Exhibit 10.1


 


SECOND AMENDMENT TO CREDIT
AGREEMENT


 


THIS
SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of the 28th
day of September, 2004 (this “Amendment”), is made among DJ ORTHOPEDICS, LLC, a Delaware limited liability company
(the “Borrower”), DJ ORTHOPEDICS, INC.,
a Delaware corporation (the “Parent”), the other Guarantors (as defined
in the Credit Agreement referred to below) identified on the signature pages
hereto, the Lenders (as defined in the Credit Agreement referred to below)
identified on the signature pages hereto, and WACHOVIA
BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the “Administrative Agent”).


 


RECITALS


 


A.            The Borrower, the Parent, the
Lenders, the Administrative Agent, and the Syndication Agent and Documentation
Agents identified therein are parties to a Credit Agreement, dated as of
November 26, 2003 (as amended, the “Credit Agreement”), providing for
the availability of certain credit facilities to the Borrower upon the terms
and conditions set forth therein. 
Capitalized terms used herein without definition shall have the meanings
given to them in the Credit Agreement.


 


B.            The Borrower has requested certain
amendments to the Credit Agreement.  The
Administrative Agent and the Lenders have agreed to make such amendments on the
terms and conditions set forth herein.


 


STATEMENT
OF AGREEMENT


 


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


 


ARTICLE I


 


AMENDMENTS


 


1.1           Excess Cash Flow.  The definition of “Excess Cash Flow” in
Section 1.1 of the Credit Agreement is hereby amended by (i) deleting
the word “and” from the end of clause (b)(ix) thereof, (ii) replacing
the period at the end of clause (b)(x) thereof with a comma and adding the
word “and” immediately thereafter, and (iii) adding a new
clause (b)(xi) thereof as follows:


 


“(xi) amounts paid by the Parent pursuant to Section 8.6(a)(vi)
to purchase, redeem, retire or otherwise acquire shares of its Capital Stock.”


 


1.2           Stock Purchases.  Section 8.6(a) of the Credit Agreement
is hereby amended by (i) deleting the word “and” from the end of
clause (iv) thereof, (ii) replacing the period at the end of
clause (v) thereof with a semicolon and adding the word “and” immediately
thereafter, and (iii) adding a new clause (vi) thereof as follows:


 





















 


“(vi)        in
addition to transactions permitted under clause (v) above, the Borrower
may declare and make dividend payments and other distributions to the Parent to
enable the Parent to purchase, redeem, retire or otherwise acquire shares of
its Capital Stock (or options or rights to acquire its Capital Stock) in an
aggregate cash amount not exceeding $20,000,000 for all such purchases, redemptions,
retirements and acquisitions from and after September 28, 2004, so long as,
immediately after giving pro forma effect thereto, (A) no Default or Event
of Default shall have occurred and be continuing, and (B) the Borrower
shall have not less than $25,000,000 in a combination of (x) Unutilized
Revolving Credit Commitments plus (y) Cash and Cash Equivalents in
one or more deposit and/or securities accounts with the Administrative Agent or
an Affiliate thereof or with a branch of a bank or other financial institution
located in the United States, in and upon which accounts and the contents
thereof (and all proceeds of the foregoing) the Administrative Agent, for the
benefit of itself and the Lenders, has a Lien and security interest at all
times prior and superior to all other Liens (other than Liens of the types
described in Sections 8.3(v), 8.3(vi), 8.3(viii) and 8.3(ix)).”


 


ARTICLE II


 


REPRESENTATIONS AND WARRANTIES


 


To induce the
Administrative Agent and the Lenders to enter into this Amendment, each of the
Credit Parties represents and warrants to the Administrative Agent and the
Lenders as follows:


 


2.1           Representations and Warranties.  Both immediately before and after giving
effect to this Amendment, all representations and warranties of the Credit
Parties contained herein, in the Credit Agreement (as amended hereby) and in
the other Credit Documents qualified as to materiality are true and correct and
those not so qualified are true and correct in all material respects (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty is
true and correct (if qualified as to materiality) or true and correct in all
material respects (if not so qualified), in each case as of such date).


 


2.2           No Default.  Both immediately before and after giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing.


 


ARTICLE III


 


CONDITIONS PRECEDENT


 


3.1           Conditions of Effectiveness.  This Amendment shall become effective as of
the date when the Administrative Agent shall have received an executed
counterpart hereof from each of the Credit Parties and the Required Lenders.


 


2





















 


ARTICLE IV


 


ACKNOWLEDGEMENT AND CONFIRMATION OF CREDIT PARTIES


 


Each of the
Guarantors hereby acknowledges and consents to all of the terms and conditions
of this Amendment and agrees that this Amendment and all documents executed in
connection herewith do not operate to reduce or discharge such Guarantor’s
obligations under the Guaranty Agreement and the other Credit Documents to
which it is a party.  Further, each of
the Credit Parties hereby (i) confirms its pledge of and grant of a
security interest in all of its Collateral to the Administrative Agent made
pursuant to the Security Agreement, the Pledge Agreement and the other Credit
Documents to which it is a party, (ii) further confirms and agrees that,
after giving effect to this Amendment, the Credit Agreement, the Notes, the
Guaranty Agreement, the Security Agreement, the Pledge Agreement and the other
Credit Documents to which it is a party remain in full force and effect and
enforceable against such Credit Party in accordance with their respective terms
and shall not be discharged, diminished, limited or otherwise affected in any
respect, and (iii) represents and warrants to the Administrative Agent and
the Lenders that it has no knowledge of any claims, counterclaims, offsets, or
defenses to or with respect to its obligations under the Credit Documents, or
if such Credit Party has any such claims, counterclaims, offsets, or defenses
to the Credit Documents or any transaction related to the Credit Documents, the
same are hereby waived, relinquished, and released in consideration of the
execution of this Amendment.  Each of the
Guarantors further waives any defense to its guaranty liability occasioned by
this Amendment.  This acknowledgement and
confirmation by each of the Credit Parties is made and delivered to induce the
Administrative Agent and the Lenders to enter into this Amendment, and each
Credit Party acknowledges that the Administrative Agent and the Lenders would
not enter into this Amendment in the absence of the acknowledgement and
confirmation contained herein.


 


ARTICLE V


 


MISCELLANEOUS


 


5.1           Governing Law.  This Amendment shall be governed by and
construed and enforced in accordance with the laws of the State of New York
(including Sections 5-1401 and 5-1402 of the New York General Obligations Law,
but excluding all other choice of law and conflicts of law rules).


 


5.2           Full Force and Effect.  Except as expressly amended hereby, the
Credit Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. 
As used in the Credit Agreement, “hereinafter,” “hereto,” “hereof,” and
words of similar import shall, unless the context otherwise requires, mean the
Credit Agreement after amendment by this Amendment.  Any reference to the Credit Agreement or any
of the other Credit Documents herein or in any such documents shall refer to
the Credit Agreement and Credit Documents as amended hereby.  This Amendment is limited as specified and
shall not constitute or be deemed to constitute an amendment, modification or
waiver of any provision of the Credit Agreement except as expressly set forth
herein.  This Amendment shall constitute
a Credit Document under the terms of the Credit Agreement.


 


3





















 


5.3           Expenses.  The Borrower agrees on demand (i) to pay all
reasonable fees and expenses of counsel to the Administrative Agent, and (ii)
to reimburse the Administrative Agent for all reasonable out-of-pocket costs
and expenses, in each case, in connection with the preparation, negotiation,
execution and delivery of this Amendment and the other Credit Documents
delivered in connection herewith.


 


5.4           Severability.  To the extent any provision of this Amendment
is prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.


 


5.5           Successors and Assigns.  This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and permitted
assigns of the parties hereto.


 


5.6           Construction.  The headings of the various sections and
subsections of this Amendment have been inserted for convenience only and shall
not in any way affect the meaning or construction of any of the provisions
hereof.


 


5.7           Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.


 


4





















 


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


 


 


	
   

  	
  DJ
  ORTHOPEDICS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DJ
  ORTHOPEDICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DJ
  ORTHOPEDICS CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DJ
  ORTHOPEDICS DEVELOPMENT

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


[signatures continued on following pages]


 





















 


	
   

  	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as Administrative Agent and as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 





















 


	
   

  	
  [NAME OF
  INSTITUTION]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: