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EXHIBIT H
SHAREHOLDER SUPPORT AGREEMENT
SHAREHOLDER SUPPORT AGREEMENT, dated as of October 2, 1997
(this "Agreement"), among FREMONT PURCHASER II, INC., a Delaware corporation ("F
Purchaser"), RCBA PURCHASER I, L.P., a Delaware limited partnership ("B
Purchaser"; and together with F Purchaser, "Purchasers"; each individually, a
"Purchaser") and XXXXX X. XXXXXXXXX, M.D., a citizen of the United States (the
"Shareholder").
WHEREAS, as of the date hereof Shareholder owns or controls
19,856,366 shares of Common Stock, par value $.001 per share ("Company Common
Stock"), of Kinetic Concepts, Inc., a Texas corporation (the "Company ") (all
such Company Common Stock and any shares of Company Common Stock of which
ownership (either beneficially or of record) or control is hereafter acquired by
the Shareholder prior to the termination of this Agreement being referred to
herein as the "Shares");
WHEREAS, Purchasers and the Company propose to enter into a
Transaction Agreement, dated as of even date herewith (as the same may be
amended from time to time, the "Transaction Agreement"), which provides, upon
the terms and subject to the conditions thereof, for (i) the Company to make a
cash tender offer (the "Offer") to acquire all of the issued and outstanding
shares of Company Common Stock for $19.25 per share, net to the seller in cash,
upon and subject to the conditions of the Transaction Agreement and the Offer,
(ii) the purchase by Purchasers and the sale by the Company (the "Stock
Purchase") of 8,083,712 shares of Company Common Stock (subject to adjustment in
accordance with Section 2.0 and Section 5.06 of the Transaction Agreement)
immediately prior to the consummation of the Offer and (iii) the merger of each
of Purchasers with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchasers to
enter into the Transaction Agreement, Purchasers have requested that the
Shareholder agree, and, in order to induce Purchasers to enter into the
Transaction Agreement, the Shareholder has agreed, subject to the terms and
conditions hereof, (i) to grant to the Purchasers an option to purchase from the
Shareholder 4,200,000 Shares, (ii) to tender 13,792,211 Shares pursuant to the
Offer and (iii) vote all Shares he then owns or controls at the time of the
Stockholders' Meeting in favor of the Merger;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and covenants set forth herein and in the Transaction
Agreement, the parties hereto agree as follows:
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ARTICLE I
THE OPTIONS
SECTION 1.01. Grant of Options. (a) The Shareholder hereby
grants to F Purchaser an irrevocable option (the "F Option") to purchase
2,529,197 Shares at a price per Share equal to $19.25 (the "Purchase Price").
(b) The Shareholder hereby grants to B Purchaser an
irrevocable option (the "B Option"; and together with the F Option, the
"Options"; and each individually, an "Option") to purchase 1,670,803 Shares at a
price per Share equal to the Purchase Price.
(c) The Options shall expire if not exercised prior to the
earlier of (i) the close of business on the 180th day following termination of
the Transaction Agreement pursuant to Section 8.01(c)(ii) or 8.01(d)(ii) thereof
and (ii) the consummation of the Offer.
SECTION 1.02. Exercise of Options. Provided that (a) to the
extent necessary, any applicable waiting periods (and any extension thereof)
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act") with respect to the exercise
of an option shall have expired or been terminated and (b) no preliminary or
permanent injunction or other order, decree or ruling issued by any court or
governmental or regulatory authority, domestic or foreign, of competent
jurisdiction prohibiting the exercise of the Options or the delivery of Shares
shall be in effect, either Purchaser may exercise its Option at any time
following termination of the Transaction Agreement pursuant to Section
8.01(c)(ii) or 8.01(d)(ii) thereof until the expiration of such Option. In the
event that either Purchaser wishes to exercise its Option, such Purchaser shall
give written notice (the date of such notice being herein called the "Notice
Date"), to the Shareholder specifying a place and date (not later than ten
Business Days (as defined below) and not earlier than three Business Days
following the Notice Date) for closing such purchase (the "Closing"). For the
purpose of this Agreement, the term "Business Day" shall mean a Saturday, a
Sunday or a day on which banks are not required or authorized by law or
executive order to be closed in the City of New York.
SECTION 1.03. Payment for Delivery of Certificates. At the
Closing, (a) The Purchaser exercising its Option shall pay the aggregate
Purchase Price for the shares being purchased from the Shareholder by wire
transfer in immediately available funds of the total amount of the Purchase
Price for such Shares to an account designated by the Shareholder by written
notice to such Purchaser, and (b) the Shareholder shall deliver to such
Purchaser a certificate or certificates evidencing such Shares, and the
Shareholder agrees that such Shares shall be transferred free and clear of all
liens. All such certificates shall be duly endorsed in blank, or with
appropriate stock powers, duly executed in blank, attached
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thereto, in proper form for transfer, with the signature of the Shareholder
thereon guaranteed, and with all applicable taxes paid or provided for.
ARTICLE II
TENDER OF SHARES
SECTION 2.01. Tender of Shares. The Shareholder hereby
undertakes to validly tender or cause to be validly tendered (i) 10,000,000
Shares pursuant to the Offer by the third Business Day following commencement of
the Offer and (ii) an additional 3,792,211 Shares pursuant to the Offer by the
tenth Business Day following the commencement of the Offer, and thereafter not
to withdraw from the Offer any such Shares prior to the expiration or
termination of the Offer; provided, however, in the event the number of Shares
to be purchased in the Stock Purchase is reduced in accordance with Section 2.01
and Section 5.06 of the Transaction Agreement the number of Shares so tendered
shall be adjusted so that the portion of the Shares to be retained by the
Shareholder after consummation of the Merger shall remain at 33.53%.
ARTICLE III
TRANSFER AND VOTING OF SHARES
SECTION 3.01. Transfer of Shares. Except as otherwise provided
herein, the Shareholder shall not (a) sell, pledge or otherwise dispose of any
of his Shares, (b) deposit his Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy with
respect thereto or (c) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment, transfer or other disposition of any Shares; provided, however, that
the Shareholder shall have the right to transfer Shares by gift or the laws of
descent to any person or entity directly or indirectly controlled by the
Shareholder.
SECTION 3.02. Voting of Shares; Further Assurances. (a) The
Shareholder, by this Agreement, with respect to those Shares that he owns of
record, does hereby constitute and appoint Purchasers, or any nominee of
Purchasers, with full power of substitution, as his true and lawful attorney and
proxy, for and in its name, place and stead, to vote each of such Shares as his
proxy, at every annual, special or adjourned meeting of the stockholders of the
Company (including the right to sign his name (as stockholder) to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable law) (i) in favor of the adoption of the Transaction
Agreement and approval of the Merger and the other transactions contemplated by
the Transaction Agreement, (ii) against any transaction pursuant to an
Acquisition Proposal (as defined below) or any other action or agreement that
would result in a breach of any covenant,
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representation or warranty or any other obligation or agreement of the Company
under the Transaction Agreement or which could result in any of the conditions
to the Company's obligations under the Transaction Agreement not being
fulfilled, and (iii) in favor of any other matter relating to consummation of
the transactions contemplated by the Transaction Agreement. The Shareholder
further agrees to cause a minimum of 6,064,155 Shares and all Shares owned by
him beneficially to be voted in accordance with the foregoing. The Shareholder
acknowledges receipt and review of a copy of the Transaction Agreement.
(b) If either Purchaser shall exercise its Option in
accordance with the terms of this Agreement, and without additional
consideration, the Shareholder shall execute and deliver further transfers,
assignments, endorsements, consents and other instruments as such Purchaser may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement and the Transaction Agreement, including the
transfer of any and all of the Shareholder's Shares to such Purchaser and the
release of any and all liens, claims and encumbrances covering such Shares.
(c) The Shareholder shall perform such further acts and
execute such further documents and instruments as may reasonably be required to
vest in Purchaser the power to carry out the provisions of this Agreement.
(d) The Shareholder shall take all such other actions as such
other actions as shall be reasonably requested by Purchasers in order to assist
in, and shall cooperate with Purchasers in connection with, the consummation of
the transactions contemplated by the Transaction Agreement, including (i)
participating in meetings with shareholders of the Company and financing
sources, (ii) soliciting proxies and (iii) providing information concerning the
Company to third parties.
(e) The obligations of the Shareholder pursuant to this
Article III shall terminate upon the earlier of (i) the date of termination of
the Transaction Agreement in the case of termination for any reason and (ii) the
consummation of the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE SHAREHOLDER
The Shareholder hereby represents and warrants and covenants
to Purchasers as follows:
SECTION 4.01. Power; Binding Agreement. The Shareholder has
the legal capacity, power and authority to enter into and perform all of the
Shareholder's obligations under this agreement. This Agreement has been duly
executed and delivered by the
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Shareholder and, assuming its due authorization, execution and delivery by
Purchasers, constitutes a legal, valid and binding obligation of the
Shareholder, enforceable against the Shareholder in accordance with its terms.
SECTION 4.02. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Shareholder does not, and
the performance of this Agreement by the Shareholder will not, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Shareholder. There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which the Shareholder is a trustee whose consent
is required for the execution and delivery of this Agreement or the consummation
by the Shareholder of the transactions contemplated by this Agreement.
(b) The execution and delivery of this Agreement by the
Shareholder does not, and the performance of this Agreement by the Shareholder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange Act and
the HSR Act and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or materially delay the performance by the Shareholder of its
obligations under this Agreement.
SECTION 4.03. Title to Shares. The Shareholder has full right,
power and authority to sell, transfer and deliver, or cause to be transferred or
delivered 19,856,366 Shares pursuant to this Agreement. Upon delivery of such
Shares and payment of the Purchase Price therefor as contemplated herein, each
Purchaser will receive good and valid title to such Shares, free and clear of
any pledge, lien, security interest, charge, claim, equity, option, proxy,
voting restriction or encumbrance of any kind.
SECTION 4.04 Acquisition Proposals. Until the earlier of (i)
the consummation of the Merger and (ii) 180 days after the termination of the
Transaction Agreement in case of termination pursuant to Section 8.01(c)(ii) or
8.01(d)(ii) thereof, or on the date of termination in the case of termination
for any other reason, the Shareholder shall not, directly or indirectly, through
any representative, agent or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any person or entity relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) any portion of the assets of, or any equity interest in, the Company
or any of its subsidiaries or any recapitalization, business combination or
similar transaction with the Company or any of its subsidiaries (any
communication with respect to the foregoing being an "Acquisition Proposal") or
participate in any negotiations regarding, or furnish to any other person or
entity any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing. The Shareholder will
immediately cease all existing activities,
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discussions and negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal. From and after the execution of this Agreement, the
Shareholder shall immediately advise Purchasers in writing of the receipt,
directly or indirectly, of any inquiries, discussions, negotiations, or
proposals relating to an Acquisition Proposal that the Shareholder receives in
his capacity as a shareholder of the Company (including the specific terms
thereof and the identity of the other party or parties involved) and furnish to
Purchasers within 48 hours of such receipt an accurate description of all
material terms (including any changes or adjustments to such terms as a result
of negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers hereby represent and warrant to the Shareholder as
follows:
SECTION 5.01. Due Organization; Binding Agreement. Each of
Purchasers is duly organized and validly existing under the laws of the State of
Delaware. Each of Purchasers has all necessary corporate or partnership power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by each of
Purchasers have been duly authorized by all necessary corporate or partnership
action on the part of each of Purchasers. This Agreement has been duly executed
and delivered by each of Purchasers and, assuming its due authorization,
execution and delivery by the Shareholder, constitutes a legal, valid and
binding obligation of each of Purchasers, enforceable against Purchasers in
accordance with its terms.
SECTION 5.02. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by each of Purchasers does not, and
the performance of this Agreement by each of Purchasers will not, (i) conflict
with or violate the organizational documents of either of Purchasers, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to either of Purchasers or by which either of Purchasers or any of
its properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the property or assets of either of Purchasers pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which either of
Purchasers is a party or by which it or any of its properties is bound or
affected, except for any such breaches, defaults or other occurrences that would
not prevent or materially delay the performance by either of Purchasers of its
obligations under this Agreement.
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(b) The execution and delivery of this Agreement by each of
Purchasers does not, and the performance of this Agreement by each of Purchasers
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange Act and
the HSR Act and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay the performance by either of Purchasers of its obligations
under this Agreement.
SECTION 5.03. Investment Intent. The purchase of Shares from
the Shareholder pursuant to this Agreement is for the account of Purchasers for
the purpose of investment and not with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address as shall be specified by notice given in accordance
with this Section 6.01):
(a) if to F Purchaser:
Fremont Purchaser II, Inc.
00 X Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No: (000) 000-0000
Attention: General Counsel
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with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
(b) if to B Purchaser:
RCBA Purchaser I, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq., General Counsel
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
(c) If to Shareholder to:
Xxxxx Xxxxxxxxx, M.D.
c/o Mission Center Management
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxx Xxxxx
with a copy to:
Xxxxxx & Xxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxx Xxxxxx, Esq.
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SECTION 6.02. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 6.03. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 6.04. Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof.
SECTION 6.05. Assignment. This Agreement shall not be assigned
by operation-of law or otherwise.
SECTION 6.06. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, except that this Agreement shall not be amended without the
prior written consent of the Company.
SECTION 6.07. Specific Performance. The parties hereto agree
that irreparable would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 6.08. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that State. All
actions and proceeding arising out of or relating to this Agreement shall be
heard and determined in any Delaware state or federal court. THE COMPANY AND
PURCHASERS KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
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COURSE OF DEALING, STATEMENT (VERBAL OR WRITTEN) OR ACTION OF THE COMPANY OR
PURCHASERS.
SECTION 6.09. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
FREMONT PURCHASER II, INC.
By: /s/ X. X. Xxxx
------------------------
Name: X. X. Xxxx
Title: General Counsel
and Secretary
RCBA PURCHASER I, L.P.
By: /s/ N. Xxxxx Xxxx
------------------------
Name: N. Xxxxx Xxxx
Title: Managing Director
/s/ Xxxxx X. Xxxxxxxxx, M.D.
---------------------------
XXXXX X. XXXXXXXXX, M.D.
Acknowledged for purposes of
Section 6.06 only:
KINETIC CONCEPTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
