Exhibit 10.1

 

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NETSCOUT SYSTEMS, INC.

AND THE OTHER PARTIES HERETO

STOCKHOLDERS AGREEMENT

September 19, 2007

 

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STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT, dated as of September 19, 2007 (this “Agreement”),
is entered into among NetScout Systems, Inc. (the “Company”), and the
undersigned Persons who are, or who are to become, stockholders of the Company.
Each of such Persons, other than the Company are sometimes referred to
individually as a “Stockholder” and together as the “Stockholders.”

WHEREAS, concurrently herewith, the Company, Bradley Merger Sub LLC, a Delaware
limited liability company and wholly-owned subsidiary of the Company (“Merger
Sub”), Network General Central Corporation, a Delaware corporation (“NetGen”),
and Network General Corporation, a Delaware Corporation (“NetGen Opco” and
together with NetGen, the “Seller Parties”) have entered into an Agreement and
Plan of Merger (as amended from time to time, the “Merger Agreement”), dated the
date hereof, pursuant to which, subject to satisfaction or waiver of the
conditions therein, Merger Sub will merge with and into NetGen (the “Merger”),
and the Company will issue shares of its Common Stock, par value $0.001 per
share (the “Shares”), to the Stockholders;

WHEREAS, upon consummation of the Merger, the Stockholders will Beneficially Own
Shares;

WHEREAS, the parties believe that it is in the best interests of the Company and
the Stockholders to provide for certain rights and obligations of the parties
with respect to various corporate matters of the Company following the Merger;
and

WHEREAS, the Merger Agreement contemplates that this Agreement will be executed
concurrently with the execution of the Merger Agreement, with its provisions to
become effective upon consummation of the Merger.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements of the parties hereto contained herein, and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, and
subject to the satisfaction or waiver of the conditions hereof, the parties
hereto agree as follows:

ARTICLE I.

INTRODUCTORY MATTERS

1.1. Defined Terms.

In addition to the terms defined elsewhere herein, the following terms have the
following meanings when used herein with initial capital letters:

“13D Group” means a “group” as such term is used in Section 13(d)(3) of the
Exchange Act.

“AAA” has the meaning given to that term in Section 7.9 of this Agreement.

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“Affiliate” has the meaning given to that term in Rule 405 promulgated under the
Securities Act; provided that (a) officers, Directors or employees of the
Company will not be deemed to be Affiliates of a Stockholder for purposes hereof
solely by reason of being officers, Directors or employees of the Company;
(b) for purposes of Article II, none of the investment fund Affiliates of any
Stockholder or any of the portfolio companies in which any Stockholder or any of
its investment fund Affiliates have made a debt or equity investment shall be
considered Affiliates of such Stockholder, unless (i) such Stockholder has
provided material non-public information with respect to the Company and its
Subsidiaries to such investment fund Affiliate or portfolio company or (ii) such
Stockholder has expressly directed such investment fund Affiliate or portfolio
company to take an action that would be restricted by Article II if it had been
taken by such Stockholder; and (c) for purposes of this Agreement (other than
Article II), none of the portfolio companies in which any Stockholder or any of
its investment fund Affiliates have made a debt or equity investment shall be
considered Affiliates of such Stockholder.

“Agreement” means this Agreement, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

“Assumption Agreement” means a writing substantially in the form of Exhibit A
hereto whereby a Permitted Transferee or other Transferee pursuant to Sections
3.22 becomes a party to, and agrees to be bound to the same extent as its
Transferor by, the terms of this Agreement.

“Beneficial Owner,” “Beneficially Own,” “Beneficial Ownership” and words of
similar import have the meanings ascribed to such terms in Rule 13d-3 under the
Exchange Act. Without duplicative counting of the same securities by the same
holder, securities “Beneficially Owned” by a Person includes securities
“Beneficially Owned” by all other Persons with whom such Person would constitute
a 13D Group with respect to securities of the same issuer. Notwithstanding
anything to the contrary set forth in this Agreement, no Stockholder is to be
deemed to Beneficially Own any securities of the Company held by any other
Stockholder solely by virtue of the provisions of this Agreement.

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

“Business Day” means a day other than a Saturday, Sunday, federal or
Massachusetts or California state holiday, or other day on which commercial
banks in Massachusetts or California are authorized or required by law to close.

“Change of Control of the Company” shall mean any of the following: (i) a
merger, consolidation or other business combination or transaction to which the
Company is a party if the shares of Voting Stock outstanding immediately prior
to the effective date of such merger, consolidation or other business
combination or transaction do not represent (or the shares of Voting Stock into
which they are converted or exchanged pursuant to such merger, consolidation or
other business combination or transaction do not represent) 50% or more of the
Total Current Voting Power of the surviving corporation (or its parent
corporation) following such merger, consolidation or other business combination
or transaction; (ii) an acquisition by any Person (other than the Stockholder
and their Affiliates or any 13D Group of which any of them is a

 

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member) of beneficial ownership of Voting Stock representing 50% or more of the
Total Current Voting Power of the Company following such acquisition, (iii) a
sale of all or substantially all the consolidated assets of the Company to any
Person or Persons (other than the Stockholders and their Affiliates or any 13D
Group of which any of them is a member); or (iv) a liquidation or dissolution of
the Company.

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

“Common Stock” means the Common Stock, par value $0.001 per share, of the
Company.

“Control,” “Controlled,” “Controlling,” and “Under Common Control With” have the
meanings ascribed to such terms in Rule 12b-2 under the Exchange Act.

“Demand Party” has the meaning given to that term in Section 4.2(a) of this
Agreement.

“Demand Registration” has the meaning given to that term in Section 4.2(a) of
this Agreement.

“Director” means any member of the Board.

“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.

“Holder” has the meaning given to that term in Section 4.5 of this Agreement.

“Indemnified Parties” has the meaning given to that term in Section 4.5 of this
Agreement.

“Initial Share Holding Period” has the meaning given to that term in Section 0
of this Agreement.

“Initiating Holder” has the meaning given to that term in Section 4.1(a) of this
Agreement.

“Legend” has the meaning given to that term in Section 3.3(d) of this Agreement.

“Lien” means, with respect to any property or asset, any mortgage, pledge,
security interest, lien (statutory or other), charge, encumbrance or other
similar restrictions or limitations of any kind or nature whatsoever on or with
respect to such property or asset.

“Marketed Underwritten Take-Down” means any Underwritten Take-Down that involves
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.

“Merger” has the meaning given to that term in the recitals of this Agreement.

“Merger Agreement” has the meaning given to that term in the recitals of this
Agreement.

 

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“NetGen Stock” means shall mean all shares of NetGen’s capital stock authorized,
issued or outstanding prior to the consummation of the Merger, of whatever class
or series, including all of the Common Stock, $0.01 par value per share, of
NetGen.

“NetGen Stock Option” means any options, warrants, stock appreciation rights,
convertible debt or other rights (contingent and other, vested or unvested) to
purchase or otherwise acquire, equity securities of NetGen or any NetGen
Subsidiary or any phantom stock, stock appreciation rights or other derivative
instrument or right to payment related to such equity securities.

“NetGen Subsidiary” means any Subsidiary of NetGen, including without limitation
NetGen Opco.

“Permitted Transferee” means, in the case of any Stockholder, (A) any Affiliate
(other than an individual) of such Stockholder, (B) any stockholder, general or
limited partner, director, officer, managing or non-managing member or employee
of such Stockholder and the direct and indirect owners of any of the foregoing
entities, (C) the heirs, executors, administrators, testamentary trustees,
legatees or beneficiaries of any of the individuals referred to in clause (B),
(D) for estate planning purposes, any trust, the beneficiaries of which include
only (1) such Stockholder, (2) Permitted Transferees referred to in clauses (A),
(B) and (C) and (3) spouses (including former spouses) and lineal descendants
(including by adoption) of Permitted Transferees referred to in clause (B), and
(E) a corporation, partnership, limited liability company or similar entity, a
majority of the equity of which is owned and Controlled by such Stockholder
and/or Permitted Transferees referred to in clauses (A), (B), (C) and (D).

“Person” means any individual, corporation, limited liability company,
partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of any
nature whatsoever.

“Prior Shelf Registration Statement” means, collectively, the Company’s
Registration Statement on Form S-3, File No. 333-145047, and any registration
statement filed pursuant to Rule 462(b) of the Securities Act with respect
thereto.

“Public Offering” means the sale of any class of capital stock of the Company to
the public pursuant to an effective registration statement (other than a
registration statement on Form S-4 or S-8 or any similar or successor form)
filed under the Securities Act.

“Registrable Securities” means (i) the Shares that are issued to the
Stockholders pursuant to the Merger Agreement and (ii) any Shares or other
securities which may be issued, converted, exchanged or distributed in respect
of the Shares that are issued to the Stockholders pursuant to the Merger
Agreement by way of merger, consolidation, tender offer, stock dividend, stock
split, asset sale or other distribution, recapitalization or reclassification.
For purposes of this Agreement, with respect to any Stockholder, any Registrable
Securities held by such Stockholder will cease to be Registrable Securities when
(A) a registration statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of
pursuant to such effective registration statement, (B) such Registrable
Securities

 

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shall have been offered and sold pursuant to Rule 144 or Rule 145 (or any
similar provisions then in effect) under the Securities Act, (C) all Registrable
Securities held by such Stockholder and its Affiliates (i) equal, in the
aggregate, less than 5% of the outstanding Common Stock and (ii) are eligible
for transfer to the public pursuant to Rule 144 or Rule 145 (or any similar
provisions then in effect) under the Securities Act (without restriction as to
manner of sale or amount sold) during any three-month period, (D) such
Registrable Securities are Transferred by a Person in a transaction in which
rights under the provisions of this Agreement are not assigned in accordance
with this Agreement, or (E) such Registrable Securities cease to be outstanding.

“Registration Expenses” means any and all expenses of the Company in connection
with any registration that is subject to Sections 4.1 or 4.2, including without
limitation (i) all SEC, stock exchange, and National Association of Securities
Dealers, Inc. (the “NASD”) registration and filing fees (including, if
applicable, the fees and expenses of any “qualified independent underwriter,” as
such term is defined in Rule 2720 of the NASD, and of its counsel), (ii) all
fees and expenses of complying with securities or blue sky laws (including fees
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) all fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange and all rating
agency fees, (v) the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any Special Audits
and/or “cold comfort” letters required by or incident to such performance and
compliance, (vi) any fees and disbursements of underwriters customarily paid by
the issuers or sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any, (vii) the reasonable fees and
disbursements of counsel selected pursuant to Section 4.7 in connection with
such registration; provided, however, that such fees and disbursements do not
exceed $40,000 in connection with such registration (in which case, such excess
shall not be deemed a “Registration Expense”); and (viii) the costs and expenses
of the Company relating to analyst and investor presentations or any “road show”
undertaken in connection with any registration and/or marketing of the
Registrable Securities, provided that, subject to the obligations of the Company
set forth in Section 4.3(r), nothing in this clause (viii) shall obligate the
Company to engage or participate in any such presentations or road show.

“Registration Rights Holders” means, collectively, (i) the Stockholders, and
(ii) to the extent permitted by Section 4.9, the assignees of such Stockholders.

“SEC” means the 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.

“Shares” has the meaning given to that term in the recitals to this Agreement.

“Shelf Registration Statement” shall have the meaning given to such term in
Section 4.2(a) of this Agreement.

 

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“Significant Event” has the meaning given to that term in Section 2.2(b) of this
Agreement.

“SLP Stockholder” means (i) Silver Lake Partners, L.P. and each other
Stockholder that is an Affiliate of Silver Lake Partners, L.P. and (ii) to the
extent any Registrable Securities are Transferred by any such Stockholder to any
of its Permitted Transferees, each such Permitted Transferee if it executes and
delivers an Assumption Agreement.

“Special Audit” means an audit of the Company other than the regular audit
conducted by the Company at the end of its fiscal year.

“Sponsor” means Silver Lake Partners, L.P. or TPG Starburst IV, LLC, and
“Sponsors” means Silver Lake Partners, L.P. and TPG Starburst IV, LLC,
collectively.

“Stockholder” has the meaning given to that term in the recitals to this
Agreement.

“Stockholder Representatives” has the meaning given to that term in Section 5.1
of this Agreement.

“Subsidiary” shall mean, in respect of any specified Person, any corporation or
other entity of which 50% or more of the outstanding share capital or other
equity interest is owned, directly or indirectly, by such specified Person.

“Suspension Period” has the meaning given to that term in Section 4.2(a) of this
Agreement.

“Total Current Voting Power” means, with respect to any corporation, the total
number of votes which may be cast in the election of members of the board of
directors of the corporation if all securities entitled to vote in the election
of such directors are present and voted.

“TPG Stockholders” means (i) each Stockholder that is an Affiliate of TPG
Capital, L.P. and (ii) to the extent any Registrable Securities are Transferred
by any such Stockholder to any of its Permitted Transferees, each such Permitted
Transferee if it executes and delivers an Assumption Agreement.

“Transfer” means, with respect to any Share (or direct or indirect economic or
other interest therein), a transfer, distribution, sale, gift, assignment,
pledge, hypothecation or other disposition, whether directly or indirectly
(pursuant to the creation of a derivative security or otherwise), the grant of
an option or other right or the imposition of a restriction on disposition or
voting or by operation of law; provided that any transfer of limited
partnership, limited liability company or other ownership interests in the
Sponsors or any of their respective Affiliates or Permitted Transferees shall
not be deemed to be a “Transfer.” When used as a verb, “Transfer” shall have the
correlative meaning. In addition, “Transferred”, “Transferee” and “Transferring”
shall have the correlative meanings.

“Underwritten Shelf Take-Down” means an offering or sale of Registrable
Securities pursuant to a Shelf Registration Statement that is underwritten.

 

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“Voting Stock” means the Shares and any other securities of the Company entitled
to vote generally in the election of Directors of the Company.

1.2. Construction.

The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rule of strict construction
will be applied against any party. Unless the context otherwise requires:
(a) “or” is disjunctive but not exclusive, (b) words in the singular include the
plural, and in the plural include the singular, (c) the words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement,
and Section and Exhibit references are to this Agreement unless otherwise
specified and (d) whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”

ARTICLE II.

STANDSTILL PROVISIONS

2.1. Restrictions.

Except to the extent approved by a majority of the Directors, excluding the
Stockholder Representatives, subject to the provisions of Section 2.2 hereof,
each Stockholder agrees, severally and not jointly, that such Stockholder shall
not, and it shall cause its Affiliates not to, directly or indirectly:

(a) purchase or acquire, or offer or agree to purchase or acquire, directly or
indirectly, alone or in concert with any other Person, by purchase, gift or
otherwise, Beneficial Ownership of any Voting Stock of the Company if such
acquisition would result in the Stockholders and their Affiliates Beneficially
Owning more than the number of Shares (subject to adjustment for any events set
forth in clause (B) below) such Stockholders and their Affiliates collectively
Beneficially Own upon consummation of the Merger, except (A) as specifically
contemplated by the Merger Agreement, (B) by way of stock dividends or
distributions, rights offerings, stock-splits, reclassifications,
recapitalizations, changes in capitalization, consolidations, restructurings,
business combinations, exchange offers, reorganizations or any other similar
action taken by the Company, or (C) for equity-based awards granted to any
Stockholder or Affiliate thereof solely in such Person’s capacity as a Director
or employee of the Company;

(b) join or in any way participate in or encourage the formation of any 13D
Group with respect to the Beneficial Ownership of Voting Stock of the Company
with any Person who is not, immediately prior to the time of formation of such
13D Group, (i) another Stockholder or (ii) an Affiliate of (A) such Stockholder
or another Stockholder or (B) any other Person which is then a member of a 13D
Group with such Stockholder or another Stockholder;

 

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(c) (i) make, or in any way participate in, directly or indirectly, alone or in
concert with any other Person, any “solicitation” of “proxies” (as such terms
are defined or used in Regulation 14A under the Exchange Act), including
participation in any election contest, or (ii) otherwise communicate with the
stockholders of the Company (other than (x) another Stockholder, (y) an
Affiliate of such Stockholder, or (z) any other Person which is then a member of
a 13D Group with such Stockholder or another Stockholder) in connection with or
in relation to a proxy solicitation; provided, that the limitation contained in
this clause (c) shall not apply to any proposal relating to a Change of Control
of the Company to be voted on by the Company’s stockholders that is not
instituted or proposed by such Stockholder or any Affiliate of such Stockholder
or any 13D Group of which such Stockholder or any Affiliate of such Stockholder
is a member;

(d) advise or seek to influence any Person (other than (i) another Stockholder,
(ii) Affiliates of such Stockholder or another Stockholder or (iii) Persons who
are members of any 13D Group of which such Stockholder or another Stockholder is
member and which does not violate Section 2.1(b) above), with respect to the
voting of any Voting Stock;

(e) initiate or propose one or more stockholders’ proposals, as described in
Rule 14a-8 under the Exchange Act, with respect to the Company;

(f) call, request or otherwise attempt to convene or cause management of the
Company to convene a meeting of the stockholders of the Company;

(g) initiate, propose or solicit any proposal with respect to any merger,
consolidation or business combination involving the Company, any tender or
exchange offer for equity securities of the Company, any sale or purchase of a
substantial amount of the assets of the Company, any purchase of Voting Stock of
the Company (other than as permitted in Section 2.1(a) above), any dissolution,
liquidation, reorganization or recapitalization or similar business transaction
involving the Company;

(h) deposit any shares of Voting Stock of the Company in a voting trust or
subject any such Voting Stock to any arrangement or agreement with respect to
the voting of such Voting Stock (other than arrangements or agreements solely
involving (i) another Stockholder, (ii) Affiliates of such Stockholder or
another Stockholder or (iii) Persons who are members of any 13D Group of which
such Stockholder or another Stockholder is member and which does not violate
Section 2.1(b) above);

(i) seek to place a representative on the Board or remove any Board members;
except with respect to the Stockholders’ Board appointment rights provided by
Section 5.1;

(j) propose publicly (or in a manner reasonably expected to result in public
disclosure) to do, announce an intention to do, or enter into any arrangement or
understanding with any other Person to do, any of the actions restricted or
prohibited under this Section 2.1; or

(k) propose publicly (or in a manner reasonably expected to result in public
disclosure) any proposal to amend or terminate the provisions of this
Section 2.1;

 

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provided that nothing in this Section 2.1 shall (i) prohibit or restrict any
Stockholder or its Affiliates from taking any action required or contemplated by
any other provision of this Agreement or the Merger Agreement, (ii) prohibit any
individual who is serving as a Director of the Company, solely in his or her
capacity as such Director, from taking any action or making any statement in
such capacity, (iii) prohibit any individual who is serving as an Officer or
employee of the Company, solely in his or her capacity as such, from performing
his or her duties in such capacity or from participating in the employee stock
purchase program (if any) of the Company in which such individual is eligible to
participate by virtue of such capacity, or (iv) restrict any disclosure or
statements required to be made by any Stockholder or its Affiliates under
applicable law to the extent any such requirement does not arise from actions by
such Stockholder in violation of this Agreement. Notwithstanding anything to the
contrary set forth herein, if the Board has engaged in any discussions or
negotiations with, or provided any information to, any Person other than a
Stockholder or any Affiliate thereof or any 13D Group of which such Stockholder
is a member with respect to a potential Change of Control of the Company (or a
transaction of the type that, if consummated, would result in a Change of
Control of the Company) and provided the Board has not determined to terminate
all such discussions, negotiations and provision of information within 20 days
of the commencement of such discussion, negotiations and provisions of
information, then, for so long as such condition continues to apply, such
Stockholder and its Affiliates may make a private offer to effect a Change of
Control of the Company to the Board that neither such Stockholder nor any of its
Affiliates (i) publicly discloses or (ii) takes any action which would
reasonably be expected to require the Company to publicly disclose such offer.

2.2. Suspension and Termination of Standstill Restrictions.

(a) Upon the occurrence of a Significant Event (as defined below), the
restrictions set forth in Section 2.1 shall be suspended.

(b) “Significant Event” means any of the following:

(i) the Company enters into an agreement for, or makes a public announcement of
its intention to pursue, (A) the sale or other disposition of a majority or more
of the Company’s outstanding Shares, (B) the sale or disposition of all or
substantially all of the Company’s assets or a similar sale or change of control
transaction, or (C) any merger, consolidation, or other similar business
combination that could result in a Change of Control of the Company; or

(ii) the public announcement of a bona fide proposal by a third party or 13D
Group (other than the Company, a Stockholder, or any Person who is then an
Affiliate of a Stockholder) to acquire Voting Stock of the Company (including
pursuant to a tender or exchange offer or merger), which, if successful, would
result in a Change of Control of the Company; provided, however, that the Board
either (A) has approved or recommended that the stockholders of the Company
accept such offer or (B) has not rejected or recommended that the stockholders
of the Company refrain from accepting such offer; or

(iii) a third party or 13D Group successfully consummates a proposal of the type
described in the foregoing clause 2.2(b)(ii); or

 

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(iv) the adoption by the Board of a plan of liquidation or dissolution.

(c) Upon the cessation of the event or events that lead to the suspension of the
restrictions in Section 2.1 pursuant to this Section 2.2, those restrictions
shall be reinstated in accordance with their terms unless this Agreement has
been terminated in accordance with Section 7.1.

(d) The restrictions set forth in Section 2.1 shall terminate with respect to
(i) all Stockholders, upon a Change of Control of the Company, and (ii) each
Stockholder, such time as such Stockholder and its Affiliates Beneficially Own
less than five percent (5%) of the Company’s outstanding Common Stock.

ARTICLE III.

TRANSFER RESTRICTIONS; CERTAIN DISTRIBUTIONS

3.1. Limitations on Transfer.

During the six-month period following the Closing Date (such period, the
“Initial Share Holding Period”), the Stockholders, severally and not jointly,
agree not to Transfer any Shares received by it on the Closing Date, except that
the Stockholders may make:

(a) Transfers of Shares by any Stockholder to its Permitted Transferees pursuant
to Section 3.2 below;

(b) Transfers of Shares pursuant to (x) any stock repurchase program of the
Company or any of its Subsidiaries, (y) any tender or exchange offer commenced
under the Exchange Act, or (z) any merger, consolidation, sale, other business
combination transaction, reclassification, reorganization, recapitalization or
other transaction in which stockholders of the Company are offered, permitted or
required to participate as holders of the Common Stock; and

(c) Transfers pursuant to Section 4.1.

3.2. Transfer to Permitted Transferees.

(a) During the Initial Share Holding Period, any Stockholder may Transfer any or
all of the Shares held by it to any Permitted Transferee of such Stockholder;
provided that any such Transfer is permitted by such Stockholder’s charter,
bylaws, limited partnership agreement, limited liability company agreement or
other governing documents, as applicable.

(b) During the Initial Share Holding Period, each Permitted Transferee of any
Stockholder to which Shares are Transferred shall, and such Stockholder shall
cause such Permitted Transferee to, Transfer back to such Stockholder (or to
another Permitted Transferee of such Stockholder) any Shares it owns prior to
such Permitted Transferee ceasing to be a Permitted Transferee to such
Stockholder if such cessation would occur during the Initial Share Holding
Period.

 

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(c) Any Permitted Transferee of Shares during the Initial Share Holding Period
will be required, at the time of and as a condition to such Transfer, to become
a party to this Agreement by executing and delivering an Assumption Agreement
and, upon executing and delivering an Assumption Agreement, will be treated as a
Stockholder for all purposes hereof.

3.3. Other.

(a) Any Transfer of Shares under this Agreement (other than through a Public
Offering) shall not be effective unless and until the Company shall have been
furnished with information reasonably requested by it (which may include an
opinion from counsel) demonstrating that such Transfer is exempt from or not
subject to the provisions of Section 5 of the Securities Act and any other
applicable securities laws.

(b) In the event of any purported Transfer by a Stockholder of any Shares in
violation of the provisions of this Agreement, such purported Transfer will be
void and of no effect, and the Company will not give effect to such Transfer.

(c) The Company will be entitled to take all necessary steps to ensure that any
Shares issued to the Stockholders are identified as restricted securities within
the meaning of Rules 144 and 145 promulgated under the Securities Act and that
any resales of such Shares will be made in accordance with an exemption from
registration under the Securities Act or pursuant to an effective registration
statement.

(d) Each certificate representing the Shares held by a Stockholder initially
will bear a customary legend on the face thereof prescribed by the Company
referencing the provisions of Article III (the “Legend”). The Legend will be
removed by the Company, with respect to any certificate representing Shares, by
the delivery of substitute certificates without such Legend at any time
requested by the Stockholders after (i) the Initial Share Holding Period or
(ii) the termination of the restrictions set forth in Article III.

3.4. Termination. The restrictions set forth in Article III shall terminate with
respect to a Stockholder upon the earlier of (a) a Change of Control of the
Company and (b) such time as such Stockholder and its Affiliates Beneficially
Own less than five percent (5%) of the Company’s outstanding Common Stock.

ARTICLE IV.

REGISTRATION RIGHTS

4.1. Piggyback Rights.

(a) If the Company proposes to register any of the Shares under the Securities
Act (other than a registration on Form S-4 or S-8, or any successor or other
forms promulgated for similar purposes) or sell Shares in an Underwritten
Take-Down pursuant to a previously filed registration statement on which
Registrable Securities were included (it being understood that no Registrable
Securities are or will be included on the Prior Registration Statement), whether
or not for sale for its own account (other than pursuant to Section 4.2), it
will, at each such time, give

 

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prompt written notice to the Registration Rights Holders of its intention to do
so. Upon the written request of any Registration Rights Holder made within 14
days after the receipt of any such notice (which request shall specify the
number of Registrable Securities intended to be registered or disposed of by
such Registration Rights Holder and all other Registration Rights Holders who
are Permitted Transferees of such Registration Rights Holder), the Company will
use its reasonable best efforts to effect the registration under the Securities
Act, or the sale of, all Registrable Securities which each Registration Rights
Holder has so requested to be registered or sold; provided that (i) if, at any
time after giving written notice of its intention to register or sell any
securities and prior to the effective date of the registration statement filed
in connection with such registration or the pricing in connection with an
Underwritten Take-Down, as applicable, the Company or any other holder of
securities that initiated such registration (an “Initiating Holder”) shall
determine for any reason not to proceed with the proposed registration or
Underwritten Take-Down of the securities to be sold by it, the Company or such
Initiating Holder may, at its election, give written notice of such
determination to the Registration Rights Holders and, thereupon, the Company
shall be relieved of its obligation to register or sell any Registrable
Securities in connection with such registration or Underwritten Take-Down, and
(ii) if such registration involves an underwritten offering (including any
Underwritten Take-Down), the Registration Rights Holders requesting to be
included in the registration or Underwritten Take-Down must sell their
Registrable Securities to the underwriters selected by the Company or the
Initiating Holder, as the case may be, on the same terms and conditions as apply
to the Company or the Initiating Holders, as the case may be), provided, however
that (x) each such Registration Rights Holder shall only be obligated to
(i) make representations and warranties generally as to his, her or its
respective (A) execution, delivery and performance of such underwriting
agreement and the agreements contemplated thereby, (B) individual ownership of
the Registrable Securities being sold pursuant to such underwriting agreement
and (C) information provided by such Registration Rights Holder in writing
specifically for inclusion in the prospectus and (ii) agree to provide
indemnification for any liability arising out of any such representations or
warranties of such Registration Rights Holder, and (y) in no event shall a
Registration Rights Holder’s liability for such indemnification exceed the net
proceeds received by such Holder for the sale of such Registrable Securities
pursuant to such underwriting agreement.

(b) The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 4.1.

(c) If a registration pursuant to this Section 4.1 involves an underwritten
offering (including any Underwritten Take-Down) and the managing underwriter
advises the Company in writing that, in its opinion, the number of Registrable
Securities and other securities requested to be included in such registration or
Underwritten Take-Down exceeds the number which can be sold in such offering, so
as to be reasonably likely to have an adverse effect on the timing or
distribution of the securities offered in such offering, then the Company will
include in such registration or Underwritten Take-Down (i) first, 100% of the
securities, if any, the Company proposes to sell for its own account, provided
that the registration of Shares contemplated by this Section 4.1 was initiated
by the Company with respect to Shares intended to be registered for sale for its
own account, and (ii) second, the number of Registrable Securities requested to
be included by the Registration Rights Holders, if any, in such registration or
Underwritten Take-Down which in the opinion of the managing underwriter, can be
sold, without having the adverse effect

 

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referred to above, which number of Registrable Securities shall be allocated pro
rata among all such Registration Rights Holders, based on the relative number of
Registrable Securities then held by each such Registration Rights Holders. In
the event that (A) the Company did not initiate the registration of securities
or Underwritten Take-Down intended to be registered for sale for its own account
and (B) the number of Registrable Securities entitled to registration rights
with respect to such Shares, requested to be included in such registration or
Underwritten Take-Down is less than the number which, in the opinion of the
managing underwriter, can be sold, the Company may include in such registration
or Underwritten Take-Down securities it proposes to sell for its own account up
to the number of securities that, in the opinion of the underwriter, can be
sold.

4.2. Demand Registration.

(a) At any time during the period commencing as of the end of the Initial Share
Holding Period, upon the written request of any of SLP Stockholders holding
Shares that represent at least 40% of the Registrable Securities by the SLP
Stockholders or any of the TPG Stockholders holding Shares that represent at
least 40% of the Registrable Securities by the TPG Stockholders (a “Demand
Party”) requesting that the Company effect the registration under the Securities
Act, which, if requested by such Demand Party, may be a “shelf” registration
statement under Section 415 of the Securities Act (a “Shelf Registration
Statement”), of all or part of such Demand Party’s Registrable Securities or an
Underwritten Take-Down (a “Demand Registration”) and specifying the amount and
intended method of disposition thereof, the Company will promptly give written
notice of such requested registration or such Underwritten Take-Down to the
Registration Rights Holders and other holders of securities entitled to notice
of such registration or Underwritten Take-Down and thereupon will, as
expeditiously as reasonably possible, file a registration statement (or, in the
case of an Underwritten Take-Down, an amendment thereto or prospectus
supplement) to effect the registration and sale under the Securities Act of:

(i) such Registrable Securities which the Company has been so requested to
register or sell by the Demand Party; and

(ii) the Registrable Securities of other Registration Rights Holders which the
Company has been requested to register or sell by written request given to the
Company by the Registration Rights Holders within 14 days after the giving of
such written notice by the Company to the Registration Rights Holders (which
request shall specify the amount and intended method of disposition of such
securities);

all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Securities and such
other securities so to be registered or sold; provided that the Company shall
not be required (a) to effect on more than one occasion, without regard to the
requesting Demand Party, the filing of a Shelf Registration Statement, (b) to
effect on more than one occasion, at the request of the SLP Stockholders, either
(x) the filing of a registration statement (other than a Shelf Registration
Statement) providing for the registration of Registrable Securities and a
fully-marketed underwritten offering thereof (including a customary road show),
or (y) subject to the foregoing clause (a), the filing of a Shelf Registration
Statement (if not already on file) and the completion, at any time elected by
the SLP

 

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Stockholders, of a Marketed Underwritten Take-Down from a Shelf Registration
Statement (regardless of which Demand Party has requested such Shelf
Registration Statement), or (c) to effect on more than one occasion, at the
request of the TPG Stockholders, either (x) the filing of a registration
statement (other than a Shelf Registration Statement) providing for the
registration of Registrable Securities and a fully-marketed underwritten
offering thereof (including a customary road show), or (y) subject to the
foregoing clause (a), the filing of a Shelf Registration Statement (if not
already on file) and the completion, at any time elected by the TPG
Stockholders, of a Marketed Underwritten Take-Down from a Shelf Registration
Statement (regardless of which Demand Party has requested such Shelf
Registration Statement), and provided further that the Company shall not be
obligated to file a registration statement relating to any registration request
or complete an Underwritten Take-Down, in either case under this Section 4.2(a):

(1) within a period of 90 days after (x) the completion of an Underwritten Shelf
Take-Down under a previously effective Shelf Registration Statement in which the
Registration Rights Holders were provided the opportunity to sell Registrable
Securities, (y) the effective date of any other type of registration statement
pursuant to which the Registration Rights Holders were entitled to register and
sell Registrable Securities, or (z) any offering by the Company pursuant to the
Prior Registration Statement; or

(2) if the Registration Rights Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration or sale,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $5,000,000; or

(3) if with respect thereto the managing underwriter, the SEC, the Securities
Act, or the form on which the registration statement is to be filed, would
require the conduct of a Special Audit; or

(4) if the Company is in possession of material non-public information and the
Board determines in good faith that disclosure of such information would not be
in the best interests of the Company and its stockholders, in which case the
filing of the registration statement may be delayed until the earlier of the
fifth Business Day after such conditions shall have ceased to exist and the 90th
day after receipt by the Company of the written request to register Registrable
Securities under this Section 4.2(a); provided that all such delays under this
clause (5) that occur during any one-year period shall not exceed an aggregate
of one hundred-twenty (120) days; or

(5) solely with respect to the filing of a registration statement (as opposed to
the completion of an Underwritten Take-Down), if a Shelf Registration Statement
is then effective and available for the sale and distribution of such Demand
Party’s Registrable Securities.

 

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(b) The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities and Underwritten Take-Down requested
pursuant to this Section 4.2.

(c) A registration requested pursuant to this Article IV will not be deemed to
have been effected unless (i) the registration statement filed by the Company
with the SEC in connection with such registration has been declared effective by
the SEC and remained effective for the amount of time required by Section 4.2(f)
or Section 4.3(b) or (ii) the Demand Party has withdrawn its request for such
registration statement; provided that, if, within 60 days after it has become
effective, the offering of Registrable Securities pursuant to such registration
is interfered with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court, then such registration will be
deemed not to have been effected.

(d) If a Marketed Underwritten Take-Down is requested or a requested
registration pursuant to this Section 4.2 involves a fully-marketed underwritten
offering (including a road show) and regardless of whether the Company is
registering any securities therein, the Company and the Demand Party shall
jointly select the investment banker or bankers and managers to administer the
offering, including the lead managing underwriter. If an Underwritten Take-Down
is requested that is not a Marketed Underwritten Take-Down or a requested
registration pursuant to this Section 4.2 does not involve a fully-marketed
underwritten offering (including a road show), the Demand Party shall select the
investment banker or bankers and managers to administer the offering, including
the lead managing underwriter.

(e) If an Underwritten Take-Down is requested or a requested registration
pursuant to this Section 4.2 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
Registrable Securities requested to be included in such Underwritten Take-Down
or registration exceeds the number which can be sold in such offering, so as to
be reasonably likely to have an adverse effect on the timing or distribution of
the securities offered in such offering, then the Company will include in such
registration such number of Registrable Securities requested to be included in
such Underwritten Take-Down or registration which, in the opinion of such
managing underwriter, can be sold without having the adverse effect referred to
above, which number shall be allocated pro rata among all such holders of
Registrable Securities requesting to be included in such Underwritten Take-Down
or registration based on the relative number of Registrable Securities then held
by each such holder of Registrable Securities. In the event that the number of
Registrable Securities and Shares of other holders, in each case entitled to
registration rights with respect to such Shares requested to be included in such
Underwritten Take-Down or registration is less than the number which, in the
opinion of the managing underwriter, can be sold, the Company may include in
such registration securities it proposes to sell for its own account up to the
number of securities that, in the opinion of the underwriter, can be sold.

 

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(f) Any requested Shelf Registration Statement pursuant to this Section 4.2
shall be kept effective until the earlier of: (A) the two-year anniversary of
the effectiveness of the registration statement (plus the aggregate number of
days in all Suspension Periods, if any) or (B) such time as no selling
stockholder holds more than 5% of the outstanding Common Stock of the Company
and each selling stockholder may sell all of the Shares that it Beneficially
Owns within a three-month period pursuant to Rule 144 or Rule 145 under the
Securities Act.

(g) With respect to any requested Shelf Registration Statement or other
registration statement, the Company shall be entitled, from time to time, by
providing written notice to the Registration Rights Holders who elected to
participate in such requested registration pursuant to this Section 4.2, to
require such Registration Rights Holders to suspend the use of the prospectus
included therein for sales of Registrable Securities under the registration
statement for a period of up to ninety (90) consecutive days (a “Suspension
Period”) if the Company shall determine that is in possession of material
non-public information and the Board determines in good faith that disclosure of
such information would not be in the best interests of the Company and its
stockholders; provided that all Suspension Periods that occur during any
one-year period shall not exceed an aggregate of one hundred-twenty (120) days.
Immediately upon receipt of such notice, the Registration Rights Holders covered
by such registration statement shall suspend the use of the prospectus until the
requisite changes to the prospectus have been made. Any Suspension Period shall
terminate at such time as the public disclosure of such information is made,
subject to the maximums set forth in the first sentence hereof. After the
expiration of any Suspension Period and without any further request from a
Registration Rights Holder, the Company shall as promptly as reasonably
practical notify the Registration Rights Holders of such termination and prepare
a post-effective amendment or supplement to the registration statement or the
prospectus, or any document incorporated therein by reference, or file any other
required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the prospectus will not include any
untrue statement of material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.

4.3. Registration Procedures.

If and whenever the Company is required to file a registration statement with
respect to, or to use its reasonable efforts to effect or cause the registration
of, any Registrable Securities under the Securities Act as provided in this
Agreement the Company will as expeditiously as reasonably possible:

(a) prepare and, in any event within 45 days after the request for registration
may be given to the Company pursuant to Section 4.2, file with the SEC a
registration statement on the appropriate form with respect to such Registrable
Securities and use its reasonable efforts to cause such registration statement
to be declared effective by the SEC as soon as reasonably practicable; provided,
however, that the Company may discontinue any registration of securities as to
which it is the initiating party at any time prior to the effective date of the
registration statement relating thereto; provided, further, that not less than
five (5) Business Days before filing a registration statement or prospectus, or
any amendments or supplements thereto, the Company will furnish to counsel for
the sellers of Registrable Securities covered by such registration statement
copies of all documents proposed to be filed;

 

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(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period not in
excess of 100 days (unless such registration statement or prospectus relates to
(1) an underwritten Public Offering, in which event the registration statement
shall not be required to remain effective at the request of the Registration
Rights Holders for a period of in excess of 60 days or (2) the Shelf
Registration Statement) and to comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement; provided that not less than five (5) Business Days
before filing a registration statement or prospectus, or any amendments or
supplements thereto, the Company will furnish to counsel for the sellers of
Registrable Securities covered by such registration statement copies of all
documents proposed to be filed;

(c) furnish to each seller of such Registrable Securities such documents as such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities by such seller;

(d) use its reasonable efforts to register or qualify within the United States
such Registrable Securities covered by such registration in such United States
jurisdictions as each seller shall reasonably request, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
seller to consummate the disposition of the Registrable Securities owned by such
seller in such jurisdictions, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction where, but for the requirements of this subsection (d), it
would not be obligated to be so qualified, to subject itself to taxation in any
such jurisdiction or to consent to general service of process in any such
jurisdiction;

(e) use its reasonable efforts to cause such Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities;

(f) notify each seller of any such Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act within the appropriate period
mentioned in Section 4.3(b), of the Company’s becoming aware that 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, and at the request of any Registration
Rights Holder, prepare and furnish to such Registration Rights Holder a
reasonable number of copies of an amended or supplemental prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit 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;

 

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(g) otherwise use its reasonable efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable (but not more than 15 months) after the effective date of
the registration statement, an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act;

(h) (i) use its reasonable efforts to list such Registrable Securities on any
securities exchange on which the Shares are then listed if such Registrable
Securities are not already so listed and if such listing is then permitted under
the rules of such exchange; and (ii) use its reasonable efforts to provide a
transfer agent and registrar for such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement;

(i) enter into such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other Persons in addition to, or in substitution for the
indemnification provisions hereof, and take such other actions as sellers of a
majority of shares of such Registrable Securities included in such registration
statement or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities;

(j) obtain a “cold comfort” letter or letters from the Company’s independent
public auditors in customary form and covering matters of the type customarily
covered by “cold comfort” letters as the seller or sellers of a majority of
shares of such Registrable Securities included in such registration statement
shall reasonably request;

(k) make available for inspection by any Registration Rights Holder of any
seller of such Registrable Securities covered by such registration statement, by
any underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by any such seller or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and cause
all of the Company’s officers, Directors and employees to supply all information
reasonably requested by any such Registration Rights Holder, underwriter,
attorney, accountant or agent in connection with such registration statement;

(l) notify counsel for the holders of Registrable Securities included in such
registration statement and the managing underwriter or agent, immediately, and
confirm the notice in writing (i) when the registration statement, or any
post-effective amendment to the registration statement, shall have been declared
effective by the SEC, or any supplement to the prospectus or any amendment to
the prospectus shall have been filed, (ii) of the receipt of any comments from
the SEC, (iii) of any request of the SEC to amend the registration statement or
amend or supplement the prospectus or for additional information, and (iv) of
the issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes;

(m) use its reasonable efforts to prevent the issuance of any stop order
suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the withdrawal of any such order at the earliest
possible moment;

 

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(n) if requested by the managing underwriter or agent or any Registration Rights
Holder, promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or agent or such
Registration Rights Holder reasonably requests to be included therein,
including, with respect to the number of Registrable Securities being sold by
such Registration Rights Holder or its Permitted Transferees to such underwriter
or agent, the purchase price being paid therefor by such underwriter or agent
and with respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering (unless the Company, after
consultation with counsel, reasonably concludes that such information would be
materially misleading to prospective buyers in the Public Offering); and make
all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;

(o) cooperate with the Registration Rights Holders and the managing underwriter
or agent, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities to be
sold under the registration statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or agent,
if any, or the Registration Rights Holders may request;

(p) if requested by the applicable parties, obtain for delivery to the
Registration Rights Holders and to the underwriter or agent an opinion or
opinions from counsel for the Company in customary form and in form, substance
and scope reasonably satisfactory to such Registration Rights Holders,
underwriters or agents and their counsel;

(q) cooperate with each Registration Rights Holder and each underwriter or agent
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD; and

(r) with respect to underwritten Public Offerings under Section 4.2, act in good
faith to facilitate, cooperate with and participate in customary selling efforts
related thereto and provide reasonable assistance in marketing activities with
respect to the distribution of such Public Offering, which may include, in the
case of any Demand Registration with respect to a Marketed Underwritten
Take-Down or other fully-marketed underwritten offering, causing the senior
executives of the Company (subject to the reasonable availability of such
executives) to participate in customary “road show” presentations as reasonably
requested by the managing underwriter in such Public Offering.

 

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4.4. Other Registration-Related Matters.

(a) The Company may require any Person that is selling Shares in a Public
Offering pursuant to Sections 4.1 or 4.2 to furnish to the Company in writing
such information regarding such Person and pertinent to the disclosure
requirements relating to the registration and the distribution of the
Registrable Securities which are included in such Public Offering as the Company
may from time to time reasonably request in writing.

(b) Each Registration Rights Holder agrees, severally and not jointly, that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 4.3(f), it will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until its receipt of the copies of the amended or
supplemented prospectus contemplated by Section 4.3(f) and, if so directed by
the Company, each Registration Rights Holder will deliver to the Company all
copies, other than permanent file copies then in their possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. In the event the Company gives any such notice, the period for
which the Company will be required to keep the registration statement effective
will be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 4.3(f) to and including
the date when each seller of Registrable Securities covered by such registration
statement has received the copies of the supplemented or amended prospectus
contemplated by Section 4.3(f).

(c) To the extent not already subject to the restrictions in Article III of this
Agreement, each holder of Registrable Securities will, in connection with any
Demand Registration, upon the request of the Demand Party, the Company or of the
underwriters managing any underwritten offering of the Company’s securities,
agree in writing not to effect any sale, disposition or distribution of
Registrable Securities (other than those included in the Public Offering)
without the prior written consent of the managing underwriter for such period of
time commencing 30 days before and ending 90 days (or such earlier date as the
managing underwriter shall agree) after the effective date of such registration
or the “take-down” of securities off a previously effective registration
statement.

4.5. Indemnification.

(a) In the event of any registration of any securities of the Company under the
Securities Act pursuant to Sections 4.1 or 4.2, the Company hereby indemnifies
and agrees to hold harmless, to the extent permitted by law, the sellers of any
Registrable Securities covered by such registration statement (each a “Holder”),
each Affiliate of such Holder and their respective directors and officers,
members and managers, general and limited partners or stockholders (and the
directors, officers, employees, affiliates and Controlling Persons of any of the
foregoing), each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who Controls such
Holder or any such underwriter within the meaning of the Securities Act
(collectively, the “Indemnified Parties”), against any and all losses, claims,
damages or liabilities, joint or several, and expenses to which such Indemnified
Party may become subject under the Securities Act, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether or not such

 

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Indemnified Party is a party thereto) arise out of or are based upon (i) any
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, (ii) any 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 when they were made, (iii) 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,
or (iv) 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 Registration Rights Holders of such Registrable
Securities (provided that in such instance the Company shall not be so liable if
it has undertaken commercially reasonable efforts to so register or qualify such
Registrable Securities), and, with respect to each of the foregoing, the Company
will reimburse such Indemnified Party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided that the Company will not be
liable to any Indemnified Party in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon any untrue statement or omission made in
such registration statement, in any such preliminary, final or summary
prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information with respect to such Indemnified Party
furnished to the Company by such Indemnified Party expressly for use in the
preparation thereof, nor shall the Company be liable to any Indemnified Party
for any amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent will not be unreasonably withheld or delayed). Such indemnity will
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and will survive the Transfer of
such securities by such Holder.

(b) The Company shall have the right to require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Sections 4.1 or 4.2 that the Company shall have received an undertaking
reasonably satisfactory to it from the Holder of such Registrable Securities or
any prospective underwriter to indemnify and hold harmless (in the same manner
and to the same extent as set forth in Section 4.5(a)) the Company, all other
Holders or any prospective underwriter, as the case may be, and any of their
respective Affiliates, directors, officers and Controlling Persons, with respect
to any untrue statement in or omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement, if and to the extent such untrue statement or omission was made in
reliance upon and in conformity with written information with respect to such
Holder or underwriter furnished to the Company by such Holder or underwriter
expressly for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
will remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the Holders, or any of their respective
affiliates, directors, officers or Controlling Persons and will survive the
Transfer of such securities by such Holder. In no event shall the liability of
any selling Holder of Registrable Securities hereunder be greater in

 

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amount than the dollar amount of the net proceeds actually received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.

(c) Promptly after receipt by an Indemnified Party hereunder of written notice
of the commencement of any action or proceeding with respect to which a claim
for indemnification may be made pursuant to this Section 4.5, such Indemnified
Party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided that the failure of the Indemnified Party to give notice as provided
herein will not relieve the indemnifying party of its obligations under
Section 4.5(a) or 4.5(b), except to the extent that the indemnifying party is
actually and materially prejudiced by such failure to give notice. In case any
such action is brought against an Indemnified Party, unless in such Indemnified
Party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. If, in such Indemnified Party’s reasonable judgment, having
common counsel would result in a conflict of interest between the interests of
such indemnified and indemnifying parties, then such Indemnified Party may
employ separate counsel reasonably acceptable to the indemnifying party to
represent or defend such Indemnified Party in such action, it being understood,
however, that the indemnifying party will not be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for all
such Indemnified Parties (and not more than one separate firm of local counsel
at any time for all such Indemnified Parties) in such action. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation. No Indemnified Party shall have the right to
consent to entry of judgment or enter into a settlement without consent of the
indemnifying parties.

(d) If the indemnification provided for hereunder from the indemnifying party is
unavailable to an Indemnified Party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to herein, then 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, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and Indemnified Parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and Indemnified Parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a 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 Parties, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party under this
Section 4.5(d) as a result of the losses, claims, damages, liabilities and
expenses

 

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referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding. In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the net
proceeds actually received by such Holder upon the sale of the Registrable
Securities giving rise to such contribution obligation.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.5(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

(e) Indemnification similar to that specified in this Section 4.5 (with
appropriate modifications) shall be given by the Company and each seller of
Registrable Securities with respect to any required registration or other
qualification of securities under any law or with any governmental entity other
than as required by the Securities Act.

(f) The obligations of the parties under this Section 4.5 will be in addition to
any liability which any party may otherwise have to any other party.

(g) The provisions of this Section 4.5 shall survive any termination of this
Agreement or any Transfer of Registrable Securities by the Holders.

4.6. Reports under the Exchange Act.

With a view to making available to the Registration Rights Holders the benefits
of Rule 144 under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Registration Rights Holders to sell Registrable
Securities to the public without registration, the Company agrees to:

(a) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times; and

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act.

4.7. Selection of Counsel.

In connection with any registration of Registrable Securities or Underwritten
Take-Down pursuant to Sections 4.1 or 4.2, the Registration Rights Holders of a
majority of the Registrable Securities covered by any such registration may
select one counsel to represent all Registration Rights Holders of Registrable
Securities covered by such registration or Underwritten Take-Down.

 

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4.8. Additional Rights.

The Company represents and warrants that it is not a party to, and agrees that
it will not enter into, and will cause its Subsidiaries not to, enter into, any
agreement which conflicts with or limits or prohibits the exercise of the rights
granted to the Registration Rights Holders of Registrable Securities in this
Article IV.

4.9. Transfer of Registration Rights.

The right of any Registration Rights Holder under this Article IV may be
assigned or otherwise conveyed to any Permitted Transferees of such Registration
Rights Holder in connection with the Transfer of Registrable Securities to such
Permitted Transferee; provided such Permitted Transferee has become a party to
this Agreement by executing and delivering an Assumption Agreement.

4.10. Termination of Registration Rights.

The right of any Registration Rights Holder under this Article IV (other than
Section 4.5) shall terminate on the earlier of (i) such time as such
Registration Rights Holder ceases to hold any Registrable Securities or (ii) the
fifth year anniversary of the Closing (as defined in the Merger Agreement).

ARTICLE V.

BOARD REPRESENTATION

5.1. Board Representation.

(a) Effective as of the Closing Date, subject to applicable law, each of the
Sponsors shall have the right to designate one Person to the Company’s Board of
Directors; provided that such designee must be reasonably satisfactory to the
Company (such determination to be made by the Board after receiving a
recommendation from the nominating committee of the Company; provided that for
the avoidance of doubt, (x) each of Kenneth Y. Hao and Bryan Taylor are deemed
to be satisfactory to the Company and the Board and (y) any other Person who is
a managing director or equivalent of either Silver Lake Partners, L.P. or one of
its investment fund Affiliates or TPG Starburst IV, LLC or one of its investment
fund Affiliates as of the date hereof shall be deemed to be satisfactory to the
Company and the Board for such purposes unless any such managing director does
not meet the criteria for directors required by Nasdaq, any corporate governance
guidelines or policies adopted by the Board or any committee thereof, or any
other applicable law and regulation (each a “Stockholder Representative”).

(b) The Company shall take all necessary action, subject to applicable law, to
cause the size of the Board to be increased by two members, effective as of the
Closing Date, and the Company shall cause the vacancies to be filled by
(i) Kenneth Y. Hao (or such other individual as may be designated in writing by
Silver Lake Partners, L.P. at least forty-five (45) days prior to the filling of
such vacancy and in accordance with Section 5.1(a) hereof) to be the initial
Stockholder Representative designated by Silver Lake Partners, L.P., and
(ii) Bryan Taylor (or such other individual as may be designated in writing by
TPG Starburst IV, LLC at least forty-five (45) days prior to the filling of such
vacancy and in accordance with Section 5.1(a) hereof) to be the initial
Stockholder Representative designated by TPG Starburst IV, LLC.

 

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(c) Effective as of (x) if the Closing Date is no later than November 15, 2007
and the 2008 annual meeting of stockholders of the Company is no earlier than
September 1, 2008, the 2008 annual meeting of stockholders of the Company or
(y) otherwise, the one-year anniversary of the Closing Date (as applicable, the
“Representation Reduction Date”), either Kenneth Y. Hao (or his designated
replacement pursuant to Section 5.1(b)) or Bryan Taylor (or his designated
replacement pursuant to Section 5.1(b)) shall resign from the Board, and the
Company shall cause the size of the Board to be decreased by one member. If
Silver Lake Partners, L.P. and TPG Starburst IV, LLC do not agree upon which
Stockholder Representative shall resign, the Stockholder Representative
appointed by the Sponsor that, together with its Affiliates, Beneficially Owns
the least amount of Common Stock of the Company shall resign. If each Sponsor,
together with its Affiliates, Beneficially Owns an equal amount of Common Stock
of the Company, then the members of the Board (excluding such Stockholder
Representatives) shall designate the Stockholder Representative that shall
resign.

(d) At the expiration of the remaining Stockholder Representative’s designated
term as director, the Board will recommend a vote by the Company’s stockholders
in favor of the reelection of such Stockholder Representative (or the election
of any replacement designated by Silver Lake Partners, L.P. or TPG Starburst IV,
LLC, as applicable, in accordance with Section 5.1(a) hereof).

(e) Subject to Sections 5.1(c) and 5.1(f), in connection with any future meeting
of stockholders of the Company at which Directors are to be elected, the Company
hereby agrees to (i) include each of the Stockholder Representatives on each
slate of nominees for election to the Board proposed by the Company and/or the
Board (or any committee thereof), (ii) recommend the election of the Stockholder
Representatives to the stockholders of the Company, and (iii) without limiting
the foregoing, to otherwise use its reasonable best efforts to cause the
Stockholder Representatives to be elected to the Board.

(f) After the Representation Reduction Date, if so requested in writing by the
Company and/or the Board, the Sponsors shall lose their right to designate a
Stockholder Representative at such time as the Sponsors and their Affiliates,
collectively, no longer Beneficially Own at least 50% of the number of shares of
Common Stock received by the Sponsors pursuant to the Merger. The Sponsor that
at such time has the right to designate a Stockholder Representative shall cause
such Stockholder Representative to immediately resign from the Board of
Directors upon the ownership threshold of the previous sentence no longer being
met.

5.2. Information Rights.

(a) Subject to Section 5.2(a), the Company agrees that each Stockholder
Representative will be entitled to provide copies of the information received by
such Stockholder Representative as a member of the Company’s Board of Directors
to Silver Lake Partners, L.P. and TPG Starburst IV, LLC, in each case for so
long as such Stockholder, together with its respective Affiliates, beneficially
owns in the aggregate at least five percent (5%) of the outstanding shares of
Common Stock, provided, that no Stockholder Representative shall be entitled to
provide copies of such information to the extent that the Company indicates that
disclosure of such information would be reasonably likely to result in the
waiver of attorney-client privilege.

 

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(b) Silver Lake Partners, L.P. and TPG Starburst IV, LLC, severally and not
jointly, agree to keep confidential, and to comply with Regulation FD under the
Exchange Act with respect to, all proprietary and non-public information
regarding the Company and its Subsidiaries received pursuant to this
Section 5.2; provided that nothing herein shall prevent such Stockholder from
disclosing any such information that (a) is or becomes generally available to
the public other than as a result of a disclosure by such Stockholder in
violation of this Agreement, (b) was within the Stockholder’s possession or
developed by it prior to being furnished with such information (provided that
the source of such information was not known by the Stockholder to be bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the Company with respect to such information);
(c) becomes available to the Stockholder on a non-confidential basis from a
source other than the Company (provided that such source is not known by the
Stockholder to be bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to, the Company
with respect to such information); or (d) is required to be disclosed by law,
any legal or administrative process or any order, decree or similar requirement
(provided that prior to such disclosure, such Stockholder shall, unless
prohibited under such circumstances, promptly notify the Company of any such
disclosure so that the Company may take whatever action it deems appropriate at
its expense, including intervention in any proceeding and the seeking of an
injunction or a protective order to prohibit such disclosure, and the
Stockholders shall reasonably cooperate with respect thereto).

5.3. Termination. Notwithstanding anything to contrary contained in this
Agreement, the provisions of this Article V are not assignable by any
Stockholder to any Person other than to an investment fund Affiliate of such
assigning Stockholder; provided such investment fund Affiliate has become a
party to this Agreement by executing and delivering an Assumption Agreement.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

6.1. Representations and Warranties of Stockholders.

Each Stockholder hereby represents and warrants, severally and not jointly, to
the Company as follows as of the date hereof and as of the Closing (as defined
in the Merger Agreement):

(a) such Stockholder has the legal capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby;

(b) in the case of any Stockholder that is a corporation, limited partnership or
limited liability company, such Stockholder is an entity duly organized and
validly existing under the laws of the jurisdiction in which it is incorporated
or constituted, and each such Stockholder

 

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has all requisite power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby, and has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of this Agreement;

(c) this Agreement has been validly executed and delivered by such Stockholder
and constitutes the legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, and (ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought;

(d) neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will result in a violation of, or a default
under, or conflict with, any material contract, trust, commitment, agreement,
understanding, arrangement or restriction of any kind to which such Stockholder
is a party or by which such Stockholder’s assets are bound. Except as set forth
in this Agreement and the Merger Agreement, the consummation of the transactions
contemplated hereby will not violate, or require any consent, approval, or
notice under, any provision of any judgment, order, decree, statute, law, rule
or regulation applicable to such Stockholder;

(e) such Stockholder acknowledges that the issuance of the Shares is expected to
be effected pursuant to an exemption from registration under the Securities Act,
and the resale of the Shares may be subject to the restrictions under the
Securities Act unless such Shares are otherwise transferred pursuant to an
effective registration statement under the Securities Act or an appropriate
exemption from registration;

(f) such Stockholder is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act;

(g) such Stockholder is the sole, true, lawful, record and beneficial owner of
shares of NetGen Stock in the amount set forth opposite such Stockholder’s name
in Section 4.03(b) of the Disclosure Schedule to the Merger Agreement by NetGen,
free and clear of any and all Liens and any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such shares), other than restrictions on transfer under applicable securities
laws. Other than the NetGen Stock listed on such schedule, such Stockholder owns
no securities of either Seller Party or NetGen Stock Options or other rights to
subscribe for or otherwise acquire any securities of either Seller Party and has
no other interest in or voting rights with respect to any securities of either
Seller Party; and

(h) as of the date hereof, no claim, action, suit, proceeding, arbitration,
investigation or inquiry before any Governmental Entity is now pending or, to
the actual knowledge of such Stockholder, threatened, against or relating to
such Stockholder which would prohibit or adversely affect the ability of such
Stockholder to consummate or perform the transactions contemplated by this
Agreement.

 

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6.2. Representations and Warranties of Company.

The Company hereby represents and warrants to the Stockholders as follows as of
the date hereof and as of the Closing (as defined in the Merger Agreement):

(a) the Company is a corporation duly organized and validly existing under the
laws of Delaware and has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement;

(b) this Agreement has been duly authorized, executed and delivered by the
Company, and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought;

(c) neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will result in a violation of, or a default
under, or conflict with, any material contract, trust, commitment, agreement,
understanding, arrangement or restriction of any kind to which the Company is a
party or by which the Company’s assets are bound. Except as set forth in this
Agreement and the Merger Agreement, the consummation of the transactions
contemplated hereby will not violate, or require any consent, approval, or
notice under, any provision of any judgment, order, decree, statute, law, rule
or regulation applicable to the Company; and

(d) as of the date hereof, no claim, action, suit, proceeding, arbitration,
investigation or inquiry before any Governmental Entity is now pending or, to
the actual knowledge of the Company, threatened, against or relating the Company
which would prohibit or adversely affect the ability of the Company to
consummate or perform the transactions contemplated by this Agreement.

ARTICLE VII.

MISCELLANEOUS

7.1. Effective Date.

The provisions of this Agreement, other than Section 7.2, 7.8 and 7.9, shall
become effective upon consummation of the Merger as contemplated by the Merger
Agreement, and prior to such time shall have no force or effect. The provisions
of Section 7.2, 7.8 and 7.9 of this Agreement shall become effective as of the
date hereof. If the Merger Agreement terminates in accordance with its terms,
this Agreement will terminate in its entirety at such time and thereafter be of
no force and effect.

 

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7.2. Approval of Merger.

Immediately after the date hereof, the Stockholders shall take such actions
necessary to adopt and approve the Merger Agreement, the Merger and the
transactions contemplated thereby, by the requisite stockholder vote required by
the DGCL and such Stockholders’ charter, bylaws or other governing documents.

7.3. Notices.

All notices, consents, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, courier
service or fax (postage prepaid, return receipt requested) as follows (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 7.3):

 

  (a) if to the Company:

  NetScout Systems, Inc.

  310 Littleton Road

  Westford, Massachusetts 01886

  Attn.: President and Chief Executive Officer

  Fax: (978) 614-4039

  with a copy to:

  Cooley Godward Kronish LLP

  The Prudential Tower

  800 Boylston Street * 46th Floor

  Boston, MA 02199

  Attention: Miguel J. Vega

  Fax: (617) 937-2400

 

  (b) if to Silver Lake Partners, L.P. or any of its Affiliates:

  Silver Lake Partners, L.P.

  2775 Sand Hill Road, Suite 100

  Menlo Park, California 94025

  Attention: General Counsel Fax: (650) 234-2502

  with a copy to:

  Simpson Thacher & Bartlett LLP

  2550 Hanover Street

  Palo Alto, California 94304

  Attention: Chad Skinner

  Fax: (650) 251-5002

 

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  (c) if to TPG Starburst IV, LLC or any of its Affiliates:

  TPG Starburst IV, LLC

  c/o TPG Capital

  301 Commerce Street

  Suite 3300

  Fort Worth, TX 76102

  Attention: John Viola

  Fax: (817) 850-4023

  with a copy to:

  Simpson Thacher & Bartlett LLP

  2550 Hanover Street

  Palo Alto, California 94304

  Attention: Chad Skinner

  Fax: (650) 251-50

 

  (d) if to any other Stockholder, at the address and fax number that such
Stockholder has provided to the Company by delivery of a notice in compliance
with this Section 7.3.

7.4. Further Assurances.

The parties hereto will sign such further documents, cause such meetings to be
held, resolutions passed, exercise their votes and do and perform and cause to
be done such further acts and things as may be necessary in order to give full
effect to this Agreement and every provision hereof.

7.5. Assignment.

This Agreement will inure to the benefit of and be binding on the parties hereto
and their respective successors and permitted assigns. Except as specifically
provided herein, this Agreement may not be assigned by any party hereto without
the express prior written consent of the other parties, except that the
Stockholders may assign their rights and obligations without such consent to the
extent provided in Section 3.2, Section 4.9 and Section 5.3. Any attempted
assignment in violation of this Section 7.5 will be null and void.

7.6. Amendment; Waiver.

This Agreement may be amended, supplemented or otherwise modified only by a
written instrument executed by the parties hereto. Notwithstanding the
foregoing, additional Persons that are Accredited Holders (as defined in the
Merger Agreement) may be added as Stockholders to this Agreement without the
consent or additional signatures of any other party hereto, and upon deliver of
an executed joinder to the Stockholders Representatives (as defined in the
Merger Agreement) and the Company, such additional Persons shall be deemed to be
a party hereto and such joinder shall be a part of this Agreement. No waiver by
any party of any of the

 

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provisions hereof will be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach.

7.7. Third Parties.

Except as otherwise set forth herein, this Agreement does not create any rights,
claims or benefits inuring to any Person that is not a party hereto nor create
or establish any third party beneficiary hereto.

7.8. Governing Law.

This Agreement will be governed by, and construed in accordance with, the laws
of the State of Delaware.

7.9. Binding Arbitration.

Any controversy, dispute or claim arising out of, in connection with, or in
relation to, the construction, performance, or breach of this Agreement shall be
adjudicated by binding arbitration conducted in accordance with the existing
rules for commercial arbitration of the American Arbitration Association, or any
successor organization in New York City (the “AAA”), as determined by the party
initiating the arbitration. The demand for arbitration shall be delivered in
accordance with the notice provisions of this Agreement. Arbitration hereunder
shall be conducted by a single arbitrator selected jointly by the parties
hereto. If within ten (10) Business Days after a demand for arbitration is made,
the parties hereto are unable to agree on a single arbitrator, three arbitrators
shall be appointed. Each party shall select one arbitrator and those two
arbitrators shall then select within ten (10) Business Days a third neutral
arbitrator. If the arbitrators selected by the parties cannot agree on the third
arbitrator, they shall discuss the qualifications of such third arbitrator with
the AAA prior to selection of such arbitrator, which selection shall be in
accordance with the existing rules of the AAA. If an arbitrator cannot continue
to serve, a successor to an arbitrator selected by the parties shall be also
selected by the same party, and a successor to a neutral arbitrator shall be
selected as specified above. A full rehearing will be held only if the neutral
arbitrator is unable to continue to serve or if the remaining arbitrators
unanimously agree that such a rehearing is appropriate. Any discovery in
connection with arbitration hereunder shall be limited to information directly
relevant to the controversy or claim in arbitration. Judgment upon any
arbitration award rendered may be entered in any court of competent
jurisdiction. EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.

7.10. Specific Performance.

Without limiting or waiving in any respect any rights or remedies of the parties
hereto under this Agreement now or hereinafter existing at law or in equity or
by statute, each of the

 

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parties hereto will be entitled to seek specific performance of the obligations
to be performed by the other in accordance with the provisions of this
Agreement, including during such time prior to the final and binding decision in
any arbitration contemplated by Section 7.9.

7.11. Release by Stockholders.

(a) Effective upon consummation of the Merger, each Stockholder, on behalf of
himself, herself or itself and his, her or its (as applicable) past, present and
future successors, assigns, predecessors and Affiliates (collectively, the
“Releasing Parties”), irrevocably releases each Seller Party and its
subsidiaries and each of their successors, assigns, predecessors, employees,
officers, directors, attorneys, agents and representatives (collectively, the
“Released Parties”) from any and all claims, actions, causes of action, demands,
liens, agreements, contracts, covenants, actions, suits, obligations,
controversies, debts, costs, fees, dues, expenses, damages, judgments, orders
and all other claims and liabilities of every nature and description, known or
unknown, matured or unmatured, at law or equity or mixed, and whether or not
contingent, which any Releasing Party now has or has had against any of the
Released Parties or hereafter can, shall or may have against any of the Released
Parties, in respect of or arising from any event, act or omission occurring or
circumstances existing on or prior to the date hereof, in each case, to the
extent related to any Seller Party, their respective operations and the Merger
provided, that the undersigned is not releasing (i) any rights under the Merger
Agreement, any Ancillary Agreement (as defined in the Merger Agreement) or this
Agreement; (ii) any indemnification obligations of a Seller Party or subsidiary
thereof under such Seller Party’s or subsidiary’s certificate of incorporation
or bylaws (or equivalent governing documents) for claims that may arise against
the Releasing Party in his or her capacity as a director or officer of such
Seller Party or (iii) any indemnification obligations, or any rights with
respect to limitations of liabilities or corporate opportunities, of a Seller
Party or any of its subsidiaries under the Amended and Restated Shareholders’
Agreement, dated as of January 31, 2006, among NetGen, NetGen Opco and the
investors named therein and the Management Agreement, dated as of July 16, 2004,
between NetGen and Affiliates of Silver Lake Partners, L.P. and TPG Capital,
L.P.

(b) California Civil Code Section 1542 Waiver. In giving the releases set forth
in this Agreement, which include claims which may be unknown to a Stockholder at
present, each Stockholder hereby acknowledges that he or she has read and
understands Section 1542 of the California Civil Code which provides as follows:
“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.” Each Stockholder hereby expressly waives and relinquishes all
rights and benefits under that section and any law or legal principle of similar
effect in any jurisdiction with respect to his or her release of claims herein,
including but not limited to the release of unknown and unsuspected claims.

7.12. NetGen Transaction Expenses.

Each of the Stockholders agrees, severally and not jointly, that after the
Closing, such Stockholder shall not incur or direct the incurrence of any NetGen
Transaction Expenses that are not included in the calculation of Total
Consideration in the Merger Agreement without the prior

 

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consent of the Company, and in any event, the Stockholders, severally and not
jointly, agree to be responsible for any NetGen Excess Transaction Expenses that
are not included in the calculation of Total Consideration in the Merger
Agreement, regardless of whether the Company consented to such out-of-pocket
expenses or not. Notwithstanding the foregoing, the Stockholders shall not be
responsible for any NetGen Transaction Expenses that are incurred at the
direction of the Company or the Surviving Corporation or any of their Affiliates
after the Closing.

7.13. Entire Agreement.

This Agreement sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof.

7.14. Titles and Headings.

The section headings contained in this Agreement are for reference purposes only
and will not affect the meaning or interpretation of this Agreement.

7.15. Severability.

If any provision of this Agreement is declared by any court of competent
jurisdiction to be illegal, void or unenforceable, all other provisions of this
Agreement will not be affected and will remain in full force and effect.

7.16. Counterparts.

This Agreement may be executed in any number of counterparts, each of which will
be deemed to be an original and all of which together will be deemed to be one
and the same instrument.

[Signature page immediately follows.]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date first written above.

 

NETSCOUT SYSTEMS, INC. By:   /s/ Anil Singhal Name:   Anil Singhal Title:  
President and Chief Executive Officer

[Signature Page to the Stockholders Agreement]

 

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SILVER LAKE PARTNERS, L.P. By:   Silver Lake Technology Associates, L.L.C.   its
General Partner By:   /s/ Kenneth Hao Name:   Kenneth Hao Title:   Managing
Director

 

SILVER LAKE INVESTORS, L.P. By:   Silver Lake Technology Associates, L.L.C.  
its General Partner By:   /s/ Kenneth Hao Name:   Kenneth Hao Title:   Managing
Director

 

SILVER LAKE TECHNOLOGY INVESTORS, L.L.C. By:   Silver Lake Technology
Management, L.L.C.,   its Manager By:   /s/ Kenneth Hao Name:   Kenneth Hao
Title:   Managing Director

[Signature Page to the Stockholders Agreement]

 

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TPG STARBURST IV, LLC By:   TPG Partners IV, L.P.,   its Managing Member By:  
TPG GenPar IV, L.P.,   its General Partner By:   TPG Advisors IV, Inc.,   its
General Partner By:   /s/ Dick Boyce   Name: Dick Boyce   Title: Partner

 

TPG STARBURST III, LLC By:   TPG Partners III, L.P.,   its Managing Member By:  
TPG GenPar III, L.P.,   its General Partner By:   TPG Advisors III, Inc.,   its
General Partner By:   /s/ Dick Boyce   Name: Dick Boyce   Title: Partner

 

 

T3 STARBURST II, LLC By:   T3 STARBURST II, LLC   its Managing Member By:   T3
STARBURST II, LLC   its General Partner By:   T3 STARBURST II, Inc.   its
General Partner By:   /s/ Dick Boyce   Name: Dick Boyce   Title: Partner

[Signature Page to the Stockholders Agreement]

 

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EXHIBIT A

ASSUMPTION AGREEMENT

In consideration of the transfer to (him)(her)(it) of [    ] shares of Common
Stock of NetScout Systems, Inc. (the “Company”), [            ] (the “Additional
Stockholder”) and the Company agree that, as of the date written below,
Additional Stockholder shall become a party as a Stockholder to that certain
Stockholders Agreement, dated as of September 19, 2007, by and among the Company
and the Stockholders party thereto (as amended from time to time, the
“Stockholders Agreement”), and shall be bound by all of the terms and provisions
of the Stockholders Agreement, as such person or entity was an original party
thereto and was included in the definition of “Stockholder” as used therein.

Executed as of the [    ] day of [            ], [    ]

 

      By:   Title: