Exhibit 10.29


 


FIRST AMENDED AND RESTATED MANAGEMENT
SERVICES

AGREEMENT


 


This
agreement, dated August 11, 2003 (this “First Amended and Restated
Management Services Agreement” or this “Agreement”) by and among
Kinetic Concepts, Inc., a Texas corporation (the “Company”), Dr. James
Leininger (“Leininger”), Blum Capital Partners, L.P. (“Blum”),
Blum Strategic GP II, L.L.C., Fremont Partners, L.L.C. (“Fremont II”)
and Fremont Partners III, L.L.C. (“Fremont III” and together with
Leininger, Blum, Blum Strategic GP II, L.L.C. and Fremont II, the “Managers”
and each a “Manager”) amends and restates that certain Management
Services Agreement (the “Initial Agreement”) entered into as of November
5, 1997 by and between the Company, Leininger, Richard C. Blum & Associates,
L.P. and  Fremont II, pursuant to which
the Managers were retained by the Company to provide management, consulting,
financial, strategic planning, tax and accounting services to the Company
pursuant to the terms and subject to the conditions set forth in the Initial
Agreement.  Upon the effectiveness of
this Agreement as contemplated by paragraph 9 hereof, the Initial Agreement
shall be amended (pursuant to paragraph 7(d) thereof) and restated in its
entirety as set forth in this Agreement:


 


1.                                       The Company has retained the
Managers, and the Managers hereby agree to accept such retention, to provide to
the Company and to its divisions, subsidiaries and affiliates (collectively, “PortCo”),
when and if called upon, certain management, consulting, financial, strategic
planning, tax and accounting services of the type customarily performed by the
Managers (the “Advisory Services”).


 


2.                                       The parties acknowledge that the
Company has previously paid to each of the Managers a management fee in
consideration for Advisory Services performed between January 1, 2003 and June
30, 2003 pursuant to the Initial Agreement equal to the respective amounts set
forth below:


 


	
  Manager

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Leininger

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Blum

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Fremont II

  	
   

  	
  $

  	
  300,000

  	
   

  



 


Except
as set forth in paragraph 3 hereunder, no other management fees shall be due to
the Managers under this Agreement.


 


3.                                       Each Manager may also invoice the
Company for additional investment banking fees in connection with acquisition,
divestiture or certain other transactions or in the event that such Manager or
any of its affiliates performs services for PortCo above and beyond those
called for by this Agreement; provided, however, that any such fees must be
agreed to in advance by the Company.


 

















 


4.                                       In addition to any fees that may be
payable to any Manager under this Agreement, the Company also agrees to
reimburse each Manager and its respective affiliates, from time to time upon
request, for all reasonable out-of-pocket expenses incurred prior to the date of
such request in connection with the provision of Advisory Services, including,
without limitation, all unreimbursed travel expenses and expenses of their
counsel and other advisors.


 


5.                                       The Company agrees to indemnify and
hold each Manager and its respective affiliates, members, partners, executives,
officers, directors, employees, agents, representatives and controlling persons
(including without limitation, the respective members of the Board of Directors
of the Company designated by each Manager (each such person, including such
Manager, being an “Indemnified Party”) harmless from and against any and
all losses, claims, damages and liabilities (including, without limitation,
losses, claims, damages and liabilities arising from or in connection with
legal actions brought by or on behalf of the holders or future holders of the
outstanding securities of PortCo or creditors or future creditors of PortCo),
joint, several or otherwise, to which such Indemnified Party may become subject
under any applicable federal or state law, or otherwise, related to or arising
out of any activity contemplated by this Agreement or the retention of such
Manager or its affiliates pursuant to, and such Manager’s or its affiliates’
performance of the Advisory Services contemplated by, this Agreement and will
reimburse any Indemnified Party for all expenses (including counsel fees and
disbursements) upon request as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party and whether or not such claim, action or proceeding is
initiated or brought by the Company and/or PortCo; provided, however,
that the Company will not be liable to any Manager or its affiliates under the
foregoing indemnification provision to the extent that any loss, claim, damage,
liability or expense is found in a final, non-appealable judgment by a court to
have resulted from the willful misconduct, bad faith or gross negligence of
such Manager or its affiliates.  The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to PortCo related to or
arising out of any activity contemplated by this Agreement or the retention of
any Manager or its affiliates pursuant to, and any Manager’s or its affiliates’
performance of the Advisory Services contemplated by, this Agreement, except to
the extent that any loss, claim, damage, liability or expense is found in a
final, non-appealable judgment by a court to have resulted from the willful
misconduct, bad faith or gross negligence of such Manager or its affiliates; provided,
however, that in no event shall any such liability in the aggregate exceed
the amount of management fees actually received by such Manager or any fees
actually received by such Manager pursuant to paragraphs 2 and 3 of this
Agreement.


 


The Company
also agrees that, without the prior written consent of the relevant Manager or
its relevant affiliate, the Company and PortCo will not settle, compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding to which an Indemnified Party related to such Manager is an
actual or potential party and in respect of which indemnification could be
sought under the indemnification provision in the immediately preceding
paragraph, unless such


 


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settlement, compromise or
consent (i) includes an unconditional release of each Indemnified Party from
all liability arising out of such claim, action or proceeding and (ii) does not
include any statement as to any admission of fault, culpability or failure to
act by or on behalf of any indemnified party.


 


Promptly after
receipt by an Indemnified Party of notice of any suit, action, proceeding or
investigation with respect to which an Indemnified Party may be entitled to
indemnification hereunder, such Indemnified Party will notify the Company in
writing of the assertion of such claim or the commencement of such suit,
action, proceeding or investigation, but the failure so to notify the Company
shall not relieve the Company from any liability which it may have hereunder,
except to the extent that such failure has materially prejudiced the
Company.  If the Company so elects
within a reasonable time after receipt of such notice, the Company may
participate at its own expense in the defense of such suit, action, proceeding or
investigation.  Each Indemnified Party
may employ separate counsel to represent it or defend it in any such suit,
action, proceeding or investigation in which it may become involved or is named
as a defendant and, in such event, the reasonable fees and expenses of such
counsel shall be borne by the Company; provided, however, that
the Company will not be required in connection with any such suit, action,
proceeding or investigation, or separate but substantially similar actions
arising out of the same general allegations or circumstances, to pay the fees
and disbursements of more than one separate counsel (other than local counsel)
for all Indemnified Parties related to a given Manager in any single action or
proceeding.  Whether or not the Company
participates in the defense of any claim, both the Company and each Manager and
its affiliates shall cooperate in the defense thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery
proceedings, hearing, trial and appeals, as may be reasonably requested in
connection therewith.


 


If the
indemnification provided for hereunder is finally judicially determined by a
court of competent jurisdiction to be unavailable to an Indemnified Party, or
insufficient to hold any Indemnified Party harmless, in respect of any losses,
claims, damages or liabilities (other than any losses, claims, damages or
liabilities found in a final, non-appealable judgment by a court to have
resulted from the willful misconduct, bad faith or gross negligence of the
Manager or its affiliates to which such Indemnified Party is related), then the
Company, on the one hand, in lieu of indemnifying such Indemnified Party, and
such Manager or its relevant affiliate, on the other hand, will contribute to
the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received, or sought to be received, by PortCo,
on the one hand, and such Manager or its relevant affiliate, solely in its
capacity as advisor under this Agreement, on the other hand, in connection with
the transactions to which such indemnification, contribution or reimbursement
is sought, or (ii) if (but only if) the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the
relative fault of PortCo, on the one hand, and such Manager or its relevant
affiliate, on the other hand, as well as any other relevant equitable
considerations; provided, however, that in no event


 


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shall any Manager’s aggregate
contribution hereunder exceed the amount of management fees actually received
by such Manager or any fees actually received by such Manager pursuant to
paragraphs 2 and 3 of this Agreement. 
The amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above will be deemed to include any legal
or other fees or expenses reasonably incurred in defending any action or
claim.  The Company and each Manager and
its affiliates agree that it would not be just and equitable if contribution
pursuant to this paragraph were determined by pro rata allocation or by any
other method, which does not take into account, the equitable considerations
referred to in this paragraph.  The
indemnity, contribution and expenses reimbursement obligations the Company has
under this paragraph shall be in addition to any liability the Company or
PortCo may have, and notwithstanding any other provision of this Agreement,
shall survive the termination of this Agreement.


 


6.                                       Any advice or opinions provided by
any Manager may not be disclosed or referred to publicly or to any third party
(other than PortCo’s legal, tax, financial or other advisors), except in
accordance with the prior written consent of such Manager.  In addition, this Agreement may not be
disclosed or referred to publicly or to any third party (other than PortCo’s
legal, tax, financial or other advisors), except (a) in accordance with the
prior written consent of each Manager or (b) to the extent, and only to the
extent, compelled by applicable law, regulation, stock exchange rules or legal
process (including any discovery request or judicial or governmental order).


 


7.                                       Each Manager shall act as an
independent contractor, with duties solely to the Company.  The provisions hereof shall inure to the
benefit of and shall be binding upon the parties hereto and their respective
successors and assigns.  Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective successors and assigns, and, to the
extent expressly set forth herein, the Indemnified Parties, any rights or
remedies under or by reason of this Agreement. 
Without limiting the generality of the foregoing, the parties
acknowledge that nothing in this Agreement, expressed or implied, is intended
to confer on any present or future holders of any securities of the Company or
its subsidiaries or affiliates, or any present or future creditor of the
Company or its subsidiaries or affiliates, any rights or remedies under or by
reason of this Agreement or any performance hereunder.


 


8.                                       This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts made and to be performed therein. 
The parties hereto hereby agree to submit to the non-exclusive jurisdiction
of the federal and state courts located in the City of San Francisco in any
action or proceeding arising out of or relating to this Agreement.


 


9.                                       The terms of this Agreement are
effective as of the date hereof and this Agreement amends, restates and
replaces the Initial Agreement in its entirety.  This Agreement shall continue in effect until the termination of
that certain Amended Agreement Among Shareholders (the “Amended Shareholder
Rights Agreement”) dated November 5, 1997 and amended August 11, 2003 by and
among the Company, Fremont Partners, L.P., Fremont Partners III, L.P., Blum
Capital Partners, L.P., Leininger and the other shareholders of the Company
that are party thereto; provided, however, that this


 


4

















 


Agreement
shall terminate earlier with respect to any individual Manager when such
Manager no longer has a right to designate a member of the Board of Directors
of the Company pursuant to the terms of the Amended Shareholder Rights
Agreement; provided  further, however, that the terms of
paragraphs 3 through 6, 8, and 10 through 12 of this Agreement shall survive
indefinitely; provided  further, however, that no member of
the Board of Directors of the Company (each, a “Director”) shall have
any rights to indemnification under paragraph 5, in his or her capacity or
purported capacity as a director, with respect to any action or inaction of
such Director that is taken or not taken, as the case may be, after the time
that such Director shall no longer be a director.


 


10.                                 Each party hereto represents and
warrants that the execution and delivery of this Agreement by such party has
been duly authorized by all necessary action of such party.


 


11.                                 If any term or provision of this
Agreement or the application thereof shall, in any jurisdiction and to any
extent, be invalid and unenforceable, such term or provision shall be
ineffective, as to such jurisdiction, solely to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable any remaining
terms or provisions hereof or affecting the validity or enforceability of such
term or provision in any other jurisdiction. 
To the extent permitted by applicable law, the parties hereto waive any
provision of law that renders any term or provision of this Agreement invalid
or unenforceable in any respect.


 


12.                                 Each of PortCo and the Managers
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) related to or arising out of
any activity contemplated by this Agreement or the retention of any Manager
pursuant to, and each Manager’s or its affiliates’ performance of the Advisory
Services contemplated by, this Agreement.


 


13.                                 Any notice or other communication
under this Agreement must be given in writing and either (i) delivered in
person, (ii) transmitted by facsimile or (iii) mailed by certified or
registered mail, postage prepaid, receipt requested as follows:


 


If
to the Company, addressed to:


 


Kinetic Concepts, Inc.


8023 Vantage Drive


San Antonio, TX 78230


Attn:  Dennis E. Noll


Fax:  (210)-255-6204


 


with a copy (which shall not constitute
notice) to:


 


Skadden, Arps, Slate, Meagher & Flom LLP


525 University Avenue


Palo Alto, CA 94301


Attn:  Thomas J. Ivey, Esq.


Fax:  (650) 470-4570


 


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If to Fremont II,
addressed to:


 


Fremont Partners, L.L.C.


199 Fremont Street, Suite 2300


San Francisco, CA 94105


Attn:  Kevin Baker, Esq.


Fax:  (415) 284-8191


 


with a copy (which shall not constitute
notice) to:


 


Skadden, Arps, Slate, Meagher & Flom LLP


525 University Avenue


Palo Alto, CA 94301


Attn:  Thomas J. Ivey, Esq.


Fax:  (650) 470-4570


 


If to Fremont III,
addressed to:


 


Fremont Partners III, L.L.C.


199 Fremont Street, Suite 2300


San Francisco, CA 94105


Attn:  Kevin Baker, Esq.


Fax:  (415) 284-8191


 


with a copy (which shall not constitute
notice) to:


 


Skadden, Arps, Slate, Meagher & Flom LLP


525 University Avenue


Palo Alto, CA 94301


Attn:  Thomas J. Ivey, Esq.


Fax:  (650) 470-4570


 


If to Leininger, addressed to:


 


Dr. James Leininger


Mission City
Management, Inc.


8122 Datapoint Drive,
Suite 900


San Antonio, TX 78229


Attn:  General Counsel


Fax:  (210) 614-5841


 


If to Blum, addressed to:


Blum Capital
Partners, L.P.


909 Montgomery
Street, Suite 400


San Francisco, CA
94133-4625


Attn:  Murray Indick, Esq.


Fax:  (415) 283-0641


 


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with a copy (which shall not constitute
notice) to:


 


Wilmer, Cutler & Pickering


2445 M Street, N.W.


Washington D.C. 20037


Attn:  Michael R. Klein, Esq.


Fax:  (202) 663-6363


 


If to Blum Strategic GP II, L.L.C., addressed
to:


 


Blum Strategic GP II,
L.L.C.


909 Montgomery
Street, Suite 400


San Francisco, CA
94133-4625


Attn:  Murray Indick, Esq.


Fax:  (415) 283-0641


 


with a copy (which shall not constitute
notice) to:


 


Wilmer, Cutler & Pickering


2445 M Street, N.W.


Washington D.C. 20037


Attn:  Michael R. Klein, Esq.


Fax:  (202) 663-6363


 


or
to such other address or to such other person as any party shall have last
designated by such notice to the other parties hereto.  Each notice or other communication shall be
effective, if given by facsimile, when transmission to the applicable facsimile
number is confirmed; if given by mail, three days after such communication is
deposited in the mails with first-class postage prepaid, addressed as foresaid;
and if given by any other means, when actually delivered to such address.


 


14.                                 This Agreement may not be assigned
by any party hereto without the prior written consent of each other party
hereto; provided that nothing in this Agreement shall preclude changes in the
composition of the members constituting Fremont II, Fremont III, Blum or Blum
Strategic GP II, L.L.C.; and provided  further that Fremont II,
Fremont III, Blum or Blum Strategic GP II, L.L.C. may be reconstituted or reorganized
from the limited liability company form to the partnership form or to the
corporate form or other form of business entity or vice versa.


 


15.                                 This Agreement may be executed
through the use of separate signature pages and in any number of counterparts,
and each of such counterparts shall, for all purposes, constitute one agreement
binding on all the parties, notwithstanding that all the parties are not
signatories to the same counterpart. 
Facsimile signatures shall constitute original signatures for all
purposes under this Agreement.


 


[Rest of page intentionally left blank]


 


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IN WITNESS
WHEREOF, the parties have executed this Management Services Agreement as of the
date first set forth above.


 


 


	
  KINETIC
  CONCEPTS, INC.,

  a Texas corporation

  	
   

  	
  FREMONT
  PARTNERS, L.L.C.,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  Fremont Group, L.L.C., its managing member

  	
   

  
	
  By:  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:  

  	
   

  	
  By:  Fremont Investors, Inc., its manager  

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  FREMONT
  PARTNERS III, L.L.C.,

  a Delaware limited liability company

  	
   

  	
  BLUM CAPITAL
  PARTNERS, L.P.,

  a California limited partnership  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  Fremont Group, L.L.C., its managing

  member  

  	
   

  	
  By:  Richard C. Blum & Associates, Inc.,

  its sole general partner  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  Fremont Investors, Inc., its manager  

  	
   

  	
  By:  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  

  	
   

  
	
   

  	
   

  	
   

  	
  Title:  

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:  

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James R.
  Leininger, M.D.

  	
   

  
							



 


 


[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED

MANAGEMENT SERVICES AGREEMENT]


 


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  BLUM
  STRATEGIC GP II, L.L.C.,

  a Delaware limited liability company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:  

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  



 


 


[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED

MANAGEMENT SERVICES AGREEMENT]


 


9