Exhibit 10.6


 


KINETIC CONCEPTS, INC.


 


INVESTORS’ RIGHTS AGREEMENT


 


THIS INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of the 11th day of August, 2003, by and
among Kinetic Concepts, Inc., a Texas corporation (the “Company”), the investors listed on the
signature pages hereto, each of which is herein referred to as an “Investor”, and Fremont Partners III, L.P.,
Fremont Partners III Side-By-Side, L.P., Fremont Acquisition Company II,
L.L.C., Fremont Acquisition Company IIA, L.L,C., Blum Strategic Partners, II,
L.P., Blum Strategic Partners II GmbH & Co. KG, Stinson Capital Partners
II, L.P., RCBA-KCI Capital Partners, L.P. and James R. Leininger, M.D., each of
which is referred to as a “Sponsor”.


 


RECITALS


 


WHEREAS, the Company and the Investors are parties to the Series A
Preferred Stock Purchase Agreement, dated as of August 11, 2003, (the “Series A Agreement”);


 


WHEREAS, in order to induce the Company to enter into the Series A
Agreement and to induce the Investors to invest funds in the Company pursuant
to the Series A Agreement, each of the Sponsors, the Investors and the Company
hereby agree that this Agreement shall govern the rights of the Investors to
cause the Company to register shares of the Series A Preferred and Common Stock
issuable upon conversion of the Series A Preferred and certain other matters as
set forth herein;


 


NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:


 


1.     Definitions.  For purposes of this Agreement:


 


(a)           The term “1934 Act” means the Securities Exchange Act of 1934, as
amended.


 


(b)           The term “Act” means the Securities Act of 1933, as amended.


 


(c)           The term “Affiliate” means, as applied
to any specified Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person.  For purposes of the foregoing, “control,”
when used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, and the terms “controlled” and “controlling” shall have
meaning correlative to the foregoing. 
In the case of a Person who is an individual, the term “Affiliate” shall
include, with respect to such specified Person, (i) in the case of an
individual, members of such specified Person’s immediate family (as defined in
Instruction 2 of Item 404(a) of Regulation S-K under the Act), (ii) in the case
of an individual, trusts, the trustee or the beneficiaries of which are such
specified Person or members of such Person’s immediate family


 

















 


 


as determined in accordance with the
foregoing clause (i) and (iii) in the case of a trust, any Person that is the
trustee of a beneficiary of such trust.


 


(d)           The term “As-Converted Basis” means with respect to any Person, the
total number of shares of Common Stock that such Person holding shares of
Series A Preferred would hold assuming conversion of all such Person’s shares
of Series A Preferred into shares of Common Stock, at the then applicable
conversion rate.


 


(e)           The term “Board” means the Company’s
board of directors.


 


(f)            The term “Common Stock” means the Common Stock, par value $0.001 per
share of the Company.


 


(g)           The term “Credit Agreement” means the Credit Agreement, dated as of
August 11, 2003, among the Company, the lenders party thereto in their
capacities as lenders thereunder, Morgan Stanley Senior Funding Inc., as
Administrative Agent, and Credit Suisse First Boston, acting through its Cayman
Islands branch, as Syndication Agent, together with the documents related
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreements may be amended (including any
amendment and restatement thereof), supplemented, restated or otherwise
modified from time to time.


 


(h)           The term “Initial Offering” means the Company’s first firm commitment
underwritten public offering of its Common Stock under the Act.


 


(i)            The term “Issue Date” means the date that the first share of Series A
Preferred is issued.


 


(j)            The term “Person” means an individual, partnership, corporation,
unincorporated organization, limited liability company, trust or joint venture,
or a governmental agency or political subdivision thereof.


 


(k)           The term “Principal Investor” means an Investor that holds at least 2.0%
of the Common Stock on an As-Converted Basis.


 


(l)            The term “register,” “registered,”
and “registration” refer to a registration
effected by preparing and filing a registration statement or similar document
in compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.


 


(m)          The term “Registrable Securities” means, as of the date of any
registration, (i) shares of the Series A Preferred and any Common Stock issued
or issuable upon conversion of the Series A Preferred, and (ii) any Common
Stock issued as a dividend or other distribution with respect to, or in exchange
for, or in replacement of, the shares referenced in (i) above, owned by
any Investor that may not be sold without restriction under federal or state
securities law; provided, however, that the term “Registrable
Securities” shall exclude Series A Preferred and Common Stock issued or
issuable upon conversion of the Series A Preferred sold by a Person in a
transaction in which such Person’s rights under Section 2 are expressly not


 


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assigned. 
The number of shares of Registrable Securities outstanding shall be
determined by the number of shares of Common Stock outstanding that are, and
the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities that are, Registrable Securities.


 


(n)           The term “SEC” shall mean the Securities and Exchange Commission.


 


(o)           The term “Series A Preferred” means all the Series A Convertible
Participating Preferred Stock of the Company.


 


2.     Registration Rights.  The Company covenants and agrees as follows:


 


2.1           Piggy-Back Rights.


 


(a)           If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Investors) the public
offering of any of its capital stock under the Act (other than in connection
with (i) the Initial Offering, (ii) a registration relating solely to the sale
of securities to participants in a Company benefit plan, (iii) a registration
relating to a corporate reorganization or other transaction under Rule 145 of
the Act or (iv) a registration on any form that does not include substantially
the same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities), the Company shall,
at such time, promptly give each Investor written notice of such proposed
registration.  Upon receipt by the
Company of the written request of any Investor given within twenty (20) days
after mailing of such notice by the Company, the Company shall, subject to the
provisions of Section 2.1(c), use its reasonable best efforts to cause to be
registered under the Act all of the Registrable Securities that each such
Investor has requested to be registered.


 


(b)           Right to Terminate Registration. 
The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 2.1 prior to the effectiveness
of such registration whether or not any Investor has elected to include any of
its Registrable Securities in such registration.  The expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.4 hereof.


 


(c)           Underwriting Requirements. 
In connection with any offering involving an underwriting of shares of
the Company’s capital stock, the Company shall not be required under this
Section 2.1 to include any of the Investors’ Registrable Securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (or by other persons
entitled to select the underwriters) and enter into an underwriting agreement
in customary form with an underwriter or underwriters selected by the
Company.  If the total amount of
Registrable Securities requested by Investors to be included in such offering,
together with the securities to be included in such offering by the Company or
any other stockholder that is not an Investor (such stockholder, an “Other Stockholder”), exceeds the amount of
securities that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such Registrable Securities and
securities to be


 


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included by Other Stockholders (“Other Securities”) that the underwriters
determine in their sole discretion, together with the securities to be included
in such offering by the Company, will not jeopardize the success of the
offering.  If the number of securities
to be included in such offering are reduced in accordance with the preceding
sentence, the number of securities to be included in the offering will be
apportioned pro rata among the selling Investors and Other Stockholders
according to the total amount of Common Stock (on an As-Converted Basis)
entitled to be included therein owned by each selling Investor or Other
Stockholder pursuant to registration rights, unless otherwise mutually agreed
to by such selling Investors and Other Stockholder; provided that no such
limitation shall be imposed unless a comparable limitation is also being
imposed on Other Stockholders and any reduction of the number of securities to
be included in the offering by the selling Investors and Other Stockholders is
to be apportioned pro rata among all such parties.  For purposes of the preceding sentence concerning apportionment,
for any selling Investor or selling stockholder that is (a) a partnership or
corporation, all Registrable Securities or other securities entitled to be
included in the offering pursuant to registration rights held by the partners,
retired partners and stockholders of such Investor, or the estates and family
members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be Registrable
Securities or other securities of such selling Investor or selling stock holder
and any pro rata reduction with respect to such “selling Investor” or “selling
stockholder” shall be based upon the aggregate amount of such Registrable
Securities or other securities owned by all such related entities and
individuals, or (b) that is an individual, the estates and family members of
such individual and any trusts for the benefit of the foregoing persons shall
be deemed to be Registrable Securities or other securities of such selling
Investor or selling stock holder and any pro rata reduction with respect to
such “selling Investor” or “selling stockholder” shall be based upon the
aggregate amount of such Registrable Securities or other securities owned by
all such related entities and individuals.


 


2.2           Obligations of the Company. 
In connection with a registration of any Registrable Securities under
Section 2.1 that is not terminated in accordance with Section 2.1(b), the
Company shall, as expeditiously as reasonably possible:


 


(a)           prepare and file with the SEC a
registration statement with respect to the offering of such Registrable
Securities and use its reasonable efforts to cause such registration statement
to become effective, and, upon the request of the Investors of a majority of
the Registrable Securities registered thereunder, keep such registration
statement effective for a period of up to one hundred twenty (120) days or, if
earlier, until the distribution contemplated in the Registration Statement has
been completed;


 


(b)           prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement;


 


(c)           furnish to the Investors such
numbers of copies of a prospectus, including a preliminary prospectus, if any,
in conformity with the requirements of the Act, and such other documents as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;


 


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(d)           use its reasonable best efforts to
register and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Investors, provided that the Company shall not be
required in connection therewith or as a condition thereto to bear undue
expense or qualify to do business or, unless the Company is already subject to
service in such jurisdiction, to file a general consent to service of process
in any such states or jurisdictions;


 


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


 


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


 


(g)           cause all such Registrable
Securities covered by such registration statement to be listed on each
securities exchange on which similar securities issued by the Company are then
listed;


 


(h)           provide a transfer agent and
registrar for all Registrable Securities registered pursuant hereunder and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date, as declared by the SEC, of such registration;


 


(i)            furnish, at the request of any
Investor requesting registration of Registrable Securities, on the date that
such Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or , if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to Investors
holding a majority of the Registrable Securities requesting registration, addressed
to the underwriters and to the Investors requesting registration of Registrable
Securities and (ii) a “comfort” letter dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to
a majority in interest of the Registrable Securities held by the  Investors requesting registration, addressed
to the underwriters and to the Investors requesting registration of Registrable
Securities; and


 


(j)            advise each Investor holding
Registrable Securities covered by such registration, promptly after the Company
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for such purpose and promptly
use its 


 


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reasonable efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued.


 


2.3           Information from Investor. 
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 2 with respect to the Registrable
Securities of any selling Investor that such Investor shall, within ten (10)
days of the request of each Investor that such Investor’s Registrable
Securities to be included in a registration, furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended
method of disposition of such Regsitrable Securities as shall be required to
effect the registration of such Investor’s Registrable Securities.


 


2.4           Expenses of Registration. 
All expenses (other than underwriting discounts and commissions
(excluding the Company’s pro rata share to the extent that it is also selling
securities), which shall be borne by the selling Investor) incurred in
connection with registrations, filings or qualifications pursuant to Section
2.1, including (without limitation) all registration, filing and qualification
fees, printers’ and accounting fees, fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of one counsel and one local
counsel for the selling Investors, shall be borne by the Company.


 


2.5           [Intentionally Omitted]


 


 


2.6           Indemnification. 
In the event any Registrable Securities are included in a registration
statement under this Section 2:


 


(a)           To the extent permitted by law, the
Company will indemnify and hold harmless each Investor, the partners or
officers, directors, stockholders, members, managers, employees, subsidiaries
and other affiliates of each Investor, any underwriter (as defined in the Act)
for such Investor and each person, if any, who controls such Investor or
underwriter within the meaning of the Act or the 1934 Act (each an “Investor Indemnified Party”), against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or any state securities laws or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations: 
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities laws or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities laws or
otherwise; and the Company will reimburse each such Investor Indemnified Party
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 2.6(a) shall not
apply to amounts paid in settlement of any such loss,


 


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claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus or final prospectus or any
amendments or supplements thereto in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Investor Indemnified Party; further provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Investor Indemnified Party, or
underwriter, or any person controlling such Investor Indemnified Party, from
whom the person asserting any such losses, claims, damages or liabilities
purchased shares in the offering, if a copy of the prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Investor
Indemnified Party to such person, if required by law so to have been delivered
by or on the behalf of such Investor Indemnified Party, at or prior to the
written confirmation of the sale of the shares to such Person, and if the
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.


 


(b)           To the extent permitted by law, each
selling Investor will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, any other Investor selling securities in such registration
statement and any controlling person of any such underwriter or other Investor
(each a “Company Indemnified Party”),
against any losses, claims, damages or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, the 1934 Act or
any state securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus or final
prospectus or any amendments or supplements thereto, in each case to the extent
(and only to the extent) that such statement or omission was made in reliance
upon and in conformity with written information furnished by such Investor
expressly for use in connection with such registration; and each such Investor
will reimburse any Company Indemnified Parties for any legal or other expenses
reasonably incurred by such person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 2.6(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Investor
(which consent shall not be unreasonably withheld or delayed), provided that in
no event shall any Investor’s cumulative aggregate liability out of which such
violation arises under this subsection 2.6(b)and section 2.6(d) exceed the net
proceeds from the offering out of which such violation arises that are received
by such Investor.


 


(c)           Promptly after receipt by an
indemnified party under this Section 2.6 of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 2.6, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to


 


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assume the defense thereof with counsel
mutually satisfactory to the parties; provided,
however, that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel and one local counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, only if
materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any indemnification obligation to the indemnified party
under this Section 2.6, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.6.


 


(d)           If the indemnification provided for
in this Section 2.6 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault and benefit of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense, as well as any
other relevant equitable considerations. 
The relative fault and benefit of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties’ relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission, provided, however that (A) in no event shall any
Investor’s cumulative, aggregate liability under this subsection 2.6(d), or
under subsection 2.6(b) hereof, or under such subsections together, exceed the
net proceeds from the offering received by such Investor; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person
or entity who was not guilty of such fraudulent misrepresentation. Notwithstanding
anything to the contrary herein, no party shall be liable for contribution
under this subsection 2.6(d), except to the extent and under the circumstances
as such party would have been liable to indemnify under subsection 2.6(a) or
subsection 2.6(b) hereof, as the case may be, if such indemnification were
enforceable under applicable law.


 


(e)           The obligations of the Company and
Investors under this Section 2.6 shall survive the completion of any offering
of Registrable Securities in a registration statement under this Section 2, and
otherwise.


 


2.7           “Market Stand-Off” Agreement. 
Each Investor hereby agrees that, if the Company files a registration
statement under the Act to register its Common Stock, or any of the Company’s
securities convertible into Common Stock, such Investor (A) shall not (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Registrable Securities then owned by such Investor (other than those


 


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included in the registration), or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Registrable
Securities, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise, for a period equal to (x) 180 days after the consummation of the
Initial Offering, (y) 90 days after the effective date of any registration with
respect to any offering subsequent to the Initial Offering or, (z) in each
case, such longer period of time as may be reasonably requested or shorter
period as may reasonably be deemed appropriate by the managing underwriter in
connection with such Initial Offering or subsequent offering, provided, however,
that (1) if any such offering (including the Initial Offering) is made in
connection with the merger, consolidation or sale of the Company, such longer
period of time as may be set forth in any lock-up or market stand-off agreement
executed by the Sponsors, and (2) none of the restrictions set forth in this Section
2.7 shall apply to the Investors unless concurrently comparable restrictions
are imposed on the Sponsors; and (B) shall enter into such agreements as
requested by the underwriters in connection with the offering that is the
subject of such registration, providing for similar restrictions to those
described in clause (A).  Each Investor
hereby authorizes and directs, and shall cause its Permitted Transferees to
authorize and direct, the Company not to authorize any transfer of any
Registrable Securities that does not comply with this Section 2.7.  An Investor’s obligations under this Section
2.7 shall expire on the earlier of (1) two years after the Initial Offering, or
(2) such time after at which the Registrable Securities held by such Investor
and its Affiliates do not exceed more than 1.0% of the Common Stock
outstanding, provided, that at
such time, (1) such Investor and its Affiliates do not hold any shares of
Series A Preferred, and (2) shall not be on or prior to 180 days following the
Initial Offering.


 


In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.


 


2.8           Termination of Registration Rights. 
An Investor’s registration rights, pursuant to this Section 2 shall
expire at such time after the Initial Offering in which all Registrable
Securities held by such Investor (and any Affiliate of the Investor with whom
such Investor must aggregate its sales under Rule 144) can be sold in any 90
day period without registration in compliance with Rule 144.


 


3.     Transfers of Shares


 


3.1           Restrictions on Transfer.


 


(a)           Prior to the consummation of the
Initial Offering, no Investor shall, directly or indirectly, transfer or
otherwise dispose of any shares of Series A Preferred or shares of Common Stock
issuable on conversion thereof owned by such Investor, or any interest therein,
except pursuant to a Permitted Transfer described in Section 3.2, unless such
transfer or disposition is made in accordance with the applicable provisions of
Sections 3.3, 3.4, and 3.5 of this Agreement. 
Any attempt by an Investor to effect a transfer or disposition in violation
of this Agreement shall be void and ineffective for all purposes. The words
“transfer” and “dispose” mean the making of any sale, exchange, assignment,
gift, security interest, pledge or other encumbrance, or any contract therefor,
any voting trust or other agreement or arrangement with


 


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respect to the transfer or voting rights or
any other beneficial interests, the creation of any other claim thereto or any
other transfer or disposition whatsoever, whether voluntary or involuntary,
affecting the right, title, interest or possession in or to any equity
securities of the Company.


 


(b)           Prior to the consummation of the
Initial Offering, no Investor may transfer any shares of Series A Preferred or
shares of Common Stock issuable upon conversion thereof to a direct or indirect
competitor of the Company or to any Person with a material interest in, or a
material degree of control over a competitor of the Company without the prior
written consent of the Board.  The
determination of whether a transfer violates this Section 3.1(b) shall be made
by the Board in its reasonable discretion.


 


(c)           No Investor may transfer any shares
of Series A Preferred or shares of Common Stock issuable upon conversion
thereof unless such transfer is (i) made pursuant to an effective registration
statement under the Securities Act, or (ii) is exempt from registration under
the Securities Act and exempt from qualification under any applicable state and
foreign securities laws.  Should an
Investor propose to transfer any such shares pursuant to clause (ii), such
Investor shall deliver to the Company an opinion of counsel reasonably
satisfactory to the Company stating that such transfer is exempt from
registration under the Securities Act and exempt from qualification under
applicable state and federal securities laws.


 


3.2           Permitted Transfers.


 


(a)           Affiliates. 
An Investor may transfer any shares of Series A Preferred or shares of
Common Stock issued or issuable upon conversion thereof to an Affiliate of such
Investor (a “Permitted Transferee”), provided, that the Permitted Transferee
shall (i) be subject to and acknowledge the rights of the Company, the Sponsors
and the Investors set forth herein, and (ii) agree in writing to be bound by
this Agreement to the same extent as the transferring Investor.  In the event of any transfer to a Permitted
Transferee, such Permitted Transferee shall thereafter be deemed an “Investor”
under this Agreement and shall have the rights and obligations of an Investor
hereunder.


 


(b)           Sale Subject to Right of First Offer. 
in addition to the rights set forth in Section 3.2(a), beginning on the
seventh anniversary of the Issue Date an Investor may transfer any shares of
Series A Preferred or shares of Common Stock issued or issuable on conversion
thereof to any person that is reasonably acceptable to the Company and does not
compete with the Company so long as such Investor complies with the provisions
of Section 3.3 in connection with such transfer.


 


(c)           Termination of Restrictions.  The restrictions on transfer imposed by this
Section 3.2 and the Investors’ obligations hereunder shall expire upon the
consummation of the Initial Offering


 


3.3           Right of First Offer:


 


(a)           Offer Notice. Beginning on the seventh anniversary
of the Issue Date, if any Investor (the “Selling Investor”) desires to transfer
any Series A Preferred or shares of Common Stock issued or issuable on
conversion thereof other than (i) to a Permitted Transferee or (ii) as a
Tag-Along Investor or Bring-Along Investor, such Selling Investor shall,


 


10

















 


prior to soliciting a bona fide written offer
from an independent third-party (the “Third-Party Offer”), deliver to each of
the Company and the Company for further delivery to the Sponsors a written
notice (the “Offer Notice”) offering to sell such shares of the Series A
Preferred proposed to be sold (the “Offered Shares”) first to the Company, and
secondly, under the circumstances set forth herein, to the Sponsors. The Offer
Notice shall state (i) that the Investor desires to sell the Offered Shares,
(ii) the purchase price per share and (iii) the material terms and conditions
subject to which the Offered Shares are offered.


 


(b)           Exercise of Right of First Offer.


 


(i)                   Upon receipt of the Offer Notice,
the Company shall have the option (the “Company Right of First Offer”), which
shall be exercisable by written notice (the “Company Notice of Election”)
delivered to the Selling Investor within 30 days after the date the Offer
Notice is delivered to the Company (the “Company First Offer Option Period”),
to purchase from the Investor, at the price and upon the terms specified in the
Offer Notice, all, but not less than all, of the Offered Shares.


 


(ii)                  If the Company does not exercise the
Company Right of First Offer within the Company First Offer Option Period, the
Sponsors shall have the option (the “Sponsor Right of First Offer”), which
shall be exercisable by written notice (the “Sponsor Notice of Election”) delivered
to the Selling Investor within 10 days after the expiration of the Company
First Offer Option Period (the “Sponsor First Offer Option Period”), to
purchase from the Investor, at the price and upon the terms specified in the
Offer Notice, all, but not less than all, of the Offered Shares.  The Sponsors shall have the right to
purchase such Offered Shares pro rata, based on the total amount of Common
Stock such Sponsor holds on an As-Converted Basis.  In the event that one or more of the Sponsors does not desire to
purchase the Offered Shares pursuant to the Sponsor Right of First Offer, the
remaining Sponsor(s) shall be entitled to purchase all, but not less than all,
of the Offered Shares.


 


(iii)                 Each Company Notice of Election and
Sponsor Notice of Election shall recite that such Company Notice of Election or
Sponsor Notice of Election, as the case may be, constitutes a binding
obligation of the Company or the Sponsors, as the case may be, committing the
same to purchase, upon the same terms and subject to the conditions set forth
in the Offer Notice.


 


(iv)                The closing of the purchase of the
Offered Shares subscribed to by the Company or the Sponsors pursuant to this
Section 3.3 shall be held at the principal office of the Company at 10:00 a.m.,
local time on the date contemplated in the Offer Notice, which date will not be
earlier than the earlier to occur of (x) the thirtieth (30th) day after the
later to expire of the Company First Offer Option Period or, if applicable, the
Sponsor First Offer Option Period, and (y) the date that the waiting period
under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended,
shall have expired or been terminated, if applicable to the Sponsors’ purchase
of the Offered Shares.


 


11

















 


(c)           Sale to Third-Party Purchaser.


 


(i)                   If the Offer Notice shall have been
duly delivered, and the Company or the Sponsors shall not have exercised the
Company Right of First Offer or the Sponsor Right of First Offer to purchase
all of the Offered Shares, the Selling Investor may solicit Third-Party Offers
to purchase all (but not less than all) of the Offered Shares and, so long as
any sale of the Offered Shares made pursuant to a Third-Party Offer is (A) upon
such terms, including price, and subject to such conditions, as are not
materially less favorable to the Selling Investor, taken as a whole, than those
set forth in the Offer Notice, (B) consummated within one hundred (100) days
from the date the Offer Notice is first delivered to the Company, and (C) in
accordance with clause (ii) below, such transfer may be consummated without
further restriction under this Section 3 and shall be a Permitted Transfer
under this Agreement.  If the Selling
Investor shall not have completed the sale of all (but not less than all) of
the Offered Shares in accordance with the foregoing, the Selling Investor shall
not subsequently transfer the Offered Shares except in accordance with the
requirements of this Section 3.3.


 


(ii)                  All Offered Shares transferred by
the Selling Investor in accordance with clause (i) above shall remain, and the
third-party purchaser shall agree and be permitted to take and hold such
Offered Shares, subject to all of the obligations and restrictions imposed
upon, and rights granted to, the Selling Investor by this Agreement. No
transfer of Offered Shares to which the preceding sentence applies shall be
effective unless and until the third-party purchaser shall have executed and
delivered to the Company  appropriate
instruments or other supporting documents to the foregoing effect.


 


(d)           Termination of Right of First Offer. 
Each of the Company Right of First Offer and the Sponsor Right of First
Offer shall expire upon the consummation of the Initial Offering.


 


3.4           Tag-Along Rights.


 


(a)           The Right. 
If any Sponsor or any of its Affiliates proposes to enter into any
agreement to sell shares of Series A Preferred or Common Stock to any person
(other than transfers among each Sponsor and its Affiliates) (a “Prospective
Purchaser”) that, when taken together with all other sales of Series A
Preferred or Common Stock by such Sponsor and its Affiliates (other than
transfers among such Sponsor and its Affiliates) from and after the Issue Date,
would exceed 50% of the aggregate number of shares of Common Stock (on an
As-Converted Basis) owned by such Sponsor and its Affiliates on the date
hereof, (a “Tag-Along Sale”), then each of the Investors shall have the right,
but not the obligation, to participate in any such sale or transfer of such
shares of Series A Preferred or Common Stock by such Sponsor and its Affiliates
in accordance with the procedures set forth below and on the same terms and
subject to the same conditions as those on which such Sponsor and its
Affiliates propose to transfer their shares. 
Prior to any proposed Tag-Along Sale, the Sponsor shall deliver, and/or
where applicable shall cause its Affiliates to deliver, to each Investor, a
written notice (the “Tag-Along Notice”) stating the number of shares of Series
A Preferred and/or Common Stock that the Sponsor and/or its s Affiliates desire
to sell and providing copies of any documents setting forth the terms and
conditions to which such sale is subject. 
The Tag-Along Notice shall set forth the percentage of shares of Series
A Preferred and/or Common Stock held by each Investor that such Investor can
include in such Tag-Along Sale (the “Tag-Along Percentage”), which  percentage will equal the quotient of (i)
the difference of (x) the total number of shares of Common Stock


 


12

















 


(on an As-Converted Basis) that are proposed
to be sold in the Tag-Along Sale, minus
(y) the total number of shares of Common Stock (on an As-Converted Basis) that
any other Persons with similar “tag-along” or “co-sale” rights have the right
to sell in connection with such transaction (assuming that all such persons
exercise all such rights to the fullest extent), divided by (ii) the total number of shares of Common Stock
(on an As-Converted Basis), owned in the aggregate by the Investors and the
Sponsor and/or its Affiliates on the date of such Tag-Along Notice.


 


(b)           Election to Participate. 
Each Investor shall have the right (the “Tag-Along Right”) for ten (10)
days from receipt of the Tag-Along Notice described in Section 3.4(a) (the
“Tag-Along Option Period”) to elect to participate in the Tag-Along Sale.  Any Investor electing to participate in the
Tag-Along Sale (a “Tag-Along Investor”) shall give all other Investors, the
Company and the Sponsor who delivered such Tag-Along Notice written notice
thereof (the “Election Notice”) within the Tag-Along Option Period.  The Election Notice shall specify the number
of shares of Common Stock and/or Series A Preferred that such Tag-Along
Investor desires to sell to the Prospective Purchaser, which amount shall not
exceed the product of (i) the Tag-Along Percentage set forth in the Tag-Along
Notice, multiplied by (ii) the
total number of shares of Common Stock (on an As-Converted Basis) that such
Investor owns as of the date of the Election Notice.  The failure of any Investor to submit an Election Notice within
the Tag-Along Option Period shall constitute an election by such remaining
Investor not to participate in such Tag-Along Sale.  By delivering an Election Notice to such Sponsors within the
Tag-Along Option Period, a Tag-Along Investor shall have the right to sell to
the Prospective Purchaser that number of Common Stock or Series A Preferred
specified in the Election Notice; provided,
however, that, to the extent the Prospective Purchaser is unwilling
or unable to purchase all of the shares proposed to be sold by such Sponsors
and the Tag-Along Investors, the number of shares to be sold by each of the
Sponsors and each of the Tag-Along Investors shall be ratably reduced so that
the number of shares to be sold by such Sponsors and each of the Tag-Along
Investors equals the number of shares that the Prospective Purchaser is willing
or able to purchase.


 


(c)           Actions of Affiliates. Each Sponsor shall use its reasonable
best efforts to cause its Affiliates to comply with the provisions of this
Section 3.4.


 


(d)           Termination of Tag-Along Rights. 
Each Investor’s Tag-Along Right shall expire upon the consummation of
the Initial Offering.


 


3.5           Bring-Along Rights.


 


(a)           The Right. 
If one or more of the Sponsors and/or any of their Affiliates (the
“Sponsor Parties”) propose to enter into any agreement to sell or otherwise
dispose of any Common Stock or Series A Preferred that would constitute 50% or
more of the Common Stock (on an As-Converted Basis) held by the Sponsors and
their Affiliates on the Issue Date to a Prospective Purchaser (a “Bring-Along
Sale”), then such Sponsor Parties shall have the right (the “Bring-Along
Right”) to compel each of the Investors and any Permitted Transferees of the
Investors (the “Bring-Along Parties”) to sell, free and clear of any liens or
encumbrances, (1) if the Sponsor Parties are selling Series A Preferred in
connection with such Bring-Along Sale, a number of shares of Series A Preferred
equal to the product obtained by


 


13

















 


multiplying (i) the total number of shares of
Series A Preferred, owned by such Investor as of the date of the Bring-Along
Notice, with (ii) a fraction, the numerator of which shall be the total number
of shares of Series A Preferred that the Sponsor Parties propose to sell and
the denominator of which shall equal the total number of shares of Series A
Preferred owned by such Sponsor Parties s as of the date of the Bring-Along
Notice, for such consideration per share of Series A Preferred as the Sponsor
Parties would receive for shares of Series A Preferred in such Bring-Along Sale
and on the same terms and subject to the same conditions as the Sponsor Parties
are able to obtain, and (2) if the Sponsor Parties are selling shares of Common
Stock and/or shares of Series A Preferred in connection with such Bring-Along
Sale, the number of shares of Common Stock equal to the product obtained by
multiplying (i) the total number of shares of Common Stock (on an As-Converted
Basis (but without counting for such purposes shares of Series A Preferred
required to be sold under (1) above)), owned by such Investor as of the date of
the Bring-Along Notice, with (ii) a fraction, the numerator of which shall be
the total number of shares of Common Stock (on an As-Converted Basis (but
without counting for such purposes shares of Series A Preferred that such
Sponsor Parties are selling, if the Investor is required to sell shares of Series
A Preferred under (1) above)) that the Sponsor Parties propose to sell and the
denominator of which shall equal the total number of shares of Common Stock (on
an As-Converted Basis (but without counting for such purposes shares of Series
A Preferred that such Sponsor Parties are selling, if the Investor is required
to sell shares of Series A Preferred under (1) above)), owned by the Sponsor
Parties as of the date of the Bring-Along Notice, for such consideration per
share of Common Stock as the Sponsor Parties would receive for shares of Common
Stock and on the same terms and subject to the same conditions as the Sponsors
are able to obtain; provided, however, that the Bring-Along
Parties shall be required to give only representations and warranties substantially
comparable to the representations and warranties of such Sponsor Sparties,
which representations and warranties will be limited to representations and
warranties as to their title to the shares being sold by them, to their
existence, power and authorization to execute any sale documents, that such
sale shall not contravene such Bring-Along Parties’ organizational documents,
if any, or any law or regulation applicable to such Bring-Along Party, that
such sale shall not breach or cause a default under any material agreement to
which such Bring-Along Party is party, and to the enforceability of such
documents, and shall not be obligated to accept an overall limit on their
liability in excess of the net proceeds received by them in any such sale.  The Sponsors shall exercise the Bring-Along
Right by giving written notice (the “Bring-Along Notice”) to the Company and
the Bring-Along Parties stating (i) that they propose to effect such
transaction, (ii) the name and address of the Prospective Purchaser, (iii) the
proposed purchase price per share and other terms and conditions of the
proposed sale and (iv) that all the Bring-Along Parties shall be obligated
to sell their Common Stock or Series A Preferred, as applicable, upon the same
terms and subject to the same conditions (subject to applicable law).


 


(b)           Procedure. 
Not later than ten (10) days following the date of receipt of the
Bring-Along Notice, each of the other Investors shall deliver to the Sponsors
certificates representing all Common Stock or Series A Preferred, as
applicable, held by a Bring-Along Investor, accompanied by duly executed stock
powers.  If any Bring-Along Investor
fails to deliver such certificates to the Sponsors, the Company shall cause the
books and records of the Company to show that the shares represented by such
certificates of such Bring-Along Investor are bound by the provisions of this
Section 3.5 and are transferable only to the Prospective Purchaser or an
Affiliate of such Prospective Purchaser upon surrender for transfer by the
holder


 


14

















 


thereof. 
Upon the consummation of the sale of the Common Stock or Series A
Preferred of the Sponsors and the Common Stock or Series A Preferred of the
Bring-Along Investors pursuant to this Section 3.5, the Sponsors shall
give notice thereof to the Bring-Along Investors and shall remit to each of the
Bring-Along Investors the total sales price received for the Common Stock or
Series A Preferred of such Bring-Along Investor sold pursuant hereto.


 


(c)           Termination of Bring-Along Rights. 
The Sponsor Parties’ Bring-Along Rights and the Investors’ obligations
under this Section 3.5 shall expire upon the consummation of the Initial
Offering.


 


3.6           Registration of Transfer by the
Company.  No transfer of any equity security of the
Company by any Investor shall be effective (and the Company shall not transfer
on its books any such shares) unless (i) the certificates representing such
equity securities of the Company issued to the Permitted Transferee shall bear
any legends required by Section 3.7 and (ii) the Permitted Transferee (if not
already a party hereto) shall have executed and delivered to the Company, as a
condition precedent to such transfer, an instrument or instruments in form and
substance reasonably satisfactory to the Company confirming that the Permitted
Transferee agrees to be bound by the terms of this Agreement to the same extent
as its transferor.


 


3.7           Legend.


 


(a)           Each certificate representing
Registrable Securities shall (unless otherwise permitted by the provisions of
this Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (it being understood and agreed that such legend shall
be removed by the Company at the request of an Investor following the
consummation of an Initial Offering and the expiration of the restrictions
contained in Section 2.7 hereof):


 


THE
SECURITIES EVIDENCED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AN INVESTORS’
RIGHTS AGREEMENT DATED AS OF AUGUST 11, 2003 (THE “AGREEMENT”), WHICH CONTAINS
PROVISIONS REGARDING (I) CERTAIN RESTRICTIONS ON THE TRANSFER OF SUCH
SECURITIES, (II) CERTAIN RIGHTS OF FIRST OFFER AND CO-SALE RIGHTS APPLICABLE TO
THIS SECURITY AND (III) CERTAIN OTHER MATTERS. A COPY OF SUCH AGREEMENT IS AVAILABLE
FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY.  ANY TRANSFER OF THE SECURITIES EVIDENCED BY
THIS CERTIFICATE IN VIOLATION OF THE AGREEMENT IS NULL AND VOID.”


 


(b)           Except as provided in this 3.7(b),
each certificate representing Registrable Securities shall be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):


 


THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN 
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR


 


15

















 


HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SUCH ACT OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


Notwithstanding the foregoing, the Company
shall be obligated to reissue promptly certificates without the legend set
forth in this Section 3.7(b) at the request of any holder thereof if the holder
shall have obtained an opinion of counsel at such Investor’s expense (which
counsel may be counsel to the Company) reasonably acceptable to the Company to
the effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification or legend.


 


(c)           Any legend endorsed on an instrument
pursuant to applicable state securities laws and the stop-transfer instructions
with respect to such securities shall be removed upon receipt by the Company of
an order of the appropriate blue sky authority authorizing such removal.


 


4.     Covenants of the Company.


 


4.1           Delivery of Financial Statements. 
The Company shall deliver to each Principal Investor copies of any
financial statements delivered to its lenders under its Credit Agreement, but
not compliance certificates; provided,
however, that the Company shall
not be required to deliver to the Principal Investors any projections delivered
to the Company’s senior lenders under its Credit Agreement until after the
first anniversary of the Issue Date; provided,
further, that the Company shall
not be required to deliver to the Principal Investors any projections delivered
to the Company’s lenders under its Credit Agreement at any time if the Company
in good faith is contemplating an Initial Offering at such time or determines
in good faith that delivery of such projections could have an adverse effect on
the Company.


 


4.2           Senior Management. 
The Company shall make members of its senior management available to the
Principal Investors, as a group, twice per calendar year, to discuss the
operations of the Company, at times and locations reasonably determined by the
Company after consultation with the Principal Investors.


 


4.3           Termination of Information and
Inspection Covenants.  The covenants set forth
in Sections 4.1 and 4.2 shall terminate as to a Principal Investor and be of no
further force or effect upon the earlier of (i) the Initial Offering, (ii) the
merger, consolidation or sale of the Company or (iii) such time as such
Investor ceases to be a Principal Investor.


 


5.     Miscellaneous.


 


5.1           Successors and Assigns. 
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties (including transferees of any
shares of Registrable Securities). Excepts as otherwise expressly provided
herein, (i) the Investors and the Company shall not be able to assign their rights
under this Agreement to any Person, and (ii) a Sponsor shall be able to assign
its rights and obligations under this Agreement to any Affiliate or any


 


16

















 


other Person in connection with a sale of any
shares of Series A Preferred or shares of Common Stock issuable on conversion
thereof that is subject to the tag-along rights contained in Section 3.4,
provided that such Affiliate or such other Person assumes all obligations of
such Sponsor under this Agreement. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.


 


5.2           Governing Law. 
This Agreement shall be governed by and construed under the laws of the
State of New York, without regard to the laws of any other jurisdiction that
might be applied because of the conflicts of laws principles of the State of
New York.


 


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


 


5.4           Titles and Subtitles. 
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.


 


5.5           Notices. 
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given,
mailed, received or delivered, as applicable: (i) upon personal delivery to the
party to be notified, (ii) one business day after being sent by confirmed telex
or facsimile with confirmation or receipt, (iii) three (3) business days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt, if addressed to the party to be notified at the address indicated for
such party on the signature pages hereof or on Annex A, or at such other
address as such party may designate by ten (10) days’ advance written notice to
the other parties.


 


5.6           Expenses. 
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.


 


5.7           Entire Agreement; Amendments and
Waivers.  This Agreement  constitutes the full and entire understanding and agreement among
the parties with regard to the subject matter hereof. Any term of this
Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the parties
hereto; provided, however, that notwithstanding any
provision to the contrary herein, no amendment to this Agreement may be made
without the written consent of any party affected thereby if such amendment
would impose any new obligations on such party or diminish any right of such party
hereunder without similarly diminishing the right of all similarly situated
parties. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each


 


17

















 


holder of any Registrable Securities, each
future holder of all such Registrable Securities, and the Company.


 


5.8           Severability. 
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement and
the balance of the Agreement shall be interpreted as if such provision was so
excluded and shall be enforceable in accordance with its terms.


 


5.9           Information Confidential. 
Each Investor acknowledges that the information received by them
pursuant hereto may be confidential and for its use only, and it will not use
such confidential information except in connection with its investment in
shares of Series A Preferred or shares of Common Stock issued or issuable on
conversion thereof or reproduce, disclose or disseminate such information to
any other person (other than its employees or agents having a need to know the
contents of such information, and its attorneys), except in connection with the
exercise of rights under this Agreement, unless the Company has made such
information available to the public generally or such Holder is required to
disclose such information by a governmental body or under or pursuant to
applicable law.  Notwithstanding the
foregoing, the parties (and each employee, representative, or other agent of
the parties) may disclose to any and all persons, without limitation of any
kind, the tax treatment and any facts that may be relevant to the tax structure
of the transaction, provided, however, that no party (and no employee,
representative, or other agent thereof) shall disclose any other information
that is not relevant to understanding the tax treatment and tax structure of
the transaction (including the identity of any party and any information that
could lead another to determine the identity of any party), or any other
information to the extent that such disclosure would result in a violation of
any federal or state securities law.


 


5.10         Aggregation of Stock. 
All shares of Registrable Securities held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.


 


(Remainder of this page intentionally left
blank)


 


18

















 


IN
WITNESS WHEREOF, the parties hereto have executed this
Investors’ Rights Agreement as of the day and year first above written.


 


COMPANY:


 


KINETIC CONCEPTS, INC.


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  Address:

  
	
  Telephone Number:

  
	
  Fax Number:

  



 


[Signature Page to Investors' Rights Agreement]


 

















 


GS CAPITAL PARTNERS 2000,
L.P.


 


By: GS Advisors 2000,
L.L.C., its general partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


GS CAPITAL PARTNERS 2000
OFFSHORE, L.P.


 


By:  GS Advisors 2000, L.L.C., its general
partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


GS CAPITAL PARTNERS 2000
GmbH & CO. BETEILIGUNGS KG


 


By:  Goldman Sachs Management GP GmbH, its
general partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


GS CAPITAL PARTNERS 2000
EMPLOYEE FUND, L.P.


 


By:  GS Employee Funds 2000 GP, L.L.C., its
general partner


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


 


GOLDMAN SACHS DIRECT
INVESTMENT FUND 2000, L.P.


 


By:  GS Employee Funds GP, L.L.C., its general
partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


INVESTORS:


 


DLJ Merchant Banking
Partners III, L.P.


 


By:  DLJ Merchant Banking, Inc., its Managing
General Partner


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


 


DLJ Merchant Banking III,
Inc., its Advisory General Partner on behalf of DLJ Offshore Partners III, C.V.


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


 


DLJ Merchant Banking III,
Inc. as Advisory General Partner on behalf of DLJ Offshore Partners III-1, C.V.
and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate
General Partner of DLJ Offshore Partners
III-1, C.V.


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


DLJ Merchant Banking III,
Inc. as Advisory General Partner on behalf of DLJ Offshore Partners III-2, C.V.
and as attorney-in-fact for DLJ Merchant Banking III, L.P., as Associate
General Partner of DLJ Offshore Partners
III-2, C.V.


 


	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


DLJ MB PartnersIII Gmbh
& Co. KG


 


By:  DLJ Merchant Banking III, L.P., its Managing
Limited Partner


 


	
   

  	
  By:  DLJ Merchant Banking III, Inc., its
  General Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						



 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


Millennium Partners II, L.P.


 


By:  DLJ Merchant Banking III, Inc., its Managing
General Partner


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				



 


Address:


Telephone Number:


Fax Number:


 


 


MBP III Plan Investors, L.P.


 


By:  DLJ LBO Plans Management Corporation II, its
General Partner


 


	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


	
   

  	
  JOHN P. BYRNES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARRY R. JACOBSON, M.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DAVID J. SIMPSON

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  C. THOMAS SMITH

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


SPONSORS:


 


 


FREMONT PARTNERS III, L.P.


 


	
  By:  FP Advisors III, L.L.C.

  
	
  Its:  General Partner

  
	
   

  
	
   

  	
  By:  Fremont Group, L.L.C.

  
	
   

  	
  Its:  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:  Fremont Investors, Inc.

  
	
   

  	
   

  	
  Its:  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
  Telephone Number:

  
	
   

  	
   

  	
   

  	
  Fax Number:

  



 


 


FREMONT PARTNERS III
SIDE-BY-SIDE, L.P.


 


	
   

  	
  By:  Fremont Group, L.L.C.

  
	
   

  	
  Its:  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:  Fremont Investors, Inc.

  
	
   

  	
   

  	
  Its:  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
  Telephone Number:

  
	
   

  	
   

  	
   

  	
  Fax Number:

  



 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


FREMONT ACQUISITION COMPANY
II, L.L.C.


 


	
   

  	
  By:  Fremont Partners, L.P.

  
	
   

  	
  Its:  Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:  FP Advisors, L.L.C.

  
	
   

  	
   

  	
  Its:  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:  Fremont Group, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:  Fremont Investors, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
  Telephone Number:

  
	
   

  	
   

  	
   

  	
  Fax Number:

  
									



 


 


FREMONT ACQUISITION COMPANY
IIA, L.L.C.


 


	
   

  	
  By:  FP Advisors, L.L.C.

  
	
   

  	
  Its:  Non-Member Manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:  Fremont Group, L.L.C.

  
	
   

  	
   

  	
  Its:  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:  Fremont Investors, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
  Its:  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone Number:

  
	
   

  	
   

  	
   

  	
   

  	
  Fax Number:

  
									



 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


BLUM STRATEGIC PARTNERS II,
L.P.


 


By: Blum Strategic GP II,
L.L.C.


Its: General Partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


 


BLUM STRATEGIC PARTNERS II
GmbH & Co. KG


 


By: Blum Strategic GP II,
L.L.C.


Its: Managing Limited
Partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


 


STINSON CAPITAL PARTNERS II,
L.P.


 


By: Blum Capital Partners,
L.P.


Its: General Partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


RCBA-KCI CAPITAL PARTNERS,
L.P.


 


By: Blum Capital Partners,
L.P.


Its: General Partner


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


	
  JAMES R. LEININGER, M.D.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
			



 


 


Address:


Telephone Number:


Fax Number:


 


[SIGNATURE PAGE TO INVESTORS' RIGHTS AGREEMENT]


 

















 


Annex A


 


	
  Investor

  	
   

  	
  Information

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JOHN P. BYRNES

  	
   

  	
  Address:

  	
   

  	
  19387 US 19 North

  Clearwater, FL  33764

  
	
   

  	
   

  	
  Telephone Number:

  	
   

  	
  (727) 530-7700 x 8226

  
	
   

  	
   

  	
  Fax Number:

  	
   

  	
  (727) 532-4091

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HARRY R. JACOBSON, M.D.

  	
   

  	
  Address:

  	
   

  	
  Vanderbilt University
  Medical Center

  D-3300 Medical Center North

  Nashville, TX  37232

  
	
   

  	
   

  	
  Telephone Number:

  	
   

  	
  (615) 343-3485

  
	
   

  	
   

  	
  Fax Number:

  	
   

  	
  (615) 343-7286

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DAVID J. SIMPSON

  	
   

  	
  Address:

  	
   

  	
  2725 Fairfield Road

  Kalamazoo, MI  49002

  
	
   

  	
   

  	
  Telephone Number:

  	
   

  	
  (269) 383-7324

  
	
   

  	
   

  	
  Fax Number:

  	
   

  	
  (269) 383-7353

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. THOMAS SMITH

  	
   

  	
  Address:

  	
   

  	
  17703 Cedar Creek Canyon

  Dallas, TX  75252

  
	
   

  	
   

  	
  Telephone Number:

  	
   

  	
  (972) 380-9120

  
	
   

  	
   

  	
  Fax Number:

  	
   

  	
  (972) 735-0196

  



 


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