exv4w4



 








Exhibit 4.4




AMENDMENT AND WAIVER NO. 4 TO THE CREDIT AGREEMENT




Dated as of December 20, 2005




          AMENDMENT AND WAIVER NO. 4 TO THE CREDIT AGREEMENT (this “Amendment”) among ENCORE MEDICAL
IHC, INC., a Delaware corporation (the “Borrower”), ENCORE MEDICAL CORPORATION, a Delaware
corporation (“Holdings”), the banks, financial institutions and other institutional lenders parties
to the Credit Agreement referred to below (collectively, the “Lenders”) and BANK OF AMERICA, N.A.,
as Administrative Agent (in such capacity, the “Administrative Agent”).




PRELIMINARY STATEMENTS:




          (1) WHEREAS, the Borrower, Holdings, the Lenders and the Administrative Agent have entered
into a Credit Agreement dated as of October 4, 2004, as amended by Letter Amendment and Waiver No.
1, dated as of February 14, 2005, Amendment and Waiver No. 2, dated as of May 5, 2005 and Letter
Amendment No. 3, dated as of July 21, 2005 (such Credit Agreement, as so amended, the “Credit
Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as
specified in the Credit Agreement;




          (2) WHEREAS, the Borrower has requested that the Lenders amend and waive certain provisions to
the Credit Agreement as described below and including, without limitation, an increase of the
Revolving Credit Commitments; and




          (3) WHEREAS, the Lenders have agreed, subject to the terms and conditions hereinafter set
forth, to amend and waive certain provisions to the Credit Agreement as set forth below.




          NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto
hereby agree as follows:




          SECTION 1. Amendments to the Credit Agreement. The Credit Agreement is, effective as
of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section
3 hereof, hereby amended as follows:




          (a) Section 1.01 of the Credit Agreement is hereby amended as follows:





     (i) By deleting, in clause (iv) of the definition of “Consolidated EBITDA” the amounts
“$10,000,000” and “$5,000,000” and by replacing such amounts with, respectively, the amounts
“$20,000,000” and “$15,000,000”.









 



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     (ii) By deleting in the definition of “Consolidated EBITDA” clause (vi) thereof and by
inserting the following clause (vi) in its place:



“(vi) restructuring and integration costs incurred (A) in connection with the
Transaction through December 31, 2005; provided that the maximum amount of
costs incurred under this subclause (A) shall not exceed $5,000,000, and (B) in
connection with the Compex Acquisition through the date that is twelve months after
the Fourth Amendment Effective Date; provided that the maximum amount of
costs incurred under this subclause (B) shall not exceed $7,500,000,”




     (iii) By deleting in the definition of “Consolidated EBITDA” clause (viii) thereof and
by inserting the following clause (viii) in its place:




“(viii) transaction fees and expenses related to (A) attempted or completed
acquisitions (other than the Transaction) up to a maximum aggregate amount of
$2,500,000 during any period of four consecutive Fiscal Quarters, and (B) the Compex
Acquisition up to a maximum aggregate amount of $4,500,000,”




     (iv) By inserting at the end of the definition of “Revolving Credit Commitment” the
following phrase: “; provided, however, that upon the Compex Acquisition Closing Date the
Revolving Credit Commitments shall be increased by the commitments set forth on Schedule
2.01(a) hereto.”




(v) By inserting the following new definitions therein in the appropriate alphabetical
order:




“Compex Acquisition” means the acquisition by the Borrower of all of the Equity
Interests in Compex Technologies, Inc. a Minnesota corporation pursuant to that
certain stock purchase agreement dated as of November 11, 2005 and entered into by
and among Holdings, Encore-Snow Acquisition Corp. and Compex Technologies, Inc.;
provided that, after giving effect to such acquisition, Compex Technologies, Inc.
shall be a wholly-owned direct Subsidiary of the Borrower.




“Compex Acquisition Closing Date” means the date Compex Technologies, Inc. merges
with and into Encore-Snow Acquisition Corp. as part of the Compex Acquisition, it
being understood that the Compex Acquisition Closing Date shall occur on or before
June 30, 2006.




“Fourth Amendment” means the Amendment No. 4, dated as of December 20, 2005, to this
Agreement among the Borrower, Holdings, the Lenders party thereto and the
Administrative Agent.




“Fourth Amendment Effective Date” has the meaning specified in Section 2 of the
Fourth Amendment.




     (b) Section 7.03(i)(D) of the Credit Agreement is hereby amended by deleting therein
the amounts “$7,500,000” and “$15,000,000” and by replacing such amounts with, respectively,
the amounts “$15,000,000” and “$30,000,000”.









 



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          Section 7.11 of the Credit Agreement is hereby amended by deleting therein the schedule of
Capital Expenditures and by replacing such schedule with the following schedule:




	 	 	 	 	 
	“Fiscal Year	 	Amount
	 
	2004
	 	$	11,100,000	 
	2005
	 	$	13,800,000	 
	2006
	 	$	13,000,000	 
	2007
	 	$	14,200,000	 
	2008
	 	$	15,700,000	 
	2009
	 	$	17,300,000	 
	2010
	 	$	19,000,000	” 







     (c) A new Schedule 2.01(a) is added to the Credit Agreement in the form of
Schedule I to this Amendment.



          SECTION 2. Waiver. Compliance by Holdings and its Subsidiaries with the limitations
set forth in Section 7.03(i)(D) of the Credit Agreement, with respect to the limits on total cash
consideration that may be paid by or on behalf of Holdings and its Subsidiaries for any purchase or
acquisition of the type described in Section 7.03(i) of the Credit Agreement of no more than
$15,000,000 after giving effect to the amendment set forth in Section 1(b) above for any single
transaction, is on and as of the Fourth Amendment Effective Date hereby waived by the Lenders,
solely to the extent and for the purpose of permitting the Compex Acquisition and the repayment of
debt of Compex Technologies, Inc., associated therewith. Notwithstanding such waiver, after
consummation of the Compex Acquisition (i) Holdings and its Subsidiaries shall be required to
comply with the limitations set forth in Section 7.03(i)(D) of the Credit Agreement, as amended
hereby and (ii) without any further action by the Administrative Agent or the Lenders, all of the
terms and provisions set forth in the Loan Documents shall have the same force and effect as if
this waiver had not been entered into by the parties hereto, and the Administrative Agent and the
Lenders shall have all of the rights and remedies afforded to them under the Loan Documents as
though no waiver had been granted by them hereunder.




          SECTION 3. Conditions of Effectiveness. Sections 1 and 2 of this Amendment shall
become effective as of the date first written above (the “Fourth Amendment Effective Date”) when
(i) the Administrative Agent shall have received counterparts of (A) this Amendment executed by the
Borrower, the Required Lenders, and solely in respect of Section 1 of this Amendment the Revolving
Credit Lenders that shall have increased their Revolving Credit Commitments or, as to any of such
Lenders, advice satisfactory to the Administrative Agent that such Lender has executed this
Amendment, (B) the Consent and Confirmation attached hereto executed by each of the Loan Parties
(other than the Borrower), (C) an opinion of Jackson Walker, L.L.P., counsel to the Borrower, in
form and substance satisfactory to the Administrative Agent and its counsel, (D) such certificates
of resolutions or other action, incumbency certificates and/or other certificates of Responsible
Officers of the Borrower and of each other Loan Party, as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Amendment, and (E) such documents and
certifications as the Administrative Agent may reasonably require to evidence that the Borrower and
each other Loan










 



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Party is duly organized or formed and is validly existing in its jurisdiction of organization,
(ii) the Borrower shall have paid all reasonable out-of-pocket costs and expenses (including the
reasonable fees, charges and disbursements of counsel to the Administrative Agent) incurred in
connection with the Loan Documents (including this Amendment), (iii) no Default shall have occurred
and be continuing, or would occur as a result of the transactions contemplated by this Amendment,
and (iv) the Borrower shall have paid, on or before December 29, 2005, for the benefit of each
Lender executing this Amendment on or before 5:00 p.m. Eastern time on December 20, 2005, a fee
equal to 0.05% of the Commitments of each such Lender.




          SECTION 4. Representations and Warranties of the Borrower. Each of Holdings and the
Borrower represents and warrants as follows:





     (a) The execution, delivery and performance by each of Holdings and the Borrower of
this Amendment and by each other Loan Party of the Consent and Confirmation and the
consummation of the transactions contemplated hereby and thereby, are within its corporate
powers, have been duly authorized by all necessary corporate action and do not contravene
(i) its charter or by-laws or (ii) any law or any contractual restriction binding on or
affecting it, the continuation of which would be reasonably likely to have a Material
Adverse Effect.




     (b) After giving effect to this Amendment, the representations and warranties contained
in each of the Loan Documents are correct in all material respects on and as of the date
hereof as though made on and as of such date (other than any such representations or
warranties that, by their terms, refer to a specific date other than the date hereof, in
which case as of such specific date).




     (c) After giving effect to this Amendment, no event shall have occurred and be
continuing that constitutes a Default.



          SECTION 5. Reference to and Effect on the Credit Agreement, the Notes and the Loan
Documents. On and after the Fourth Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”,
“thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and
be a reference to the Credit Agreement, as amended by this Amendment. The Credit Agreement, as
specifically amended by this Amendment, is and shall continue to be in full force and effect and is
hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing,
the Collateral Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case as
amended by this Amendment. The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or remedy of any
Lender Party or the Administrative Agent or under the Credit Agreement, nor constitute a waiver of
any provision of the Credit Agreement.










 



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          SECTION 6. Execution in Counterparts.





     (a) This Amendment may be executed in any number of counterparts and by any combination
of the parties hereto in separate counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and the same Amendment.
Delivery of an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this Amendment.




     (b) If you agree to the terms and provisions hereof, please evidence such agreement by
executing and returning two original counterparts of this Amendment to Shearman & Sterling
LLP, 599 Lexington Avenue, New York, New York 10022, Attention: Sunita Daswani, facsimile
no. (646) 848-4582.




     (c) This Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York.









 



 


          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	BORROWER:



ENCORE MEDICAL IHC, INC.,

a Delaware corporation

 	 
	 	By:  	/s/  Harry L. Zimmerman
 	 
	 	 	Name:  	Harry L. Zimmerman 	 
	 	 	Title:  	Executive Vice President-General Counsel 	 
	 
	 	HOLDINGS:



ENCORE MEDICAL CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/  Harry L. Zimmerman
 	 
	 	 	Name:  	Harry L. Zimmerman 	 
	 	 	Title:  	Executive Vice President-General Counsel 	 
	 


Agreed as of the date first above written:




	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Paul Folino
 	 
	 	 	Name:  	Paul Folino 	 
	 	 	Title:  	Assistant Vice President 	 
	 









 



 




CONSENT AND CONFIRMATION




Dated as of December 20, 2005




          Each of the undersigned hereby consents to the foregoing Amendment and hereby (a) confirms and
agrees that notwithstanding the effectiveness of such Amendment, each Loan Document to which it is
a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed
in all respects, except that, on and after the effectiveness of such Amendment, each reference in
the Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall
mean and be a reference to the Credit Agreement, as amended by such Amendment, (b) confirms and
agrees that the pledge and security interest in the Collateral granted by it pursuant to the
Collateral Documents to which it is a party shall continue in full force and effect, and (c)
acknowledges and agrees that such pledge and security interest in the Collateral granted by it
pursuant to such Collateral Documents shall continue to secure the Obligations purported to be
secured thereby, as amended or otherwise affected hereby.




          This Consent and Confirmation shall be governed by, and construed in accordance with, the laws
of the State of New York. Each of the undersigned hereby irrevocably submits to the non-exclusive
jurisdiction of the courts of the State of New York, New York county and the courts of the United
States of America located in the Southern District of New York and hereby agrees that any legal
action, suit or proceeding arising out of or relating to the foregoing Amendment and this Consent
and Confirmation may be brought against them in any such courts. This Consent and Confirmation may
be executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement. Delivery of an executed counterpart of a
signature page to this Consent and Confirmation by telecopier shall be effective as delivery of a
manually executed counterpart of this Consent and Confirmation.











 



 

	 	 	 	 	 
	 	ENCORE MEDICAL IHC, INC.



ENCORE MEDICAL CORPORATION



ENCORE MEDICAL, L.P.



ENCORE MEDICAL GP, INC.



ENCORE MEDICAL PARTNERS, INC.



ENCORE MEDICAL ASSET CORPORATION



ENCORE — OTI ACQUISITION LLC



EMPI, INC.



EMPI CORP.



EMPI SALES CORP.

 	 
	 	By:  	/s/ Harry L. Zimmerman
 	 
	 	 	Name:  	Harry L. Zimmerman 	 
	 	 	Title:  	Executive Vice President — General Counsel