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                                                                    EXHIBIT 10.1

                               DJ ORTHOPEDICS LLC


                                       AND


                               JOHN PETER NIELSEN


                                       AND


                             DJ ORTHOPAEDICS PTY LTD



                             SHAREHOLDERS AGREEMENT





                                 MINTER ELLISON
                                     Lawyers
                                  Rialto Towers
                               525 Collins Street
                               MELBOURNE VIC 3000

                                DX 204 Melbourne
                            Telephone (03) 9229 2000
                            Facsimile (03) 9229 2666

                                   JFF 1371372


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                             SHAREHOLDERS AGREEMENT

AGREEMENT                                                           5 April 2001


BETWEEN    DJ ORTHOPEDICS LLC of 2985 Scott Street, Vista, California 92083,
           United States of America (a Delaware limited liability company
           registered in the United States of America) ('DJO')

AND        JOHN PETER NIELSEN of 9 Derribong Place, Thornleigh, NSW 2120
           Australia ('NIELSEN')

AND        DJ ORTHOPAEDICS PTY LTD ACN 094 431 473 of Unit 8, 10 Chilvers Road,
           Thornleigh, New South Wales 2120 Australia ('NEWCO')


RECITALS

A.     DJO manufactures and supplies surgical bracing and other orthopaedic
       products.

B.     Nielsen is the sole director and shareholder of Timax. Timax has agreed
       to grant to Newco the right to distribute Oral Maxillo Facial Products
       worldwide pursuant to the Timax Distribution Agreement.

C.     DJO has acquired the right to distribute ASDM worldwide pursuant to the
       ASDM Terms Sheet.

D.     DJO has agreed to grant to Newco the right to distribute the DJO Products
       in the Territory pursuant to the DJO Distribution Agreement.

E.     Nielsen has incorporated Newco to operate the Business, subject to the
       parties completing the steps set out in clause 3.2.

F.     The parties wish to record in this agreement the commercial terms of
       their agreement for the funding, activities and management of Newco, the
       conduct of the Business and related matters.


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AGREEMENT

1.     DEFINITIONS

       In this agreement, unless the context otherwise requires:

       'ASDM' means the ASDM orthopaedic knee sets, details of which are set out
       in the ASDM Terms Sheet.

       'ASDM TERMS SHEET' means the basic terms of agreement set out in the term
       sheet set out in Schedule 6A.

       'ASDM PRICING' means the pricing at which DJO has agreed to purchase the
       ASDM under the ASDM Terms Sheet.

       'BOARD' means the board of Directors.

       'BUDGET' means the annual budget for Newco adopted by the Board in
       accordance with clause 9.2.

       'BUSINESS' means the business of marketing, distributing, selling and
       servicing:

       (a)    the DJO Products in the Territory; and

       (b)    the Oral Maxillo Facial Products worldwide.

       'BUSINESS DAY' means a day on which banks are open for general banking
       business in Sydney, New South Wales, Australia, excluding weekends and
       public holidays.

       'BUSINESS PLAN' means the business plan for Newco attached as Schedule 4,
       as amended by the parties, in accordance with clause 7.3.

       'CONSTITUTION' means the constitution set out in Schedule 1.

       'CHANGE IN CONTROL' means a change in the ownership of 51% of the share
       capital in a party (where appropriate) from the date of this agreement,
       or a change in the effective control, or ability to make or influence
       decisions, of a party from the date of this agreement.

       'COMMENCEMENT DATE' means March 5, 2001 or such other date as the parties
       hereto agree in writing.

       'CREDIT AGREEMENT' means agreement of that name between DJO, Donjoy LLC
       and certain lenders and dated 30 June 1999 (as amended from time to
       time).

       'DEED OF ACCESSION' means a deed substantially in the form set out in
       Schedule 2.

       'DIRECTOR' means a director of Newco.

       `DJO DISTRIBUTION AGREEMENT' means the distribution agreement set out in
       Schedule 6B.


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       `DJO PRODUCTS' means the surgical bracing, ASDM and all other orthopaedic
       products manufactured or distributed by DJO.

       'EBITDA' means earnings of Newco (excluding the earnings derived from the
       Oral Maxillo Facial Products) before interest, tax, depreciation and
       amortisation as determined in accordance with accounting standards and
       generally accepted accounting principles in the United States of America
       and otherwise subject to the overriding provisions set out in Schedule 8.

       'ENCUMBRANCE' means an interest or power:

       (a)    reserved in or over any interest in any asset including any
              retention of title; or

       (b)    created or otherwise arising in or over any interest in any asset
              under a bill of sale, mortgage, charge, lien, pledge, trust or
              power, and whether existing or agreed to be granted or created.

       'ENGAGE IN' means to participate, assist in (except in an immaterial way)
       or otherwise be directly or indirectly involved as a member, shareholder,
       unit holder, director, consultant, adviser, licensor, licensee,
       contractor, principal, agent, manager, employee, beneficiary, partner,
       associate, trustee or financier.

       'FINANCIAL YEAR' means each period of 12 months commencing on 1 January
       and ending on 31 December or such other period as the Board determines
       and includes:

       (a)    the period from the Commencement Date to 31 December 2001
              (inclusive of both dates); and

       (b)    the period commencing on the last 1 January before the date of
              termination of this agreement and ending on that date of
              termination (inclusive of both dates).

       'FORCE MAJEURE' means in relation to a party, an act, event or cause that
       is beyond the reasonable control of that party, including:

       (a)    act of God, war, sabotage, riot, insurrection, civil commotion,
              national emergency (whether in fact or law), martial law, fire,
              lightning, flood, cyclone, earthquake, landslide, storm or other
              adverse weather conditions, explosion, power shortage, strike,
              lockout or other industrial action, epidemic, quarantine,
              radiation or radioactive contamination;

       (b)    action or inaction of a government or other competent authority
              (including a court of competent jurisdiction) including
              expropriation, restraint, prohibition, intervention, requisition,
              requirement, direction or embargo by legislation, regulation,
              decree or other legally enforceable order; and

       (c)    breakdown of plant, machinery or equipment or shortages of labour,
              transportation, fuel, power, machinery, equipment or material,


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       but excludes any consequences of either party failing to make a payment
       as and when due to any person (whether a party to this agreement or not).

       'INDENTURE' means the document of that name dated 30 June 1999 between
       DJO, Donjoy LLC and the Bank of New York, as trustee, (as amended from
       time to time).

       'MANAGING DIRECTOR' means the person appointed as managing director of
       Newco in accordance with clause 8.2.

       'MONTH' means a calendar month unless otherwise agreed by the parties in
       writing.

       `ORAL MAXILLO FACIAL PRODUCTS' means the oral maxillo facial products
       distributed by Timax.

       `ORAL MAXILLO FACIAL PRODUCTS BUSINESS' means the business of marketing,
       distributing, selling and servicing the Oral Maxillo Facial Products as
       carried on by Timax as at the date of this agreement.

       'PARTY' means a party to this agreement and any other person that
       executes a Deed of Accession and becomes a party to this agreement from
       time to time.

       'PRODUCT' means any product marketed, supplied or sold by the Business.

       'RESTRAINT PERIOD' means the term of this agreement together with each of
       the following periods separately:

       (a)    two years from the date of termination of this agreement;

       (b)    18 months from the date of termination of this agreement;

       (c)    one year from the date of termination of this agreement.

       'RESTRAINT REGION' means each of the following areas separately:

       (a)    the Territory;

       (b)    Australia, New Zealand, Singapore, Indonesia, New Guinea and
              Thailand;

       (c)    Australia, New Zealand, Singapore, Indonesia and Thailand;

       (d)    Australia, New Zealand, Singapore and Indonesia;

       (e)    Australia, New Zealand and Singapore;

       (f)    Australia and New Zealand;

       (g)    Australia.

       'SERVICES AGREEMENT' means the agreement set out in Schedule 3.

       'SHARE' means a fully paid ordinary share in Newco.


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       'SHAREHOLDER' means the registered holder of at least one Share.

       'SIMPLE MAJORITY VOTE' means a vote or resolution passed by:

       (a)    in the case of a vote or resolution of Shareholders, Shareholders
              who together hold more than 50% of the total voting rights of
              those Shareholders present and entitled to vote at a meeting of
              Shareholders; and

       (b)    in the case of a resolution of the Board, Directors who together
              hold more than 50% of the total voting rights of those Directors
              present and entitled to vote at a Board meeting.

       'SUBSIDIARY' has the meaning given in Division 6 of Part 1.2 of the
       Corporations Law.

       'SUPPLEMENTARY AGREEMENT' means the Services Agreement, the DJO
       Distribution Agreement, the Timax Distribution Agreement, the ASDM Terms
       Sheet and all other agreements necessary to give effect to this
       agreement.

       'TERRITORY' means Australia, New Zealand, Malaysia, Singapore, Indonesia,
       New Guinea and Thailand.

       'TIMAX' means Timax Surgical Pty Ltd ACN 094 508 693.

       `TIMAX DISTRIBUTION AGREEMENT' means the distribution agreement set out
       in Schedule 7 between Timax and Newco pursuant to which Timax grants
       Newco the exclusive worldwide distribution rights to the Oral Maxillo
       Facial Products.

       'TRANSFER' means to sell, transfer, assign, pledge, hypothecate or
       otherwise dispose of, whether voluntarily or not and whether or not for
       consideration.

       'UNANIMOUS VOTE' means a vote or resolution passed by:

       (a)    in the case of a vote or resolution of Shareholders, Shareholders
              who together hold all of the Shares; and

       (b)    in the case of a resolution of the Board, all Directors.

2.     OBJECTIVES

2.1    OBJECTIVES

       The objectives of DJO and Nielsen in entering into this agreement are:

       (a)    to regulate the funding, management and control of Newco and their
              dealings as Shareholders in Newco;

       (b)    to ensure that the Business is supported by the Shareholders and
              continues as provided for in this agreement;


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       (c)    to use their respective business skills, know how and experience
              and expertise to manage and conduct the Business; and

       (d)    to ensure that the Business is managed to maximise the
              profitability of Newco.

2.2    CARRYING OUT THE OBJECTIVES

       To carry out the objectives, each party must (as appropriate):

       (a)    be just and faithful and provide full information to each other in
              relation to the affairs and activities of the Business;

       (b)    do or cause to be done all things necessary or desirable to carry
              out this agreement including casting votes as Shareholders and
              causing their nominees to the Board to carry out this agreement;

       (c)    not unreasonably delay any action, approval, direction,
              determination or decision required under this agreement;

       (d)    not do anything which may prejudice Newco or the Shareholders; and

       (e)    use all reasonable endeavours to obtain marketing and sales
              opportunities to enable Newco to carry on the Business.

3.     ESTABLISHMENT OF NEWCO

3.1    NIELSEN WARRANTY - INCORPORATION OF NEWCO

       Nielsen represents and warrants to DJO that Newco:

       (a)    was incorporated in New South Wales as a proprietary company
              limited by shares on 11 September 2000 by Nielsen, with issued
              capital comprising 100 ordinary shares, fully paid; and

       (b)    between the date of incorporation of Newco and the date of this
              agreement, Newco has not carried on any business or incurred any
              liability of any kind except that which would be, as contemplated
              by this agreement, in the ordinary course of business for Newco.

3.2    DEALING WITH NEWCO

       (a)    On or before the date of this Agreement:

              (i)    Nielsen must procure that Timax enters into, and Newco must
                     enter into, the Timax Distribution Agreement;

              (ii)   DJO and Newco will enter into the DJO Distribution
                     Agreement;

              (iii)  DJO will enter into the ASDM Terms Sheet; and

              (iv)   Nielsen and Newco will enter into the Services Agreement.


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       (b)    Within 15 days following the date of this agreement:

              (i)    Nielsen will subscribe to Newco for the issue and allotment
                     by Newco of 39,900 Shares in consideration for his payment
                     of A$300,000, to Newco and procuring Timax to enter into
                     the Timax Distribution Agreement provided that Nielsen must
                     substantiate to the reasonable satisfaction of DJO that he
                     has incurred not less than A$200,000 in establishing and
                     operating Newco since its incorporation, such costs to
                     exclude all legal expenses associated with negotiating this
                     agreement;

              (ii)   DJO will subscribe to Newco for the issue and allotment by
                     Newco of 60,000 Shares in consideration for the promise to
                     transfer to Newco ASDM to the value of A$1,574,520 based on
                     the ASDM Pricing; and

              (iii)  Newco must issue and allot the Shares referred to in
                     clauses 3.2(b)(i) and (ii).

3.3    FURTHER ISSUES OF SHARES

       Other than as provided in clause 3.2, the parties agree to procure that
       the Board does not cause the issue of, and Newco does not issue, any
       Shares or securities in Newco to any person except in accordance with
       this agreement.

4.     COMMENCEMENT OF BUSINESS

4.1    TIMAX

       Following the entering into of the Timax Distribution Agreement, and
       subject to the terms of this agreement and the Timax Distribution
       Agreement, the business of marketing, distributing, selling and servicing
       the Oral Maxillo Facial Products will be operated as a division of Newco.

4.2    [DELIBERATELY BLANK]

4.3    [DELIBERATELY BLANK]

4.4    COMMENCEMENT OF BUSINESS BY NEWCO

       (a)    The parties acknowledge that Newco will carry on the Business on
              and from the date of its incorporation.

       (b)    The parties agree to procure that Newco will not carry on any
              business other than the Business without the approval of the Board
              by Unanimous Vote (including at least one director appointed by
              each of DJO and Nielsen).

       (c)    The parties agree that DJO will be able to consolidate any
              business results related to the sale of the DJO Products by Newco
              following the Commencement Date based on its ownership of Shares
              as contemplated by this agreement.


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5.     NON-COMPETE

5.1    PERIOD AND REGION

       Subject to clauses 5.2 to 5.4 inclusive, in consideration of the mutual
       obligations undertaken by the parties:


       (a)    each Shareholder covenants with the other Shareholder and Newco
              that it will not during the Restraint Period in the Restraint
              Region engage in any business or activity that is the same as, or
              competes in a material way with, the Business or any material part
              of it; and

       (b)    DJO and its related bodies corporate and Newco each covenant with
              Nielsen that they will not for a period of two years from the date
              of termination of the Timax Distribution Agreement in the
              Restraint Region, engage in any business or activity that is the
              same as, or competes in a material way with, the business of Timax
              while Timax remains under the ownership and control of Nielsen.


5.2    INTERPRETATION

       Clause 5.1 has effect as if it consisted of several separate and
       independent covenants and restraints consisting of each separate covenant
       and restraint set out in the clause combined with each separate Restraint
       Period and of each such separate combination combined with each separate
       Restraint Region.

5.3    SEVERABILITY

       If any of:

       (a)    the several separate and independent covenants and restraints in
              clause 5.1 are or become invalid or unenforceable for any reason,
              then that invalidity or inability to enforce will not affect the
              validity or enforceability of any of the other separate and
              independent covenants and restraints in clause 5.1; and

       (b)    the prohibitions and restrictions in clause 5.1 are judged to go
              beyond what is reasonable in the circumstances and necessary to
              protect the goodwill of the Business and the respective interests
              of the parties, but would be judged reasonable and necessary if
              any activity were deleted, or any period or area were reduced,
              then the prohibitions or restrictions apply with that activity
              deleted, or that period or area reduced by the minimum amount
              necessary.

5.4    PROVISOS

       (a)    A Shareholder together with its associates may hold in the
              aggregate up to 5% of the shares in a listed company even though
              the company carries on any of the activities referred to in clause
              5.1.


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       (b)    Nothing in clause 5.1 will prevent a party from giving effect to
              its obligations under this agreement or any Supplementary
              Agreement.

       (c)    Nothing in clause 5.1 will prevent Nielsen from distributing,
              selling or otherwise dealing with the Oral Maxillo Facial Products
              if the Timax Distribution Agreement is properly terminated.

6.     BOARD OF DIRECTORS OF NEWCO

6.1    NUMBER OF DIRECTORS

       The parties agree that Newco will have not less than two and not more
       than three Directors.

6.2    NOMINEES

       (a)    While it holds any Shares (but not otherwise), DJO:

              (i)    is entitled to appoint up to two Directors, one of which
                     will be Les Cross unless otherwise determined by DJO; and

              (ii)   may require the removal or substitution of any Director so
                     appointed,

       (b)    While he holds any Shares (but not otherwise), Nielsen:

              (i)    is entitled to be appointed a Director; and

              (ii)   may require his substitution as a Director by any person he
                     so nominates,

              provided that no other Shareholder from time to time has the right
              to appoint or remove Directors except as provided in the
              Corporations Law.

       (c)    Each Shareholder, to the extent allowed at law, must vote all
              Shares held by it for the election to the Board of all individuals
              nominated in accordance with clause 6.2 and for the removal from
              the Board of all Directors proposed to be removed in accordance
              with clause 6.2.

6.3    CHAIRPERSON

       The parties agree that at each Board meeting a Director appointed by DJO
       will be appointed Chairperson of the Board meeting.

6.4    VOTES

       The voting entitlements of the Directors are as follows:

       (a)    the Directors appointed by DJO in accordance with clause 6.2 will
              have:

              (i)    in the case of one Director, two votes; or


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              (ii)   in the case of two Directors, one vote each.

       (b)    Nielsen or his substitute permitted under clause 6.2, is entitled
              to one vote; and

       (c)    the Chairperson will not have a casting vote.

6.5    ALTERNATE DIRECTORS

       (a)    Each Director may appoint an alternate director.

       (b)    A person may be appointed as the alternate for more than one
              Director, in which case that person will be entitled to cast such
              number of votes as the number of Directors he or she represents
              (having regard to clause 6.4).

6.6    BOARD MEETINGS

       The parties agree that:

       (a)    at least two meetings of the Board will take place in the first
              Financial Year and thereafter the number of meetings will be
              agreed by the Board;

       (b)    additional Board meetings will be convened at the written request
              of any Shareholder holding, or Shareholders that together hold,
              not less than 5% of the Shares;

       (c)    Board meetings may be conducted by telephone conference, video
              conference or any similar means of audio or audio-visual
              communication;

       (d)    before the closure of each Board meeting the Chairperson will
              prepare and distribute the notice and agenda for the following
              Board meeting in accordance with clause 6.6(e), unless otherwise
              agreed in writing by the Directors by Unanimous Vote;

       (e)    at least 10 Business Days' prior written notice of Board meetings,
              together with an agenda, must be given to all Directors, unless
              otherwise agreed in writing by the Directors or so resolved (and
              recorded at any meeting) by Unanimous Vote;

       (f)    the agenda for Board meetings must be prepared with the
              consultation of the other Directors, except for Board meetings
              convened at the request of a Shareholder under clause 6.6(b),
              where the agenda must be prepared by that Shareholder;

       (g)    no resolution of the Board can be passed in respect of any matter
              of which notice was not given in the agenda for that meeting,
              unless otherwise agreed in writing by the Directors or so resolved
              (and recorded at any meeting) by Unanimous Vote; and

       (h)    no resolution of the Board can be passed in respect of any action
              to be taken or not taken (as the case may be) unless the Board has
              confirmed with DJO


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              that the action to be taken or not taken (as the case may be) does
              not constitute a default under the Credit Agreement and/or
              Indenture.

6.7    DIRECTORS' EXPENSES

       Unless the Shareholders otherwise determine by Unanimous Vote, Directors
       will be reimbursed by Newco for any expenses properly incurred by any
       Director solely in connection with preparing for, travelling to or
       attending Board meetings but excluding any consequential costs or loss of
       attending such meetings, provided that such reimbursable amounts do not
       exceed those provided for in the Budget for the relevant Financial Year.

6.8    QUORUM

       A quorum for meetings of the Board will be constituted by the attendance
       (in person or by alternate) of one nominee Director appointed by each of
       DJO and by Nielsen.

6.9    QUORUM NOT PRESENT

       If a quorum is not present within 30 minutes of the time specified for a
       meeting of the Board, the meeting will be adjourned to the date and time
       five Business Days after the original time of the meeting and at the same
       place or by the same means if so elected under clause 6.6(c) as the
       original meeting and no notice of such adjourned meeting is required to
       be given to Directors. Any Directors in attendance (in person or by
       alternate) at that adjourned meeting will constitute a quorum.

7.     AUTHORISATION POLICY

7.1    GENERAL

       Except as otherwise specified in this agreement or the Corporations Law:

       (a)    the Board will have full power to direct the activities of Newco;
              and

       (b)    all decisions of the Shareholders and Board will be made by Simple
              Majority Vote.

7.2    DECISIONS BY UNANIMOUS VOTE

       Subject to clause 7.4, all decisions with respect to the matters set out
       in clause 7.3 must be made only by a Unanimous Vote of the Shareholders
       provided that no matter set out in clause 7.3 will be referred to the
       Shareholders unless a Unanimous Vote of the Board first authorises that
       referral. For the avoidance of doubt, unless there is a Unanimous Vote of
       the Board and a Unanimous Vote of the Shareholders in relation to a
       matter set out in clause 7.3, no decision will have been made and no
       action is authorised to be taken in relation to such a matter.

7.3    DECISIONS

       Subject to clauses 7.2 and 7.4, the parties agree that the following
       matters must be put to the Shareholders for decision by Unanimous Vote:


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       (a)    any amendment to the Constitution of Newco;

       (b)    winding up of Newco other than as provided for in this agreement;

       (c)    reorganisation, reclassification, reconstruction, consolidation or
              subdivision of the capital of Newco (including any buy-back or
              redemption of shares in the capital of Newco) or the creation of
              any different class of securities in the capital of Newco;

       (d)    the issue or allotment of any securities (including Shares) by
              Newco, other than in accordance with clauses 3.2 or 12(d);

       (e)    the delegation of any power of the Board, including the
              establishment of any committee of the Board;

       (f)    the incorporation or establishment of any subsidiary of Newco;

       (g)    the entry by Newco into any joint venture or partnership;

       (h)    approval or amendment of the Budget;

       (i)    approval or amendment of the Business Plan;

       (j)    declaring any dividend;

       (k)    the purchase by Newco of any assets (excluding office equipment
              and supplies and loan kits and instruments) or the making of any
              investment with a value of $100,000 (or where the value is
              expressed in currency other than Australian dollars, the
              equivalent of USD50,000) or more or a commitment to purchase in
              any one year a number of assets (excluding office equipment and
              supplies and loan kits and instruments) or make a number of
              investments with an aggregate value of $200,000 or more (or where
              the value is expressed in currency other than Australian dollars,
              the equivalent of USD100,000);

       (l)    the sale of the Business or major undertaking of Newco;

       (m)    the sale of any asset of Newco with a value of $100,000 (or where
              the value is expressed in currency other than Australian dollars,
              the equivalent of USD50,000) or more or entry into of a commitment
              to sell in any period of 12 months a number of assets of Newco
              with an aggregate value of $200,000 (or where the value is
              expressed in currency other than Australian dollars, the
              equivalent of USD100,000) or more (excluding the sale of Products
              in the ordinary course of business);

       (n)    subject to clauses 7.3(k) and 7.3(m), Newco entering into,
              amending or terminating any contract other than as part of the
              conduct of the Business in the ordinary course;


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       (o)    any item of expenditure not otherwise specifically provided for in
              clause 7.3 or the Budget in excess of $100,000 (or where the value
              is expressed in currency other than Australian dollars, the
              equivalent of USD50,000);

       (p)    the provision of any mortgage, charge, debenture, pledge, lien or
              other encumbrance by Newco over any or all of its assets,
              property, undertaking or uncalled capital or Newco giving any
              guarantee or indemnity;

       (q)    other than in the ordinary course of the Business, Newco making
              any loan or providing any financial accommodation;

       (r)    Newco borrowing any amount from any person other than normal trade
              terms in respect of materials purchased by Newco in the ordinary
              course of the Business;

       (s)    any change in the strategic direction of Newco or the commencement
              by Newco of any new business other than the Business, as carried
              on at the time of the proposed change;

       (t)    subject to clause 11.3, the appointment or removal of the auditors
              of, and legal advisers to, Newco.

       (u)    the entry by Newco into any agreement or arrangement (whether in
              writing or otherwise) with a Shareholder or any associate of a
              Shareholder; and

       (v)    any subsidiary of Newco formed in accordance with this agreement
              doing any act (or the equivalent of any act) outlined in clause
              7.3(a) to (u) inclusive.

7.4    APPROVAL IN BUDGET

       Clauses 7.3(k) and 7.3(m) do not apply to a specific decision in a
       Financial Year if that decision has been expressly approved (including as
       to the quantum of the item concerned) in the Budget for that Financial
       Year.

7.5    SHAREHOLDER MEETING QUORUM

       The quorum necessary for any meeting of the members of Newco will be a
       representative of DJO and a representative of Nielsen. If a quorum is not
       so present, the meeting shall be adjourned to the same time and place on
       the same Business Day in the following week and at that adjourned meeting
       the quorum will be a representative of either DJO or Nielsen.

8.     MANAGEMENT AND STAFF

8.1    DAY TO DAY CONTROL

       Subject to clause 7, the management of the Business will, on a day to day
       basis, be under the direction of the Managing Director (in accordance
       with the Business Plan and Budget, as appropriate), who will report and
       be responsible to the Board for the activities and operations of the
       Business provided that the Managing Director must


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       not permit or allow Newco to do or refrain from doing (as the case may
       be) anything that would cause Newco or DJO to be in default under the
       Credit Agreement and/or Indenture.

8.2    MANAGING DIRECTOR

       (a)    The first Managing Director, will be Nielsen, who will (subject to
              clause 8.2(b)) hold office until Nielsen ceases to hold Shares.

       (b)    In the event of Nielsen's death, retirement, resignation, removal
              in accordance with the Services Agreement or inability to serve,
              the Board may appoint a successor or replacement Managing Director
              by a Simple Majority Vote.

9.     BUSINESS PLAN, BUDGET AND FINANCIAL REPORTS

9.1    BUSINESS PLAN

       (a)    The Business Plan for the Financial Year ending 31 December 2001
              is set out in Schedule 4.

       (b)    The parties must review the Business Plan on an annual basis at
              the same time as the Budget.

9.2    BUDGET

       (a)    The Budget for the Financial Year ending on 31 December 2001
              (which is hereby approved by DJO and Nielsen) and the basic
              principles to be applied in developing the financial projections
              for the period 2001 to 2005 are set out in Schedule 5.

       (b)    The parties must use all reasonable endeavours to agree on the
              financial projections for the period 2001 to 2005 as soon as is
              practicable after the date of this agreement.

       (c)    The parties will procure that, for each Financial Year after 31
              December 2001, the Board considers and submits for approval by the
              Shareholders a Budget (including a profit and loss statement,
              balance sheet, cash flow statement and budgeted capital
              expenditure statement) in accordance with the following procedure:

              (i)    at least three months before the relevant Financial Year,
                     the Managing Director must submit to the Shareholders a
                     draft Budget; and

              (ii)   the Shareholders must consider and seek to approve the
                     Budget (with or without amendments) by Unanimous Vote
                     before the commencement of the relevant Financial Year.

       (d)    If the Board fails to adopt a Budget before the commencement of
              any Financial Year, the parties agree that the Budget from the
              previous


                                       14
<PAGE>   16
              Financial Year will continue to apply on an annual basis in
              respect of each following Financial Year until the Board adopts a
              new Budget provided that each Budget's total expenditure amount
              will be increased by the percentage change in the Australian
              Consumer Price Index (weighted average of eight capital cities)
              index published by the Australian Bureau of Statistics or any
              successor index ('CPI') over that Financial Year (being the
              quotient of the level of CPI at the end of the relevant Financial
              Year divided by the level of CPI at the end of the previous
              Financial Year, which quotient will be multiplied by the Budget
              amount for the relevant Financial Year and then payable in the
              next Financial Year) provided always that if the quotient is less
              than one it is deemed to be one).

9.3    REPORTING

       The Managing Director must provide the Board with sufficient management
       and financial information and reports to allow the other Directors
       appointed in accordance with clause 6.2(a) to monitor the conduct of the
       Business, including:

       (a)    monthly operating and financial reports, incorporating an
              unaudited profit and loss statement, cash flow statement and
              balance sheet for each of the Oral Maxillo Facial Products
              Business, the part of the Business relating to the DJO Products as
              a whole and the part of the Business relating to the ASDM. These
              reports must conform to DJO's internal consolidated reporting
              requirements from time to time and comply with generally accepted
              accounting principles in the United States of America;

       (b)    within one month after the end of each Financial Year:

              (i)    a profit and loss statement and cash flow statement for
                     that Financial Year;

              (ii)   a balance sheet and a statement of equity as at the end of
                     that Financial Year,

              all conforming to DJO's internal consolidated reporting
              requirements from time to time, complying with generally accepted
              accounting principles in the United States of America and having
              been audited by Newco's auditors; and

       (c)    any other reports, reviews or statements that the Board may
              reasonably require.

9.4    DJO PLANS

       DJO undertakes to provide Newco with copies of DJO's strategic plans as
       in force from time to time and the parties must ensure that the Business
       Plan and Budget take DJO's plans into account as appropriate.


                                       15
<PAGE>   17

10.    FORCE MAJEURE

10.1   OBLIGATIONS SUSPENDED

       If a party becomes unable wholly or in part by reason of the occurrence
       of an event of Force Majeure to carry out any of its duties or
       obligations under this agreement:

       (a)    it must promptly give the other party written notice of:

              (i)    the occurrence of the event of Force Majeure and as many
                     details concerning it as are then known;

              (ii)   so far as can be estimated, the probable extent to which it
                     will be unable to perform or will be delayed in performing
                     the duty or obligation;

       (b)    the relevant duty or obligation, so far as it is affected by the
              event of Force Majeure, will be suspended during the continuance
              of the event of Force Majeure; and

       (c)    the party affected by the event of Force Majeure must use all
              reasonable efforts to overcome or remove that event as quickly as
              possible.

10.2   SETTLEMENT OF DISPUTE

       Clause 10.1 does not require a party to settle any labour or other
       dispute, on terms contrary to its wishes or to contest the validity or
       enforceability of any law, regulation or decree by way of legal
       proceedings.

11.    ACCOUNTS, AUDIT AND TAX RETURNS

11.1   ACCOUNT AND RECORDS

       The Managing Director must ensure that the accounts, records and
       accounting information of Newco:

       (a)    are maintained in accordance with the Corporations Law and all
              other applicable laws;

       (b)    reflect generally accepted accounting principles and approved
              accounting standards; and

       (c)    are audited annually.

11.2   ACCESS TO RECORDS

       (a)    Each Shareholder or its nominee appointed in writing is entitled,
              on giving reasonable notice, to full access during normal business
              hours and to inspect and copy (at its own cost) all of the
              accounts, records and accounting information of Newco.


                                       16
<PAGE>   18

       (b)    Access may be exercised through an employee of, or consultant or
              adviser to, the Shareholder, subject to the requirements of
              confidentiality set out in clauses 16 and 17.

11.3   AUDITOR

       (a)    Any auditor of Newco:

              (i)    must be a registered company auditor and a chartered
                     accounting firm in Australia;

              (ii)   must be willing to undertake the audit at a cost that is
                     reasonably acceptable to DJO and Nielsen;

              (iii)  must not be the auditor of either DJO or Nielsen unless
                     otherwise agreed in writing by DJO and Nielsen; and

              (iv)   must be approved by the auditor of DJO from time to time
                     (such approval not to be unreasonably withheld).

       (b)    The parties agree that the first auditor of Newco will be
              determined by the Board promptly after the date of this agreement.

11.4   TAX RETURNS

       (a)    Subject to clause 16.2, in respect of each Financial Year, Newco
              must provide each Shareholder with:

              (i)    a draft of any proposed income tax return of Newco for
                     comment before that return is submitted to the Board for
                     review; and

              (ii)   copies of such tax related material as is reasonably
                     necessary for the Shareholders to:

                     (A)    review the draft income tax return of Newco; and

                     (B)    assist with the preparation of their and their
                            associates' respective income tax returns.

       (b)    The parties agree that all income tax returns of Newco must be
              submitted to the Board for review and approval before being lodged
              with the Commissioner of Taxation.

       (c)    If there is any dispute as to the basis on which the tax return
              should be prepared and lodged and the dispute is not resolved by
              the date which is one month before the due date for lodgement of
              the return, the auditor of Newco will (with such technical
              assistance as it requires) resolve the dispute and the return will
              be lodged on the basis determined by the auditor.


                                       17
<PAGE>   19

11.5   REVIEW BY SHAREHOLDERS

       Each Shareholder is entitled to seek the review by, or advice from, its
       auditor or financial advisers from time to time concerning all accounting
       and income tax records, reports and returns of Newco and to consult with
       Newco's auditors or other relevant advisers concerning any matter arising
       from that process.

12.    FINANCING ARRANGEMENTS

       (a)    The objective of the Shareholders is that capital additional to
              that provided for in the Business Plan and the Budget will only be
              sought if necessary for the purpose of working capital or an
              agreed investment and to the extent that Newco cannot borrow from
              third parties (including financial institutions) on terms
              reasonably acceptable to all parties.

       (b)    Any additional capital may be provided by way of equity and/or
              loans from Shareholders in proportions equal to their holding of
              Shares, or any other means that is determined, as agreed by
              Unanimous Vote of the Shareholders.

       (c)    Subject to clause 12(d), the parties agree that all funding by the
              Shareholders will be contributed in the proportions:

              (i)    DJO - 60%; and

              (ii)   Nielsen - 40%.

       (d)    If funding is needed by Newco for the purposes of ensuring its
              solvency or otherwise following a resolution in accordance with
              clause 7.3, and one Shareholder is unable or unwilling to
              contribute in proportion to its holding of Shares, the other
              Shareholder may instead make such contribution by way of:

              (i)    in the case of ensuring solvency, fully paid preferred
                     equity contribution (with preferred rights to a return on
                     winding up but otherwise having the same rights as Shares)
                     and the non-contributing Shareholder's holding of equity in
                     Newco will be proportionally diluted; and

              (ii)   otherwise, by way of intercompany note (which note may be
                     convertible into equity) or fully paid preferred equity
                     contribution provided that the form of funding must first
                     be approved by Unanimous Vote of the Board.

              For the avoidance of doubt:

              (iii)  all fully paid preferred equity is to be valued on the
                     basis that it is equal in value to a Share (the value of
                     which must be assessed by the auditor of Newco);


                                       18
<PAGE>   20

              (iv)   if funding is required to ensure the solvency of Newco, a
                     Simple Majority Vote of the Board and Shareholders will be
                     sufficient to authorise the raising of funding in
                     accordance with this clause up to an amount determined by
                     the auditor of Newco as being necessary to ensure such
                     solvency and allow Newco to continue to conduct its
                     Business without either Newco or its Directors breaching
                     any laws concerning insolvent trading; and

              (v)    in no circumstances may an issue of securities occur if
                     such issue would result in a default under the Credit
                     Agreement or Indenture by any person bound by the Credit
                     Agreement or Indenture.

13.    TRANSFER OF SHARES

13.1   ENCUMBRANCES

       A Shareholder must not provide security over its Shares in favour of any
       person nor allow any such security or encumbrance to subsist, except:

       (a)    with the written approval of all other Shareholders; or

       (b)    as expressly provided in this agreement.

13.2   TRANSFERS OF SHARES

       The Shareholders must not sell or transfer any legal or beneficial
       interest in any Shares to any person except:

       (a)    with the written approval of all other Shareholders (but subject
              to clause 14); or

       (b)    in the case of a Shareholder being a company, to a company that is
              ultimately a 100% wholly owned subsidiary of the ultimate holding
              company of that Shareholder (but subject to clause 14); or

       (c)    in accordance with clauses 13.3, 13.4, or 18.

13.3   PUT OPTION

       (a)    DJO grants to Nielsen a put option under which Nielsen may require
              DJO to acquire all of the Shares held by Nielsen for a purchase
              price per Share calculated in accordance with clause 13.3(b) with
              completion to occur following satisfaction of the conditions set
              out in clause 13.3(c) and otherwise in accordance with clauses
              13.3(d), (e) and (f). The put option is exercisable in respect of
              all, but not part only, of the Shares held by Nielsen and is
              exercisable by notice in writing to DJO and Newco on Nielsen
              becoming aware of any of the following after the date of this
              agreement and for a period of 40 Business Days following Nielsen
              becoming aware (inclusive of both dates):


                                       19
<PAGE>   21

              (i)    if DJO incorporates or acquires a subsidiary in addition to
                     Newco in Australia that carries on business in competition
                     to the Business; or

              (ii)   if any two of the right of DJO to distribute the ASDM
                     orthopaedic knee sets under the ASDM Terms Sheet, the right
                     of Newco to distribute the Oral Maxillo Facial Products
                     under the Timax Distribution Agreement and the right of
                     Newco to distribute the surgical bracing products under the
                     DJO Distribution Agreement are terminated; or

              (iii)  if Nielsen's employment with Newco is terminated by Newco
                     otherwise than in accordance with the terms of the Services
                     Agreement; or

              (iv)   if DJO proposes to sell its Shares in Newco; or

              (v)    on the third anniversary of the date of this agreement and
                     each successive anniversary of that date; or

              (vi)   if a Relevant Default by DJO that adversely affects Nielsen
                     occurs, as defined in clause 18.1, and is not rectified
                     within the period therein provided.

       (b)    The purchase price per Share payable on the exercise of the option
              granted in clause 13.3(a) is the greater of:

              (i)    the amount calculated by applying the formula:

                     P = 7 X RE  X  1
                                    --
                                    Y
                     where: P means the price per Share;

                            RE means the EBITDA for the last completed four
                            quarter period of audited business results prior to
                            Nielsen exercising the put option; and

                            Y means the number of Shares on issue; and

              (ii)   an amount equal to (x) A$300,000 plus all expenses
                     substantiated by Nielsen in accordance with clause
                     3.2(b)(i), plus interest compounded monthly calculated on
                     this amount from the Commencement Date until the date of
                     exercise of the put option at the rate of 10% per annum
                     divided by (y) the number of Shares held by Nielsen at the
                     time of exercise.

       (c)    Any acquisition of Shares pursuant to the exercise of the put
              option referred to in clause 13.3(a) is conditional on
              satisfaction of all of the following (and the put option exercise
              may not be completed unless all of these conditions are either
              satisfied or waived by DJO):


                                       20
<PAGE>   22

              (i)    DJO obtaining all requisite governmental and third party
                     consents or waivers that are necessary for it to acquire
                     the Shares (including any waivers or consents that are
                     necessary for DJO or Newco to comply with their respective
                     obligations under the Credit Agreement and Indenture and
                     approval, if required, of the Foreign Investment Review
                     Board);

              (ii)   Nielsen obtaining all requisite governmental and third
                     party consents or waivers that are necessary for him to
                     sell the Shares;

              (iii)  negotiation in good faith of a sale agreement and all
                     necessary transfer documents, comprising the provision by
                     Nielsen as vendor of customary representations and
                     warranties regarding his ownership of the Shares and
                     ability to transfer them unencumbered; and

              (iv)   the parties complying with all laws and regulations and any
                     applicable rules of any recognised stock exchange
                     applicable to the acquisition of the Shares including all
                     state and federal securities laws and anti-trust (or
                     competition) laws applicable in both Australia and the
                     United States of America.

       (d)    Any acquisition of Shares pursuant to the exercise of the put
              option referred to in clause 13.3(a) will be completed within 45
              Business Days of service on DJO of the notice of exercise of the
              put option subject to a reasonable extension of time to permit
              both the conditions precedent set out in clause 13.3(c) to be
              satisfied and the accounts of Newco to be prepared and audited to
              facilitate the calculation of the price under clause 13.3(b).

       (e)    Upon the acquisition of Shares pursuant to the exercise of the put
              option referred to in clause 13.3(a) above, in addition to
              receiving the purchase price per Share payable under clause
              13.3(b) above, Nielsen is also entitled to receive an amount equal
              to the sum of (i) A$250,000 (which represents the paid in capital
              with respect to the Oral Maxillo Facial Products Business) and
              (ii) forty percent (40%) of any retained earnings attributable to
              the Oral Maxillo Facial Products Business, which retained earnings
              shall be calculated in a manner consistent with the past practices
              of Newco.

       (f)    If, in accordance with clause 13.3(a), Nielsen serves notice on
              DJO and Newco exercising his put option, but pursuant to clause
              13.3(c)(i) DJO is unable to acquire the Shares under the put
              option within 45 Business Days of that notice because of the
              operation of the Credit Agreement and/or Indenture ('BLOCKED PUT
              EXERCISE') then (i) DJO will immediately provide Nielsen with a
              written notice, advising Nielsen of the restrictions in the Credit
              Agreement and/or Indenture which prohibit the acquisition of the
              Shares and (ii) the purchase price per share payable upon the
              exercise of such put option once it is permitted under the Credit
              Agreement and/or Indenture will be calculated for the purposes of
              clause 13.3(b)(i) as of the date on which Nielsen gave notice of
              the Blocked Put Exercise.


                                       21
<PAGE>   23

13.4   CALL OPTION

       (a)    Nielsen grants to DJO a call option under which DJO may require
              Nielsen to sell to it all the Shares held by Nielsen for a
              purchase price per share calculated in accordance with clause
              13.3(b) (but subject to clause 13.4(b)) with completion to occur
              following satisfaction of conditions equivalent to those set out
              in clause 13.3(c) and otherwise in accordance with clauses 13.3(d)
              and (e). The call option is exercisable in respect of all, but not
              part, of the Shares held by Nielsen and is exercisable by notice
              in writing by DJO to Nielsen and Newco on DJO becoming aware of
              any of the following after the date of this agreement and for a
              period of 40 Business Days following DJO becoming aware (inclusive
              of both dates):

              (i)    if a Relevant Default by Nielsen that adversely affects DJO
                     or Newco occurs, as defined in clause 18.1, and is not
                     rectified within the period therein provided; or

              (ii)   if any two of the right of DJO to distribute the ASDM
                     orthopaedic knee sets under the ASDM Terms Sheet, the right
                     of Newco to distribute the Oral Maxillo Facial Products
                     under the Timax Distribution Agreement and the right of
                     Newco to distribute the surgical bracing products under the
                     DJO Distribution Agreement are terminated; or

              (iii)  following the date on which Nielsen terminates his
                     employment with Newco other than in accordance with the
                     terms of the Services Agreement; or

              (iv)   during the period commencing on the fourth anniversary of
                     the date of this agreement and concluding 40 Business Days
                     thereafter (inclusive of both dates) or any equivalent
                     period in respect of each succeeding anniversary of that
                     date.

       (b)    If, in accordance with clause 13.4(a), DJO serves notice on
              Nielsen and Newco exercising its call option, but pursuant to
              clause 13.3(c)(i), DJO is unable to acquire the Shares under the
              call option within 45 Business Days of that notice because of the
              operation of the Credit Agreement and/or Indenture ('BLOCKED CALL
              EXERCISE'), then (i) DJO will immediately provide Nielsen with a
              written notice, advising Nielsen of the restrictions in the Credit
              Agreement and/or Indenture which prohibit the acquisition of the
              Shares and (ii) the purchase price per share payable upon the
              exercise of such call option by DJO once it is permitted under the
              Credit Agreement and/or Indenture will be calculated for purposes
              of clause 13.3(b)(i) as of the date on which DJO gave notice of
              the Blocked Call Exercise.

13.5   TIMAX DISTRIBUTION AGREEMENT


       (a)    The parties agree that despite any contrary provision in the Timax
              Distribution Agreement, the Timax Distribution Agreement shall
              terminate on the


                                       22
<PAGE>   24

              completion of the acquisition of Shares pursuant to the exercise
              of the options referred to in clauses 13.3 and 13.4 or the
              acquisition of Shares pursuant to clause 26.

       (b)    On termination of the Timax Distribution Agreement, Nielsen must
              at that time procure the purchase from Newco of all Oral Maxillo
              Facial Products on the terms as to price and payment set out in
              the Timax Distribution Agreement (but subject to clause 21).

       (c)    If, in accordance with clause 13.3(a) or 13.4(a), Nielsen or DJO,
              as applicable, serves notice exercising its put option or call
              option, as applicable, but pursuant to clause 13.3(c)(i), DJO is
              unable to acquire the Shares within 45 Business Days of that
              notice because of the operation of the Credit Agreement and/or the
              Indenture, then:

              (i)    Nielsen may elect to terminate the Timax Distribution
                     Agreement by notice in writing to DJO and Newco at any time
                     after the expiration of 45 Business Days from the date on
                     which he or DJO served notice exercising its option; and

              (ii)   if Nielsen elects to terminate the Timax Distribution
                     Agreement in accordance with clause 13.5(c)(i), the parties
                     agree that the Timax Distribution Agreement shall terminate
                     immediately.


14.    DEED OF ACCESSION

       The parties must procure that the Board does not register a person as a
       Shareholder, whether pursuant to a transfer of Shares or otherwise,
       unless that person has first entered into a Deed of Accession agreeing to
       be bound by this agreement.

15.    RESOLUTION OF DISPUTES

15.1   NO PROCEEDINGS

       A party must not start court proceedings (except proceedings seeking
       interlocutory relief) in respect of a dispute arising out of this
       agreement or any Supplementary Agreement ('DISPUTE') unless it has first
       complied with clause 15.

15.2   NOTIFICATION OF DISPUTE

       A party claiming that a Dispute has arisen must promptly notify each
       other party to the Dispute giving details of the basis of the Dispute.

15.3   REASONABLE ENDEAVORS TO RESOLVE DISPUTE

       During the 15 Business Days period after a notice is given under clause
       15.2 (or any longer period agreed in writing by the parties to the
       Dispute) ('INITIAL PERIOD'), each


                                       23
<PAGE>   25

       party to the Dispute ('DISPUTANT') must use all reasonable endeavors to
       resolve the Dispute.

15.4   REFERRAL OF DISPUTES

       If the Disputants are unable to resolve the Dispute within the Initial
       Period, each Disputant agrees that the Dispute must be referred, at the
       request of any Disputant, to the chief executive officer of DJO, Nielsen,
       the chairperson of Newco and the most senior officer of any other party
       acceding to this agreement, who must try and resolve the Dispute within a
       period of 10 Business Days. Any such request for referral must be made
       within five Business Days of the conclusion of the Initial Period.

15.5   TERMINATION OF DISPUTE RESOLUTION PROCESS

       If, following a request for referral under clause 15.4, the Dispute has
       not been resolved within 10 Business Days after the date of the request,
       a Disputant that has complied with clause 15.4 may terminate the dispute
       resolution process under clause 15 by giving notice to each other
       Disputant.

15.6   BREACH OF CLAUSE 15

       If, in relation to a Dispute, a Disputant breaches any provision of
       clauses 15.1 to 15.4, each other Disputant need not comply with clauses
       15.1 to 15.4 in relation to that Dispute.

16.    RIGHTS TO INFORMATION

16.1   RIGHTS TO INFORMATION

       Subject to clause 16.2, the parties agree that:

       (a)    each Shareholder is entitled to copies of any information in
              relation to the Business received by the Board ('BOARD
              INFORMATION'); and

       (b)    they will procure that Newco provides to each Shareholder all
              information reasonably requested by that Shareholder.

16.2   CONFIDENTIALITY

       The parties agree that the Board Information and information disclosed
       under clauses 11.4(a) or 16.1 (collectively the 'DISCLOSED INFORMATION')
       is confidential and each Shareholder must:

       (a)    keep confidential the Disclosed Information;

       (b)    use the Disclosed Information solely in relation to, or in the
              best interests of, Newco and the Business; and

       (c)    disclose the Disclosed Information only to those of its employees,
              advisers, related entities, shareholders, banks, insurers and
              rating agencies who have


                                       24
<PAGE>   26

              a need to know (and only to the extent each has a need to know)
              and who are aware and agree that the Board Information must be
              kept confidential and, if reasonably required by Newco sign an
              undertaking of confidentiality in favour of the Owner in a form
              reasonably approved by the Owner from time to time.

16.3   EXCEPTIONS

       The obligations of confidentiality under clause 16 do not extend to
       information that (whether before or after this agreement is executed):

       (a)    is disclosed to a party under this agreement, but at the time of
              disclosure is rightly known to that party and not subject to an
              obligation of confidentiality on that party;

       (b)    at the time of disclosure is within the public domain or after
              disclosure comes into the public domain other than by a breach or
              breaches of any obligation under this clause 16;

       (c)    is required, in the reasonable opinion of a party, by law or the
              rules of any recognised securities exchange (whether in Australia,
              the United States of America or elsewhere) to be disclosed and the
              party required to make the disclosure ensures that information is
              disclosed only to the extent required; or

       (d)    is required, in the reasonable opinion of a party, to be disclosed
              as part of any capital raising or attempt to become listed on any
              recognised stock exchange of that party or any direct or indirect
              shareholder in that party.

17.    PROTECTION OF CONFIDENTIAL INFORMATION

17.1   MEANING OF CONFIDENTIAL INFORMATION

       In clause 17, 'CONFIDENTIAL INFORMATION' of a party means all
       confidential information given or made available by that party to another
       party or to Newco, including:

       (a)    industry information, plans, intellectual property, trade secrets,
              client lists, commercially sensitive information and confidential
              know-how; and

       (b)    financial information.

17.2   CONFIDENTIALITY

       Each party (referred to in this clause as the 'RECIPIENT') agrees in
       relation to the Confidential Information of each other party ('OWNER'):

       (a)    to keep confidential the Confidential Information;

       (b)    to use the Confidential Information solely in relation to, or in
              the best interests of, Newco and the Business; and


                                       25
<PAGE>   27

       (c)    to disclose the Confidential Information only to those of its
              employees, consultants, advisers and shareholders who have a need
              to know (and only to the extent each has a need to know) and who:

              (i)    in the case of employees, are aware and agree that the
                     Confidential Information must be kept confidential; and

              (ii)   in the case of consultants, advisers and shareholders, are
                     aware and agree that the Confidential Information must be
                     kept confidential.

17.3   OTHER INFORMATION

       Clause 17 is subject to the provisions of any agreement or arrangement
       between the Owner and the Recipient relating to any Confidential
       Information, its use or disclosure.

17.4   EXCEPTIONS

       The obligations of confidentiality under clause 17 do not extend to
       information that (whether before or after this agreement is executed):

       (a)    is disclosed to a party under this agreement, but at the time of
              disclosure is rightly known to that party and not subject to an
              obligation of confidentiality on that party;

       (b)    at the time of disclosure is within the public domain or after
              disclosure comes into the public domain other than by reason of a
              breach or breaches of any obligation under clause 17; and

       (c)    is required by law or the rules of any recognised securities
              exchange (whether in Australia, the United States of America or
              elsewhere in the world) to be disclosed and the party required to
              make the disclosure has taken all reasonable steps to oppose or
              prevent the disclosure and to limit, as far as reasonably
              possible, the extent of the disclosure.

18.    DEFAULT

18.1   RELEVANT DEFAULTS

       (a)    If any party ('DEFAULTING PARTY') is in default of any of its
              obligations under this agreement or any Supplementary Agreement
              (collectively 'RELEVANT AGREEMENTS'), any other party to this
              agreement ('NOTIFYING PARTY'), whether a party to the Relevant
              Agreement or not, may, within 20 Business Days of it becoming
              aware that the default occurred, by notice to the Defaulting
              Party, require the Defaulting Party to institute remedial action
              in respect of that default.

       (b)    If the Defaulting Party fails to reasonably commence remedial
              action within 20 Business Days after the date of the notice or the
              default is not remedied within 40 Business Days after the date of
              the notice, the default is a 'RELEVANT DEFAULT'.


                                       26
<PAGE>   28

       (c)    The Notifying Party may recover from the Defaulting Party all loss
              and damage which the Notifying Party incurs as a consequence of
              the Relevant Default and may (but is not required to) within 40
              Business Days of the occurrence of the Relevant Default terminate
              all Relevant Agreements with immediate effect by giving notice to
              that effect to all other parties to such agreements and exercising
              the put or call options granted under clauses 13.3 or 13.4 (as
              appropriate).

       (d)    All other parties including the Defaulting Party shall do all
              things necessary to procure the termination of all Relevant
              Agreements if the Notifying Party exercises its rights under
              clause 18.1(c).

18.2   DEFAULTS

       Without in any way limiting clause 18.1, a party will be deemed to have
       committed a default under this agreement and all Supplementary Agreements
       to which it is a party if that party has:

       (a)    a bona fide petition presented against it, an application is made
              to a Court for an order or an order is made that it be wound up,
              and such application is not withdrawn or such order is not set
              aside or stayed within 10 Business Days of the date of the
              application or the order, as appropriate;

       (b)    a bona fide resolution passed or a meeting summoned or convened to
              consider a resolution for its winding up;

       (c)    a receiver appointed over its assets or undertakings or any part
              of them;

       (d)    a bona fide application made to a Court for an order appointing an
              official manager, trustee, voluntary administrator, liquidator or
              provisional liquidator, or similar officer in respect of the
              Defaulting Party, or one of them is appointed and such application
              is not withdrawn or such appointment is not set aside or stayed
              within 10 Business Days of the date of the application or the
              appointment, as appropriate;

       (e)    entered into, or resolved to enter into, a scheme of arrangement
              or composition with, or assignment for the benefit of all, or any
              class, of its creditors, or proposes a reorganisation, moratorium
              or other administration involving the Defaulting Party other than
              for the purpose of a bona fide scheme of solvent reconstruction or
              amalgamation;

       (f)    ceased, or is unable, to pay its debts as and when they fall due;

       (g)    any of the events set out in section 459C(2) of the Corporations
              Law occur in relation to it;

       (h)    become, or been deemed, under any legislation to be insolvent or
              unable to pay its debts; or


                                       27
<PAGE>   29

       (i)    anything having a substantially similar effect to any of the
              events set out in clauses 18.2(a) to (h) inclusive occur in
              respect of it under the law of any applicable jurisdiction.

19.    TERMINATION

19.1   PERIOD OF AGREEMENT

       (a)    This agreement will remain in force and effect until the first to
              occur of the following:

              (i)    the agreement of all parties in writing to terminate the
                     agreement;

              (ii)   the winding up of Newco; or

              (iii)  at any time following the issuance of the Shares referred
                     to in clauses 3.2(b)(i) and (ii), the date on which there
                     is only one Shareholder.

       (b)    This agreement (subject to clause 20.2) will cease to have any
              force and effect, in respect of a party that is a Shareholder,
              when that party ceases to be a Shareholder in accordance with this
              agreement.

19.2   TERMINATION GENERALLY

       If this agreement is terminated, all Supplementary Agreements (other than
       the ASDM Terms Sheet) will terminate on the same date as this agreement
       is terminated without the requirement to give notice to any party to the
       Supplementary Agreements.

20.    CONSEQUENCES OF TERMINATION

20.1   CONSEQUENCES OF TERMINATION GENERALLY

       On termination of this agreement for any reason:

       (a)    if DJO controls Newco, the parties must procure that Newco ceases
              to carry on any business relating to the Oral Maxillo Facial
              Products, except as necessary to fulfil contractual obligations
              arising prior to the date of termination;

       (b)    the parties must procure that Newco makes available to DJO and
              Nielsen, all information requested in relation to the customers of
              Newco during the term of this agreement; and

       (c)    DJO and Nielsen must either return or destroy (and certify to the
              other the destruction of), and must procure that Newco does the
              same, all Confidential Information provided to each other.


                                       28
<PAGE>   30

20.2   CONTINUING OBLIGATIONS

       The provisions of clauses 5, 16, 17, 19, 20 and 21 continue to apply
       notwithstanding Termination of this agreement.

20.3   PRE-EXISTING RIGHTS

       Termination of this agreement, or the cessation of the application of
       this agreement to a former Shareholder (as envisaged by clause 19.1(b)),
       will not affect any accrued rights of a party as at the date of
       termination or cessation of application.

21.    RIGHT OF FIRST REFUSAL - TIMAX

21.1   PERMITTED TRANSFER

       From the date of this agreement and for the period ending 24 months after
       the date of termination of the Timax Distribution Agreement, Nielsen
       agrees not to sell any shares (other than shares pursuant to the exercise
       of options outstanding on the date of this agreement) in Timax without
       the prior consent in writing of DJO, which consent will not be
       unreasonably withheld, and undertakes that Timax will not dispose of its
       assets or business ("TIMAX BUSINESS") otherwise than in accordance with
       clause 21. Nielsen hereby represents and warrants that the option plan
       under which he has issued options that are outstanding as of the date of
       this agreement will include a provision that will require the holders of
       those options to transfer any shares of Timax that they acquire upon
       exercise of such options along with Nielsen's shares in Timax if DJO
       exercises its right of first refusal in accordance with this clause 21.

21.2   If within the period of 24 months after the date of termination of the
       Timax Distribution Agreement Nielsen proposes to sell any shares in Timax
       (other than shares pursuant to the exercise of options outstanding on the
       date of this agreement) or Timax proposes to dispose of the Timax
       Business to any third party, Nielsen shall before such transfer deliver
       to DJO an offer to sell the Timax shares or the Timax Business (as the
       case may be) to DJO. The offer must specify:-

       (a)    the consideration payable; and

       (b)    any other material terms and conditions.


                                       29
<PAGE>   31

21.3   An offer made pursuant to clause 21.2 shall remain open and irrevocable
       for a period of 40 Business Days ("ACCEPTANCE PERIOD") from the date of
       its receipt by DJO. DJO may accept the offer by delivering to Nielsen a
       notice in writing within the Acceptance Period. Failure to advise of its
       decision during the Acceptance Period is deemed to be a rejection of the
       offer.

21.4   During the Acceptance Period, Nielsen agrees not to sell or otherwise
       dispose of (including by way of granting options or rights over) any
       shares in Timax and undertakes that Timax will not dispose of any right,
       title or interest in the Timax Business without the prior consent in
       writing of DJO.

21.5   If DJO accepts the offer in accordance with clause 21.3, the sale of the
       Timax Business or the sale of the shares in Timax (as the case may be)
       must be made on a Business Day designated by Nielsen, not less than 10
       and not more than 30 days after the expiration of the Acceptance Period.

21.6   If DJO does not accept the offer in accordance with clause 21.3 or if the
       sale does not complete in accordance with clause 21 due to a default by
       DJO, Nielsen may sell the shares in Timax or Timax may sell the Timax
       Business (as the case may be) to a third party on terms and conditions no
       less favourable than those set out in the offer to DJO.

22.    ACKNOWLEDGMENT AND WARRANTIES

22.1   REPRESENTATIONS AND WARRANTIES - COMPANIES

       Each party that is a company (including in the capacity of a trustee)
       represents and warrants to the other parties that:

       (a)    (INCORPORATION) it is a company duly incorporated and validly
              existing under the laws of the country of its incorporation;

       (b)    (CORPORATE POWER) it has the corporate power to enter into and
              perform its obligations under this agreement and to carry out the
              transaction contemplated in this agreement;

       (c)    (CORPORATE ACTION) it has taken all necessary corporate action to
              authorise the entry into and performance of this agreement and to
              carry out the transaction contemplated by this agreement;

       (d)    (BINDING OBLIGATION) this document is its valid and binding
              obligation; and

       (e)    (NO CONTRAVENTION) neither the execution and performance by it of
              this agreement nor any transaction contemplated under this
              agreement will violate in any respect any provision of:

              (i)    its constituent documents; or

              (ii)   any other document, agreement or other arrangement binding
                     on it or its assets (other than the Credit Agreement and/or
                     Indenture)


                                       30
<PAGE>   32

22.2   REPRESENTATIONS AND WARRANTIES - INDIVIDUALS

       Each party that is an individual (including in the capacity of a trustee)
       represents and warrants to the others that:

       (a)    (BINDING OBLIGATION) this document is its valid and binding
              obligation; and

       (b)    (NO CONTRAVENTION) neither the execution and performance by it of
              this agreement nor any transaction contemplated under this
              agreement will violate in any respect any provision of any other
              document, agreement or other arrangement binding on it or its
              assets.

22.3   DISCLAIMER

       Each party acknowledges that:

       (a)    it has relied on its own enquiries in respect of all matters
              relating to this agreement and has not relied on any
              representation, warranty, condition or statement made by or on
              behalf of any other party other than as set out in this agreement;

       (b)    any conditions or warranties which may otherwise be implied by law
              into this agreement are expressly excluded to the extent permitted
              by law; and

       (c)    each party releases the other party from all actions, claims,
              demands and liability which it may have or claim to have or, but
              for this release, it might have had, against the other party
              arising out of any representation, warranty, covenant or provision
              not set out or referred to in this agreement.

23.    CONFLICT WITH OTHER DOCUMENTS

23.1   If there is any conflict between the provisions of this agreement and
       either:

       (a)    the Constitution; or

       (b)    any Supplementary Agreement,

       ('OTHER DOCUMENTS'), the provisions of this agreement prevail. On receipt
       of a written request from any party, all parties must take all reasonable
       steps to amend the other documents to remove that conflict.

23.2   If there is any conflict between the provisions of this agreement and
       either:

       (a)    the Credit Agreement; or

       (b)    the Indenture,


                                       31
<PAGE>   33

       ('FURTHER DOCUMENTS'), the provisions of the further document prevail. On
       receipt of a written request from any party, all parties must take all
       reasonable steps to amend this agreement to remove that conflict.

24.    GST

24.1   Except where express provision is made to the contrary, any consideration
       payable under any clause in this agreement or otherwise in respect of
       this agreement is exclusive of GST. If GST is imposed on any supply made
       by any party ('SUPPLIER') to another party ('RECIPIENT') under this
       agreement, the supplier may recover from the recipient an amount
       calculated by multiplying the relevant GST rate by the value of the GST
       exclusive consideration, in addition to any GST exclusive consideration
       paid or payable by the recipient to the supplier in respect of that
       supply. Any amount recoverable from the recipient under this clause shall
       be calculated without any deduction or set-off of any other amount.

24.2   Any amount recoverable under clause 24.1:

       (a)    is payable on demand by the supplier provided that the supplier
              has first issued a tax invoice prior to that amount becoming
              payable;

       (b)    is subject to adjustment (whether by increase or decrease) on
              reasonable grounds and such adjustment is payable by the recipient
              or refundable by the supplier (as appropriate) within five days of
              the adjustment being determined and an adjustment note being
              provided.

24.3   In clause 24, the terms 'adjustment note', 'GST', 'GST exclusive
       consideration', 'GST rate', 'supply' and 'tax invoice' each have the
       meaning set out in A New Tax System (Goods and Services Tax) Act 1999
       (Cth).

25.    NAMES

       The parties acknowledge that Newco has the right to use all names,
       trademarks, logos, marks and house styles, whether registered or
       otherwise, of DJO and Timax (`NAMES') subject, in each case, to the terms
       and conditions (including any limitations) set out in the DJO
       Distribution Agreement and the Timax Distribution Agreement, as
       appropriate.

26.    DEATH OR CONTINUING DISABLEMENT OF NIELSEN

       (a)    Subject to clause 26(b) and any other agreement that the
              Shareholders subsequently reach by Unanimous Vote, Newco shall
              take out and maintain term life insurance cover on the life of
              Nielsen (including a total and permanent trauma disablement
              provision) with the level of such term life insurance cover being
              determined annually in advance by the Board and with the
              beneficiaries being those Shareholders in Newco other than Nielsen
              in proportion to their shareholding in Newco. In respect of the
              first such policy, it must be effected within one month of the
              date of the last person executing this agreement.


                                       32
<PAGE>   34

       (b)    The parties agree that following the death or total and permanent
              disablement of Nielsen, Nielsen's personal representatives will
              transfer Nielsen's shareholding in Newco to such remaining
              Shareholders in the stated proportions in consideration of the
              payment of the amount received by the remaining Shareholders
              pursuant to the term life policy on the life of Nielsen.

27.    RELATIONSHIP BETWEEN PARTIES

       This agreement does not create a relationship of employment, agency or
       partnership between the parties.

28.    FURTHER ACTION

       Each party must:

       (a)    use reasonable efforts to do all things necessary or desirable to
              give full effect to this agreement; and

       (b)    refrain from doing anything unreasonable that might hinder
              performance of this agreement.

29.    ASSIGNMENT

       A party must not assign or otherwise deal with this agreement or any
       right under this agreement without the prior written consent of the other
       parties.

30.    WAIVER

       The failure of a party at any time to require performance of any
       obligation under this agreement is not a waiver of that party's right:

       (a)    to insist on performance of, or claim damages for breach of, that
              obligation unless that party acknowledges in writing that the
              failure is a waiver; and

       (b)    at any other time to require performance of that or any other
              obligation under this agreement.

31.    GOVERNING LAW AND JURISDICTION

       This agreement is governed by the law applicable in New South Wales,
       Australia. Each party submits to the non-exclusive jurisdiction of the
       courts of New South Wales, Australia.

32.    NOTICE

32.1   METHODS OF SERVICE

       A notice required or authorised to be given or served on a party under
       this agreement must be in writing in the English language and must be
       given or served by facsimile, prepaid first class post or airmail or hand
       to that party at its address or facsimile


                                       33
<PAGE>   35

       number appearing below or such other address or facsimile number as the
       party may have notified in writing to the other parties:

              DJO:                    DJ Orthopedics LLC
                                      2985 Scott Street
                                      Vista  CA  92083
                                      United States of America

              Facsimile number:       1 760 734 3536

              Attention:              Chief Executive Officer.

              NIELSEN:                John Nielsen
                                      9 Derribong Place
                                      Thornleigh NSW 2120

              Facsimile number:       61 2 9980 8958

              Attention:              John Nielsen.

              NEWCO:                  Notices are to be provided to both DJO and
                                      Nielsen as provided above.

32.2   TIME OF SERVICE

       A notice will be deemed, in the absence of proof to the contrary, to have
       been given or served on the party to whom it was sent:

       (a)    in the case of hand delivery, on delivery during business hours of
              the recipient of the notice;

       (b)    in the case of prepaid airmail, ten Business Days after the date
              of despatch; or

       (c)    in the case of facsimile transmission, at the time of despatch
              provided that following transmission the sender receives a
              transmission confirmation report.

32.3   TYPES OF NOTICE

       In clause 32, 'notice' includes a demand, request, consent, approval,
       offer and any other instrument or communication made, required or
       authorised to be given under a provision of this agreement.

32.4   SIGNING OF NOTICES

       A notice given or served under this agreement is sufficient if:

       (a)    in the case of a company, it is signed by a director or secretary
              of that company; or


                                       34
<PAGE>   36

       (b)    in the case of an individual it is signed by that party.

32.5   BUSINESS HOURS

       In clause 32, 'business hours' means the hours from 9:00 am to 5:00 pm
       Australian Eastern Standard Time on a Business Day.

33.    SEVERABILITY

       Part or all of any provision of this agreement that is illegal or
       unenforceable may be severed from this agreement and the remaining
       provisions of this agreement continue in force provided such severance
       does not affect the commercial efficacy of this agreement or render it
       void as against public policy.

34.    ALTERATION

       This agreement may be altered only in writing signed by each party.

35.    COUNTERPARTS

       This agreement may be executed in any number of counterparts which may be
       exchanged by facsimile transmission. If this agreement is executed in
       facsimile counterparts, each party must forward an original counterpart
       executed by it to the other party as soon as possible after execution.

36.    ENTIRE AGREEMENT

       This agreement and the Supplementary Agreements are the entire agreement
       between the parties concerning its subject matter and supersedes all
       previous agreements, representations and understandings (if any).

37.    INTERPRETATION

37.1   INTERPRETATION

       In this agreement, unless the contrary intention appears:

       (a)    headings are for ease of reference only and do not affect the
              meaning of this agreement;

       (b)    the singular includes the plural and vice versa and words
              importing a gender include other genders;

       (c)    other grammatical forms of defined words or expressions have
              corresponding meanings;

       (d)    a reference to a clause, paragraph, schedule or annexure is a
              reference to a clause or paragraph of or schedule or annexure to
              this agreement and a reference to this agreement includes any
              schedules and annexures;


                                       35
<PAGE>   37

       (e)    a reference to a document or agreement, including this agreement,
              includes a reference to that document or agreement as novated,
              altered or replaced from time to time;

       (f)    a reference to 'A$', '$A', 'dollar' or '$' is a reference to
              Australian currency and a reference to 'US$' or 'USD' is a
              reference to the United States of America's currency;

       (g)    a reference to a specific time for the performance of an
              obligation is a reference to that time in the State, Territory or
              other place where that obligation is to be performed;

       (h)    a reference to a party includes its executors, administrators,
              successors and permitted assigns;

       (i)    use of the word 'includes' or 'including' is deemed to mean
              'includes, without limitation,' or 'including, without
              limitation,', as appropriate;

       (j)    words and expressions importing natural persons include
              partnerships, bodies corporate, associations, governments and
              governmental and local authorities and agencies;

       (k)    a reference to any legislation or statutory instrument or
              regulation is construed in accordance with the Acts Interpretation
              Act 1901 (Cth) or the equivalent State legislation, as applicable;

       (l)    words and expressions defined in the Corporations Law as at the
              date of this agreement have the meanings given to them in the
              Corporations Law at that date; and

       (m)    a reference to writing includes typewriting, printing,
              lithography, photography and any other method of representing or
              reproducing words, figures or symbols in a permanent and visible
              form.


                                       36
<PAGE>   38

EXECUTED as an agreement

EXECUTED by DJ ORTHOPEDICS LLC in    )
accordance with its constitution in  )
 the presence of:                    )
                                     )


--------------------------------------   ---------------------------------------
Director/secretary                       Director

--------------------------------------   ---------------------------------------
Name of director/secretary (print)       Name of director (print)


SIGNED by JOHN PETER NIELSEN in      )
the presence of                      )
                                     )


--------------------------------------   ---------------------------------------
Signature of witness                     John Peter Nielsen


--------------------------------------
Name of witness (print)


EXECUTED by DJ ORTHOPAEDICS          )
PTY LTD in accordance with its       )
constitution in the presence of:     )
                                     )


--------------------------------------   ---------------------------------------
Director/secretary                       Director


--------------------------------------   ---------------------------------------
Name of director/secretary (print)       Name of director (print)


                                       37
<PAGE>   39

                                   SCHEDULE 1
                                  CONSTITUTION

Refer to attached document.


                                       38
<PAGE>   40

                                   SCHEDULE 2
                                DEED OF ACCESSION

DEED dated #

by

of

('ACCEDING PARTY')

RECITAL

This deed is supplemental to a shareholders agreement dated 5 April 2001 ('SA')
entered into between DJ Orthopedics LLC., John Peter Nielsen and DJ Orthopaedics
Pty Ltd ACN 094 431 473.

OPERATIVE PART

1.     ACCEDING PARTY TO BE BOUND

       The Acceding Party confirms that it has been supplied with a copy of the
       SA and covenants with all present parties to the SA (whether original or
       by accession) ('PARTIES') to observe, perform and be bound by all the
       terms of the SA so that the Acceding Party is deemed, from the date on
       which the Acceding Party is registered as a holder of Shares in Newco, to
       be a party to the SA.

2.     REPRESENTATIONS AND WARRANTIES

       The Acceding Party represents and warrants to the parties that:

       (a)    (INCORPORATION) if a company it is duly incorporated and validly
              existing under the laws of the country of its incorporation;

       (b)    (CORPORATE POWER) if a company it has the corporate power to enter
              into and perform its obligations under this document and to carry
              out the transactions contemplated by the SA;

       (c)    (CORPORATE ACTION) if a company it has taken all necessary
              corporate action to authorise the entry into and performance of
              this document and to carry out the transactions contemplated by
              the SA;

       (d)    (BINDING OBLIGATION) this document is its valid and binding
              obligations;

       (e)    (NO CONTRAVENTION) neither the execution and performance by it of
              this document nor any transaction contemplated under the SA will
              violate in any respect any provision of:

              (i)    its constituent documents; or


                                       39
<PAGE>   41

              (ii)   any other document, agreement or other arrangement binding
                     on it or its assets.



3.     ADDRESS FOR NOTICE

       The address of the Acceding Party for the purposes of clause 31 of the SA
       is, until substituted in accordance with clause 31:

       #

4.     GOVERNING LAW

       This deed is governed by the laws applicable in New South Wales,
       Australia.

5.     ATTORNEYS

       Where this deed is executed on behalf of a party by an attorney, that
       attorney by executing declares and warrants that the attorney has been
       duly appointed and has no notice of the revocation of the power of
       attorney under the authority of which the attorney executes the deed on
       behalf of that party.

EXECUTED in New South Wales as a deed.



EXECUTED by # in accordance with its  )
constitution in the presence of:      )
                                      )
                                      )


--------------------------------------   ---------------------------------------
Director/secretary                       Director


--------------------------------------   ---------------------------------------
Name of director/secretary (print)       Name of director (print)


                                       40
<PAGE>   42

                                   SCHEDULE 3
                               SERVICES AGREEMENT

Refer to attached document.


                                       41
<PAGE>   43

                                   SCHEDULE 4
                                  BUSINESS PLAN

Refer to attached document


                                       42
<PAGE>   44

                                   SCHEDULE 5
                                     BUDGET

Refer to attached document


                                       43
<PAGE>   45

                                   SCHEDULE 6A
                                ASDM TERMS SHEET

       Refer to attached document.


                                       44
<PAGE>   46

                                   SCHEDULE 6B
                           DJO DISTRIBUTION AGREEMENT

Refer to attached document.


                                       45
<PAGE>   47

                                   SCHEDULE 7
                          TIMAX DISTRIBUTION AGREEMENT

Refer to attached document.


                                       46
<PAGE>   48

                                   SCHEDULE 8
             EBITDA AND NET OPERATING PROFIT CALCULATION PRINCIPLES


In determining the EBITDA and the net operating profit of Newco:

1.     the calculation of earnings associated with the Oral Maxillo Facial
       Products Business will be based on the gross profit dollars for the Oral
       Maxillo Facial Products less an allocation of total sales, general and
       administration expenses ('S,G & A'); and

2.     the allocation of S,G & A expenses will be based on the following:

       (a) where the cost is specifically identifiable as being incurred by the
       Oral Maxillo Facial Products Business, then the expenses will be
       allocated to the Oral Maxillo Facial Products Business; and

       (b) where clause (a) does not apply, the allocation of S,G&A expenses
       will be based on the proportion that gross revenue of sales attributable
       to the Oral Maxillo Facial Products Business bears to the total gross
       revenue earned by Newco in the last completed Financial Year.


                                       47