A of the Internal Revenue Code, payments under this section may be delayed. All delayed payments shall be paid, along with interest at the rate of prime +

		1%, as soon as such payment may be made in compliance with section 409A. Compensation and benefits contingent upon the execution of a customary release of claims in favor of the Company, Silver Lake Partners, L.P. (“SLP”) (if SLP is still a stockholder of the Company at that time) and related parties and compliance in all material respects with those restrictive covenants described in the section entitled “Confidentiality/Non-competition/No Raid”.

Change in Control: Termination Without Cause or if Executive Resigns with Good Reason		In the event that Executive is terminated without Cause or if Executive resigns for Good Reason in the 1 month prior to, or the 13 month period following, a Change in Control, Executive will be eligible to receive the following:
		Severance and Accrued Compensation: The Accrued Rights. Continuation of base salary and target performance bonus for a period of 24 months following termination (payable in accordance with usual and customary payroll practices). A pro rata portion of any performance bonus that Executive would have been entitled to receive for the quarter or year, as the case may be, in which such termination of employment occurs, determined based upon the actual satisfaction of performance goals. The pro-rata bonus will be payable at the time that the Company ordinarily would otherwise pay the performance bonus for such period. Continued coverage for a period of 24 months following termination of employment under the Company’s health insurance plans in accordance with the terms thereof, as required under COBRA or similar provisions of state law, at the same cost to Executive immediately prior to the date of termination; provided, however, that in the event that such continued health care coverage cannot be provided under COBRA or the similar provisions of state law beyond the end of the 18^th month following Executive’s termination of employment, then such health care coverage will be provided under a comparable health plan. In order to comply with section 409A of the Internal Revenue Code, payments under this section may be delayed. All delayed payments shall be paid, along with interest at the rate of prime + 1%, as soon as such payment may be made in compliance with

		section 409A. Compensation and benefits contingent upon the execution of a customary release of claims in favor of the Company, SLP (if SLP is still a stockholder of the Company at that time) and related parties and compliance in all material respects with those restrictive covenants described in the section entitled “Confidentiality/Non-competition/No Raid”.

Confidentiality/Noncompetition/No Raid		The Executive will be subject at all times during and after employment to a confidentiality covenant prohibiting the Executive from disclosing or using at any time any non-public confidential or proprietary information concerning the Company, SLP, the initial investor group, or their respective affiliates, except as required by law or while employed by the Company for the benefit of the Company. The terms and conditions related to Executive’s obligations in the preceding sentence will be memorialized in an agreement the terms and conditions of which will be substantially identical to those set forth in the Company’s form of Agreement Regarding Confidential Information and Assignment of Inventions (Rev. 02/01/2003). In addition, while employed and for 24 months thereafter, the Executive to be bound by covenants not to compete with the Company, SLP, the initial investor group or their respective affiliates and not to solicit or hire for the benefit of anyone, other than the Company, the initial investor group and their respective affiliates, any employee who is, or was during the 12 months preceding the time of the solicitation or hiring by the Company, employed by the Company or any of its subsidiaries.

Other		Employee benefits in accordance with the Company’s programs as in effect from time to time and applicable to the Company’s executive officers. Agreement shall contain “best after tax results” clause for purposes of Section 280G of the Internal Revenue Code. Prior to an IPO, in order to allow Executive to not be subject to the 20% excise tax imposed under Section 4999 of the Internal Revenue Code, Executive, the Company and SLP shall use commercially reasonable best efforts to obtain stockholder approval in accordance with the terms of Section 280G of the Internal Revenue Code. The Company shall reimburse Executive for reasonable legal

		fees and costs associated with the negotiation and execution of the employment and equity agreements contemplated hereby. Governing Law: California.

Definitions

Cause		(i) the willful and continued failure to perform his or her material duties with respect to the Company or its affiliates, which continues beyond 10 business days after a written demand for substantial performance specifying such failure(s) is received by Executive from the Company (the “Cure Period”); or (ii) the willful or intentional engaging by the Executive in conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company or SLP (taking into account their respective affiliates); or (iii) the conviction for, or a plea of nolo contendre to, the commission of a felony; or (iv) a material breach of the Executive’s covenants (other a breach that is immaterial and non-recurring) in his employment agreement that causes a demonstrable injury, monetarily or otherwise, to the Company, SLP or their respective affiliates.

Good Reason		(i) any reduction in the Executive’s base salary or the Executive’s annual incentive compensation opportunity (other than a general reduction, not to exceed 10%, in base salary or annual incentive compensation opportunities that affects all members of senior management equally); or (ii) any of (A) a substantial reduction in the Executive’s duties, responsibilities or title or (B) the assignment of any duties or responsibilities that are materially inconsistent with Executive’s positions described in the section entitled Title (provided, however, that neither of (I) a change in Executive’s title or reporting relationships, or (II) an adjustment in the nature of Executive’s duties and responsibilities that does not remove from him the authority to manage substantially all of the products and services offered by the Company, in either case following a merger, consolidation, tender offer, or other purchase or sale of a business that involves the Company, shall constitute “Good Reason”); or (iii) a transfer of the Executive’s primary workplace by more than thirty-five (35) miles from the current workplace; or

(iv) failure of any successor to the business of the Company to assume the Company’s obligations under this Agreement or any employment agreement.

Note: The Executive’s written agreement to any of the above shall cause the event not to constitute “Good Reason”.

Change in Control

(i) the sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are used in the Securities Exchange Act of 1934, as amended), other than Silver Lake Partners II, LP (“SLP II”), any investment fund that is an affiliate (as defined under the rules promulgated under the Securities Act of 1933, as amended) of SLP II (collectively with SLP II, “SLP Funds”) or a controlled affiliate of SLP Funds; or

(ii) any person or group, other than an SLP Funds or a controlled affiliate of SLP Funds, is or becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; or

(iii) a merger or consolidation of the Company into another person which is not SLP Funds or a controlled affiliate of SLP Funds, if the stockholders of the common stock of the Company immediately prior to such transaction do not own a majority of the outstanding common stock of the surviving company or its parent immediately after the transaction in substantially the same proportions relative to each other as immediately prior to such transaction;

if and only if any such event listed in (i)-(iii) above results in the inability of SLP to elect a majority of the Board of the Company or the resulting successor or controlling entity.

SUMMARY OF MANAGEMENT EQUITY TERMS

General Agreement		Pursuant to this transaction, Messrs. Woodward and Pender (each an “Executive,” and collectively “Executives”) and certain other employees will be required to exchange a portion of their shares of restricted stock (including all unvested shares of restricted stock) of Serena Software, Inc. (“the Company”) and of their options to purchase the common stock of the Company, for shares and options in the recapitalized Company. Such exchange will apply to the agreed upon percentage of the sum of (1) the aggregate value of the “Option Spread” (as defined below) and (2) the value of the restricted stock held by certain members of the management team (to be identified by SLP) as determined by Executives and Silver Lake Partners, L.P (“SLP”) (the “Rollover Amount”). The Rollover Amount for Messrs. Woodward and Pender shall be 66% and 60%, respectively. Any shares of restricted stock comprising a portion of the Rollover Amount as designated by Executive (but including all unvested shares of restricted stock) shall be exchanged for shares of common stock in the recapitalized Company with equivalent value. Any options to purchase the common stock of the Company comprising a portion of the Rollover Amount as designated by Executive shall be exchanged for options to acquire shares of common stock of the recapitalized Company with an equivalent value equal to the “Option Spread” (as defined below). At the Closing, cash will be paid to Executives and other members of the management team (net of applicable taxes) equal to the sum of $24 for each share of vested restricted stock that he owns and the Option Spread (as defined below) for each share subject to a vested option that he owns and that in each case is not exchanged in order to reach the Rollover Amount.

Rollover Equity

Restricted Stock		At the closing of the proposed acquisition (the “Closing”), the unvested restricted stock issued to Executives by the Company in 2005 and any vested restricted stock exchanged in order to satisfy the Rollover Amount (collectively, the “Restricted Stock”) will be appropriately adjusted as a result of the recapitalization of the Company and will remain outstanding and subject to the applicable terms and conditions set forth in the documents evidencing the award of the Restricted Stock by the Company and the applicable terms and conditions set forth in this document.

Company Stock Options		All unvested options to purchase Company common stock granted

		under any stock option plans or other equity-related plans of the Company or any of its subsidiaries (the “Company Stock Options) will vest in full immediately prior to the Closing. At the Closing, the total “Option Spread” (described below) will be calculated for each member of the management team (to be identified by SLP). The Option Spread will be equal to the product of (i) the excess, if any, of (A) $24 per share of Company common stock less (B) the exercise price per share of Company common stock subject to such Company Stock Option, multiplied by (ii) the total number of shares of Company common stock subject to Company Stock Options held by the individual. At the Closing, each member of the management team will be paid an amount of cash (net of applicable taxes) equal to the Option Spread that he will not be contributing into the recapitalized Company, and each outstanding Company Stock Option with an exercise price in excess of $24 per share will terminate at the Closing. As soon as practicable following the Closing, the Company will provide each member of the management team a substitute option with an equivalent value equal to the amount of Option Spread that he will be contributing to the recapitalized Company (the “Substitute Option”). Substitute Options will be issued with an exercise price equivalent to the greater of (1) 25% of the price per share that SLP pays for each share of common stock of the recapitalized Company or (2) the lowest exercise price that complies with Prop. Treas. Reg. § 1.409A-1(b)(5).

Section 368 Stock		At their discretion, each member of the management team will be permitted to contribute any share of Company common stock that such person holds immediately prior to the Closing into the recapitalized Company following the Closing in exchange for fully vested common stock of the recapitalized Company with equivalent value (“Section 368 Stock”). To the extent feasible and permitted by applicable law, this exchange will be treated as a tax free exchange of capital under Section 368 of the Internal Revenue Code.

Founders Stock		At their discretion, each member of the management team will be permitted to purchase some number of shares of the common stock of the recapitalized Company at the same per share price as SLP paid for the common stock of the recapitalized Company (the “Founder Stock”).

COMPANY 200[5] STOCK INCENTIVE PLAN

Adoption of Company 200[5] Stock Incentive Plan		As soon as practicable following the Closing, the Company will adopt the Company 200[5] Stock Incentive Plan (the “Plan”).

Shares reserved for issuance under the Plan		Company common stock representing 12% of outstanding common stock on a fully diluted basis as of the Closing will be reserved for issuance under the Plan (the “Share Reserve”). One-half of the Share Reserve will be issued as Time Options and one-half of the Share Reserve will be issued as Performance Options to be granted to vice president (or more senior) level employees.

Initial Options		As soon as practicable following the Closing,(1) the Board of Directors of the Company (the “Board”) will issue options (in addition to the Substitute Options) to the Executives and other employees of the Company and its subsidiaries representing no more than 10% of the Company’s outstanding common stock on a fully diluted basis as of the Closing (the “Initial Options”). One-half of the Initial Options will be allocated to participants at the discretion of the Board after considering the Rollover Amount applicable to each participant and the actual amount of each participant’s investment in the recapitalized Company (including by way of Restricted Stock, Section 368 Stock, Founders Stock, and Substitute Options). Initial Options will be granted to the Executives in the following proportions: • Chief Executive Officer (Mark E. Woodward): No more than 70% of the Initial Options issued will be Performance Options and no less than 30% of the Initial Options issued will be Time Options. • Chief Financial Officer (Robert I. Pender, Jr.): No more than 70% of the Initial Options issued will be Performance Options and no less than 30% of the Initial Options issued will be Time Options.

Future Awards		The shares reserved for issuance under the Plan, which are not designated as Initial Options, may be granted at the discretion of the Board (the “Future Awards”).

(1) Note that some portion of the initial 10% option pool will be reserved for new hires in the following identified key executive positions (head of sales, general counsel and Chief Information Officer).

Duration of the Plan		10 years

Exercise Price of Options		The Initial Options will have an exercise price equal to the price paid per share of common stock by SLP on the Closing (the “Base Price”). Future Awards issued as options will have an exercise price equal to 100% of fair market value of a share of Company common stock on the date of grant, as determined by the Board, which determination shall use reasonable valuation methods consistently applied, in conformance with the guidelines of Treas. Reg. § 1.409A-1(b)(5)(iv)(B).

Vesting		The Initial Options will vest as follows: • Time Options will vest as to 25% of the total option at the completion of 12 months of continuous service from the grant date, and then in 36 equal monthly increments thereafter (award is fully vested after 4 years of continuous service from the grant date). • Up to 20% of the Performance Options may vest on an annual basis if the Company achieves certain fiscal year performance targets. The Performance Options may also vest on a cumulative basis (e.g., if in one year the applicable performance targets are not met, there will be “catch-up” vesting if, on a cumulative basis, the performance targets are met). Schedule B attached hereto provides additional detail related to the vesting of Performance Options based upon the achievement of specified fiscal year and cumulative performance objectives. Future Awards issued under the Plan will become vested pursuant to terms and conditions established by the Board at the time of grant.

Change in Control		In addition to the vesting set forth above, options will also vest and become exercisable on the occurrence of a Change in Control (as defined below) as follows:

		• All Time Options will vest and become exercisable immediately prior to a Change in Control. • In the event that SLP recognizes the financial returns described below, certain Performance Options may vest as a result of a Change in Control. • All Performance Options that have not previously

		vested will vest and become exercisable immediately prior to such Change in Control if as a result of such Change of Control SLP earns greater than 3 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing. • Performance Options that previously failed to vest as a result of the failure to meet the performance objectives specified in Schedule B hereto will vest and become exercisable immediately prior to such Change in Control if as a result of such Change of Control SLP earns greater than 2.0 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing. For the avoidance of doubt, i) Performance Options subject to vesting upon the achievement of performance objectives for fiscal years commencing after the Change in Control will not vest and become exercisable as a result of the Change in Control and ii) Performance Options subject to vesting upon the achievement of performance objectives for the fiscal year in which the Change in Control occurs will vest on a pro-rata basis based upon the number of full weeks which have elapsed during such fiscal year prior to the Change in Control and without regard to actual financial performance during such fiscal year. • No Performance Option will vest if SLP does not earn greater than 2.0 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing.

Form of Option Exercise Payment		Cash, mature shares of Company common stock, same day sale program (i.e., “cashless exercise”) to the extent permitted under applicable law and other forms of consideration acceptable to the Board.

Termination of Stock Options		Vested options will terminate as set forth on Schedule A attached hereto, but in no event later than the tenth anniversary of the date of issuance.

Stockholders’ Agreement		Each share of Company common stock acquired by Executive (the “Management Shares”) and each option issued to Executive (the “Management Options”) will be subject to a management stockholders’ agreement and a sale participation agreement. For the avoidance of doubt, Management Shares will include each share of

		Restricted Stock, Section 368 Stock, Founders Stock, Company common stock issued under the Plan or pursuant to the exercise of Substitute Options (whether issued before or after the date of termination of an individual’s service with the Company), and Management Options will include all Substitute Options and all options issued under the Plan. The management stockholders’ agreement and the sale participation agreement, together, will provide for the following: (i) transfer restrictions, subject to certain exceptions, which exceptions shall include the Executive’s right to transfer his Management Shares to any estate planning vehicles that he might establish, for his benefit or the benefit of his family (including, without limitation, a trust, partnership, corporation or other entity); (ii) a right of first refusal of the Company; (iii) in the event of termination of service(2) with the Company, the Company and SLP will have the option to repurchase the Management Shares and Management Options issued to Executive under such circumstances and at such prices as set forth on Schedule A attached hereto; (iv) piggyback registration rights on behalf of the Executive; and (v) tag-along rights on behalf of the Executive and drag-along rights for SLP.

Definitions

Cause		(i) the willful and continued failure to perform his or her material duties with respect to the Company or its affiliates, which continues beyond 10 business days after a written demand for substantial performance specifying such failure(s) is received by Executive from the Company (the “Cure Period”); or (ii) the willful or intentional engaging by the Executive in conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company or SLP (taking into account their respective affiliates); or (iii) the conviction for, or a plea of nolo contendre to, the

(2) For the avoidance of doubt, in this context “service” is intended to mean service as a member of the Company’s Board of Directors or substantially full-time service as an employee or consultant to the Company or its subsidiaries.

		commission of a felony; or

		(iv) a material breach of the Executive’s covenants (other than one that is immaterial and non-recurring) in his employment agreement that causes a demonstrable injury, monetarily or otherwise, to the Company, SLP or their respective affiliates.

Change in Control		(i) the sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are used in the Securities Exchange Act of 1934, as amended), other than Silver Lake Partners II, LP (“SLP II”), any investment fund that is an affiliate (as defined under the rules promulgated under the Securities Act of 1933, as amended) of SLP II (collectively with SLP II, “SLP Funds”) or a controlled affiliate of SLP Funds; or (ii) any person or group, other than an SLP Funds or a controlled affiliate of SLP Funds, is or becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; or (iii) a merger or consolidation of the Company into another person which is not SLP Funds or a controlled affiliate of SLP Funds, if the stockholders of the common stock of the Company immediately prior to such transaction do not own a majority of the outstanding common stock of the surviving company or its parent immediately after the transaction in substantially the same proportions relative to each other as immediately prior to such transaction; if and only if any such event listed in (i)-(iii) above results in the inability of SLP to elect a majority of the Board of the Company or the resulting successor or controlling entity.

Good Reason		(i) any reduction in the Executive’s base salary or the Executive’s annual incentive compensation opportunity (other than a general reduction, not to exceed 10%, in base salary or annual incentive compensation opportunities that affects all members of senior management equally); or (ii) any of (A) a substantial reduction in the Executive’s duties, responsibilities or title or (B) the assignment of any duties or responsibilities that are materially inconsistent with Executive’s positions described in the section entitled Title (provided, however, that neither of (I) a change in Executive’s title or reporting

relationships, or (II) an adjustment in the nature of Executive’s duties and responsibilities that does not remove from him the authority to manage the [area of expertise (e.g., HR function)] related to substantially all of the products and services offered by the Company, in either case following a merger, consolidation, tender offer, or other purchase or sale of a business that involves the Company, shall constitute “Good Reason”); or

(iii) a transfer of the Executive’s primary workplace by more than thirty-five (35) miles from the current workplace; or

(iv) failure of any successor to the business of the Company to assume the Company’s obligations under this Agreement or any employment agreement.

Note: The Executive’s written agreement to any of the above shall cause the event not to constitute “Good Reason”.

IPO

An initial public offering of the Company of at least 25% of the outstanding shares, or that results in gross proceeds to the Company equal to at least 50% of SLP’s initial investment in the Company’s common stock (excluding any common stock syndicated or otherwise resold by SLP or its affiliates within 6 months of the Closing). For the avoidance of doubt, any subsequent public offering of the Company will be combined with the initial public offering of the Company in order to determine whether the 25% and 50% thresholds contained in the preceding sentence have been surpassed.

SCHEDULE A

SUMMARY OF MANAGEMENT EQUITY CALL RIGHTS BY COMPANY

Termination for:	Management Shares	All Options

Death/Disability (Vested Options(3): 12 months to exercise)	FMV(4) prior to an IPO MV(5) after an IPO	N/A

Without Cause/Quit for Good Reason (Vested Options: 12 months to exercise)	FMV prior to an IPO MV after an IPO	N/A

Quit without Good Reason (Vested Options: 3 months to exercise)	FMV prior to an IPO, and MV after an IPO	All vested options at same price as stock minus exercise price

For Cause (All Options expire immediately on termination)	Lower of i) BV(6) and ii) FMV prior to an IPO, and MV after an IPO	All options (whether or not vested) terminate without payment therefor

(3) Unvested options immediately terminate on the date of termination of service for any reason.

(4) Prior to an IPO, the fair market value (FMV) of the Company common stock as determined by the Board following the principle of reasonable valuation methods consistently applied under the guidelines of Treas. Reg. § 1.409A-1(b)(5)(iv)(B).

(5) Subsequent to an IPO, the market value (MV) shall be the closing trading price of the Company common stock.

(6) Book Value (BV) of the Company common stock, calculated in accordance with U.S. generally accepted accounting principles and based on the initial aggregate purchase price paid by SLP and the initial investor group for the Company, adjusted for, generally and among other things, profits, losses, contributions to equity, deductions, dividends paid, divided by a fully diluted number of the Company’s share capital.

SCHEDULE B

PERFORMANCE TARGETS APPLICABLE TO PERFORMANCE OPTIONS

	FY07		FY08		FY09		FY10		FY11
EBITA Targets
Lower Bound	$	102.6	$	114.8	$	122.8	$	131.3	$	140.4
Upper Bound	106.3		127.8		138.8		151.1		164.7
Cumulative Lower Bound			217.4		340.2		471.5		611.9
Cumulative Upper Bound			234.1		372.9		524.0		688.7

Vesting Rules:

1. No portion of the shares subject to a Performance Option shall vest unless the Lower Bound EBITA target is achieved.

2. If the Lower Bound EBITA target is achieved at the end of a specified fiscal year, 10% of the shares subject to a Performance Option shall vest.

3. If the Upper Bound EBITA target is achieved at the end of a fiscal year, 20% of the shares subject to a Performance Option shall vest.

4. In the event that actual EBITA results fall between the Lower Bound and Upper Bound EBITA targets, the percentage of shares subject to the Performance Options that will vest at the end of a fiscal year will be determined based on a straight line interpolation calculation.

5. The Performance Options may also vest and become exercisable on a “catch-up” basis at the end of FY08, FY09, FY10 and FY11. At the end of FY08, FY09, FY10 or FY11, the applicable Cumulative Lower Bound and the Cumulative Upper Bound shall be substituted for the Lower Bound and Upper Bound for all prior fiscal years. Thereafter, rules 1 through 4 above shall be reapplied for each prior fiscal year. In the event that the recalculated amount at the end of any fiscal year would provide an amount of accelerated vesting that exceeds the aggregate amount of vesting otherwise applicable to the Performance Option, then the Performance Option shall be vested to such greater extent.

6. EBITA shall be determined in accordance with U.S. generally accepted accounting principles, except that certain payments, including stock-based compensation expenses recognized under FAS 123(R), SLP management fees, and all costs associated with this transaction will not be considered in calculating EBITA. For the avoidance of doubt, EBITA generally shall mean consolidated net income for a specified fiscal year plus, without duplication and to the extent reflected as a charge in the statement of such consolidated net income for such period, the sum of (a) income tax expense, (b) interest expense, (c) total amortization expense, and (d) any extraordinary, unusual or non-recurring non-cash expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such consolidated net income for such period, non-cash losses on sales of assets outside of the ordinary course of business), and shall further be calculated in accordance with the preceding sentence.

EX-9 9 a05-20673_1ex9.htm EXHIBIT 9

Exhibit 9

November 11, 2005

Robert I. Pender Jr.

2042 Tripiano Court

Mountain View, CA 94040-3870

Dear Robert:

We desire that you continue as the Company’s Senior Vice President, Finance and Administration and Chief Financial Officer following the “Closing” (as defined in the Merger Agreement). To confirm our mutual agreement to that end, we request that you sign and return a copy of this letter indicating your agreement to serve as the Senior Vice President, Finance and Administration and Chief Financial Officer of the Company following the Closing, and your agreement to contribute certain shares of Company common stock into MergerCo in exchange for common stock of MergerCo and to exchange certain options to acquire Company common stock for options in the recapitalized Company, pursuant to the terms and conditions set forth in the Summary of Employment Terms and the exhibits thereto (collectively, the “Executive Arrangements”). Prior to the Closing, you and MergerCo agree to execute the necessary documents so long as they reflect and set forth in all material respects the business terms and conditions set forth in the Executive Arrangements and address other customary provisions associated with your services as Senior Vice President, Finance and Administration and Chief Financial Officer of the Company and your status as a stockholder of the Company.

The terms of this letter agreement will be governed by the laws of the State of California.

[Remainder of Page Intentionally Left Blank]

	Very truly yours,

	Spyglass Merger Corp.

	By:	/s/ ALAN K. AUSTIN
	Name: Alan K. Austin
	Title: Vice President

Acknowledged and Agreed:

/s/ ROBERT I. PENDER, JR.
Robert I. Pender Jr.

EXHIBIT A

EXECUTIVE ARRANGEMENTS

Execution Copy

SUMMARY OF EMPLOYMENT TERMS

Executive		Robert I. Pender, Jr. (“Executive”)

Title		Senior Vice President, Finance and Administration; Chief Financial Officer of Serena Software, Inc. (the “Company”)

Term		A period commencing on the closing of the proposed acquisition (the “Closing”) and continuing for an indefinite term.

Base Salary		$290,000 per annum, subject to annual review for increases, and payable in accordance with the Company’s usual payment practices.

Annual Performance Bonus		Executive shall be eligible to earn an annual performance bonus award of up to 100% of Executive’s base salary, based upon the achievement of annual performance targets established by the Board of Directors of the Company (the “Board”). The annual performance targets and annual performance bonus awards shall be divided into quarterly targets and corresponding quarterly awards. Each quarterly award shall be earned for each quarter in which the corresponding quarterly target is achieved. No quarterly award shall be earned for any quarter in which the quarterly target is not achieved, however, any quarterly award not earned in such quarter will be earned upon the achievement of either cumulative quarterly performance targets year to date or that year’s annual performance target.

Business Expenses		Reasonable business expenses shall be reimbursed by the Company in accordance with Company policy (not less favorable than current practice).

Vacation		4 weeks per year

New Options to Acquire Company Common Stock		Effective at the Closing, Executive will be granted an option (the “Option”) to acquire common stock of the Company. The Option will be granted pursuant to the 2005 Company Stock Incentive Plan (see “Summary of Management Equity Terms” attached as Exhibit A (the “Equity Terms”)), which will be established as soon as practicable following the Closing. A portion of the Option will be granted as a “Time Option” (as defined in the Equity Terms) and a portion of the Option will be granted as a “Performance Option” (as defined in the Equity Terms).

The general terms and conditions applicable to the Option and the additional “Rollover Equity” are summarized in the Equity Terms.

Termination Without Cause or if Executive Resigns with Good Reason:

Severance and Accrued Compensation:

Continuation of base salary for a period of 24 months following termination (payable in accordance with usual and customary payroll practices).

Six months of additional vesting credit for any Time Options.

In order to comply with section 409A of the Internal Revenue Code, payments under this section may be delayed. All delayed payments shall be paid, along with interest at the rate of prime + 1%, as soon as such payment may be made in compliance with section 409A.

		Compensation and benefits contingent upon the execution of a customary release of claims in favor of the Company, Silver Lake Partners, L.P. (“SLP”) (if SLP is still a stockholder of the Company at that time) and related parties and compliance in all material respects with those restrictive covenants described in the section entitled “Confidentiality/Non-competition/No Raid”.

Change in Control: Termination Without Cause or if Executive Resigns with Good Reason		In the event that Executive is terminated without Cause or if Executive resigns for Good Reason in the 1 month prior to, or the 13 month period following, a Change in Control, Executive will be eligible to receive the following:
		Severance and Accrued Compensation: The Accrued Rights. Continuation of base salary and target performance bonus for a period of 24 months following termination (payable in accordance with usual and customary payroll practices). A pro rata portion of any performance bonus that Executive would have been entitled to receive for the quarter or year, as the case may be, in which such termination of employment occurs, determined based upon the actual satisfaction of performance goals. The pro-rata bonus will be payable at the time that the Company ordinarily would otherwise pay the performance bonus for such period. Continued coverage for a period of 24 months following termination of employment under the Company’s health insurance plans in accordance with the terms thereof, as required under COBRA or similar provisions of state law, at the same cost to Executive immediately prior to the date of termination; provided, however, that in the event that such continued health care coverage cannot be provided under COBRA or the similar provisions of state law beyond the end of the 18^th month following Executive’s termination of employment, then such health care coverage will be provided under a comparable health plan. In order to comply with section 409A of the Internal Revenue Code, payments under this section may be delayed. All delayed payments shall be paid, along with interest at the rate of prime + 1%, as soon as such payment may be made in compliance with section 409A. Compensation and benefits contingent upon the execution of a customary release of claims in favor of the Company, SLP (if

		SLP is still a stockholder of the Company at that time) and related parties and compliance in all material respects with those restrictive covenants described in the section entitled “Confidentiality/Non-competition/No Raid”.

Confidentiality/Noncompetition/No Raid		The Executive will be subject at all times during and after employment to a confidentiality covenant prohibiting the Executive from disclosing or using at any time any non-public confidential or proprietary information concerning the Company, SLP, the initial investor group, or their respective affiliates, except as required by law or while employed by the Company for the benefit of the Company. The terms and conditions related to Executive’s obligations in the preceding sentence will be memorialized in an agreement the terms and conditions of which will be substantially identical to those set forth in the Company’s form of Agreement Regarding Confidential Information and Assignment of Inventions (Rev. 02/01/2003). In addition, while employed and for 24 months thereafter, the Executive to be bound by covenants not to compete with the Company, SLP, the initial investor group or their respective affiliates and not to solicit or hire for the benefit of anyone, other than the Company, the initial investor group and their respective affiliates, any employee who is, or was during the 12 months preceding the time of the solicitation or hiring by the Company, employed by the Company or any of its subsidiaries.

Other		Employee benefits in accordance with the Company’s programs as in effect from time to time and applicable to the Company’s executive officers. Agreement shall contain “best after tax results” clause for purposes of Section 280G of the Internal Revenue Code. Prior to an IPO, in order to allow Executive to not be subject to the 20% excise tax imposed under Section 4999 of the Internal Revenue Code, Executive, the Company and SLP shall use commercially reasonable best efforts to obtain stockholder approval in accordance with the terms of Section 280G of the Internal Revenue Code. The Company shall reimburse Executive for reasonable legal fees and costs associated with the negotiation and execution of the employment and equity agreements contemplated hereby.

		Governing Law: California.

Definitions

Cause		(i) the willful and continued failure to perform his or her material duties with respect to the Company or its affiliates, which continues beyond 10 business days after a written demand for substantial performance specifying such failure(s) is received by Executive from the Company (the “Cure Period”); or (ii) the willful or intentional engaging by the Executive in conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company or SLP (taking into account their respective affiliates); or (iii) the conviction for, or a plea of nolo contendre to, the commission of a felony; or (iv) a material breach of the Executive’s covenants (other a breach that is immaterial and non-recurring) in his employment agreement that causes a demonstrable injury, monetarily or otherwise, to the Company, SLP or their respective affiliates.

Good Reason		(i) any reduction in the Executive’s base salary or the Executive’s annual incentive compensation opportunity (other than a general reduction, not to exceed 10%, in base salary or annual incentive compensation opportunities that affects all members of senior management equally); or (ii) any of (A) a substantial reduction in the Executive’s duties, responsibilities or title or (B) the assignment of any duties or responsibilities that are materially inconsistent with Executive’s positions described in the section entitled Title (provided, however, that neither of (I) a change in Executive’s title or reporting relationships, or (II) an adjustment in the nature of Executive’s duties and responsibilities that does not remove from him the authority to manage Finance and Administration functions related to substantially all of the products and services offered by the Company, in either case following a merger, consolidation, tender offer, or other purchase or sale of a business that involves the Company, shall constitute “Good Reason”); or (iii) a transfer of the Executive’s primary workplace by more than thirty-five (35) miles from the current workplace; or (iv) failure of any successor to the business of the Company to assume the Company’s obligations under this Agreement or any

employment agreement.

Note: The Executive’s written agreement to any of the above shall cause the event not to constitute “Good Reason”.

Change in Control

if and only if any such event listed in (i)-(iii) above results in the inability of SLP to elect a majority of the Board of the Company or the resulting successor or controlling entity.

SUMMARY OF MANAGEMENT EQUITY TERMS

General Agreement		Pursuant to this transaction, Messrs. Woodward and Pender (each an “Executive,” and collectively “Executives”) and certain other employees will be required to exchange a portion of their shares of restricted stock (including all unvested shares of restricted stock) of Serena Software, Inc. (“the Company”) and of their options to purchase the common stock of the Company, for shares and options in the recapitalized Company. Such exchange will apply to the agreed upon percentage of the sum of (1) the aggregate value of the “Option Spread” (as defined below) and (2) the value of the restricted stock held by certain members of the management team (to be identified by SLP) as determined by Executives and Silver Lake Partners, L.P (“SLP”) (the “Rollover Amount”). The Rollover Amount for Messrs. Woodward and Pender shall be 66% and 60%, respectively. Any shares of restricted stock comprising a portion of the Rollover Amount as designated by Executive (but including all unvested shares of restricted stock) shall be exchanged for shares of common stock in the recapitalized Company with equivalent value. Any options to purchase the common stock of the Company comprising a portion of the Rollover Amount as designated by Executive shall be exchanged for options to acquire shares of common stock of the recapitalized Company with an equivalent value equal to the “Option Spread” (as defined below). At the Closing, cash will be paid to Executives and other members of the management team (net of applicable taxes) equal to the sum of $24 for each share of vested restricted stock that he owns and the Option Spread (as defined below) for each share subject to a vested option that he owns and that in each case is not exchanged in order to reach the Rollover Amount.

Rollover Equity

Restricted Stock		At the closing of the proposed acquisition (the “Closing”), the unvested restricted stock issued to Executives by the Company in 2005 and any vested restricted stock exchanged in order to satisfy the Rollover Amount (collectively, the “Restricted Stock”) will be appropriately adjusted as a result of the recapitalization of the Company and will remain outstanding and subject to the applicable terms and conditions set forth in the documents evidencing the award of the Restricted Stock by the Company and the applicable terms and conditions set forth in this document.

Company Stock Options		All unvested options to purchase Company common stock granted

		under any stock option plans or other equity-related plans of the Company or any of its subsidiaries (the “Company Stock Options) will vest in full immediately prior to the Closing. At the Closing, the total “Option Spread” (described below) will be calculated for each member of the management team (to be identified by SLP). The Option Spread will be equal to the product of (i) the excess, if any, of (A) $24 per share of Company common stock less (B) the exercise price per share of Company common stock subject to such Company Stock Option, multiplied by (ii) the total number of shares of Company common stock subject to Company Stock Options held by the individual. At the Closing, each member of the management team will be paid an amount of cash (net of applicable taxes) equal to the Option Spread that he will not be contributing into the recapitalized Company, and each outstanding Company Stock Option with an exercise price in excess of $24 per share will terminate at the Closing. As soon as practicable following the Closing, the Company will provide each member of the management team a substitute option with an equivalent value equal to the amount of Option Spread that he will be contributing to the recapitalized Company (the “Substitute Option”). Substitute Options will be issued with an exercise price equivalent to the greater of (1) 25% of the price per share that SLP pays for each share of common stock of the recapitalized Company or (2) the lowest exercise price that complies with Prop. Treas. Reg. § 1.409A-1(b)(5).

Section 368 Stock		At their discretion, each member of the management team will be permitted to contribute any share of Company common stock that such person holds immediately prior to the Closing into the recapitalized Company following the Closing in exchange for fully vested common stock of the recapitalized Company with equivalent value (“Section 368 Stock”). To the extent feasible and permitted by applicable law, this exchange will be treated as a tax free exchange of capital under Section 368 of the Internal Revenue Code.

Founders Stock		At their discretion, each member of the management team will be permitted to purchase some number of shares of the common stock of the recapitalized Company at the same per share price as SLP paid for the common stock of the recapitalized Company (the “Founder Stock”).

COMPANY 200[5] STOCK INCENTIVE PLAN

Adoption of Company 200[5] Stock Incentive Plan		As soon as practicable following the Closing, the Company will adopt the Company 200[5] Stock Incentive Plan (the “Plan”).

Shares reserved for issuance under the Plan		Company common stock representing 12% of outstanding common stock on a fully diluted basis as of the Closing will be reserved for issuance under the Plan (the “Share Reserve”). One-half of the Share Reserve will be issued as Time Options and one-half of the Share Reserve will be issued as Performance Options to be granted to vice president (or more senior) level employees.

Initial Options		As soon as practicable following the Closing,(1) the Board of Directors of the Company (the “Board”) will issue options (in addition to the Substitute Options) to the Executives and other employees of the Company and its subsidiaries representing no more than 10% of the Company’s outstanding common stock on a fully diluted basis as of the Closing (the “Initial Options”). One-half of the Initial Options will be allocated to participants at the discretion of the Board after considering the Rollover Amount applicable to each participant and the actual amount of each participant’s investment in the recapitalized Company (including by way of Restricted Stock, Section 368 Stock, Founders Stock, and Substitute Options). Initial Options will be granted to the Executives in the following proportions: • Chief Executive Officer (Mark E. Woodward): No more than 70% of the Initial Options issued will be Performance Options and no less than 30% of the Initial Options issued will be Time Options. • Chief Financial Officer (Robert I. Pender, Jr.): No more than 70% of the Initial Options issued will be Performance Options and no less than 30% of the Initial Options issued will be Time Options.

Future Awards		The shares reserved for issuance under the Plan, which are not designated as Initial Options, may be granted at the discretion of the Board (the “Future Awards”).

Duration of the Plan		10 years

Exercise Price of Options		The Initial Options will have an exercise price equal to the price paid per share of common stock by SLP on the Closing (the “Base Price”). Future Awards issued as options will have an exercise price equal to 100% of fair market value of a share of Company common stock on the date of grant, as determined by the Board, which determination shall use reasonable valuation methods consistently applied, in conformance with the guidelines of Treas. Reg. § 1.409A-1(b)(5)(iv)(B).

Vesting		The Initial Options will vest as follows: • Time Options will vest as to 25% of the total option at the completion of 12 months of continuous service from the grant date, and then in 36 equal monthly increments thereafter (award is fully vested after 4 years of continuous service from the grant date). • Up to 20% of the Performance Options may vest on an annual basis if the Company achieves certain fiscal year performance targets. The Performance Options may also vest on a cumulative basis (e.g., if in one year the applicable performance targets are not met, there will be “catch-up” vesting if, on a cumulative basis, the performance targets are met). Schedule B attached hereto provides additional detail related to the vesting of Performance Options based upon the achievement of specified fiscal year and cumulative performance objectives. Future Awards issued under the Plan will become vested pursuant to terms and conditions established by the Board at the time of grant.

Change in Control		In addition to the vesting set forth above, options will also vest and become exercisable on the occurrence of a Change in Control (as defined below) as follows:

		• All Time Options will vest and become exercisable immediately prior to a Change in Control. • In the event that SLP recognizes the financial returns described below, certain Performance Options may vest as a result of a Change in Control. • All Performance Options that have not previously

		vested will vest and become exercisable immediately prior to such Change in Control if as a result of such Change of Control SLP earns greater than 3 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing. • Performance Options that previously failed to vest as a result of the failure to meet the performance objectives specified in Schedule B hereto will vest and become exercisable immediately prior to such Change in Control if as a result of such Change of Control SLP earns greater than 2.0 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing. For the avoidance of doubt, i) Performance Options subject to vesting upon the achievement of performance objectives for fiscal years commencing after the Change in Control will not vest and become exercisable as a result of the Change in Control and ii) Performance Options subject to vesting upon the achievement of performance objectives for the fiscal year in which the Change in Control occurs will vest on a pro-rata basis based upon the number of full weeks which have elapsed during such fiscal year prior to the Change in Control and without regard to actual financial performance during such fiscal year. • No Performance Option will vest if SLP does not earn greater than 2.0 times the Base Price for each share of Common Stock held (directly or indirectly) by SLP or an affiliate that was purchased at Closing.

Form of Option Exercise Payment		Cash, mature shares of Company common stock, same day sale program (i.e., “cashless exercise”) to the extent permitted under applicable law and other forms of consideration acceptable to the Board.

Termination of Stock Options		Vested options will terminate as set forth on Schedule A attached hereto, but in no event later than the tenth anniversary of the date of issuance.

Stockholders’ Agreement		Each share of Company common stock acquired by Executive (the “Management Shares”) and each option issued to Executive (the “Management Options”) will be subject to a management stockholders’ agreement and a sale participation agreement. For the avoidance of doubt, Management Shares will include each share of

		Restricted Stock, Section 368 Stock, Founders Stock, Company common stock issued under the Plan or pursuant to the exercise of Substitute Options (whether issued before or after the date of termination of an individual’s service with the Company), and Management Options will include all Substitute Options and all options issued under the Plan. The management stockholders’ agreement and the sale participation agreement, together, will provide for the following: (i) transfer restrictions, subject to certain exceptions, which exceptions shall include the Executive’s right to transfer his Management Shares to any estate planning vehicles that he might establish, for his benefit or the benefit of his family (including, without limitation, a trust, partnership, corporation or other entity); (ii) a right of first refusal of the Company; (iii) in the event of termination of service(2) with the Company, the Company and SLP will have the option to repurchase the Management Shares and Management Options issued to Executive under such circumstances and at such prices as set forth on Schedule A attached hereto; (iv) piggyback registration rights on behalf of the Executive; and (v) tag-along rights on behalf of the Executive and drag-along rights for SLP.

Definitions

Cause		(i) the willful and continued failure to perform his or her material duties with respect to the Company or its affiliates, which continues beyond 10 business days after a written demand for substantial performance specifying such failure(s) is received by Executive from the Company (the “Cure Period”); or (ii) the willful or intentional engaging by the Executive in conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company or SLP (taking into account their respective affiliates); or (iii) the conviction for, or a plea of nolo contendre to, the

		commission of a felony; or

		(iv) a material breach of the Executive’s covenants (other than one that is immaterial and non-recurring) in his employment agreement that causes a demonstrable injury, monetarily or otherwise, to the Company, SLP or their respective affiliates.

Change in Control		(i) the sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are used in the Securities Exchange Act of 1934, as amended), other than Silver Lake Partners II, LP (“SLP II”), any investment fund that is an affiliate (as defined under the rules promulgated under the Securities Act of 1933, as amended) of SLP II (collectively with SLP II, “SLP Funds”) or a controlled affiliate of SLP Funds; or (ii) any person or group, other than an SLP Funds or a controlled affiliate of SLP Funds, is or becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power of the voting stock of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; or (iii) a merger or consolidation of the Company into another person which is not SLP Funds or a controlled affiliate of SLP Funds, if the stockholders of the common stock of the Company immediately prior to such transaction do not own a majority of the outstanding common stock of the surviving company or its parent immediately after the transaction in substantially the same proportions relative to each other as immediately prior to such transaction; if and only if any such event listed in (i)-(iii) above results in the inability of SLP to elect a majority of the Board of the Company or the resulting successor or controlling entity.

Good Reason		(i) any reduction in the Executive’s base salary or the Executive’s annual incentive compensation opportunity (other than a general reduction, not to exceed 10%, in base salary or annual incentive compensation opportunities that affects all members of senior management equally); or (ii) any of (A) a substantial reduction in the Executive’s duties, responsibilities or title or (B) the assignment of any duties or responsibilities that are materially inconsistent with Executive’s positions described in the section entitled Title (provided, however, that neither of (I) a change in Executive’s title or reporting

(iii) a transfer of the Executive’s primary workplace by more than thirty-five (35) miles from the current workplace; or

(iv) failure of any successor to the business of the Company to assume the Company’s obligations under this Agreement or any employment agreement.

Note: The Executive’s written agreement to any of the above shall cause the event not to constitute “Good Reason”.

IPO

SCHEDULE A

SUMMARY OF MANAGEMENT EQUITY CALL RIGHTS BY COMPANY

Termination for:	Management Shares	All Options

Death/Disability (Vested Options(3): 12 months to exercise)	FMV(4) prior to an IPO MV(5) after an IPO	N/A

Without Cause/Quit for Good Reason (Vested Options: 12 months to exercise)	FMV prior to an IPO MV after an IPO	N/A

Quit without Good Reason (Vested Options: 3 months to exercise)	FMV prior to an IPO, and MV after an IPO	All vested options at same price as stock minus exercise price

For Cause (All Options expire immediately on termination)	Lower of i) BV(6) and ii) FMV prior to an IPO, and MV after an IPO	All options (whether or not vested) terminate without payment therefor

(3) Unvested options immediately terminate on the date of termination of service for any reason.

(5) Subsequent to an IPO, the market value (MV) shall be the closing trading price of the Company common stock.

SCHEDULE B

PERFORMANCE TARGETS APPLICABLE TO PERFORMANCE OPTIONS

	FY07		FY08		FY09		FY10		FY11
EBITA Targets
Lower Bound	$	102.6	$	114.8	$	122.8	$	131.3	$	140.4
Upper Bound	106.3		127.8		138.8		151.1		164.7
Cumulative Lower Bound			217.4		340.2		471.5		611.9
Cumulative Upper Bound			234.1		372.9		524.0		688.7

Vesting Rules:

1. No portion of the shares subject to a Performance Option shall vest unless the Lower Bound EBITA target is achieved.

2. If the Lower Bound EBITA target is achieved at the end of a specified fiscal year, 10% of the shares subject to a Performance Option shall vest.

3. If the Upper Bound EBITA target is achieved at the end of a fiscal year, 20% of the shares subject to a Performance Option shall vest.

non-recurring non-cash expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such consolidated net income for such period, non-cash losses on sales of assets outside of the ordinary course of business), and shall further be calculated in accordance with the preceding sentence.

EX-10 10 a05-20673_1ex10.htm EXHIBIT 10

Exhibit 10

June 24, 2005

CONFIDENTIAL

Kenneth Hao

Managing Director

Silver Lake Management Company, L.L.C.

2725 Sand Hill Road, Suite 150

Menlo Park, CA 94025

Dear Mr. Hao:

NON-DISCLOSURE AGREEMENT

In connection with your consideration of possible transaction with SERENA Software, Inc. (the “Company”), you have requested financial and other information concerning the business and affairs of the Company. As a condition to the Company’s furnishing to you and your representatives financial and other information which has not theretofore been made available to the public, you and your representatives agree to treat all such non-public information furnished to you and your representatives in writing or orally by the Company or its representatives on and after the date of this agreement (herein collectively referred to as the “Confidential Evaluation Material”), as follows:

(1) You and your representatives recognize and acknowledge the competitive value and confidential nature of the Confidential Evaluation Material and the damage that could result to the Company if information contained therein is disclosed to any third party. You and your representatives also recognize and acknowledge that the Confidential Evaluation Material is being provided to you and your representatives in reliance upon your and their acceptance of the terms of this agreement.

(2) You and your representatives agree that the Confidential Evaluation Material will be used solely for the purpose of evaluating the proposed transaction. You also agree that you and your officers, employees, financing sources, consultants, Affiliates, agents and advisors, herein collectively referred to as “your representatives,” will not disclose or permit the disclosure of any of the Confidential Evaluation Material now or hereafter received or obtained from the Company or its representatives to any third party or otherwise use or permit the use of the Confidential Evaluation Material in any way detrimental to the Company, except as required by court order or legal process, without the prior written consent of the Company, provided, however, that any such information may be disclosed to such of your representatives who need to know such information for the purpose of evaluating the proposed transaction and who are advised of this agreement and agree to keep such information confidential and to be bound by this agreement to the same extent as if they were parties hereto, it being understood that you shall be responsible for any breach of this agreement by your representatives; provided, however, that you shall not be responsible for any failure to comply with the terms of this agreement by any of your representatives that (i) is not one of your officers, employees or Affiliates and (ii) has signed an undertaking in favor of the Company and you to the effect of Annex A hereto.

(3) In the event you or your representatives receive a request to disclose Confidential Evaluation Material pursuant to any court order or legal process, you or your representatives

will give the Company prompt written notice thereof so that the Company may seek an appropriate protective order. You and your representatives agree to cooperate (at the Company’s expense) as reasonably requested by the Company in its efforts to maintain the confidentiality of such Confidential Evaluation Material. If you or your representatives are ultimately required to disclose such Confidential Evaluation Material, you or your representatives shall disclose only so much thereof as necessary to comply with such court order or legal process.

(4) Except as may be required by court order or legal process, neither party hereto nor any of its representatives will disclose to any other person or entity: (a) the fact that information regarding the Company is being or has been furnished to you; (b) the fact that discussions or negotiations regarding any transaction are or have been taking place between representatives of you and the Company, or any information regarding the status or terms of any such discussions or negotiations between the Company and you or the identity of the parties thereto; (c) the fact that the Company is or has been considering the possibility of entering into a transaction with you of the nature discussed by you and the Company. In addition, neither you nor your representatives will disclose to any other person or entity that the Company has been considering the possibility of entering into a transaction of the nature discussed by you and the Company, with any third party. Either party hereto shall be permitted to disclose any fact or information covered by this paragraph 4 to the same extent, and under the same conditions, as you are permitted to disclose Confidential Evaluation Material pursuant to paragraphs 2 and 3 hereof. Nothing in this paragraph (4) shall be construed to prevent or limit the Company’s or its representatives’ right to disclose, discuss, negotiate or enter into a transaction of the nature discussed by you and the Company with any other person or entity or provide information regarding the Company to any other person or entity.

(5) In the event that the transaction contemplated by this agreement is not consummated, neither you nor any of your representatives shall, without prior written consent of the Company, use any of the Confidential Evaluation Material now or hereafter received or obtained from the Company or its representatives for any purposes other than your evaluation of such transaction.

(6) At any time upon the Company’s request, all Confidential Evaluation Material (and all copies, summaries, and notes of the contents or parts thereof) shall be returned or, if you so choose, destroyed and not retained by you or your representatives in any form or for any reason and written certification to that effect will be sent by you to the Company within 30 days of such request; provided, however, that you and your representatives shall not be obligated to return or destroy the Confidential Evaluation Material if, and to the extent, otherwise required by any applicable law, regulation, policy or procedures relating to the retention, back-up storage or automatic archiving of files and data. Any Confidential Evaluation Material that is retained by you or your representatives for the sole purpose of compliance with such law, regulation, policy or procedures shall not be used for any purpose other than to evidence compliance therewith and such retained material and information shall continue to be subject to the confidentiality obligations set forth in this letter agreement, which obligations shall survive any termination hereof. All the Confidential Evaluation Material will be and remains the property of the Company.

(7) The following information provided by the Company shall not be deemed Confidential Evaluation Material: (A) any information that is or becomes generally available to the public other than as a result of an improper disclosure by you or your representatives; (B) any information which becomes legally available to you from a source other than the Company that is not, to your knowledge after reasonable inquiry, bound by a confidentiality obligation to the Company; (C) any information that is already in your possession as of the date hereof or (D) any information that is independently developed by you without use of or reference to the Confidential Evaluation Material.

(8) Neither this letter agreement nor any action taken in connection with this letter agreement will give rise to any obligation on the part of either you or the Company (a) to engage in any discussions or negotiations with the other party or with any of the other party’s representatives, or (b) to pursue or enter into any transaction of any nature with the other party. The parties acknowledge and agree that neither shall have any legally binding commitment for a transaction unless set forth in a separate written agreement that is executed and delivered by both of them.

(9) Nothing contained in this letter agreement nor the conveying of Confidential Evaluation Material hereunder shall be construed as granting or conferring any rights by license or otherwise in any trademark, patent, copyright, trade secret, technological information or other information, or other intellectual property.

(10) You agree that for a period of one year from the date of this letter agreement, neither you nor your representatives will, without the prior written consent of the Company, directly or indirectly: (A) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any securities or direct or indirect rights to acquire any securities of the Company or any subsidiary thereof, or of any successor to or person in control of the Company, or any assets of the Company or any division thereof or of any such successor or controlling person; provided, however, that nothing herein shall prohibit the purchase of securities in the ordinary course of any of your representatives’ business that does not in any event result in aggregate ownership by such representative of more than 2% of the outstanding amount of any class of securities of the Company; (B) seek or propose to influence or control the management or policies of the Company, make or in any way participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the rules of the Securities and Exchange Commission) to vote any voting securities of the Company or any subsidiary thereof, or seek to advise or influence any person or entity with respect to the voting of any voting securities of the Company or any subsidiary thereof; (C) make any public announcement with respect to, or submit a proposal for or offer of (with or without conditions), any merger, recapitalization, reorganization, business combination or other extraordinary transaction involving the Company or any subsidiary thereof or any of their securities or assets; or (D) enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing, or otherwise form, join or in any way engage in discussions relating to the formation of, or participate in, a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in connection with any of the foregoing.

(11) The provisions of this agreement relating to confidentiality shall terminate two years from the date hereof. The invalidity or enforceability of any provision of this agreement shall not affect the validity or enforceability of any other provision.

(12) This agreement shall be governed by the laws of the State of California applicable to agreements made and to be performed within.

(13) “You” used alone shall mean Silver Lake Management Company, L.L.C. and its officers, employees and Affiliates.

(14) An “Affiliate” of, or person “affiliated” with, a specified person shall mean a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified and has received the Confidential Evaluation Material from such specified person.

Please confirm your agreement with the foregoing by signing and returning to the undersigned a copy of this letter.

			SERENA Software, Inc.

			By	/S/ MARK WOODWARD
				Name: Mark Woodward
				Title: CEO

Accepted and Agreed as of
the date first written above:

Silver Lake Management Company, L.L.C.


By	/S/ KENNETH HAO
	Name:	Kenneth Hao
	Title:	Managing Director

Annex A

[Date]

Serena Software, Inc.

2755 Campus Drive, 3rd Floor

San Mateo, California 94403

Silver Lake Management Company, L.L.C.

2725 Sand Hill Road, Suite 150

Menlo Park, California 94025

Ladies and Gentlemen:

Reference is made to the Non-Disclosure Agreement, dated as of June [ ], 2005 (the “Agreement”), by and between Serena Software, Inc. (“Serena”) and Silver Lake Management Company, L.L.C. (“Silver Lake”), a copy of which is attached hereto. Capitalized terms that are used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.

The undersigned acknowledges that it has received Confidential Evaluation Material and, in consideration therefor, agrees to be bound by the provisions of the Agreement applicable to Silver Lake’s representatives as though the undersigned were a party thereto. The undersigned acknowledges that this letter agreement is for the benefit of Serena and Serena may enforce the terms of the Agreement against the undersigned as though the undersigned were a party thereto. For purposes of this Letter Agreement, all references to “your representatives” in the Agreement shall be deemed to refer to the undersigned.

	Very truly yours,


	(Representative)



	(Signature)


	(Name)


	(Title)

EX-11 11 a05-20673_1ex11.htm EXHIBIT 11

Exhibit 11

MANAGEMENT AGREEMENT

This Management Agreement (this “Agreement”) is entered into as of November 11, 2005 by and between Spyglass Merger Corp., a Delaware corporation (together with its successors (including Serena (as defined below) after the Merger (as defined below) and permitted assigns, the “Company”), and Silver Lake Management Company, L.L.C., a Delaware limited liability company (the “Manager”). Unless the context otherwise requires, all capitalized terms used, but not defined herein, shall have the meanings set forth in the Stockholders Agreement referenced in the Contribution and Voting Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the “Contribution Agreement”) among the Company, Silver Lake Partners II, L.P. and the other parties thereto (as such Stockholders Agreement may be amended, supplemented or otherwise modified from time to time).

RECITALS

WHEREAS, the Company has been formed for the purpose of merging with and into (the “Merger”) SERENA Software, Inc., a Delaware corporation (“Serena”), pursuant to the Agreement and Plan of Merger, dated as of November 11, 2005, between the Company and Serena (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”);

WHEREAS, to enable the Company to engage in the Merger and related transactions, the Manager provided financial and structural advice and analysis as well as assistance with due diligence investigations and negotiations (the “Financial Advisory Services”); and

WHEREAS, the Company desires to retain the Manager to provide certain management and advisory services to it, and the Manager is willing to provide such services on the terms and subject to the conditions set forth below.

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Services. The Manager hereby agrees that, during the term of this Agreement (the “Term”), it will provide the following consulting and management advisory services to the Company as requested from time to time by the Board of Directors of the Company:

(a) advice in connection with the negotiation and consummation of agreements, contracts, documents and instruments necessary to provide the Company with financing on terms and conditions satisfactory to the Company;

(b) financial, managerial and operational advice in connection with the Company’s day-to-day operations, including, without limitation, advice with respect to the development and implementation of strategies for improving the operating, marketing and financial performance of the Company and its subsidiaries; and

(c) such other services (which may include financial and strategic planning and analysis, consulting services, human resources and executive recruitment services and other services) as the Manager and the Company may from time to time agree in writing.

The Manager shall devote such time and efforts to the performance of services contemplated hereby as the Manager deems reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by the Manager on a weekly, monthly, annual or other basis. The Company acknowledges that the Manager’s services are not exclusive to the Company and that the Manager will render similar services to other persons and entities. The Manager and the Company understand that the Company may, at times, engage one or more investment bankers or financial advisers to provide services in addition to, but not in lieu of, services provided by the Company under this Agreement. In providing services to the Company, the Manager will act as an independent contractor and it is expressly understood and agreed that this Agreement is not intended to create, and does not create, any partnership, agency, joint venture or similar relationship and that no party has the right or ability to contract for or on behalf of any other party or to effect any transaction for the account of any other party.

2. Payment of Fees.

(a) In the event that the Termination Fee (as defined in the Merger Agreement) becomes payable to the Company pursuant to the terms of the Merger Agreement, the Company shall cause the Termination Fee to be paid to the Manager.

(b) The Company will pay to the Manager, in consideration of the Manager providing the Financial Advisory Services, a transaction fee (the “Transaction Fee”) in the amount of $10,000,000, such fee being payable at the Closing (as defined in the Merger Agreement) of the Merger.

(c) During the period commencing on the Closing Date (as defined in the Merger Agreement) and continuing throughout the Term, the Company will pay to the Manager, an annual periodic fee of $1,000,000 (the “Periodic Fee”) in exchange for the ongoing services provided by the Manager under this Agreement, such fee being payable by the Company quarterly in advance on or before the start of each calendar quarter; provided, however, that the Periodic Fee for the period from the Closing Date through the last day of the calendar quarter in which the Closing occurs shall be paid upon Closing. The Periodic Fee shall be prorated for any partial period of less than three months.

(d) During the Term, as the Manager and the Company may mutually agree, the Manager may advise the Company in connection with financing, acquisition, disposition and change of control transactions involving the Company or any of its respective direct or indirect subsidiaries (however structured), and in connection with any such transaction the Company will pay to the Manager (or such Affiliates as they may respectively designate) an aggregate fee that is mutually agreed between the Manager and the Company, with the approval of the Co-Investor Designee, as defined in the Stockholders Agreement (the “Subsequent Fee”).

Each payment made pursuant to this Section 2 shall be paid by wire transfer of immediately available federal funds to the account specified on Schedule 1 hereto, or to such other account(s) as the Manager may specify to the Company in writing prior to such payment.

3. Term. (a) This Agreement shall continue in full force and effect until the seven-year anniversary of the Closing (the “End Date”); provided, however, that (a) the Manager and the Company may unanimously cause this Agreement to be terminated with the approval of the Co-Investor Designee (in which case this Agreement will terminate), (b) the Manager may cause this Agreement to terminate at any time following (i) an Initial Public Offering, (ii) a transaction subject to Section 3.5 of the Stockholders Agreement or (iii) a sale of all or substantially all of the assets of the Company, in each case by delivering written notice of such termination to the Company (in which case this Agreement will terminate) and (c) the Company may cause this Agreement to be terminated at any time following an Initial Public Offering by delivering written notice of such termination to the Manager (in which case this Agreement will terminate). In the event of a termination of this Agreement, the Company shall pay Manager (or such Affiliates as they may respectively designate) (i) all unpaid Periodic Fees (pursuant to Section 2(c) above), Subsequent Fees (pursuant to Section 2(d) above) and expenses (pursuant to Section 4(a) below) due with respect to periods prior to the date of termination plus (ii) the net present value (using a discount rate equal to the then yield on U.S. Treasury Securities of like maturity) of the Periodic Fees that would have been payable with respect to the period from the date of termination until the End Date. Sections 3 through 12 (inclusive) of this Agreement shall survive any termination of this Agreement.

4. Expenses; Indemnification.

(a) Expenses. The Company will pay on demand all Reimbursable Expenses. As used herein, “Reimbursable Expenses” means (i) all reasonable expenses incurred or accrued prior to the Closing Date by the Manager or its Affiliates in connection with this Agreement, the Merger Agreement, the Merger or any related transactions, consisting of their respective out-of-pocket expenses for travel and other incidentals in connection with such transactions (including, without limitation, all air travel (in such manner as determined by the Manager) and other travel related expenses) and the out-of-pocket expenses and the fees and charges of (A) Simpson Thacher & Bartlett LLP (as counsel to the Manager and its affiliated funds), (B) PricewaterhouseCoopers LLP and (C) any other consultants or advisors retained by the Manager or its Affiliates in connection with such transactions, (ii) reasonable out-of-pocket expenses incurred from and after the Closing Date relating to its affiliated funds’ investment in, the operations of, or the services provided by the Manager or its Affiliates to the Company or any of its Affiliates from time to time (including, without limitation, all air travel (in such manner as determined by the Manager) and other travel related expenses), and (iii) reasonable out-of-pocket legal expenses incurred by the Manager or its Affiliates from and after Closing Date in connection with the enforcement of rights or taking of actions under this Agreement, the Contribution Agreement or the Stockholders Agreement.

(b) Indemnity and Liability. The Company will indemnify, exonerate and hold the Manager and its Affiliates (other than the Company’s subsidiaries and other controlled Affiliates), and each of their respective partners, shareholders, members,

directors, officers, fiduciaries, managers, controlling persons, employees and agents (collectively, the “Indemnitees”) free and harmless from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses) incurred by the Indemnitees or any of them before or after the date of this Agreement (collectively, the “Indemnified Liabilities”), arising out of any action, cause of action, suit, arbitration or claim arising out of, or in any way relating to (i) this Agreement, the Merger, any transaction to which the Company is a party or any other circumstances with respect to the Company (other than any such Indemnified Liabilities to the extent such Indemnified Liabilities arise out of any breach of the Stockholders Agreement or the Contribution Agreement by such Indemnitee or its affiliated or associated Indemnitees or other related persons) or any transaction entered into after the Closing Date or (ii) operations of, or services provided by the Manager to the Company or any of its Affiliates from time to time (including but not limited to any indemnification obligations assumed or incurred by any Indemnitee to or on behalf of the Company, or any of its accountants or other representatives, agents or affiliates); provided that the foregoing indemnification rights shall not be available to the extent that any such Indemnified Liabilities arose on account of such Indemnitee’s willful misconduct, and further provided that, if and to the extent that the foregoing undertaking may be unavailable or unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. For purposes of this Section 4(b), none of the circumstances described in the limitations contained in the two provisos in the immediately preceding sentence shall be deemed to apply absent a final non-appealable judgment of a court of competent jurisdiction to such effect, in which case to the extent any such limitation is so determined to apply to any Indemnitee as to any previously advanced indemnity payments made by the Company, then such payments shall be promptly repaid by such Indemnitee to the Company. Expenses incurred in defending any civil or criminal action arising out of or relating to any event or circumstance to which this indemnity shall apply shall be paid by the Company upon receipt of an undertaking by or on behalf of the Indemnitee to repay such amount if it be later shown that such Indemnitee was not entitled to indemnification hereunder. The rights of any Indemnitee to indemnification hereunder will be in addition to any other rights any such person may have under any other agreement or instrument referenced above or any other agreement or instrument to which such Indemnitee is or becomes a party or is or otherwise becomes a beneficiary or under law or regulation. None of the Indemnitees shall in any event be liable to the Company or any of its Affiliates for any act or omission suffered or taken by such Indemnitee that does not constitute gross negligence or willful misconduct as a determined by a final, non-appealable determination of a court of competent jurisdiction.

5. Disclaimer and Limitation of Liability; Opportunities.

(a) Disclaimer; Standard of Care. The Manager makes no representations or warranties, express or implied, in respect of the services to be provided by the Manager hereunder. In no event shall the Manager or any of its Indemnitees be liable to the Company or any of its Affiliates for any act, alleged act, omission or alleged omission

that does not constitute willful misconduct of the Manager as determined by a final, non-appealable determination of a court of competent jurisdiction.

(b) Freedom to Pursue Opportunities. In recognition that the Manager and its Indemnitees currently have, and will in the future have or will consider acquiring, investments in numerous companies with respect to which the Manager or its Indemnitees may serve as an advisor, a director or in some other capacity, and in recognition that the Manager and its Indemnitees have myriad duties to various investors and partners, and in anticipation that the Company, on the one hand and the Manager (or one or more affiliates, associated investment funds or portfolio companies), on the other hand, may engage in the same or similar activities or lines of business and have an interest in the same areas of corporate opportunities, and in recognition of the benefits to be derived by the Company hereunder and in recognition of the difficulties which may confront any advisor who desires and endeavors fully to satisfy such advisor’s duties in determining the full scope of such duties in any particular situation, the provisions of this Section 5(b) are set forth to regulate, define and guide the conduct of certain affairs of the Company as they may involve the Manager or its Indemnitees. Except as the Manager may otherwise agree in writing after the date hereof:

(i) The Manager and its Indemnitees shall have the right: (A) to directly or indirectly engage in any business (including, without limitation, any business activities or lines of business that are the same as or similar to those pursued by, or competitive with, the Company and its subsidiaries), (B) to directly or indirectly do business with any client or customer of the Company and its subsidiaries, (C) to take any other action that the Manager believes in good faith is necessary to or appropriate to fulfill its obligations as described in the first sentence of this Section 5(b), and (D) not to present potential transactions, matters or business opportunities to the Company or any of their subsidiaries, and to pursue, directly or indirectly, any such opportunity for itself, and to direct any such opportunity to another Person.

(ii) The Manager and its Indemnitees shall have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company or any of its Affiliates or to refrain from any actions specified in Section 5(b)(i), and the Company, on its own behalf and on behalf of its Affiliates, hereby renounces and waives any right to require the Manager or any of its Indemnitees to act in a manner inconsistent with the provisions of this Section 5(b).

(iii) The Manager and its Indemnitees shall not be liable to the Company or any of its Affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 5(b) or of any such Person’s participation therein.

(c) Limitation of Liability. In no event will the Manager or any of its Indemnitees be liable to the Company or any of its Affiliates for any indirect, special, incidental or consequential damages, including, without limitation, lost profits or savings,

whether or not such damages are foreseeable, or for any third party claims (whether based in contract, tort or otherwise), relating to the services to be provided by the Manager hereunder.

6. Information to be Provided. The Company shall furnish or cause to be furnished to the Manager such information as reasonably requested by Manager in order to provide its services hereunder and that can be reasonably obtained by the Company and its subsidiaries (the “Information”); provided that the Manager shall keep the Information confidential and will not disclose, divulge or use the Information except in connection with the provision of services hereunder. The Company recognizes and confirms that the Manager will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same, does not assume responsibility for the accuracy or completeness of the Information and such other information and will be relying upon the Information without independent verification.

7. Assignment, etc. Except as provided below, none of the parties hereto shall have the right to assign this Agreement without the prior written consent of each of the other parties, provided that upon consummation of the Merger all rights and obligations of the Company will be assumed by Serena and Serena shall be a party to this Agreement. Notwithstanding the foregoing, (a) the Manager may assign all or part of its rights and obligations hereunder to any of its respective Affiliates which provides services similar to those called for by this Agreement, in which event the Manager shall be released of its rights to fees under Section 2 and reimbursement of expenses under Section 4(a) and all of its obligations hereunder, so long as such obligations are assumed by such Affiliate and (b) the provisions hereof for the benefit of Indemnitees of the Manager shall inure to the benefit of such Indemnitees and their successors and assigns and each of such Indemnitees shall be third party beneficiaries of such provisions entitled to enforce such provisions against the Company.

8. Amendments and Waivers. No amendment or waiver of any term, provision or condition of this Agreement shall be effective, unless in writing and executed by the Manager and the Company. No waiver on any one occasion shall extend to or effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person nor any delay or omission in exercising any right or remedy shall constitute an amendment of this Agreement or a waiver of any right or remedy of any party hereto.

9. Governing Law; Jurisdiction.

(a) Governing Law. THIS AGREEMENT AND ANY RELATED DISPUTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT CONSIDERATION OF THE CONFLICTS OF LAW PRINCIPLES THEREOF.

(b) Consent to Jurisdiction. ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE)

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

(c) Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY TO THIS AGREEMENT WAIVES, AND COVENANTS THAT SUCH PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH THE DEALINGS OF ANY SHAREHOLDER OR HOLDINGS IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Any party to this Agreement may file an original counterpart or a copy of this Section 9(c) with any court as written evidence of the consent of the parties to the waiver of their rights to trial by jury.

(d) Reliance. Each of the parties hereto acknowledges that he, she or it has been informed by each other party that the provisions of Section 8 hereof constitute a material inducement upon which such party is relying and will rely in entering into this Agreement and the transactions contemplated hereby.

10. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any prior communication or agreement with respect thereto.

11. Notice. All notices, demands, and communications required or permitted under this Agreement shall be in writing and shall effective if served upon such other party and such other party’s copied persons as specified below to the address set forth for it below (or to such other address as such party shall have specified by notice to each other party) if (i) delivered personally, (ii) sent and received by facsimile or (iii) sent by certified or registered mail or by Federal Express, DHL, UPS or any other comparably reputable overnight courier service, postage prepaid, to the appropriate address as follows:

If to the Company:

Spyglass Merger Corp.
c/o Silver Lake Partners
2725 Sand Hill Road, Ste. 150
Menlo Park, California 94025
Facsimile: (650) 233-8125
Attention: Hollie Moore

If to the Manager:

Silver Lake Management Company, L.L.C.
c/o Silver Lake Partners
2725 Sand Hill Road, Ste. 150
Menlo Park, California 94025
Facsimile: (650) 233-8125
Attention: Alan Austin

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP
3330 Hillview Avenue
Palo Alto, California 94304
Facsimile: (650) 251-5002
Attention: Richard Capelouto

Unless otherwise specified herein, such notices or other communications shall be deemed effective, (a) on the date received, if personally delivered or sent by facsimile during normal business hours, (b) on the business day after being received if sent by facsimile other than during normal business hours, (c) one business day after being sent by Federal Express, DHL or UPS or other comparably reputable delivery service and (d) five business days after being sent by registered or certified mail. Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

12. Severability. If in any proceedings a court shall refuse to enforce any provision of this Agreement, then such unenforceable provision shall be deemed eliminated from this Agreement for the purpose of such proceedings to the extent necessary to permit the remaining provisions to be enforced. To the full extent, however, that the provisions of any applicable law may be waived, they are hereby waived to the end that this Agreement be deemed to be a valid and binding agreement enforceable in accordance with its terms, and in the event that any provision hereof shall be found to be invalid or unenforceable, such provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent consistent with and possible under applicable law.

13. Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf as an instrument under seal as of the date first above written by its officer or representative thereunto duly authorized.

COMPANY:	SPYGLASS MERGER CORP.


	By:	/s/ HOLLIE MOORE
		Name:	Hollie Moore
		Title:	President


MANAGER:	SILVER LAKE MANAGEMENT COMPANY, L.L.C.


	By:	/s/ ALAN K. AUSTIN
		Name:	Alan K. Austin
		Title:	Managing Director and
			Chief Operating Officer

EX-12 12 a05-20673_1ex12.htm EXHIBIT 12

Exhibit 12

September 13, 2005

Merrill Lynch

Global Markets & Investment Banking

Letterhead

Spyglass Merger Corp.
2725 Sand Hill Road, Suite 150
Menlo Park, CA 94025
Attention: Hollie Moore

Dear Hollie:

Pursuant to our recent conversations, we are pleased to confirm the arrangements under which Merrill Lynch & Co. (“Merrill Lynch”) will act as a financial advisor to Spyglass Merger Corp. (the “Company”) in connection with a proposed acquisition of Serena Software, Inc. (the “Target”).

1. Scope of Engagement. As your financial advisor, we will perform such financial advisory and investment banking services for the Company as are customary and appropriate in transactions of this type and as you reasonably request including assisting the Company in analyzing, structuring, negotiating and effecting the proposed Acquisition Transaction (as defined below) on the terms and conditions of this letter agreement.

In the event that the Company makes a tender or exchange offer for securities of the Target during the period Merrill Lynch is retained by the Company or within the Tail Period (as defined below), the Company will retain Merrill Lynch as sole dealer-manager for such offer pursuant to a dealer-manager agreement that is mutually acceptable to the Company and Merrill Lynch (for the avoidance of doubt, it is understood that no fee will be payable to Merrill Lynch in connection with its retention as dealer-manager).

2. Acquisition Transaction. For purposes of this agreement, an “Acquisition Transaction” is any transaction or series of transactions in which the Company or any of its affiliates acquires directly or indirectly a majority of any of the stock, assets, revenues, income or business of the Target or otherwise gains control of the Target, including any combination of the businesses, regardless of the structure or form of the transaction.

3. Fees. The Company agrees to pay the following fee to Merrill Lynch for its financial advisory services. If, during the period Merrill Lynch is retained by the Company or within one year thereafter (the “Tail Period”), the Acquisition Transaction is consummated or the Company enters into an agreement regarding the Acquisition Transaction (which is subsequently consummated), there will be a fee of $5.0 million, payable in cash upon the closing of the Acquisition Transaction.

4. Expenses. In addition to the fees, the Company agrees to reimburse Merrill Lynch for its reasonable expenses incurred in connection with this engagement, such reimbursement being payable only upon the closing of the Acquisition Transaction. These expenses generally include travel costs, document production and other customary expenses for this type of transaction, including the reasonable fees and disbursements of legal counsel.

5. Disclosure. Any document, advice, opinion or analysis provided by Merrill Lynch hereunder will be solely for the use and benefit of senior management of the Company and will not be quoted, reproduced,

summarized, or otherwise disclosed, nor will any reference to Merrill Lynch be made, without Merrill Lynch’s prior written consent. Notwithstanding any other provision of this letter agreement, immediately upon the commencement of discussions with respect to the transactions contemplated hereby, the Company (and each employee, representative or other agent of the Company) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this letter agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure.

6. Information. The Company will furnish, or arrange to have furnished to, Merrill Lynch such information as Merrill Lynch believes appropriate to its engagement hereunder (all such information so furnished being the “Information”), and will update such Information as appropriate. The Company recognizes and consents to the fact that Merrill Lynch (i) will use and rely on the accuracy and completeness of the Information supplied or otherwise made available to Merrill Lynch without having any obligation to independently verify the same, (ii) does not assume responsibility for the accuracy or completeness of the Information or such other information, (iii) has no obligation to undertake an independent evaluation, appraisal or physical inspection of any assets or liabilities of the Company or the Target, and (iv) with respect to any financial forecasts (including cost savings and synergies) that may be furnished to or discussed with Merrill Lynch by the Company or the Target, will assume that they have been reasonably prepared and reflect the best then currently available estimates and judgment of the Company’s or such Target’s management. Notwithstanding any provision herein to the contrary, Merrill Lynch acknowledges and agrees that the Company is not making any representation or warranty, express or implied, as to the accuracy or completeness of the Information, and the Company shall not be liable to Merrill Lynch or any other person resulting from Merrill Lynch’s use of the Information.

7. Independent Contractor. It is understood and agreed that Merrill Lynch is retained to act solely as financial advisor and, in such capacity, shall act as an independent contractor with duties solely to the Company and nothing in this letter agreement or the nature of the services shall be deemed to create a fiduciary or agency relationship between Merrill Lynch and the Company or its stockholders, creditors, employees or any other party.

8. Term and Termination. This engagement may be terminated by the Company or Merrill Lynch at any time (the “Term”) upon written notice to that effect to the other party, it being understood that the provisions of Section 3 (Fees), 4 (Expenses), 5 (Disclosure), 8 (Term and Termination), 9 (Indemnity) and 11 (Miscellaneous) shall survive termination of this agreement.

9. Indemnity. In connection with engagements such as this, it is Merrill Lynch’s policy to receive indemnification. The Company agrees to the provisions with respect to the indemnification of Merrill Lynch and the other matters set forth in Annex A. Annex A is incorporated by reference in its entirety into this letter. For the avoidance of doubt, it is understood that the provisions with respect to the indemnification of Merrill Lynch set forth in Annex A and the other rights to indemnification to which Merrill Lynch may be entitled pursuant to any other agreements entered into between the Company and Merrill Lynch in connection with an Acquisition Transaction (including, without limitation, the financing thereof) shall not entitle Merrill Lynch or any of its affiliates or their respective directors, officers, employees, agents or controlling persons to obtain duplicative indemnification from the Company with respect to any loss, claim, damage or liability.

10. Public Announcement. The Company acknowledges that Merrill Lynch may, at its option and expense, place an announcement in such newspapers, periodicals and electronic media as it may choose, stating that Merrill Lynch has acted as the financial advisor to the Company in connection with the Acquisition Transaction.

11. Miscellaneous.

(a) Merrill Lynch is acting as Financial Advisor and is not an expert on, and cannot render opinions regarding, legal, accounting, regulatory or tax matters. You should consult with your other professional advisors concerning these matters before undertaking the proposed transaction.

(b) Merrill Lynch is a full service securities firm engaged, either directly or through its affiliates, in various activities including securities trading, investment management, financing and brokerage activities and financial advisory services for companies, governments and individuals. In the ordinary course of these activities, Merrill Lynch and its affiliates may actively trade the debt and equity securities or other financial instruments (or related derivative instruments) of the Company, the Target or other parties which may be the subject of the engagement contemplated by this letter agreement for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities or instruments. The interests of the parties described in this Section 11(b) may conflict with yours.

(c) No waiver, amendment or other modification of this letter agreement shall be effective unless in writing and signed by each party to be bound thereby. This letter agreement shall inure to the benefit of and be binding on the Company, Merrill Lynch and their respective successors.

(d) In case any provision of this letter agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this letter agreement shall not in any way be affected or impaired thereby.

(e) This letter agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

(f) Each of Merrill Lynch and the Company (on its own behalf and, to the extent permitted by applicable law, on behalf of its shareholders) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of this letter agreement.

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Merrill Lynch the duplicate copy of this letter agreement enclosed herewith. We are delighted to accept this engagement and look forward to working with you on the assignment.

	Very truly yours,

	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED


		By	/s/ Christopher Gaertner
			Christopher Gaertner
			Managing Director
Accepted and agreed to as of the date first written above:

SPYGLASS MERGER CORP.

By	/s/ Hollie Moore
	Hollie Moore
	President

-----END PRIVACY-ENHANCED MESSAGE-----

Under the Securities Exchange Act of 1934 (Amendment No. )*

SIGNATURES

I CONTRIBUTIONS

1.4. Conditions to the Obligations of the Parties Hereunder. The respective obligations of the Investors to consummate the transactions contemplated by this Agreement

II REPRESENTATIONS AND WARRANTIES

2.1. Representations and Warranties of Newco. Newco represents and warrants to the Investors and the Co-Investor Founder as follows:

incorporation or bylaws of Newco, as amended to date; or (iii) violate any judgment, decree, order or award of any court, governmental or quasi-governmental agency or arbitrator applicable to Newco or their properties or assets.

(f) Newco has delivered to the Co-Investor Founder and each of the Co-Investor a true and correct copy of the Management Agreement, dated as of the date hereof (the “Management Agreement”), between Silver Lake Management Company, L.L.C. and Newco.

(g) Newco was organized solely for the purpose of effecting the Transactions and has engaged in no activity other than in connection therewith.

2.2. Representations and Warranties of the Investors. Each of the Silver Lake Investors represents and warrants, severally and not jointly, to Newco, the Co-Investor and the Co-Investor Founder that:

(a) The execution and delivery by such Silver Lake Investor of this Agreement and the Stockholders Agreement and the documents contemplated hereby and thereby, the performances by such Silver Lake Investor of its obligations hereunder

that in the absence of an effective registration statement covering the Newco Common Stock or an available exemption from registration under the Securities Act, the Newco Common Stock must be held indefinitely.

2.3. Representations and Warranties of the Co-Investor. The Co-Investor represents and warrants to Newco and each of the Silver Lake Investors that:

(c) The Co-Investor (i) is an “accredited investor” within the definition of Regulation D promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), (ii) is

(e) The Co-Investor acknowledges that it has received a copy of the Management Agreement.

(f) The Co-Investor has no liability of obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement or the Merger Agreement.

(g) The Co-Investor is a Family Affiliate (as defined in the Stockholders Agreement) of the Co-Investor Founder.

2.4. Representations and Warranties of the Co-Investor Founder. The Co-Investor Founder represents and warrants to Newco and each of the Silver Lake Investors that:

(d) The Co-Investor Founder acknowledges that he has received a copy of the Management Agreement.

(e) The Co-Investor Founder has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement or the Merger Agreement.

(f) The Co-Investor is a Family Affiliate (as defined in the Stockholders Agreement) of the Co-Investor Founder.

III VOTING AND EXCLUSIVITY

IV OTHER COVENANTS

4.2. Amendment of Certificate of Incorporation of Newco. Newco agrees to amend, and SLP II agrees to cause Newco to amend, the certificate of incorporation of Newco at or prior to the Contribution Closing to conform to Exhibit B hereto.

4.6. Fees and Expenses.

4.9. Execution of Stockholders’ Agreement. At the Contribution Closing, each of the Investors agrees to execute and deliver to the other parties thereto the Stockholders Agreement.

4.10. Actions Prior to Contribution Closing.

V MISCELLANEOUS

(a) If to Newco, to it at the following address:

(b) If to an Investor, to it at its address set forth in the Stockholders Agreement.

5.4. Successors and Assigns. All of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors.

5.6. Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.8. Survival. The representations and warranties contained herein will survive the Contribution Closing.

5.11. Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.

3. Fees. As consideration for our commitments hereunder and our agreement to arrange, manage, structure and syndicate the Credit Facilities, you agree to pay to us (or our affiliates, as the case may be) the fees as set forth in the Fee Letter.

Under the Securities Exchange Act of 1934
(Amendment No. )*