Exhibit
10.1


 


EXECUTION VERSION


 


AMENDMENT NO. 2 dated as of October 7, 2010
(this “Amendment”),
to the Credit Agreement dated as of November 20, 2007, as amended by
Amendment No. 1 dated as of January 14, 2010 (the “Credit Agreement”), among DJO
FINANCE LLC (f/k/a REABLE THERAPEUTICS FINANCE LLC), a Delaware limited
liability company (the “Company”), DJO
HOLDINGS LLC (f/k/a REABLE THERAPEUTICS HOLDINGS LLC), a Delaware limited
liability company (“Holdings”),
CREDIT SUISSE AG (f/k/a Credit Suisse), as Administrative Agent, Collateral
Agent, Swing Line Lender and an L/C Issuer and each lender from time to time
party thereto (collectively, the “Lenders” and
individually, a “Lender”).


 


A.            Pursuant to the Credit Agreement,
the Lenders have extended credit to the Company.


 


B.            The Company has requested that the
Lenders agree to amend the Credit Agreement in the manner set forth herein in
order to permit the Company to issue the New Subordinated Notes and to use the
proceeds thereof (i) to purchase or otherwise redeem in full all
outstanding Old Subordinated Notes and to pay any accrued and unpaid interest,
premiums or other amounts outstanding in respect of the Old Subordinated Notes,
(ii) to pay the costs, fees, expenses and premiums incurred in connection
with the Old Subordinated Notes Tender Offer, any redemption of the Old
Subordinated Notes, the Amendment and the issuance of the New Subordinated
Notes and (iii) to prepay Term Loans.


 


C.            The Lenders are willing to so amend
the Credit Agreement, on the terms and subject to the conditions set forth
herein.


 


Accordingly,
in consideration of the premises contained herein and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
the parties hereto agree as follows:


 


SECTION 1.  Definitions.  Capitalized terms used but not defined in
this Amendment have the meanings assigned thereto in the Credit Agreement.  The provisions of Section 1.02 of the
Credit Agreement are hereby incorporated by reference herein, mutatis  mutandis.  As used herein, the following terms shall
have the meanings set forth below:


 


“Old Subordinated
Notes Tender Offer” means the offer by the Company to purchase any
and all outstanding Old Subordinated Notes made pursuant to the Offer to
Purchase dated as of October 1, 2010.


 


SECTION 2.  Amendments to Credit Agreement.  (a)  Section 1.01 of the Credit
Agreement is hereby amended by adding the following terms in proper
alphabetical order:


 


“Old
Subordinated Notes” means the $200,000,000
in aggregate principal amount of 11.75% senior subordinated notes due 2014
co-issued by the 


 

















 


Company and DJO Finance
Corporation, a Delaware corporation and wholly owned Subsidiary of the Company.


 


“Old Subordinated Notes Refinancing Date”
means the date of issuance of the New Subordinated Notes.


 


“New
Subordinated Notes” means the senior
subordinated notes in an aggregate principal amount of at least $300,000,000 to
be co-issued by the Company and DJO Finance Corporation on the Old Subordinated
Notes Refinancing Date.


 


“Permitted Loan Refinancing Debt” means
senior, senior subordinated or subordinated Indebtedness issued or incurred by
the Company or a Subsidiary Guarantor; provided that (a) such
Indebtedness shall be unsecured, (b) such Indebtedness shall have a stated
maturity no earlier than, and shall not provide for any scheduled amortization,
principal or sinking fund payments prior to, the date that is 91 days after the
Maturity Date with respect to the Term Loans, (c) the terms and conditions
of such Indebtedness shall not provide for any mandatory prepayment or
redemption, prepayment or redemption at the option of the holder thereof, or
similar mandatory prepayment provisions, other than, subject to reinvestment
rights no less favorable to the Borrower than those under this Agreement and to
rights in respect of the prior repayment of or prior offer to repay the
Obligations, upon the occurrence of a change of control or similar event, asset
sale or casualty or condemnation event and customary acceleration rights following
an event of default, (d) the terms and conditions of such Indebtedness
(other than interest rate, fees, funding discounts, redemption or prepayment
premiums and subordination terms), taken as a whole, are not materially less
favorable to the Company than the terms of the New Notes as of the Old
Subordinated Notes Refinancing Date; provided that a
certificate of a Responsible Officer delivered to the Administrative Agent at
least five Business Days prior to the incurrence of such Indebtedness, together
with a reasonably detailed description of the material terms and conditions of
such Indebtedness or drafts of the documentation relating thereto, stating that
the Company has determined in good faith that such terms and conditions satisfy
the foregoing requirement shall be conclusive evidence that such terms and
conditions satisfy the foregoing requirement unless the Administrative Agent
notifies the Company within such five Business Day period that it disagrees
with such determination (including a reasonable description of the basis upon
which it disagrees) and (e) if such Indebtedness is subordinated to the
Obligations, it is done so on terms no less favorable to the Lenders than the
subordination terms set forth in the Existing Notes Indenture as of the Old
Subordinated Notes Refinancing Date.


 


(b)  Section 1.01
of the Credit Agreement is hereby further amended by amending and restating the
definition of “Existing Notes” in its entirety as follows:


 


“Existing Notes” means (a) prior to the
Old Subordinated Notes Refinancing Date, the Old Subordinated Notes and (b) on
and after the Old Subordinated Notes Refinancing Date, the New Subordinated
Notes.


 


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(c)  Section 1.01
of the Credit Agreement is hereby further amended by amending and restating the
definition of “Existing Notes Indenture” in its entirety as follows:


 


“Existing Notes Indenture” means (a) prior
to the Old Subordinated Notes Refinancing Date, the Indenture for the Old
Subordinated Notes, dated as of November 3, 2006, and (b) on and
after the Old Subordinated Notes Refinancing Date, the Indenture for the New
Subordinated Notes, to be dated as of the Old Subordinated Notes Refinancing
Date.


 


(d)  Section 2.05(b)(iii) of
the Credit Agreement is hereby amended by adding the words “(other than Section 7.03(v))”
immediately following the words “Section 7.03” therein.


 


Section 7.03 of the
Credit Agreement is hereby amended by (i) deleting the word “and” at the
end of clause (u) thereof, (ii) replacing “(u)” in clause (v) thereof
with “(v)”, (iii) redesignating clause (v) thereof as clause (w) thereof
and (iv) adding the following new clause (v) immediately following
clause (u) thereof:


 


“(v) Permitted
Loan Refinancing Debt; provided that
the Net Cash Proceeds of such Indebtedness are offered to prepay Term Loans
pursuant to Section 2.05(b)(iii); and”.


 


SECTION 3.  Other Agreements.  (a)  The Net Cash Proceeds of the New
Subordinated Notes shall be used solely (i) to purchase Old Subordinated
Notes tendered pursuant to the Old Subordinated Notes Tender Offer and/ or
otherwise redeem in full all outstanding Old Subordinated Notes within 30 days
after the Old Subordinated Notes Refinancing Date and, in either such case, to
pay any accrued and unpaid interest, premiums or other amounts outstanding in
respect of such Old Subordinated Notes, (ii) to pay the costs, fees,
expenses and premiums incurred in connection with the Old Subordinated Notes
Tender Offer, any redemption of the Old Subordinated Notes, the Amendment and
the issuance of the New Subordinated Notes and (iii) with respect to any
such Net Cash Proceeds not used or required to be used to repurchase or redeem
in full all outstanding Old Subordinated Notes or make the other payments in
connection therewith in accordance with clauses (i) and (ii) above,
within five Business Days following the closing of the Old Subordinated Notes
Tender Offer, to prepay Term Loans pursuant to Section 2.05(a) of the
Credit Agreement.


 


(b) 
On and after the Old Subordinated Notes Refinancing Date, the words “as of the
Closing Date” immediately following (i) the words “Existing Notes
Indenture” in (x) the definition of the term “Permitted Holdings Debt” in
the Credit Agreement, (y) Section 7.03(h) of the Credit
Agreement and (z) Section 7.03(r) of the Credit Agreement and (ii) the
words “Existing Notes” in Section 7.03(h) of the Credit Agreement,
shall in each case be deemed to read “as of the Old Subordinated Notes
Refinancing Date”.


 


SECTION 4.  Representations and Warranties.  To induce the other parties hereto to enter
into this Amendment, the Company represents and warrants to each of the Lenders
and the Administrative Agent that, after giving effect to this Amendment, (a) the representations and warranties of the Company and each other Loan
Party contained in 


 


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Article V of the Credit Agreement or in
any other Loan Document shall be true and correct in all material respects on
and as of the Amendment Effective Date (as defined below); provided that, to the extent that such
representations and warranties expressly relate to a specified earlier date,
they shall be true and correct in all material respects as of such earlier
date; provided, further,
that, any representation and warranty that is qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and correct in all
respects on such respective dates and (b) no Default or Event of Default has occurred and is
continuing.


 


SECTION 5.  Amendment Fee.  The Company agrees to pay to the
Administrative Agent, for the account of each Lender that executes and delivers
a copy of this Amendment to the Administrative Agent (or its counsel) at or
prior to 12:00 noon, New York City time, on October 5, 2010, an amendment
fee (the “Amendment Fees”) in an
amount equal to 0.05% of the sum of the aggregate principal amount of such
Lender’s Term Loans outstanding as of such date and the Revolving Credit
Commitment (whether used or unused) of such Lender as of such date; provided, that the Company shall have no
liability for any such Amendment Fees if this Amendment does not become
effective in accordance with Section 6 below.  Such Amendment Fees shall be payable in
immediately available funds on, and subject to the occurrence of, the Amendment
Effective Date, shall not be subject to setoff or counterclaim, and shall be in
addition to any other fees or amounts referred to in Section 6 below.


 


SECTION 6.  Effectiveness.  This Amendment shall become effective as of
the date (the “Amendment Effective Date”)
on which the Administrative Agent shall have received (a) counterparts of
this Amendment that, when taken together, bear the signatures of (i) the
Company, (ii) Holdings, and (iii) the Required Lenders, and (b) (i) the
Amendment Fees, (ii) any fees separately agreed in writing by the Company
and Credit Suisse Securities (USA) LLC and (iii) to the extent invoiced
(such invoice to be received by the Company no later than one Business Day
prior to the Amendment Effective Date), reimbursement or payment of all
reasonable and documented out of pocket costs and expenses of the
Administrative Agent and its Affiliates required by Section 10.04 of the
Credit Agreement or by any other Loan Document to be reimbursed or paid by the
Company in connection with this Amendment.


 


SECTION 7.  Effect of this Amendment.  Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of the Lenders or the
Agents under the Credit Agreement or any other Loan Document, and shall not
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document, all of which are ratified and affirmed in all respects and
shall continue in full force and effect. 
Nothing herein shall be deemed to entitle any Loan Party to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different
circumstances.  This Amendment shall
apply and be effective only with respect to the provisions of the Credit Agreement
specifically referred to herein.  This
Amendment shall constitute a “Loan Document” for all purposes of the Credit
Agreement and the other Loan Documents.


 


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SECTION 8.  Counterparts.  This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Delivery by electronic transmission of an executed
counterpart of a signature page to this Amendment shall be effective as
delivery of an original executed counterpart of this Amendment.


 


SECTION 9.  GOVERNING LAW.  (a)  THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


(b)  ANY LEGAL ACTION
OR PROCEEDING ARISING UNDER THIS AMENDMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AMENDMENT, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE,
AND BY EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH PARTY HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS.  EACH PARTY HERETO
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING
IN SUCH JURISDICTION IN RESPECT OF THIS AMENDMENT.


 


(c)  Each party to
this Amendment irrevocably consents to service of process in the manner
provided for notices in Section 10.02 of the Credit Agreement.  Nothing in this Amendment will affect the
right of any party to this Amendment to serve process in any other manner
permitted by law.


 


SECTION 10.  Headings.  Section headings used herein are for
convenience of reference only, are not part of this Amendment and shall not
affect the construction of, or be taken into consideration in interpreting,
this Amendment.


 


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


 


	
   

  	
  DJO
  FINANCE LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
        /s/
  Vickie L. Capps

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Vickie
  L. Capps

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DJO
  HOLDINGS LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
        /s/
  Vickie L. Capps

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Vickie
  L. Capps

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President and Chief Financial Officer 

  



 


 


[Amendment
No. 2 to the Credit Agreement- DJO]


 

















 


	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse, Cayman
  Islands Branch), as Administrative Agent,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
        /s/
  Mikhail Faybusovich

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Mikhail
  Faybusovich

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
        /s/
  Kevin Buddhdew

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kevin
  Buddhdew

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Associate
  

  



 


 


[Amendment
No. 2 to the Credit Agreement- DJO]