Exhibit 4.8**AMENDED AND RESTATED****SHAREHOLDERS’ AGREEMENT**dated as ofApril 16, 2007
 

 
**Table of Contents**           **Page**         ARTICLE 1      Definitions           Section 1.01. *Definitions*  1          ARTICLE 2      Corporate Governance           Section 2.01. *Composition of the Board*  8 Section 2.02. *Removal*  9 Section 2.03. *Vacancies*  9 Section 2.04. *Action by the Board; Shareholders*  10 Section 2.05. *Charter Amendments*  11 Section 2.06. *Conflicting Charter Provisions*  11          ARTICLE 3      Restrictions on Transfer           Section 3.01. *General*  11 Section 3.02. *Legends*  12 Section 3.03. *Permitted Transferees*  12 Section 3.04. *Restrictions on Transfers by the Institutional Shareholders*  12 Section 3.05. *Restrictions on Transfers by the Other Shareholders*  12 Section 3.06. *Restrictions on Transfer under a Credit Agreement, Indenture or Other Agreement for Indebtedness*  13          ARTICLE 4      Tag-along Rights; Drag-along Rights           Section 4.01. *Rights to Participate in Transfer*  13 Section 4.02. *Right to Compel Participation in Certain Transfers*  16          ARTICLE 5      Registration Rights           Section 5.01. *Demand Registration*  18 Section 5.02. *Incidental Registration*  20 Section 5.03. *Holdback Agreements*  21 Section 5.04. *Registration Procedures*  22 Section 5.05. *Indemnification by the Company*  25 Section 5.06. *Indemnification by Participating Shareholders*  25 Section 5.07. *Conduct of Indemnification Proceedings*  26 Section 5.08. *Contribution*  27 
 

 
           **Page**Section 5.09. *Participation in Public Offering*  28 Section 5.10. *Other Indemnification*  28 Section 5.11. *Cooperation by the Company*  28 Section 5.12. *No Transfer of Registration Rights*  28          ARTICLE 6      Certain Covenants and Agreements           Section 6.01. *Confidentiality*  28 Section 6.02. *Information*  29 Section 6.03. *Reports*  31 Section 6.04. *Cooperation in Refinancing*  31 Section 6.05. *Appointment of Shareholder Representatives*  31 Section 6.06. *Decisions by Institutional Shareholders*  32          ARTICLE 7      Miscellaneous           Section 7.01. *Entire Agreement*  32 Section 7.02. *Binding Effect; Benefit*  32 Section 7.03. *Assignability*  33 Section 7.04. *Waiver; Amendment; Termination*  33 Section 7.05. *Notices*  33 Section 7.06. *Fees and Expenses*  34 Section 7.07. *Headings*  34 Section 7.08. *Counterparts*  34 Section 7.09. *Applicable Law*  35 Section 7.10. *Waiver of Jury Trial*  35 Section 7.11. *Specific Enforcement*  35 Section 7.12. *Consent to Jurisdiction*  35 Section 7.13. *Severability*  35 Section 7.14. *Recapitalization*  35 Section 7.15. *Limitations on Subsequent Registration Rights*  36 Section 7.16. *Conflicting Agreements*  36 
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**AMENDED AND RESTATED****SHAREHOLDERS’ AGREEMENT**     AMENDED AND RESTATED SHAREHOLDERS’ AGREEMENT dated as of April 16, 2007 (the “**Agreement**”)among (i) SMART Modular Technologies (WWH), Inc., an exempted company incorporated under the lawsof the Cayman Islands (the “**Company**”), (ii) T3 II SM, LLC (“**T****3****II**”), TPG IIISM, LLC (“**TPG III**”) and TPG IV SM, LLC (“**TPG IV**”) (taken together, the “**TPG Entities,**” and each ofthe foregoing in this clause (ii), a “**TPG Entity**”), (iii) Francisco Partners, L.P. (“**FP**”),Francisco Partners Fund A, L.P. (“**FP Fund A**”) and FP Annual Fund Investors, LLC (“**FP Annual Fund**”)(taken together, the “**FP Entities,**” and each of the foregoing in this clause (iii), an “**FPEntity**”), (iv) Shah Capital Partners, L.P. (“**Shah Capital**”), (v) WestRiver Capital LLC, (vi) PatelFamily Partners, L.P. and (vii) such additional persons as may sign joinder agreements to thisAgreement.**WITNESSETH:**     WHEREAS, the Company and the parties hereto previously entered into a Shareholder’s Agreement,dated as of January 18, 2006 (the “**Original Agreement**”) in connection with the First PublicOffering (defined below);     WHEREAS, as a result of a secondary offering of Ordinary Shares by the Shareholders, theCompany and the other parties hereto desire to amend and restate the Original Agreement; and     WHEREAS, the parties hereto desire to enter into this Agreement to govern certain of theirrights, duties and obligations;     NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the partieshereto agree as follows:ARTICLE 1Definitions     Section 1.01. *Definitions.***(a)**The following terms, as used herein, have the followingmeanings:     “**Adverse Person**” means any Person whom the Board determines in good faith is a competitor or apotential competitor of the Company or its Subsidiaries.     “**Affiliate**” means, with respect to any Person, any other Person directly or indirectlycontrolling, controlled by or under common control with such Person, *provided*that nosecurityholder of the Company shall be deemed an Affiliate of any other securityholder solely byreason of any Investment in the Company. For the purpose of this definition, the term “**control**”(including with correlative meanings, the terms “**controlling**,” “**controlled by**” and “**under commoncontrol with**”), as used with respect to any Person, shall mean the possession, directly
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or indirectly, of the power to direct or cause the direction of the management and policies ofsuch Person, whether through the ownership of voting securities, by contract or otherwise.     “**Aggregate Ownership**” means, with respect to any Shareholder or group of Shareholders, andwith respect to any class of Company Securities, the total amount of such class of CompanySecurities “**beneficially owned**” (as such term is defined in Rule 13d-3 of the Exchange Act)(without duplication) by such Shareholder or group of Shareholders as of the date of suchcalculation, calculated on a Fully Diluted basis.     “**Aggregate Ownership Percentage**” means, with respect to any Shareholder (or group ofShareholders), and with respect to any class of Company Securities, the percentage equal to suchShareholder’s (or group of Shareholders’) Aggregate Ownership of such class of Company Securitiesdivided by all outstanding Company Securities of such class, calculated on a Fully Diluted basis.     “**Board**” means the board of directors of the Company.     “**Business Day**” means any day except a Saturday, Sunday or other day on which commercial banksin San Francisco or New York City are authorized by law to close.     “**Charter**” means the Amended and Restated Memorandum and Articles of Association of theCompany, as the same may be amended from time to time.     “**Company Securities**” means (i) the Ordinary Shares, (ii) securities convertible into orexchangeable for Ordinary Shares, and (iii) options, warrants or other rights to acquire OrdinaryShares or any other equity or equity-linked security issued by the Company.     “**Distribution in Kind**” means, with respect to the applicable Institutional Shareholder, (A)any Transfer by any TPG Entities’ fund that is a partnership, limited liability company,corporation or other entity of any of its Ordinary Shares to any partner, member, shareholder orother constituent of such entity pursuant to a distribution that is made to such partner, member,shareholder or other constituent in accordance with the respective partnership, limited liabilitycompany agreement, certificate or articles of incorporation or other organizational document ofsuch any TPG Entities’ fund without payment of consideration therefor by such partner, member,shareholder or other constituent, (B) any Transfer by any FP Entities’ fund that is a partnership,limited liability company, corporation or other entity of any of its Ordinary Shares to anypartner, member, shareholder or other constituent of such entity pursuant to a distribution that ismade to such partner, member, shareholder or other constituent of such entity in accordance withthe respective partnership, limited liability company agreement, certificate or articles ofincorporation or other organizational document of such FP fund without payment of considerationtherefor by such partner, member, shareholder or other constituent, and (C) any Transfer by anyShah Capital fund that is a partnership, limited liability company, corporation or other entity ofany of its Ordinary Shares to any partner, member, shareholder or other constituent of such entitypursuant to a distribution that is made to such partner, member, shareholder or other constituentof such entity in accordance with the respective partnership, limited liability company agreement,certificate or articles of incorporation or other
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organizational document of such Shah Capital fund without payment of consideration therefor bysuch partner, member, shareholder or other constituent.     “**Drag-Along Portion**” means, with respect to any Other Shareholder, (i) the Aggregate Ownershipof Ordinary Shares by such Other Shareholder *multiplied by*(ii) a fraction, the numerator of whichis the number of Ordinary Shares proposed to be sold by the Institutional Shareholders in theapplicable Compelled Sale under Section 4.02 and the denominator of which is the AggregateOwnership of Ordinary Shares by the Institutional Shareholders.     “**Exchange Act**” means the Securities Exchange Act of 1934, as amended.     “**First Public Offering**” means the first Public Offering of Ordinary Shares.     “**Five Percent Shareholder**” means a Shareholder whose Aggregate Ownership Percentage ofOrdinary Shares is 5% or more.     “**Foreign Subsidiary**” means, with respect to the Company, any entity organized under the lawsof a jurisdiction other than a State of the United States of America of which securities or otherownership interests having ordinary voting power to elect a majority of the board of directors orother persons performing similar functions are at the time directly or indirectly owned by theCompany.     “**Fully Diluted**” means, with respect to any class of Company Securities, all outstanding sharesof such class of Company Securities and all shares issuable in respect of securities convertibleinto or exchangeable for such shares, all stock appreciation rights, options, warrants and otherrights to purchase or subscribe for such Company Securities or securities convertible into orexchangeable for such Company Securities; *provided*that if any of the foregoing stock appreciationrights, options, warrants or other rights to purchase or subscribe for such Company Securities aresubject to vesting, the Company Securities subject to vesting shall be included in the definitionof “**Fully Diluted**” only upon and to the extent of such vesting.     “**Initial Ownership**” means, (i) with respect to any Shareholder and any class of CompanySecurities, the Aggregate Ownership of such class by such Shareholder as of the date of and aftergiving effect to the First Public Offering of Company Securities, or, (ii) with respect to anyPerson who shall become a party to this Agreement on a later date, such Person’s AggregateOwnership of such class as of such later date (as indicated on the joinder agreement signed by suchPerson), in each case taking into account any stock split, stock dividend, reverse stock split orsimilar event.     “**Institutional Shareholders**” means the TPG Entities, the FP Entities and Shah Capital.     “**Investment**” means, with respect to any Person, (i) any direct or indirect purchase or otheracquisition by such Person of any notes, obligations, instruments, stock, securities or ownershipinterest (including any partnership, limited liability and joint venture interest) of any otherPerson and (ii) any capital contribution by such Person to any other Person.
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     “**Ordinary Shares**” means the Ordinary Shares, par value $0.000166667 per share, of the Company.     “**Other Shareholders**” means all Shareholders other than the Institutional Shareholders.     “**Permitted Transferee**” means     (i) in the case of any TPG Entity and its Permitted Transferees, (A) any TPG Entity,TPG Entities’ fund or co-investment partnership, (B) any general or limited partner of anyTPG Entity, TPG Entities’ fund or co-investment partnership (collectively, a “**TPGPartner**”), and any corporation, partnership or other entity that is an Affiliate of any TPGPartner (collectively “**TPG Affiliates**”), (C) any managing director, general partner,director, limited partner, officer or employee of any TPG Entity, TPG Entities’ fund, anyTPG Partner or any TPG Affiliate, or any spouse, lineal descendant, sibling, parent, heir,executor, administrator, testamentary trustee, legatee or beneficiary of any of theforegoing persons described in this clause (C) (collectively, “**TPG Associates**”), and (D) anytrust, the beneficiaries of which, any charitable trust, the grantor of which, or anycorporation, limited liability company or partnership, the stockholders, members or generalor limited partners of which, include only the TPG Entities, TPG Partners, TPG Affiliates,TPG Associates, their spouses or their lineal descendants;     (ii) in the case of any FP Entity and its Permitted Transferees, (A) any FP Entity, FPfund or co-investment partnership, (B) any general or limited partner of any FP Entity, FPfund or co-investment partnership (collectively, an “**FP Partner**”), and any corporation,partnership or other entity that is an Affiliate of any FP Partner (collectively “**FPAffiliates**”), (C) any managing director, general partner, director, limited partner, officeror employee of any FP Entity, FP fund, any FP Partner or any FP Affiliate, or any spouse,lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee,legatee or beneficiary of any of the foregoing persons described in this clause (C)(collectively, “**FP Associates**”), and (D) any trust, the beneficiaries of which, anycharitable trust, the grantor of which, or any corporation, limited liability company orpartnership, the stockholders, members or general or limited partners of which, include onlythe FP Entities, FP Partners, FP Affiliates, FP Associates, their spouses or their linealdescendants;     (iii) in the case of Shah Capital and its Permitted Transferees, (A) Shah Capital, anyShah Capital fund or co-investment partnership, (B) any general or limited partner of ShahCapital, any Shah Capital fund or co-investment partnership (collectively, a “**Shah CapitalPartner**”), and any corporation, partnership or other entity that is an Affiliate of any ShahCapital Partner (collectively “**Shah Capital Affiliates**”), (C) any managing director, generalpartner, director, limited partner, officer or employee of Shah Capital, any Shah Capitalfund, any Shah Capital Partner or any Shah Capital Affiliate, or any spouse, linealdescendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee orbeneficiary of any of the foregoing persons described in this clause (C) (collectively,“**Shah Capital Associates**”), and (D) any trust, the beneficiaries of which,
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any charitable trust, the grantor of which, or any corporation, limited liabilitycompany or partnership, the stockholders, members or general or limited partners of which,include only Shah Capital, Shah Capital Partners, Shah Capital Affiliates, Shah CapitalAssociates, their spouses or their lineal descendants; and     (iv) in the case of any Other Shareholder that is or becomes a party to this Agreement,(A) a Person to whom Company Securities are Transferred from such Other Shareholder (1) bywill or the laws of descent and distribution or (2) by gift without consideration of anykind, *provided*that, in the case of clause (2), such transferee is the spouse or the linealdescendant, sibling or parent of such Shareholder, or (B) a trust that is for the exclusivebenefit of such Other Shareholder or its Permitted Transferees under (A) above.     “**Person**” means an individual, corporation, limited liability company, partnership,association, trust or other entity or organization, including a government or political subdivisionor an agency or instrumentality thereof.     “**Public Offering**” means an underwritten public offering of Registrable Securities of theCompany pursuant to an effective registration statement under the Securities Act other thanpursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.     “**Registrable Securities**” means, at any time, any Ordinary Shares and any securities issued orissuable in respect of such Ordinary Shares by way of conversion, exchange, stock dividend, splitor combination, recapitalization, merger, consolidation, other reorganization or otherwise until(i) a registration statement covering such Ordinary Shares has been declared effective by the SECand such Ordinary Shares have been disposed of pursuant to such effective registration statement,(ii) such Ordinary Shares are sold under circumstances in which all of the applicable conditions ofRule 144 (or any similar provisions then in force) under the Securities Act are met or (iii) suchOrdinary Shares are otherwise transferred, the Company has delivered a new certificate or otherevidence of ownership for such Ordinary Shares not bearing the legend required pursuant to thisAgreement and such Ordinary Shares may be resold without subsequent registration under theSecurities Act.     “**Registration Expenses**” means any and all expenses incident to the performance of orcompliance with any registration or marketing of securities, including all (i) registration andfiling fees, and all other fees and expenses payable in connection with the listing of securitieson any securities exchange or automated interdealer quotation system, (ii) fees and expenses ofcompliance with any securities or “blue sky” laws (including reasonable fees and disbursements ofcounsel in connection with “blue sky” qualifications of the securities registered), (iii) expensesin connection with the preparation, printing, mailing and delivery of any registration statements,prospectuses and other documents in connection therewith and any amendments or supplements thereto,(iv) security engraving and printing expenses, (v) internal expenses of the Company (including,without limitation, all salaries and expenses of its officers and employees performing legal oraccounting duties), (vi) fees and disbursements of counsel for the Company and customary fees andexpenses for independent certified public accountants retained by the Company (including theexpenses relating to any comfort letters or costs associated with the
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delivery by independent certified public accountants of any comfort letters requested pursuantto Section 5.04(h) hereof), (vii) reasonable fees and expenses of any special experts retained bythe Company in connection with such registration, (viii) fees, out-of-pocket costs and expenses ofthe Shareholders, including one counsel for all of the Shareholders participating in the offeringselected (A) by the participating Institutional Shareholders, in the case of any offering in whichany of the Institutional Shareholders participate, or (B) in any other case, by the Shareholdersholding the majority of the Registrable Securities to be sold for the account of all Shareholdersin the offering, (ix) fees and expenses in connection with any review by the National Associationof Securities Dealers, Inc. (the “**NASD**”) of the underwriting arrangements or other terms of theoffering, and all fees and expenses of any “qualified independent underwriter,” including the feesand expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid byissuers or sellers of securities, but excluding any underwriting fees, discounts and commissionsattributable to the sale of Registrable Securities, (xi) costs of printing and producing anyagreements among underwriters, underwriting agreements, any “blue sky” or legal investmentmemoranda and any selling agreements and other documents in connection with the offering, sale ordelivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expensesand the fees and expenses of any other agent or trustee appointed in connection with such offering,(xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken inconnection with the registration, marketing or selling of the Registrable Securities, (xiv) feesand expenses payable in connection with any ratings of the Registrable Securities, includingexpenses relating to any presentations to rating agencies and (xv) all out-of pocket costs andexpenses incurred by the Company or its appropriate officers in connection with their compliancewith Section 5.04(m).     “**Rule 144**” means Rule 144 (or any successor provisions) under the Securities Act.     “**Rule 144A**” means Rule 144A (or any successor provisions) under the Securities Act.     “**SEC**” means the Securities and Exchange Commission.     “**Securities Act**” means the Securities Act of 1933, as amended.     “**Sell-down Percentage**” means, with respect to any Shareholder (or group of Shareholders), andwith respect to any class of Company Securities, the percentage equal to such Shareholder’s (orgroup of Shareholders’) Aggregate Ownership of such class of Company Securities divided by suchShareholder’s (or group of Shareholders’) Initial Ownership of such class of Company Securities.     “**Shareholder**” means at any time, any Person (other than the Company) who shall then be a partyto or bound by this Agreement, so long as such Person shall “beneficially own” (as such term isdefined in Rule 13d-3 of the Exchange Act) any Company Securities.     “**Shortform Registration**” means a registration statement on Form S-3 (or any successor formthereto).     “**Subsidiary**” means, with respect to any Person, any entity of which securities or otherownership interests having ordinary voting power to elect a majority of the board of directors or
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other persons performing similar functions are at the time directly or indirectly owned bysuch Person.     “**Tag-Along Portion**” means the product of the Aggregate Ownership of Ordinary Shares by theTagging Person immediately prior to such Transfer and a fraction the numerator of which is themaximum number of Ordinary Shares that the buyer in the Tag-Along Sale is willing to purchase, andthe denominator of which is the Aggregate Ownership of Ordinary Shares by all Shareholders.     “**Third Party**” means a prospective purchaser(s) (other than a Permitted Transferee or otherAffiliate of a Shareholder) of Company Securities in an arm’s-length transaction from suchShareholder.     “**Transfer**” means, with respect to any Company Security, (i) when used as a verb, to sell,assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such security orany participation or interest therein, whether directly or indirectly, or agree or commit to do anyof the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition,exchange, pledge, encumbrance, hypothecation or other transfer of such security or anyparticipation or interest therein or any agreement or commitment to do any of the foregoing.     (b) The term “**Institutional Shareholder**,” to the extent such entity shall have transferred anyof its Company Securities to any of its “**Permitted Transferees,**” shall mean the InstitutionalShareholder and such Permitted Transferees, taken together.     (c) Each of the following terms is defined in the Section set forth opposite such term:   Term Section   Additional Directors 2.01(a)Agreement PreambleApplicable Holdback Period 5.03Cause 2.02Company PreambleCompelled Sale 4.02(a)Compelled Sale Notice 4.02(a)Compelled Sale Notice Period 4.02(a)Compelled Sale Price 4.02(a)Confidential Information 6.01(b)Demand Registration 5.01(a)Drag-Along Rights 4.02(a)Eligible Shareholder 4.01(a)Escrow Amount 4.01(f)Escrow Notice 4.01(f)FP PreambleFP Annual Fund PreambleFP Fund A Preamble
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   Term Section   FP Entities PreambleFP Entity PreambleFP Shareholder Representative 6.05(b)Holders 5.01(a)Incidental Registration 5.02(a)Indemnified Party 5.07Indemnifying Party 5.07Inspectors 5.04(g)Maximum Offering Size 5.01(e)Non-Requesting Shareholder 5.01(a)Original Agreement RecitalsRecords 5.04(g)Replacement Nominee 2.03(a)Representatives 6.01(b)Requesting Shareholder 5.01(a)Shah Capital PreambleShah Capital Shareholder Representative 6.05(c)T3 II PreambleTag-Along Notice 4.01(a)Tag-Along Notice Period 4.01(a)Tag-Along Offer 4.01(a)Tag-Along Response Notice 4.01(a)Tag-Along Right 4.01(a)Tag-Along Sale 4.01(a)Tag-Along Seller 4.01(a)Tagging Person 4.01(a)TPG III PreambleTPG IV PreambleTPG Entities PreambleTPG Entity PreambleTPG Shareholder Representative 6.05(a)Unused Tag Amount 4.01(d)ARTICLE 2Corporate Governance     Section 2.01*. Composition of the Board.***(a)**The Board shall consist of nine directors, andthe Shareholders agree that the directors shall be nominated as follows: (i) so long as the TPGEntities’ Aggregate Ownership Percentage of Ordinary Shares is at least 10%, up to two directorswill be nominated by the TPG Entities, acting collectively, and so long as the TPG Entities’Aggregate Ownership Percentage of Ordinary Shares is at least 5%, one director will be nominated bythe TPG Entities, acting collectively; (ii) so long as the FP Entities’ Aggregate OwnershipPercentage of Ordinary Shares is at least 10%, up to two directors will be nominated by the FPEntities, acting collectively, and so long as the FP Entities’ Aggregate Ownership
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Percentage of Ordinary Shares is at least 5%, one director will be nominated by the FPEntities, acting collectively; (iii) so long as Shah Capital’s Aggregate Ownership Percentage ofOrdinary Shares is at least 5%, one director will be nominated by Shah Capital, (iv) the ChiefExecutive Officer of the Company will be nominated by the Shareholders, acting collectively; and(v) three directors will be nominated by the Chief Executive Officer and the InstitutionalShareholders together; *provided*that, to the extent required under the Exchange Act rules and therules of the securities exchange or quotation system on which the Ordinary Shares are traded, eachsuch director nominated pursuant to this clause (v) shall (x) not be an “Affiliate” or an“Associate” (as such terms are used within the meaning of Rule 12b-2 under the Exchange Act) of anyof the Institutional Shareholders and (y) be an “independent director,” as such term is defined bythe rules of the securities exchange or quotation system on which the Ordinary Shares are traded.If the number of directors that comprise the entire Board is increased, the number of directorsadded to the Board (the “**Additional Directors**”) must be a multiple of two, and the InstitutionalShareholders shall continue to be entitled to nominate a majority of the Board as provided in thisSection 2.01.     (b) Each Shareholder entitled to vote for the election of directors to the Board agrees thatit will vote its Ordinary Shares or execute a proxy or written consent, as the case may be, andtake all other necessary action in order to ensure (including causing the Company to call a specialmeeting of Shareholders), to the extent possible, that the composition of the Board is as set forthin this Section 2.01.     The Company agrees to take all other necessary actions (including calling a special meeting ofthe Board and/or Shareholders) to ensure, to the extent possible, that the nominations to the Boardare as contemplated by this Section 2.01.     Section 2.02*. Removal.*Each Shareholder agrees that if at any time it is then entitled tovote for the removal of directors from the Board, it will not vote any of its Ordinary Shares infavor of the removal of any director who shall have been nominated in accordance with Section 2.01hereof, unless such removal shall be for Cause or the Person or Persons entitled to nominate suchdirector shall have consented to such removal in writing; *provided*that if the Person or Personsentitled to nominate any director pursuant to Section 2.01 hereof shall request in writing theremoval, with or without Cause, of such director, such Shareholder shall vote its Ordinary Sharesin favor of such removal. Removal for “**Cause**” shall mean removal of a director because of suchdirector’s (a) willful and continued failure substantially to perform his or her statutory orfiduciary duties to the Company in his or her established position, (b) participation in a fraud,act of dishonesty or other misconduct that is injurious, monetarily or otherwise, to the Company orany of its Subsidiaries, (c) having been charged with or pleading guilty to a felony or a crimeinvolving fraud or dishonesty, (d) violation of any state or federal law that has an adverse effecton the Company or (e) abuse of illegal drugs or other controlled substances or habitualintoxication.     Section 2.03*. Vacancies.*If, as a result of death, disability, retirement, resignation,removal (with or without Cause) or otherwise, there shall exist or occur any vacancy on the Board:
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     (a) the Person or Persons entitled under Section 2.01 hereof to nominate such director whosedeath, disability, retirement, resignation or removal resulted in such vacancy may, subject to theprovisions of Section 2.01 hereof, nominate another individual (the “**Replacement Nominee**”) to fillsuch vacancy and serve as a director on the Board; and     (b) subject to Section 2.01 hereof, each Shareholder then entitled to vote for the election ofthe Replacement Nominee as a director of the Company agrees that it will vote its Ordinary Shares,or execute a proxy or written consent, as the case may be, in order to ensure that the ReplacementNominee be elected to the Board.     Section 2.04*. Action by the Board; Shareholders.* Until such time as the InstitutionalShareholders collective Aggregate Ownership Percentage of Ordinary Shares is less than 25%, (1) noaction by the Company (including but not limited to any action by the Board or any committeethereof) shall be taken with respect to any of the following matters without the prior writtenconsent of the Institutional Shareholders, acting collectively:     (i) the declaration of any dividend on or the making of any distribution with respectto, or the recapitalization, reclassification, redemption, repurchase or other acquisitionof, any securities of the Company or any Subsidiary (other than intra company dividends anddistributions), except as expressly permitted by this Agreement;     (ii) any incurrence, refinancing, alteration of material terms or prepayment by theCompany or any Subsidiary of indebtedness for borrowed money in excess of $10,000,000 in theaggregate (or the guaranty by the Company or any Subsidiary of any such indebtedness);     (iii) any approval of the annual business plan, budget and long-term strategic plan ofthe Company or any Subsidiary;     (iv) any modification of the long-term business strategy or scope of the business ofthe Company or any Subsidiary or any material customer relationships thereof;     (v) (A) any merger or consolidation of the Company with or into any Person, other thana wholly owned Subsidiary, or of any Subsidiary with or into any Person other than theCompany or any other wholly owned Subsidiary, or (B) any sale of the Company or anySubsidiary or any significant operations of the Company or any Subsidiary or any jointventure transaction, acquisition or disposition of assets, business, operations orsecurities by the Company or any Subsidiary (in a single transaction or a series of relatedtransactions) having a value in each case in this clause (B) in excess of $10,000,000;     (vi) any liquidation, dissolution, commencement of bankruptcy, liquidation or similarproceedings with respect to the Company or any Subsidiary (other than with respect toinactive or otherwise immaterial Subsidiaries);
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     (vii) the issuance of any security by the Company or any Subsidiary (not includingissuances of such securities in connection with employee or stock option plans previouslyapproved by the Board or by any Subsidiary to the Company or other wholly-owned Subsidiaryof the Company), other than as specifically contemplated by this Agreement;     (viii) any determination of compensation, benefits, perquisites and other incentivesfor the Chief Executive Officer, President or the Chief Financial Officer of the Company orits Subsidiaries and the approval or amendment of any plans or contracts in connectiontherewith, and any approval or amendment to any equity or other compensation or benefitplans for employees of the Company or its Subsidiaries;     (ix) any appointment or dismissal of any of the Chief Executive Officer, President,Chief Financial Officer or any other executive officer in any similar capacity of theCompany or any Subsidiary; or     (x) any increase or decrease to the number of Directors that comprise the entire Boardof the Company; and     (2) the Company (including but not limited to any action by the Board or any committeethereof) shall not, nor permit any of its Subsidiaries to, without the prior written consent ofeach Institutional Shareholder, enter into or amend, modify or supplement, any material agreement,transaction or arrangement with any holder of 5% or more of the Company’s equity securities,executive officers, directors or Affiliates thereof or any individual related by blood, marriage oradoption to any such individual or with any entity in which any such Person or individual owns abeneficial interest of 5% or more, except as otherwise expressly contemplated by this Agreement.     Section 2.05*. Charter Amendments.*Each Shareholder entitled to vote for any amendment tothe Charter or any adoption of or amendment to the certificate of incorporation or bylaws of anySubsidiary, agrees that it will not vote nor execute a proxy or written consent, as the case maybe, in favor of any such amendment or adoption unless each Institutional Shareholder has providedprior written consent to such amendment or adoption.     Section 2.06*. Conflicting Charter Provisions.*Each Shareholder shall vote its OrdinaryShares or execute proxies or written consents, as the case may be, and shall take all other actionsnecessary to ensure, to the extent possible, that the Charter (i) facilitates, and does not at anytime conflict with, any provision of this Agreement and (ii) permits each Shareholder to receivethe benefits to which each such Shareholder is entitled under this Agreement.ARTICLE 3Restrictions on Transfer     Section 3.01*. General.*Each Shareholder understands and agrees that the Company Securitiesacquired prior to the date of this Agreement were not acquired in a transaction
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registered under the Securities Act and are restricted securities under such Act and the rulesand regulations promulgated thereunder. Each Shareholder agrees that it will not Transfer anyCompany Securities (or solicit any offers in respect of any Transfer of any Company Securities),except in compliance with the Securities Act, any applicable foreign or state securities or “bluesky” laws, and the terms and conditions of this Agreement.     Section 3.02*. Legends.*(a) In addition to any other legend that may be required, eachcertificate for Company Securities that is issued to any Shareholder shall bear a legend insubstantially the following form:     “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANYFOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH.THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THESHAREHOLDERS’ AGREEMENT DATED AS OF JANUARY 18, 2006, COPIES OF WHICH MAY BE OBTAINED UPON REQUESTFROM SMART MODULAR TECHNOLOGIES (WWH), INC. OR ANY SUCCESSOR THERETO.”     (b) If any Company Securities shall cease to be Registrable Securities under clause (i) orclause (ii) of the definition thereof, the Company, upon the written request of the holder thereof,shall issue to such holder a new certificate evidencing such shares without the first sentence ofthe legend required by Section 3.02(a) hereof endorsed thereon. If any Company Securities cease tobe subject to any and all restrictions on Transfer set forth in this Agreement, the Company, uponthe written request of the holder thereof, shall issue to such holder a new certificate evidencingsuch Company Securities without the second sentence of the legend required by Section 3.02(a)hereof endorsed thereon.     Section 3.03*. Permitted Transferees.*Notwithstanding anything in this Agreement to thecontrary, each Shareholder may at any time Transfer any or all of its Company Securities to one ormore of its Permitted Transferees without the consent of the Board or any other Shareholder orgroup of Shareholders and without compliance with Sections 3.04, 3.05, 4.01 and 4.02 so long as theTransfer to such Permitted Transferee is not in violation of applicable federal or state securitieslaws.     Section 3.04*. Restrictions on Transfers by the Institutional Shareholders.*(a) [Reserved]     (b) No Institutional Shareholder shall Transfer Company Securities to an Adverse Person (otherthan by Transfer pursuant to Section 4.02, in a Public Offering or through a national securitiesexchange) at any time.     Section 3.05*. Restrictions On Transfers By The Other Shareholders.*(a) [Reserved]     (b) No Other Shareholder shall Transfer Company Securities to an Adverse Person (other than byTransfer pursuant to Section 4.02, in a Public Offering or through a national securities exchange)at any time.
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     Section 3.06*. Restrictions on Transfer under a Credit Agreement, Indenture or OtherAgreement for Indebtedness.*Notwithstanding the foregoing provisions of this Article 3, if aTransfer otherwise permitted hereunder would trigger, under the terms of any outstanding (as of thedate hereof) credit agreement, indenture or any other agreement for indebtedness of the Company,(i) a change of control requiring repayment or (ii) other adverse consequence, then such Transfershall be prohibited.ARTICLE 4Tag-along Rights; Drag-along Rights     Section 4.01*. Rights to Participate in Transfer.*(a) Subject to Sections 3.03, 3.04, 3.06and 4.01(h), if any Shareholder or group of Shareholders (such Shareholder or group ofShareholders, the “**Tag-Along Seller**”) proposes to Transfer any number of Ordinary Shares (a“**Tag-Along Sale**”), the Shareholders other than the Tag-Along Seller (each, an “**EligibleShareholder**”) may elect, at their option, to exercise their rights under this Section 4.01 (eachsuch Shareholder, a “**Tagging Person**”).     In the event of such a proposed Transfer, the Tag-Along Seller shall provide each EligibleShareholder written notice of the terms and conditions of such proposed transfer (“**Tag-AlongNotice**”) and offer each Tagging Person the opportunity to participate in such sale. The Tag-AlongNotice shall identify the number of Ordinary Shares subject to the offer (“**Tag-Along Offer**”), thecash price at which the Transfer is proposed to be made, and all other material terms andconditions of the Tag-Along Offer, including the form of the proposed agreement, if any.     From the date of the receipt of the Tag-Along Notice, each Tagging Person shall have the right(a “**Tag-Along Right**”), exercisable by written notice (“**Tag-Along Response Notice**”) given to theTag-Along Seller within seven Business Days after its receipt of the Tag-Along Notice (the“**Tag-Along Notice Period**”), to request that the Tag-Along Seller include in the proposed Transferthe number of Ordinary Shares held by such Tagging Person as is specified in such notice, *provided*that, if the aggregate number of Ordinary Shares proposed to be sold by the Tag-Along Seller andall Tagging Persons in such transaction exceeds the number of Ordinary Shares that can be sold onthe terms and conditions set forth in the Tag-Along Notice, then (i) each Tagging Person shall beentitled to include in the Tag-Along Sale only its Tag-Along Portion of Ordinary Shares and (ii)the Tag-Along Seller shall be entitled to include the number of Ordinary Shares proposed to beTransferred by the Tag-Along Seller as set forth in the Tag-Along Notice (reduced, to the extentnecessary, so that each Tagging Person shall be able to include its Tag-Along Portion) and suchadditional Ordinary Shares as permitted by Section 4.01(d). Each Tagging Person that exercises itsTag-Along Rights hereunder shall deliver to the Tag-Along Seller, together with its Tag-AlongResponse Notice, the certificate or certificates representing the Ordinary Shares of such TaggingPerson to be included in the Transfer, together with a limited power-of-attorney authorizing theTag-Along Seller to Transfer such Ordinary Shares on the terms set forth in the Tag-Along Notice.Delivery of such certificate or certificates representing the Ordinary Shares to be Transferred andthe limited power-of-attorney authorizing the Tag-Along Seller to Transfer such Ordinary Sharesshall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging Persons. EachTag-Along Response Notice shall
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include wire transfer instructions for payment of the purchase price for the Ordinary Sharesto be sold in such Tag-Along Sale. The Tagging Persons shall (a) be required (i) to bear theirproportionate share of any escrows, holdbacks or adjustments in purchase price and any transactionexpenses and (ii) to make such representations, warranties and covenants and enter into suchagreements as are customary for transactions of the nature of the Tag-Along Offer, in each caseunder the terms of any definitive agreement(s) relating to such Tag-Along Offer and (b) benefitfrom all of the same provisions of the definitive agreements as the Tag-Along Seller, it beingunderstood that any liability of any Tagging Person for indemnification or similar post-closingobligations shall not exceed the consideration such Tagging Person receives in the Tag-Along Saleand shall not exceed a proportional share of any such liability based on such Tagging Person’sshare of the aggregate consideration in the Tag-Along Sale.     If, at the end of a 90-day period after such delivery (which 90-day period shall be extendedif any of the transactions contemplated by the Tag-Along Offer are subject to regulatory approvaluntil the expiration of five Business Days after all such approvals have been received, but in noevent later than 180 days following receipt of the Tag-Along Response Notice by the Tag-AlongSeller), the Tag-Along Seller has not completed the Transfer of all such Ordinary Shares onsubstantially the same terms and conditions set forth in the Tag-Along Notice, the Tag-Along Sellershall (i) return to each Tagging Person the limited power-of-attorney (and all copies thereof)together with all certificates representing the Ordinary Shares that such Tagging Person deliveredfor Transfer pursuant to this Section 4.01(a) and (ii) not conduct any Transfer of Ordinary Shareswithout again complying with this Section.     (b) Concurrently with the consummation of the Tag-Along Sale, the Tag-Along Seller shallnotify the Tagging Persons thereof, shall remit to the Tagging Persons the total consideration (bybank or certified check) for the Ordinary Shares of the Tagging Persons transferred pursuantthereto, and shall, promptly after the consummation of such Tag-Along Sale, furnish such otherevidence of the completion and time of completion of such transfer and the terms thereof as may bereasonably requested by the Tagging Persons.     (c) If at the termination of the Tag-Along Notice Period any Eligible Shareholder shall nothave elected to participate in the Tag-Along Sale, such Eligible Shareholder will be deemed to havewaived its rights under Section 4.01(a) with respect to the Transfer of its securities pursuant tosuch Tag-Along Sale.     (d) If (i) any Eligible Shareholder declines to exercise its Tag-Along Rights or (ii) anyTagging Person elects to exercise its Tag-Along Rights with respect to less than such TaggingPerson’s Tag-Along Portion, the Tag-Along Seller shall be entitled to Transfer, pursuant to theTag-Along Offer, a number of Ordinary Shares held by it equal to the Unused Tag Amount (reduced tothe extent necessary so that each Tagging Person who has elected to exercise its Tag-Along Rightsfor the full amount of its Tag-Along Portion shall be able to include its Tag-Along Portion withrespect to the Unused Tag Amount) and each Tagging Person who has elected to exercise its Tag-AlongRights for the full amount of its Tag-Along Portion shall be entitled to Transfer in the Tag-AlongSale its Tag-Along Portion of the Unused Tag Amount. “**Unused Tag Amount**” means the number ofOrdinary Shares constituting the sum of (i) the Tag-Along Portion of any Eligible Shareholder thatdeclined to exercise its Tag-Along Rights and (ii) the
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portion of the Tag-Along Portion with respect to which Tag-Along Rights were not exercised byany Tagging Person that exercised its Tag-Along Rights with respect to less than such Tag-AlongPerson’s Tag-Along Portion.     (e) The Tag-Along Seller may Transfer, on behalf of itself and any Tagging Person whoexercises the Tag-Along Rights pursuant to this Section 4.01(a), the Ordinary Shares subject to theTag-Along Offer and elected to be Transferred on the terms and conditions set forth in theTag-Along Notice within 90 days (or such longer period as extended under Section 4.01(a)) of thedate on which all Tag-Along Rights shall have been waived, exercised or expire; *provided*that, ifsuch Tag-Along Sale is subject to regulatory approval, such 90 day period shall be extended untilthe expiration of five Business Days after all such approvals have been received, but in no eventlater than 180 days following the effective date of the Tag-Along Sale Notice.     (f) Notwithstanding the requirements of this Section 4.01, a Tag-Along Seller may TransferOrdinary Shares at any time without complying with the requirements of paragraphs (a) and (b) ofSection 4.01 so long as such Transfer is solely for cash and the Tag-Along Seller deposits intoescrow with an independent third party at the time of Transfer that amount of the considerationreceived in the sale equal to the Escrow Amount. The “**Escrow Amount**” shall equal that amount ofconsideration that all the Eligible Shareholders would have been entitled to receive if each of theEligible Shareholders had the opportunity to participate in the Transfer as a Tagging Person to theextent of its Tag-Along Portion, determined as if each such Eligible Shareholder (i) delivered aTag-Along Response Notice to the Tag-Along Seller in the time period set forth in Section 4.01(a)and (ii) proposed to include all of its Ordinary Shares which it would have been entitled toinclude in the Transfer.     No later than the date of the Transfer, the Tag-Along Seller shall notify the Company inwriting of the proposed Transfer. Such notice (the “**Escrow Notice**”) shall set forth theinformation required in the Tag-Along Notice, and in addition, such notice shall state the name ofthe escrow agent and the account number of the escrow account. The Company shall promptly, and inany event within 10 days, deliver or cause to be delivered the Escrow Notice to each EligibleShareholder.     An Eligible Shareholder may exercise the tag-along right described in this clause (f) bydelivery to the Tag-Along Seller, within seven Business Days of the date after the Companydelivered or caused to be delivered the Escrow Notice, of (i) a written notice specifying thenumber of Ordinary Shares it proposes to sell (which such number shall not exceed such EligibleShareholder’s Tag-Along Portion), and (ii) the certificates representing such securities, withtransfer powers duly endorsed in blank.     Promptly after the expiration of the seventh Business Day after the Company has delivered orcaused to be delivered the Escrow Notice, (i) the Tag-Along Seller shall purchase that number ofOrdinary Shares as the Tag-Along Seller would have been required to include in the sale had theTag-Along Seller complied with the provisions of Section 4.01(a), (ii) the Company shall cause tobe released from the escrow to the Eligible Shareholder from whom the Tag-Along Seller purchasesOrdinary Shares pursuant to clause (i) of this paragraph the applicable amount of consideration dueto such Eligible Shareholder together with any interest
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thereon, and (iii) all remaining funds and other consideration held in escrow shall bereleased to the Tag-Along Seller.     (g) Notwithstanding anything contained in this Section 4.01, there shall be no liability onthe part of the Tag-Along Seller to the Tagging Persons (other than the obligation to return anycertificates evidencing Ordinary Shares received by the Tag-Along Seller) if the Transfer ofOrdinary Shares pursuant to this Section 4.01 is not consummated for whatever reason. Whether toeffect a Transfer of Ordinary Shares pursuant to this Section 4.01 by the Tag-Along Seller is inthe sole and absolute discretion of the Tag-Along Seller.     (h) The provisions of this Section 4.01 shall not apply to any proposed Transfer of OrdinaryShares by the Tag-Along Seller (A) in a Public Offering or pursuant to Rule 144 or (B) pursuant toSection 3.03 or 4.02.     (i) This Section 4.01 shall terminate upon the earlier to occur of (i) January 18, 2009 and(ii) the date on which the Aggregate Ownership of Ordinary Shares by the Institutional Shareholderscollectively falls below 30% of the aggregate Initial Ownership of Ordinary Shares by suchInstitutional Shareholders.     Section 4.02*. Right to Compel Participation in Certain Transfers.*(a) If the InstitutionalShareholders collectively propose (i) to Transfer not less than 50% of their Initial Ownership ofOrdinary Shares to a Third Party in a bona fide sale or (ii) a Transfer in which the OrdinaryShares to be Transferred by the Institutional Shareholders collectively, plus the Ordinary Sharesto be Transferred by the Other Shareholders pursuant to this Section 4.02(a), constitute more than50% of the outstanding Ordinary Shares (a “**Compelled Sale**”), the Institutional Shareholderscollectively may at their option require all Other Shareholders to Transfer the Drag-Along Portionof Ordinary Shares (“**Drag-Along Rights**”) then held by every Other Shareholder and, at the closingof the Compelled Sale, to exercise such number of options or warrants for Ordinary Shares held byevery Other Shareholder as is required in order that a sufficient number of Ordinary Shares areavailable to Transfer the relevant Drag-Along Portion of each such Other Shareholder, for the sameconsideration per Ordinary Share and otherwise on the same terms and conditions as theInstitutional Shareholders, *provided*that any Other Shareholder who holds options or warrants theexercise price per share of which is greater than the per share price at which the Ordinary Sharesare to be Transferred to the Third Party may, if required by the Institutional Shareholders toexercise such options, in place of such exercise, submit to irrevocable cancellation thereofwithout any liability for payment of any exercise price with respect thereto. If the CompelledSale is not consummated with respect to any Ordinary Shares acquired upon exercise of such optionsor warrants, or the Compelled Sale is not consummated, such options or warrants shall be deemed notto have been exercised or canceled, as applicable. The Institutional Shareholders shall providewritten notice of such Compelled Sale to the Other Shareholders (a “**Compelled Sale Notice**”) notlater than the 15th day prior to the proposed Compelled Sale. The Compelled Sale Notice shallidentify the transferee, the number of Ordinary Shares subject to the Compelled Sale, theconsideration for which a Transfer is proposed to be made (the “**Compelled Sale Price**”) and allother material terms and conditions of the Compelled Sale. The number of Ordinary Shares to besold by each Other Shareholder
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will be the Drag-Along Portion of the Ordinary Shares that such Other Shareholder owns. EachOther Shareholder shall be required to participate in the Compelled Sale on the terms andconditions set forth in the Compelled Sale Notice and to tender its Ordinary Shares as set forthbelow. The price payable in such Transfer shall be the Compelled Sale Price. Not later than the10th day following the date of the Compelled Sale Notice (the “**Compelled Sale Notice Period**”), eachof the Other Shareholders shall deliver to a representative of the Institutional Shareholdersdesignated in the Compelled Sale Notice certificates, and in the case of warrants, the applicableinstrument, representing all Company Securities comprising the Drag-Along Portion held by suchOther Shareholder, duly endorsed, together with all other documents required to be executed inconnection with such Compelled Sale or, if such delivery is not permitted by applicable law, anunconditional agreement to deliver such Company Securities pursuant to this Section 4.01(a) at theclosing for such Compelled Sale against delivery to such Other Shareholder of the considerationtherefor. If an Other Shareholder should fail to deliver such certificates or other applicableinstruments to the Institutional Shareholders, the Company (subject to reversal under Section4.02(b)) shall cause the books and records of the Company to show that such Company Securities arebound by the provisions of this Section 4.02(a) and that such Company Securities shall beTransferred to the Third Party immediately upon surrender for Transfer by the holder thereof. TheOther Shareholders shall (a) be required (i) to bear their proportionate share of any escrows,holdbacks or adjustments in purchase price and any transaction expenses and (ii) to make suchrepresentations, warranties and covenants and enter into such agreements as are customary fortransactions of the nature of the Compelled Sale, in each case under the terms of any definitiveagreements relating to such Compelled Sale and (b) benefit from all of the same provisions of thedefinitive agreements as the Institutional Shareholders, it being understood that any liability ofany Other Shareholder for indemnification or similar post-closing obligations shall not exceed theconsideration such Other Shareholder receives in the Compelled Sale and shall be a proportionalshare of any such liability based on such Other Shareholder’s share of the aggregate considerationin the Compelled Sale.     (b) The Institutional Shareholders shall have a period of 90 days from the date of receipt ofthe Compelled Sale Notice to consummate the Compelled Sale on the terms and conditions set forth insuch Compelled Sale Notice, *provided*that, if such Compelled Sale is subject to regulatoryapproval, such 90-day period shall be extended until the expiration of five Business Days after allsuch approvals have been received, but in no event later than 180 days following the effective dateof the Compelled Sale Notice. If the Compelled Sale shall not have been consummated during suchperiod, the Institutional Shareholders shall return to each of the Other Shareholders allcertificates or other applicable instruments representing Company Securities that such OtherShareholders delivered for Transfer pursuant hereto, together with any documents in the possessionof the Institutional Shareholders executed by the Other Shareholders in connection with suchproposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwiseapplicable at such time with respect to such Company Securities owned by the Other Shareholdersshall again be in effect.     (c) Concurrently with the consummation of the Transfer of Company Securities pursuant to thisSection 4.02, the Institutional Shareholders shall give notice thereof to the Other Shareholders,shall remit to each of the Other Shareholders who have surrendered their certificates or otherapplicable instruments the total consideration (the cash portion of which is to
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be paid by bank or certified check) for the Company Securities Transferred pursuant hereto andshall furnish such other evidence of the completion and time of completion of such Transferand the terms thereof as may be reasonably requested by such Other Shareholders.     (d) Notwithstanding anything contained in this Section 4.02, there shall be no liability onthe part of the Institutional Shareholders to the Other Shareholders (other than the obligation toreturn any certificates or other applicable instruments representing Company Securities received byany Institutional Shareholders) if the Transfer of Company Securities pursuant to this Section4.02 is not consummated for whatever reason, regardless of whether the Institutional Shareholdershave delivered a Compelled Sale Notice. Whether to effect a Transfer of Company Securitiespursuant to this Section 4.02 by the Institutional Shareholders is in the sole and absolutediscretion of the Institutional Shareholders.     (e) This Section 4.02 shall terminate upon the earlier to occur of (i) January 18, 2009 and(ii) the date on which the Aggregate Ownership of Ordinary Shares by the Institutional Shareholderscollectively falls below 30% of the aggregate Initial Ownership of Ordinary Shares by suchInstitutional Shareholders.ARTICLE 5Registration Rights     Section 5.01*. Demand Registration.*(a) If, the Company shall receive a written request fromany of the Institutional Shareholders, that the Company effect the registration under theSecurities Act of all or a portion of such Requesting Shareholder’s Registrable Securities, andspecifying the intended method of disposition thereof (a “**Demand Registration**”), then the Companyshall promptly give written notice of such requested registration at least 15 days prior to theanticipated filing date of the registration statement relating to such Demand Registration to eachNon-Requesting Shareholder. Upon the Company’s giving notice of a requested registration, theCompany will use its reasonable best efforts to effect, as expeditiously as possible, theregistration under the Securities Act of:     (x) the Registrable Securities that the Company has been so requested to register bythe Requesting Shareholders, then held by the Requesting Shareholders, and     (y) subject to the restrictions set forth in Sections 5.01(e) and 5.02, all otherRegistrable Securities of the same class as that requested to be registered by theRequesting Shareholders which any Non-Requesting Shareholder entitled to request the Companyto effect an Incidental Registration pursuant to Section 5.02 (all such Shareholders,together with the Requesting Shareholders, the “**Holders**”) have requested the Company toregister by written request received by the Company within 15 days after the receipt by suchHolders of such written notice given by the Company,all to the extent necessary to permit the disposition (in accordance with the intendedmethods thereof as aforesaid) of the Registrable Securities so to be registered, *provided*that the Company shall not be obligated to effect a Demand Registration unless either (x)
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the aggregate proceeds expected to be received from the sale of the Ordinary Sharesrequested to be included in such Demand Registration equal or exceed $25,000,000 or, in thecase of a Shortform Registration, $5,000,000 or (y) the remaining portion of RegistrableSecurities held by at least one Requesting Shareholder would be registered pursuant to suchDemand Registration. In no event will the Company be required to effect more than oneDemand Registration hereunder within any six-month period.     “**Requesting Shareholder**” means, with respect to a Demand Registration, the InstitutionalShareholder or Institutional Shareholders exercising such Demand Registration and any InstitutionalShareholder that joins a Demand Registration. “**Non-Requesting Shareholder**” means each Shareholderwith respect to a Demand Registration that is not a Requesting Shareholder.     (b) Promptly after the expiration of the 15-day period referred to in Section 5.01(a)(y)hereof, the Company will notify all the Holders to be included in the Demand Registration of theother Holders and the number of shares of Registrable Securities requested to be included therein.At any time prior to the effective date of the registration statement relating to suchregistration, the Requesting Shareholders may revoke such request, without liability to any of theother Holders, by providing a written notice to the Company revoking such request.     (c) The Company will be liable for and pay all Registration Expenses in connection with anyDemand Registration, regardless of whether it is effected.     (d) A Demand Registration shall not be deemed to have occurred     (i) unless the registration statement relating thereto (A) has become effective underthe Securities Act and (B) has remained effective for a period of at least 180 days (or suchshorter period in which all Registrable Securities of the Holders included in suchregistration have actually been sold thereunder), *provided*that such registration statementshall not be considered a Demand Registration if, after any registration statement requestedpursuant to this Section 5.01 becomes effective, (x) such registration statement isinterfered with by any stop order, injunction or other order or requirement of the SEC orother governmental agency or court and (y) less than 75% of the Registrable Securitiesincluded in such registration statement have been sold thereunder, or     (ii) if the Maximum Offering Size (as defined below) is reduced in accordance withSection 5.01(e) such that less than 662/3 % of the Registrable Securities of the RequestingShareholders sought to be included in such registration are included.     (e) If a Demand Registration involves an underwritten Public Offering and the managingunderwriter shall advise the Company and the Requesting Shareholders that, in its view, the numberof shares of Registrable Securities requested to be included in such registration (including anysecurities that the Company proposes to be included that are not Registrable Securities) exceedsthe largest number of shares that can be sold without having an adverse effect on such offering,including the price at which such shares can be sold (the “**Maximum**
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**Offering Size**”), the Company will include in such registration, in the priority listed below,up to the Maximum Offering Size:     (A) first, all Registrable Securities requested to be registered by theRequesting Shareholders and their Permitted Transferees and, in the case of aDemand Registration exercised by more than one Institutional Shareholder, allRegistrable Securities requested to be registered by each of the InstitutionalShareholders and their Permitted Transferees (allocated, if necessary for theoffering not to exceed the Maximum Offering Size, pro rata among such entities onthe basis of the relative number of shares of Registrable Securities so requestedto be registered),     (B) second, all Registrable Securities requested to be included in suchregistration by any Non-Requesting Shareholder and its Permitted Transferees(allocated, if necessary for the offering not to exceed the Maximum Offering Size,pro rata among the Non-Requesting Shareholders and their Permitted Transferees onthe basis of the relative number of Registrable Securities so requested to beincluded in such registration) excluding, for purposes of this paragraph (B), theRegistrable Securities of a Non-Requesting Institutional Shareholder in the case ofa Demand Registration in which such Non-Requesting Institutional Shareholder isincluded in paragraph (A) above, and     (C) third, any securities proposed to be registered for the account of anyother Persons (including the Company), with such priorities among them as theCompany shall determine.     (f) Upon written notice to each Requesting Shareholder, the Company may postpone effecting aregistration pursuant to this Section 5.01 on one occasion during any period of 12 consecutivemonths for a reasonable time specified in the notice but not exceeding 90 days (which period maynot be extended or renewed), if (1) an investment banking firm of recognized national standingshall advise the Company and the Requesting Shareholders in writing that effecting the registrationwould materially and adversely affect an offering of securities of such Company the preparation ofwhich had then been commenced or (2) the Company is in possession of material non-publicinformation the disclosure of which during the period specified in such notice the Company believeswould not be in the best interests of the Company.     Section 5.02*. Incidental Registration.*(a) If, at any time after the First Public Offering,the Company proposes to register any Company Securities under the Securities Act (other than aregistration on Form S-8 or S-4, or any successor or similar forms, relating to Ordinary Sharesissuable upon exercise of employee stock options or in connection with any employee benefit orsimilar plan of the Company or in connection with a direct or indirect acquisition by the Companyof another Person), whether or not for sale for its own account, it will each such time, subject tothe provisions of Section 5.02(b), give prompt written notice prior to the anticipated filing dateof the registration statement relating to such registration to each Shareholder, which
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notice shall set forth such Shareholder’s rights under this Section 5.02 and shall offer such Shareholder theopportunity to include in such registration statement the number of Registrable Securities of thesame class or series as those proposed to be registered as each such Shareholder may request (an“**Incidental Registration**”), subject to the provisions of Section 5.02(b). Uponthe written request of any such Shareholder made within 15 days after the receipt of noticefrom the Company (which request shall specify the number of Registrable Securities intended to bedisposed of by such Shareholder), the Company will use its reasonable best efforts to effect theregistration under the Securities Act of all Registrable Securities that the Company has been sorequested to register by all such Shareholders, to the extent requisite to permit the dispositionof the Registrable Securities so to be registered, *provided*that (i) if such registration involvesan underwritten Public Offering, all such Shareholders requesting to be included in the Company’sregistration must sell their Registrable Securities to the underwriters selected as provided inSection 5.04(f) on the same terms and conditions as apply to the Company or the RequestingShareholder, as applicable, and (ii) if, at any time after giving written notice of its intentionto register any securities pursuant to this Section 5.02(a) and prior to the effective date of theregistration statement filed in connection with such registration, the Company shall determine forany reason not to register such securities, the Company shall give written notice to all suchShareholders and, thereupon, shall be relieved of its obligation to register any RegistrableSecurities in connection with such registration. No registration effected under this Section 5.02shall relieve the Company of its obligations to effect a Demand Registration to the extent requiredby Section 5.01. The Company shall pay all Registration Expenses in connection with eachregistration of Registrable Securities requested pursuant to this Section 5.02.     (b) If a registration pursuant to this Section 5.02 involves an underwritten Public Offering(other than any Demand Registration, in which case the provisions with respect to priority ofinclusion in such offering set forth in Section 5.01(e) shall apply) and the managing underwriteradvises the Company that, in its view, the number of Shares that the Company and such Shareholdersintend to include in such registration exceeds the Maximum Offering Size, the Company will includein such registration, in the following priority, up to the Maximum Offering Size:     (i) first, so much of the securities proposed to be registered for the account of theCompany as would not cause the offering to exceed the Maximum Offering Size,     (ii) second, all Registrable Securities requested to be included in such registrationby the Institutional Shareholders and each of their Permitted Transferees, (allocated, ifnecessary for the offering not to exceed the Maximum Offering Size, pro rata among suchentities or persons on the basis of the relative number of shares of Registrable Securitiesso requested to be included in such registration),     (iii) third, any securities proposed to be registered for the account of any otherPersons with such priorities among them as the Company shall determine.     Section 5.03*. Holdback Agreements.*If any registration of Registrable Securities shallbecome effective in connection with a Public Offering, each Institutional Shareholder and eachOther Shareholder and the Company agree not to effect any public sale or distribution, including
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any sale pursuant to Rule 144 or Rule 144A under the Securities Act, of any Registrable Securities,and not to effect any such public sale or distribution of any other security of the Company or ofany stock convertible into or exchangeable or exercisable for any Ordinary Shares (in each case,other than as part of such Public Offering) during the 14 days prior to theeffective date of the applicable registration statement (except as part of such registration)or during the period after such effective date equal to the lesser of (i) such period of time asthe Company and the lead managing underwriter shall agree and (ii) 90 days (such lesser period, the“**Applicable Holdback Period**”).     Section 5.04*. Registration Procedures.*Whenever Shareholders request that any RegistrableSecurities be registered pursuant to Section 5.01 or 5.02 hereof, subject to the provisions of suchSections, the Company will use its reasonable best efforts to effect the registration and the saleof such Registrable Securities in accordance with the intended method of disposition thereof asquickly as practicable, and in connection with any such request:     (a) The Company will as expeditiously as possible (but in any event within (i) 45 days ofreceipt of a request for a Demand Registration or (ii) 21 days, in the case of a ShortformRegistration) prepare and file with the SEC a registration statement on any form reasonablyacceptable to the Requesting Shareholders for which the Company then qualifies or that counsel forthe Company shall deem appropriate and which form shall be available for the sale of theRegistrable Securities to be registered thereunder in accordance with the intended method ofdistribution thereof, and use its reasonable best efforts to cause such filed registrationstatement to become and remain effective for a period of not less than 180 days, or in the case ofa shelf registration statement, one year (or such shorter period in which all of the RegistrableSecurities of the Holders included in such registration statement shall have actually been soldthereunder).     (b) Prior to filing a registration statement or prospectus or any amendment or supplementthereto, the Company will, if requested, furnish to each participating Shareholder and eachunderwriter, if any, of the Registrable Securities covered by such registration statement copies ofsuch registration statement as proposed to be filed, and thereafter the Company will furnish tosuch Shareholder and underwriter, if any, such number of copies of such registration statement,each amendment and supplement thereto (in each case including all exhibits thereto and documentsincorporated by reference therein), the prospectus included in such registration statement(including each preliminary prospectus and any summary prospectus) and any other prospectus filedunder Rule 424 or Rule 430A under the Securities Act and such other documents as such Shareholderor underwriter may reasonably request in order to facilitate the disposition of the RegistrableSecurities owned by such Shareholder. Each Institutional Shareholder shall have the right torequest that the Company modify any information contained in such registration statement, amendmentand supplement thereto pertaining to such Institutional Shareholder and the Company shall use allreasonable efforts to comply with such request, *provided*, *however*, that the Company shall not haveany obligation so to modify any information if so doing would cause the prospectus to contain anuntrue statement of a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein not misleading.
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     (c) After the filing of the registration statement, the Company shall (i) cause therelated prospectus to be supplemented by any required prospectus supplement, and, as sosupplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with theprovisions of the Securities Act with respect to the disposition of all Registrable Securitiescovered by such registration statement during the applicable period in accordance with the intendedmethods of disposition by the sellers thereof set forth in such registration statement orsupplement to such prospectus and (iii) promptly notify each Shareholder holding RegistrableSecurities covered by such registration statement of any stop order issued or threatened by the SECor any state securities commission under state blue sky laws and take all reasonable actionsrequired to prevent the entry of such stop order or to remove it if entered.     (d) The Company will use its reasonable best efforts to (i) register or qualify theRegistrable Securities covered by such registration statement under such other securities or bluesky laws of such jurisdictions in the United States as any Shareholder holding such RegistrableSecurities reasonably (in light of such Shareholder’s intended plan of distribution) requests and(ii) cause such Registrable Securities to be registered with or approved by such other governmentalagencies or authorities as may be necessary by virtue of the business and operations of the Companyand do any and all other acts and things that may be reasonably necessary or advisable to enablesuch Shareholder to consummate the disposition of the Registrable Securities owned by suchShareholder, *provided*that the Company will not be required to (A) qualify generally to do businessin any jurisdiction where it would not otherwise be required to qualify but for this paragraph (d),(B) subject itself to taxation in any such jurisdiction or (C) consent to general service ofprocess in any such jurisdiction.     (e) The Company will immediately notify each Shareholder holding such Registrable Securitiescovered by such registration statement, at any time when a prospectus relating thereto is requiredto be delivered under the Securities Act, of the occurrence of an event requiring the preparationof a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasersof such Registrable Securities, such prospectus will not contain an untrue statement of a materialfact or omit to state any material fact required to be stated therein or necessary to make thestatements therein not misleading and promptly prepare and make available to each such Shareholderand file with the SEC any such supplement or amendment.     (f) (i) The selling Institutional Shareholders acting collectively will have the right, intheir sole discretion, to select an underwriter or underwriters in connection with any PublicOffering resulting from the exercise of a Demand Registration, which underwriter or underwritersmay include any Affiliate of any Institutional Shareholder, and (ii) the Company will select anunderwriter or underwriters in connection with any other Public Offering. In connection with anyPublic Offering, the Company will enter into customary agreements (including an underwritingagreement in customary form) and take such other actions as are reasonably required in order toexpedite or facilitate the disposition of such Registrable Securities in any such Public Offering,including the engagement of a “qualified independent underwriter” in connection with thequalification of the underwriting arrangements with the NASD.
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     (g) Upon execution of confidentiality agreements in form and substance reasonably satisfactoryto the Company, the Company will make available for inspection by any Shareholder and anyunderwriter participating in any disposition pursuant to a registration statement being filed bythe Company pursuant to this Section 5.04 and any attorney, accountant or other professionalretained by any such Shareholder or underwriter (collectively, the “**Inspectors**”), all financial andother records, pertinent corporate documents and properties of the Company (collectively, the“**Records**”) as shall be reasonably necessary or desirable to enable them to exercise their duediligence responsibility, and cause the Company’s officers, directors and employees to supply allinformation reasonably requested by any Inspectors in connection with such registration statement.Records that the Company determines, in good faith, to be confidential and that it notifies theInspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure ofsuch Records is necessary to avoid or correct a misstatement or omission in such registrationstatement or (ii) the release of such Records is ordered pursuant to a subpoena or other order froma court of competent jurisdiction. Each Shareholder agrees that information obtained by it as aresult of such inspections shall be deemed confidential and shall not be used by it or itsAffiliates as the basis for any market transactions in the Company Securities unless and until suchis made generally available to the public. Each Shareholder further agrees that, upon learningthat disclosure of such Records is sought in a court of competent jurisdiction, it will give noticeto the Company and allow the Company, at its expense, to undertake appropriate action to preventdisclosure of the Records deemed confidential.     (h) The Company will furnish to each such underwriter, if any, a signed counterpart, addressedto such underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfortletter or comfort letters from the Company’s independent public accountants, each in customary formand covering such matters of the kind customarily covered by opinions or comfort letters, as thecase may be, as the managing underwriter therefor reasonably requests.     (i) The Company will otherwise use its reasonable best efforts to comply with all applicablerules and regulations of the SEC, and make available to its securityholders, as soon as reasonablypracticable, an earnings statement or such other document covering a period of 12 months, beginningwithin three months after the effective date of the registration statement, which earningsstatement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158thereunder.     (j) The Company may require each such Shareholder promptly to furnish in writing to theCompany such information regarding the distribution of the Registrable Securities as the Companymay from time to time reasonably request and such other information as may be legally required inconnection with such registration.     (k) Each such Shareholder agrees that, upon receipt of any notice from the Company of thehappening of any event of the kind described in Section 5.04(e) hereof, such Shareholder willforthwith discontinue disposition of Registrable Securities pursuant to the registration statementcovering such Registrable Securities until such Shareholder’s receipt of the copies of thesupplemented or amended prospectus contemplated by Section 5.04(e) hereof, and, if so directed bythe Company, such Shareholder will deliver to the Company all copies, other than
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any permanent file copies then in such Shareholder’s possession, of the most recent prospectuscovering such Registrable Securities at the time of receipt of such notice. In the event that theCompany shall give such notice, the Company shall extend the period during which such registrationstatement shall be maintained effective (including the period referred to in Section 5.04(a)hereof) by the number of days during the period from and including the date of the giving of noticepursuant to Section 5.04(e) hereof to the date when the Company shall make available to suchShareholder a prospectus supplemented or amended to conform with the requirements of Section5.04(e) hereof.     (l) The Company will use its reasonable best efforts to list all Registrable Securitiescovered by such registration statement on any securities exchange or quotation system on which anyof the Registrable Securities are then listed or traded.     (m) The Company shall have appropriate officers of the Company (i) prepare and makepresentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii)take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use theirreasonable best efforts to cooperate as reasonably requested by the underwriters in the offering,marketing or selling of the Registrable Securities.     (n) The Company will provide and cause to be maintained a transfer agent and registrar for allRegistrable Securities covered by such registration statement from and after a date not later thanthe effective date of such registration statement.     Section 5.05*. Indemnification by the Company.*The Company agrees to indemnify and holdharmless each Shareholder holding Registrable Securities covered by a registration statement, itsofficers, directors, employees, partners and agents, and each Person, if any, who controls suchShareholder within the meaning of Section 15 of the Securities Act or Section 20 of the ExchangeAct from and against any and all losses, claims, damages and liabilities (including reasonableexpenses of investigation and reasonable attorneys’ fees and expenses) caused by any untruestatement or alleged untrue statement of a material fact contained in any registration statement orprospectus relating to the Registrable Securities (as amended or supplemented if the Company shallhave furnished any amendments or supplements thereto) or any preliminary prospectus, or caused byany omission or alleged omission to state therein a material fact required to be stated therein ornecessary to make the statements therein not misleading, except insofar as such losses, claims,damages or liabilities are caused by any such untrue statement or omission or alleged untruestatement or omission so made based upon information furnished in writing to the Company by suchShareholder or on such Shareholder’s behalf expressly for use therein. The Company also agrees toindemnify any underwriters of the Registrable Securities, their officers and directors and eachperson who controls such underwriters on substantially the same basis as that of theindemnification of the Shareholders provided in this Section 5.05.     Section 5.06*. Indemnification by Participating Shareholders.*Each Shareholder holdingRegistrable Securities included in any registration statement agrees, severally but not jointly, toindemnify and hold harmless the Company, its officers, directors and agents and each Person, ifany, who controls the Company within the meaning of either Section 15 of the Securities Act or
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Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Companyto such Shareholder, but only (i) with respect to information furnished in writing by suchShareholder or on such Shareholder’s behalf expressly for use in any registration statement orprospectus relating to the Registrable Securities, or any amendment or supplement thereto, or anypreliminary prospectus or (ii) to the extent that any loss, claim, damage, liability or expensedescribed in Section 5.05 results from the fact that a current copy of the prospectus (or suchamended or supplemented prospectus, as the case may be) was not sent or given to the Personasserting any such loss, claim, damage, liability or expense at or prior to the writtenconfirmation of the sale of the Registrable Securities concerned to such Person if it is determinedthat it was the responsibility of such Shareholder to provide such Person with a current copy ofthe prospectus (or such amended or supplemented prospectus, as the case may be) and such currentcopy of the prospectus (or such amended or supplemented prospectus, as the case may be) would havecured the defect giving rise to such loss, claim, damage, liability or expense. Each suchShareholder also agrees to indemnify and hold harmless underwriters of the Registrable Securities,their officers and directors and each Person who controls such underwriters on substantially thesame basis as that of the indemnification of the Company provided in this Section 5.06. As acondition to including Registrable Securities in any registration statement filed in accordancewith Article 5 hereof, the Company may require that it shall have received an undertakingreasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extentcustomarily provided by underwriters with respect to similar securities. No Shareholder shall beliable under this Section 5.06 for any loss, claim, damage, liability or expense in excess of thenet proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholderto which such loss, claim, damage, liability or expense relates.     Section 5.07*. Conduct of Indemnification Proceedings.*In case any proceeding (including anygovernmental investigation) shall be instituted involving any Person in respect of which indemnitymay be sought pursuant to this Article 5, such Person (an “**Indemnified Party**”) shall promptlynotify the Person against whom such indemnity may be sought (the “**Indemnifying Party**”) in writingand the Indemnifying Party shall assume the defense thereof, including the employment of counselreasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees andexpenses, *provided*that the failure of any Indemnified Party so to notify the Indemnifying Partyshall not relieve the Indemnifying Party of its obligations hereunder except to the extent that theIndemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, anyIndemnified Party shall have the right to retain its own counsel, but the fees and expenses of suchcounsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and theIndemnified Party shall have mutually agreed to the retention of such counsel or (ii) in thereasonable judgment of such Indemnified Party representation of both parties by the same counselwould be inappropriate due to actual or potential differing interests between them. It isunderstood that, in connection with any proceeding or related proceedings in the same jurisdiction,the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than oneseparate firm of attorneys (in addition to any local counsel) at any time for all such IndemnifiedParties, and that all such fees and expenses shall be reimbursed as they are incurred. In the caseof any such separate firm for the Indemnified Parties, such firm shall be designated in writing bythe Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of anyproceeding effected without its written consent, but if settled with such consent, or if there be afinal judgment for the plaintiff,
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the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from andagainst any loss or liability (to the extent stated above) by reason of such settlement orjudgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shalleffect any settlement of any pending or threatened proceeding in respect of which any IndemnifiedParty is or could have been a party and indemnity could have been sought hereunder by suchIndemnified Party, unless such settlement includes an unconditional release of such IndemnifiedParty from all liability arising out of such proceeding.     Section 5.08*. Contribution.*If the indemnification provided for in this Article 5 isunavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilitiesreferred to herein, then each such Indemnifying Party, in lieu of indemnifying such IndemnifiedParty, shall contribute to the amount paid or payable by such Indemnified Party as a result of suchlosses, claims, damages or liabilities (i) as between the Company and the Shareholders holdingRegistrable Securities covered by a registration statement on the one hand and the underwriters onthe other, in such proportion as is appropriate to reflect the relative benefits received by theCompany and such Shareholders on the one hand and the underwriters on the other, from the offeringof the Registrable Securities, or if such allocation is not permitted by applicable law, in suchproportion as is appropriate to reflect not only the relative benefits but also the relative faultof the Company and such Shareholders on the one hand and of such underwriters on the other inconnection with the statements or omissions that resulted in such losses, claims, damages orliabilities, as well as any other relevant equitable considerations and (ii) as between the Companyon the one hand and each such Shareholder on the other, in such proportion as is appropriate toreflect the relative fault of the Company and of each such Shareholder in connection with suchstatements or omissions, as well as any other relevant equitable considerations. The relativebenefits received by the Company and such Shareholders on the one hand and such underwriters on theother shall be deemed to be in the same proportion as the total proceeds from the offering (net ofunderwriting discounts and commissions but before deducting expenses) received by the Company andsuch Shareholders bear to the total underwriting discounts and commissions received by suchunderwriters, in each case as set forth in the table on the cover page of the prospectus. Therelative fault of the Company and such Shareholders on the one hand and of such underwriters on theother shall be determined by reference to, among other things, whether the untrue or alleged untruestatement of a material fact or the omission or alleged omission to state a material fact relatesto information supplied by the Company and such Shareholders or by such underwriters. The relativefault of the Company on the one hand and of each such Shareholder on the other shall be determinedby reference to, among other things, whether the untrue or alleged untrue statement of a materialfact or the omission or alleged omission to state a material fact relates to information suppliedby such party, and the parties’ relative intent, knowledge, access to information and opportunityto correct or prevent such statement or omission.     The Company and the Shareholders agree that it would not be just and equitable if contributionpursuant to this Section 5.08 were determined by pro rata allocation (even if the underwriters weretreated as one entity for such purpose) or by any other method of allocation that does not takeaccount of the equitable considerations referred to in the immediately preceding paragraph. Theamount paid or payable by an Indemnified Party as a result of the losses, claims, damages orliabilities referred to in the immediately preceding paragraph shall be
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deemed to include, subject to the limitations set forth above, any legal or other expensesreasonably incurred by such Indemnified Party in connection with investigating or defending anysuch action or claim. Notwithstanding the provisions of this Section 5.08, no underwriter shall berequired to contribute any amount in excess of the amount by which the total price at which theRegistrable Securities underwritten by it and distributed to the public were offered to the publicexceeds the amount of any damages that such underwriter has otherwise been required to pay byreason of such untrue or alleged untrue statement or omission or alleged omission, and noShareholder shall be required to contribute any amount in excess of the amount by which the totalprice at which the Registrable Securities of such Shareholder were offered to the public exceedsthe amount of any damages that such Shareholder has otherwise been required to pay by reason ofsuch untrue or alleged untrue statement or omission or alleged omission. No Person guilty offraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall beentitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.Each Shareholder’s obligation to contribute pursuant to this Section 5.08 is several in theproportion that the proceeds of the offering received by such Shareholder bears to the totalproceeds of the offering received by all such Shareholders and not joint.     Section 5.09*. Participation in Public Offering.*No Person may participate in any PublicOffering hereunder unless such Person (a) agrees to sell such Person’s securities on the basisprovided in any underwriting arrangements approved by the Persons entitled hereunder to approvesuch arrangements and (b) completes and executes all questionnaires, powers of attorney,indemnities, underwriting agreements and other documents reasonably required under the terms ofsuch underwriting arrangements and the provisions of this Agreement in respect of registrationrights.     Section 5.10*. Other Indemnification.*Indemnification similar to that specified herein (withappropriate modifications) shall be given by the Company and each Shareholder participating thereinwith respect to any required registration or other qualification of securities under any federal orstate law or regulation or governmental authority other than the Securities Act.     Section 5.11*. Cooperation by the Company.*If any Shareholder shall transfer any RegistrableSecurities pursuant to Rule 144 or Rule 144A under the Securities Act, the Company shall cooperate,to the extent commercially reasonable, with such Shareholder and shall provide to such Shareholdersuch information as such Shareholder shall reasonably request.     Section 5.12*. No Transfer of Registration Rights.*None of the rights of Shareholders underthis Article 5 shall be assignable by any Shareholder to any Person acquiring Securities in anyPublic Offering or pursuant to Rule 144 or Rule 144A of the Securities Act.ARTICLE 6Certain Covenants and Agreements     Section 6.01*. Confidentiality.*(a) Each Shareholder agrees that Confidential Information(as defined below) furnished and to be furnished to it was and will be made available in
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connection with such Shareholder’s Investment in the Company. Each Shareholder agrees that itwill use, and that it will cause any Person to whom Confidential Information is disclosed pursuantto clause (i) below to use, the Confidential Information only in connection with its Investment inthe Company and not for any other purpose (including, without limitation, to disadvantagecompetitively the Company or any other Shareholder). Each Shareholder further acknowledges andagrees that it will not disclose any Confidential Information to any Person, *provided*thatConfidential Information may be disclosed (i) to such Shareholder’s Representatives (as definedbelow) in the normal course of the performance of their duties or to any financial institutionproviding credit to such Shareholder, (ii) to the extent required by applicable law, rule orregulation (including complying with any oral or written questions, interrogatories, requests forinformation or documents, subpoena, civil investigative demand or similar process to which aShareholder is subject, *provided*that such Shareholder gives the Company prompt notice of suchrequest(s), to the extent practicable, so that the Company may seek an appropriate protective orderor similar relief (and the Shareholder shall cooperate with such efforts by the Company, and shallin any event make only the minimum disclosure required by such law, rule or regulation)), (iii) toany Person to whom such Shareholder is contemplating a Transfer of its Company Securities (*provided*that such Transfer would not be in violation of the provisions of this Agreement and as long assuch potential transferee is advised of the confidential nature of such information and agrees tobe bound by a confidentiality agreement in form and substance satisfactory to the Company andconsistent with the provisions hereof), (iv) to any regulatory authority or rating agency to whichthe Shareholder or any of its affiliates is subject or with which it has regular dealings, as longas such authority or agency is advised of the confidential nature of such information or (v) if theprior written consent of the Board shall have been obtained. Nothing contained herein shallprevent the use (subject, to the extent possible, to a protective order) of ConfidentialInformation in connection with the assertion or defense of any claim by or against the Company orany Shareholder.     (b) “**Confidential Information**” means any information concerning the Company and Persons thatare or become its Subsidiaries or the financial condition, business, operations or prospects of theCompany and Persons that are or become its Subsidiaries in the possession of or furnished to anyShareholder (including, without limitation by virtue of its present or former right to designate adirector of the Company), *provided*that the term Confidential Information does not includeinformation that (i) is or becomes generally available to the public other than as a result of adisclosure by a Shareholder or its partners, directors, officers, employees, agents, counsel,investment advisers or representatives (all such persons being collectively referred to as“**Representatives**”) in violation of this Agreement, (ii) is or was available to such Shareholder ona non-confidential basis prior to its disclosure to such Shareholder or its Representatives by theCompany or (iii) was or becomes available to such Shareholder on a non-confidential basis from asource other than the Company, *provided*that such source is or was (at the time of receipt of therelevant information) not, to the best of such Shareholder’s knowledge, bound by a confidentialityagreement with (or other confidentiality obligation to) the Company or another Person.     Section 6.02*. Information.*The Company agrees to furnish to any Institutional Shareholderthat is a Five Percent Shareholder:
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     (a) After the end of the first three fiscal quarters, as soon as practicable and in any eventon or before the applicable filing date for filing quarterly reports on Form 10-Q (or any successorform) with the SEC, consolidated balance sheets of the Company and its Subsidiaries as at the endof such period and the related consolidated statements of income, stockholders’ equity and cashflow of the Company and its Subsidiaries for such fiscal quarter, setting forth in each case incomparative form the consolidated figures for the corresponding periods of the previous fiscalyear, all in reasonable detail and certified by the Company’s Chief Financial Officer that theyfairly present the financial condition of the Company and its Subsidiaries as at the datesindicated and the results of their operations and changes in their financial position for theperiods indicated, subject to normal year-end adjustments;     (b) After the end of each fiscal year as soon as practicable and in any event on or before theapplicable filing date for filing annual reports on Form 10-K (or any successor form), consolidatedbalance sheets of the Company and its Subsidiaries as at the end of such year and the relatedconsolidated statements of income, stockholders’ equity and cash flow of the Company and itsSubsidiaries for such fiscal year, setting forth in each case, in comparative form, theconsolidated figures for the previous year, all in reasonable detail and accompanied by a reportthereon of independent certified public accountants of recognized national standing selected by theCompany, which report shall be unqualified as to going concern and scope of audit and shall statethat such consolidated financial statements present fairly the financial position of the Companyand its Subsidiaries as at the dates indicated and the results of their operations and changes intheir financial position for the periods indicated in conformity with generally accepted accountingprinciples applied on a basis consistent with prior years (except as otherwise stated therein) andthat the examination by such accountants in connection with such consolidated financial statementshas been made in accordance with generally accepted auditing standards;     (c) As soon as practicable and in any event no later than 20 days after the end of each fiscalmonth of the Company, the Company monthly management report for such month, substantially in theform of and covering the items set forth in Exhibit B hereto;     (d) Promptly upon receipt thereof, copies of all reports submitted to the Company byindependent public accountants in connection with each annual, interim or special audit of theCompany’s financial statements made by such accountant, including, without limitation, the commentletter submitted by such accountants to management in connection with their annual audit;     (e) Promptly upon their becoming available, copies of all financial statements, reports,notices and proxy statements sent or made available generally by the Company to its securityholdersor by any Subsidiary of the Company to its securityholders other than the Company or anotherSubsidiary, of all regular and periodic reports and all registration statements and prospectuses,if any, filed by the Company or any of its Subsidiaries with any securities exchange or with theSEC or any governmental authority succeeding to any of its functions, and of all press releases andother written statements made available generally by the Company or any Subsidiary to the publicconcerning material developments in the business of the Company and its Subsidiaries;
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     (f) All information provided in writing to the banks pursuant to the Company’s principalcredit facility; and     (g) From time to time such additional information regarding the financial position or businessof the Company and its Subsidiaries as such Institutional Shareholder may reasonably request.     The Company’s obligation to provide information pursuant to paragraphs (a) and (b) of thisSection 6.02 and Section 6.03 shall be deemed satisfied upon the timely filing of such informationwith the SEC.     Section 6.03. *Reports.*The Company will furnish the Shareholders with the quarterly andannual financial reports that the Company is required to file with the SEC pursuant to Section 13or Section 15(d) of the Exchange Act or, in the event the Company is not required to file suchreports, quarterly and annual reports containing the same information as would otherwise berequired in such reports.     Section 6.04. *Cooperation in Refinancing*. Each Shareholder agrees to cooperate to theextent commercially reasonable with the Company and take such steps as the Board reasonably deemsappropriate in any financing of debt of the Company and any of its Subsidiaries, includingexecuting such documents as the Board reasonably determines should be filed with any governmentalagency and conducting presentations to potential investors and rating agencies. This Section 6.04shall not be construed to require any Shareholder to contribute any additional capital to theCompany.     Section 6.05*. Appointment of Shareholder Representatives.*(a) Each TPG Entity and, to theextent that any Permitted Transferee of any TPG Entity shall have become a Shareholder, suchShareholder irrevocably appoints the TPG Shareholder Representative its agent and true and lawfulattorney-in-fact, with full power of substitution, to take the actions, receive notices andexercise the powers delegated to the TPG Shareholder Representative under this Agreement in thename of each such Shareholder, together with such actions and powers as are reasonably incidentalthereto. Notwithstanding the foregoing, the TPG Shareholder Representative shall not take anyaction or exercise any power to the extent that the holders of the majority of the Fully DilutedOrdinary Shares held by the TPG Entities and their Permitted Transferees shall have voted toprevent the Shareholder Representative from taking such action or exercising such power. “**TPGShareholder Representative**” means TPG IV as agent for the TPG Entities and their PermittedTransferees that are Shareholders. The entity appointed as the TPG Shareholder Representative maybe replaced at any time and from time to time by the vote of a majority of the Fully DilutedOrdinary Shares held by the TPG Entities and their Permitted Transferees. The new TPG ShareholderRepresentative shall notify the Company of such appointment as promptly as practicable after suchappointment.     (b) Each FP Entity and, to the extent that any Permitted Transferee of any FP Entity shallhave become a Shareholder, such Shareholder irrevocably appoints the FP Shareholder Representativeits agent and true and lawful attorney-in-fact, with full power of substitution, to take theactions, receive notices and exercise the powers delegated to the FP Shareholder
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Representative under this Agreement in the name of each such Shareholder, together with suchactions and powers as are reasonably incidental thereto. Notwithstanding the foregoing, the FPShareholder Representative shall not take any action or exercise any power to the extent that theholders of the majority of the Fully Diluted Ordinary Shares held by the FP Entities and theirPermitted Transferees shall have voted to prevent the Shareholder Representative from taking suchaction or exercising such power. “**FP Shareholder Representative**” means FP as agent for the FPEntities and their Permitted Transferees that are Shareholders. The entity appointed as the FPShareholder Representative may be replaced at any time and from time to time by the vote of amajority of the Fully Diluted Ordinary Shares held by the FP Entities and their PermittedTransferees. The new FP Shareholder Representative shall notify the Company of such appointment aspromptly as practicable after such appointment.     (c) Each of Shah Capital and, to the extent that any Permitted Transferee of Shah Capitalshall have become a Shareholder, such Shareholder irrevocably appoints the Shah Capital ShareholderRepresentative its agent and true and lawful attorney-in-fact, with full power of substitution, totake the actions, receive notices and exercise the powers delegated to the Shah Capital ShareholderRepresentative under this Agreement in the name of each such Shareholder, together with suchactions and powers as are reasonably incidental thereto. Notwithstanding the foregoing, the ShahCapital Shareholder Representative shall not take any action or exercise any power to the extentthat the holders of the majority of the Fully Diluted Ordinary Shares held by Shah Capital and itsPermitted Transferees shall have voted to prevent the Shareholder Representative from taking suchaction or exercising such power. “**Shah Capital Shareholder Representative**” means Shah Capital, asagent for Shah Capital and its Permitted Transferees that are Shareholders. The entity appointedas the Shah Capital Shareholder Representative may be replaced at any time and from time to time bythe vote of a majority of the Fully Diluted Ordinary Shares held by Shah Capital and its PermittedTransferees. The new Shah Capital Shareholder Representative shall notify the Company of suchappointment as promptly as practicable after such appointment.     Section 6.06*. Decisions by Institutional Shareholders.*In instances that the InstitutionalShareholders may, or are required to, collectively vote, request, consent or decide on any matterunder this Agreement, such vote, request, consent or decision shall be make in accordance with theresult of the vote on such matter of a majority of the Ordinary Shares held at such time by theInstitutional Shareholders and their Permitted Transferees.ARTICLE 7Miscellaneous     Section 7.01*. Entire Agreement.*This Agreement constitutes the entire agreement among theparties hereto and supersede all prior and contemporaneous agreements and understandings, both oraland written, among the parties hereto with respect to the subject matter hereof and thereof.     Section 7.02*. Binding Effect; Benefit.*This Agreement shall inure to the benefit of and bebinding upon the parties hereto and their respective heirs, successors, legal representatives
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and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to conferon any Person other than the parties hereto, and their respective heirs, successors, legalrepresentatives and permitted assigns, any rights, remedies, obligations or liabilities under or byreason of this Agreement.     Section 7.03*. Assignability.*Neither this Agreement nor any right, remedy, obligation orliability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant toany Transfer of Company Securities or otherwise, except that, any Permitted Transferee acquiringCompany Securities and any Person acquiring Company Securities who is required by the terms of thisAgreement or any employment agreement or stock purchase, option, stock option or other compensationplan of the Company or any Subsidiary to become a party hereto shall (unless already bound hereby)execute and deliver to the Company an agreement to be bound by this Agreement in the form ofExhibit A hereto and shall thenceforth be a Shareholder. Any Shareholder who ceases to ownbeneficially any Company Securities shall cease to be bound by the terms hereof (other than (i) theprovisions of Sections 5.05, 5.06, 5.07, 5.08 and 5.10 applicable to such Shareholder with respectto any offering of Registrable Securities completed before the date such Shareholder ceased to ownany Company Securities and (ii) Sections 6.01, 7.09, 7.10 and 7.11).     Section 7.04*. Waiver; Amendment; Termination.***(a)**No provision of this Agreement may bewaived except by an instrument in writing executed by the party against whom the waiver is to beeffective. Subject to the provisions of Section 7.04(b), no provision of this Agreement may beamended or otherwise modified except by an instrument in writing executed by the Company withapproval of the Board and Shareholders (including the Institutional Shareholders) holding at least50% of the then outstanding Ordinary Shares held by the parties hereto at the time of such proposedamendment or modification.     (b) Any amendment or modification of any provision of this Agreement that would adverselyaffect a right hereunder of any Institutional Shareholder may be effected only with the consent ofsuch Institutional Shareholder, except for any amendment or modification of any provision of thisAgreement that would affect any right hereunder of the Institutional Shareholders to collectivelyvote, request, consent or decide on any matter hereunder (which may be effected with the consent ofInstitutional Shareholders holding a majority of the Ordinary Shares held at such time by theInstitutional Shareholders and their Permitted Transferees). The Shareholders may amend or modifythe provisions of Article 4 without the consent of the Company.     Section 7.05*. Notices.*All notices, requests and other communications to any party shall bein writing (including facsimile transmissions) and shall be given,
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     if to the Company to:SMART Modular Technologies (WWH), Inc.