Exhibit 10.1


 


EXECUTION VERSION


 


THIS
AMENDED AND RESTATED TRANSACTION AND MONITORING FEE AGREEMENT (this “Agreement”) is dated as of November
20, 2007, and is by and between ReAble Therapeutics, Inc. (f/k/a, Encore
Medical Corporation), a Delaware corporation which, following the consummation
of the Transactions (as defined in Paragraph 3 of the Background,
below), intends to change its name to “DJO Incorporated” (the “Company”), and Blackstone
Management Partners V L.L.C., a Delaware limited liability company (“BMP”).


BACKGROUND


1.             The
Company and BMP are parties to that certain Transaction and Monitoring Fee
Agreement, dated as of November 3, 2006 (the “Current
Transaction and Monitoring Fee Agreement”), pursuant to which,
among other things, BMP has provided certain financial and structural analysis,
due diligence investigation, corporate strategy, and other financial advisory
services to the Company.


2.             ReAble
Therapeutics Finance LLC, a Delaware limited liability company and wholly-owned
subsidiary of the Company (“Merger Parent”),
and Reaction Acquisition Merger Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of Merger Parent (“Merger Sub”),
and an entity currently known as DJO Incorporated, a Delaware Corporation
which, following the consummation of the Transactions, intends to change its
name to “DJO Opco Holdings, Inc.” (“DJO Opco Holdings”),
are parties to that certain Agreement and Plan of Merger, dated as of July 15,
2007 (the “Merger Agreement”), pursuant
to which at the “Effective Time”
(as defined in the Merger Agreement) Merger Sub shall be merged with and into
DJO Opco Holdings, and DJO Opco Holdings shall thereafter be a wholly-owned
subsidiary of the Company (the “Merger”).


3.             BMP
has expertise in the areas of finance, strategy, investment, acquisitions and
other matters relating to the Company, DJO Opco Holdings, and their respective
businesses, and has facilitated the transactions referred to above and certain
other related transactions (collectively, the “Transactions”)
through its provision of financial and structural analysis, due diligence
investigations, negotiation assistance, corporate strategy and other financial
advisory services with all relevant parties to the Transactions, including in
connection with the financing of certain of the Transactions as contemplated by
the Merger Agreement.


4.             The
Company desires to continue to avail itself, for the term of this Agreement, of
BMP’s expertise and services as aforesaid, which the Company believes will be
beneficial to it, and BMP desires to continue to make such expertise available
and provide such services to the Company on the terms, and subject to the
conditions set forth in this Agreement by amending and restating in its
entirety the Current Transaction and Monitoring Fee Agreement.


In consideration of the premises and agreements contained herein and of
other good and valuable consideration, the sufficiency of which are hereby
acknowledged, the parties agree as follows:


AGREEMENT


SECTION 1.         Transaction and M&A
Advisory Fees.  In consideration of BMP undertaking financial
and structural analysis, due diligence investigations, negotiation assistance,
corporate strategy and other financial advisory services necessary in order to
enable the Transactions to be consummated, the Company will pay BMP at the
Effective Time (i) a non-refundable and irrevocable transaction fee of
$15,000,000, and (ii) $600,000 in reimbursement for certain Out-of-Pocket
Expenses (as defined in Section 5, below) incurred by BMP in connection
with its due diligence investigations in the Transactions.  In consideration of the merger and
acquisition advisory group of Blackstone
Advisory Services, L.P.
(“BAS”), an 





















 


Affiliate (as defined in Section
3(a), below) of BMP, rendering strategic and other advice and negotiation
assistance to the Company on behalf of BMP in connection with identifying and
evaluating certain potential transactions, the Company will also pay to BAS, at
the Effective Time, a non-refundable and irrevocable advisory fee of
$3,000,000.


SECTION
2.         Appointment. 
The Company hereby engages BMP to render the Services (as defined in Section
3(a), below) on the terms and subject to the conditions of this Agreement.


SECTION 3.         Services.


(a)           BMP agrees that until the Termination
Date (as defined in Section 8, below) or the earlier termination of its
obligations under this Section 3(a) pursuant to Section 4(f)
hereof, it will render to the Company, by and through itself and its
Affiliates, and such of their respective, directors, officers, employees,
investment bankers, attorneys, accountants and other advisors or
representatives (such directors, officers, employees, investment bankers,
attorneys, accountants, other advisors and representatives collectively, “Representatives”) monitoring,
advisory and consulting services in relation to the affairs of the Company and
its subsidiaries, including, without limitation, (i) advice regarding the
structure, distribution and timing of private or public debt or equity
offerings and advice regarding relationships with the Company’s and its
subsidiaries’ lenders and bankers, including in relation to the selection,
retention and supervision of independent auditors, outside legal counsel,
investment bankers or other financial advisors or consultants, (ii) advice regarding
the strategy of the Company and its subsidiaries, (iii)  advice regarding the structuring and
implementation of equity participation plans, employee benefit plans and other
incentive arrangements for certain key executives of the Company, (iv) general
advice regarding dispositions and/or acquisitions and (v) such other advice
directly related or ancillary to the above financial advisory services as may
be reasonably requested by the Company (collectively, the “Services”).  However, BMP will have no obligation to
provide any other services to the Company absent an agreement between BMP and
the Company regarding the scope of such other services and the compensation
therefor.  For the purposes of this
Agreement, “Affiliate” when used with
respect to any party shall mean any Person who is an “affiliate” of that party
within the meaning of Rule 405 promulgated under the Securities Act of 1933, as
amended; provided, that the Company and its subsidiaries shall be deemed
not to be Affiliates of BMP and its Affiliates for the purposes of this
Agreement. For the purposes of this Agreement, “Person”
shall mean any
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, governmental entity or other entity of any kind or
nature.


(b)           It is expressly agreed that the
Services to be rendered hereunder will not include investment banking or other
financial advisory services which may be provided by BMP or its Affiliates or
their respective Representatives to the Company or any of its Affiliates, in
connection with any specific acquisition, divestiture, disposition, merger,
consolidation, restructuring, refinancing, recapitalization, issuance of
private or public debt or equity securities (including, without limitation, an
initial public offering of equity securities), financing or similar transaction
by the Company or any of its subsidiaries. 
BMP may be entitled to receive additional compensation for providing services
of the type specified in the preceding sentence by mutual agreement of the
Company or such subsidiary, on the one hand, and BMP or its relevant Affiliates
or their respective Representatives, on the other hand.  In the absence of an express agreement
regarding compensation for such services performed by BMP or its Affiliates, or
their respective Representatives in connection with any such transaction
specified in this Section 3(b), and without regard to whether any such
services were performed, BMP shall be entitled to receive upon consummation of:


(i)            any such
acquisition, divestiture, disposition, merger, consolidation, restructuring or
recapitalization, a non-refundable and irrevocable fee equal to (x) one percent
(1%) 


 


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of the aggregate enterprise value of the acquired, divested, merged,
consolidated, restructured or recapitalized entity (calculated, on a
consolidated basis for such entity, as the sum of (1) the market value of its
common equity (or the fair market value thereof if not publicly traded), (2)
the value of its preferred stock (at liquidation value), (3) the book value of
its minority interests and (4) its aggregate long- and short-term debt, less
its cash and cash equivalents), or (y) if such transaction is structured as an
asset purchase or sale, one percent (1%) of the consideration paid for or
received in respect of the assets acquired or disposed of;


(ii)           any such
refinancing, a non-refundable and irrevocable fee equal to one percent (1%) of
the aggregate value of the securities subject to such refinancing; and


(iii)          any such issuance,
a non-refundable and irrevocable fee equal to one percent (1%) of the aggregate
value of the securities subject to such issuance.


(c)           Without affecting the rights of BMP
under Section 3(b) hereof, if the Company or any of its subsidiaries
determines that it is advisable for the Company or such subsidiary to hire a
financial advisor, consultant, investment banker or any similar advisor in
connection with any acquisition, divestiture, disposition, merger,
consolidation, restructuring, refinancing, recapitalization, issuance of
private or public debt or equity securities (including, without limitation, an
initial public offering of equity securities), financing or similar
transaction, it will notify BMP of such determination in writing.  Promptly thereafter, upon the request of BMP,
the parties will negotiate in good faith to agree upon appropriate services,
compensation and indemnification for the Company or such subsidiary to hire BMP
or its Affiliates or their respective Representatives for such services.  The Company and its subsidiaries may not hire
any Person, other than BMP or one of its Affiliates or their respective
Representatives, to perform any such services unless all of the following
conditions have been satisfied:  (i) the
parties are unable to agree upon the terms of the engagement of BMP or any such
Affiliate or Representative to render such services after thirty (30) days
following receipt by BMP of such written notice; (ii) such other Person has a
reputation that is at least equal to the reputation of BMP or any such
Affiliate or Representative in respect of such services; (iii) ten (10)
business days have elapsed after the Company or such subsidiary provides a
written notice to BMP of its intention to hire such other Person, which notice
shall identify such other Person and shall describe in reasonable detail the
nature of the services to be provided, the compensation to be paid and the indemnification
to be provided; (iv) the compensation to be paid is not more than BMP or any
such Affiliate or Representative was willing to accept in the negotiations
described above; and (v) the indemnification to be provided is not more
favorable to the Company or the applicable subsidiary than the indemnification
that BMP or any such Affiliate or Representative was willing to accept in the
negotiations described above.


SECTION 4.         Monitoring Fee.


(a)           In consideration of the Services
being rendered by BMP, for the term of this Agreement, the Company will pay, or
will cause to be paid, to BMP an annual non-refundable and irrevocable
monitoring fee (the “Monitoring Fee”;
the term “Monitoring Fee” as used in this Agreement with respect to any annual
period means all amounts payable with respect to such annual period pursuant to
Sections 4(b) or (c) hereof, as applicable; provided, that,
notwithstanding anything to the contrary contained in this Agreement, the
minimum annual Monitoring Fee payable to BMP beginning on January 1, 2008 and
throughout the term of this Agreement shall be $7,000,000).


(b)           The parties acknowledge that the
Monitoring Fee for the year ending December 31, 2007 was equal to $3,000,000
and was paid to BMP on January 1, 2007.


 


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(c)           The annual Monitoring Fee for fiscal
year 2008 and each subsequent year shall be equal the greater of $7,000,000 and
two percent (2%) of Consolidated EBITDA (as defined in Section 4(g),
below).  The Company will pay, or cause
to be paid, to BMP, (i) $7,000,000 on January 1, 2008, and thereafter on
January 1 of each subsequent year and (ii) within five (5) business days
following the preparation of the Company’s consolidated annual financial
statements for each fiscal year, an amount equal to the excess, if any, of two
percent (2%) of Consolidated EBITDA for the immediately preceding fiscal year
over $7,000,000, plus interest thereon from
January 1 of the relevant year through the date of payment of such amount at an
annual rate of ten percent (10%) computed and compounded daily.


(d)           In the event the Company or any of
its subsidiaries enters into a business combination transaction with another
entity that is large enough to constitute a “significant subsidiary” of the Company
under any of the relevant tests contained in Regulation S-X as promulgated by
the Securities and Exchange Commission, the Company and BMP will mutually
agree, following good faith negotiations, on an appropriate increase in the
minimum annual Monitoring Fee as warranted by the increase in the Company’s
size.  Such increase will be based on the
percentage increase in the Company’s Consolidated EBITDA determined on a pro
forma basis giving effect to such business combination transaction.


(e)           To the extent the Company cannot pay,
or cause to be paid, the Monitoring Fee for any reason, including by reason of
any prohibition on such payment pursuant to any applicable law or the terms of
any debt financing of the Company or its subsidiaries, the payment by the
Company or any of its subsidiaries to BMP of the accrued and payable Monitoring
Fee will be payable immediately on the earlier of (i) the first date on
which the payment of such deferred Monitoring Fee is no longer prohibited under
any contract applicable to the Company and the Company or its subsidiaries, as
applicable, is otherwise able to make such payment, or cause such payment to be
made, and (ii) total or partial liquidation, dissolution or winding up of
the Company.  Notwithstanding anything to
the contrary herein, under any applicable law or under any contract applicable
to the Company or its subsidiaries, any forbearance of collection of the
Monitoring Fee by BMP shall not be deemed to be a subordination of such
payments to any other Person or creditor of the Company or its
subsidiaries.  Any such forbearance shall
be at BMP’s sole option and discretion and shall in no way impair BMP’s right
to collect such payments.  Any
installment of the Monitoring Fee not paid on the scheduled due date will bear
interest, payable in cash on each scheduled due date, at an annual rate of ten
percent (10%), compounded quarterly, from the date due until paid; provided,
that with respect to the payment specified in Section 4(c)(ii), such
interest shall be in addition to, and not in lieu of, the interest specified in
Section 4(c)(ii).


(f)            (i) Notwithstanding
anything to the contrary contained in this Agreement, BMP may elect (in its
sole discretion by the delivery of written notice to the Company) at any time
in connection with or in anticipation of a change of control of the Company, a
sale of all or substantially all of the Company’s assets or an initial public
offering of common stock of the Company or its successor (or at any time
thereafter) to receive, in consideration of the termination of the Services and
for any remaining Monitoring Fees payable by the Company under this Agreement
and in addition to any fees owing to BMP in connection with such transaction
pursuant to Section 3(b) hereof, a single lump sum non-refundable and
irrevocable cash payment (the “Lump Sum Fee”)
equal to the then present value (using a discount rate equal to the yield to
maturity on the date of such written notice of the class of outstanding U.S.
government bonds having a final maturity closest to the twelfth (12th)
anniversary of such written notice (the “Discount Rate”))
of all then current and future Monitoring Fees payable under this Agreement,
assuming the Termination Date is the twelfth (12th) anniversary of the date of
such election.  Promptly after the
receipt of such written notice, the Company shall pay the Lump Sum Fee to BMP
by wire transfer in same-day funds to the bank account designated by BMP, which



 


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payment shall not be refundable under any circumstances.  Following the payment of the Lump Sum Fee,
the obligation of BMP to provide the Services hereunder, and the obligations of
the Company to pay Monitoring Fees, shall be terminated, but all other
provisions of this Agreement shall continue unaffected.


(ii)           To the extent the Company does not
pay, or cause to be paid, any portion of the Lump Sum Fee by reason of any
prohibition on such payment pursuant to any applicable law, the terms of any
agreement or indenture governing indebtedness of the Company or its
subsidiaries, any unpaid portion of the Lump Sum Fee shall be paid to BMP on
the first date on which the payment of such unpaid amount is permitted under
such agreement or indenture. 
Notwithstanding anything to the contrary herein, under any applicable
law or under any contract applicable to the Company or its subsidiaries, any
forbearance of collection of the Lump Sum Fee by BMP shall not be deemed to be
a subordination of such payments to any other Person or creditor of the Company
or its subsidiaries.  Any such
forbearance shall be at BMP’s sole option and discretion and shall in no way
impair BMP’s right to collect such payments. 
Any portion of the Lump Sum Fee not paid on the scheduled due date shall
bear interest at an annual rate equal to the Discount Rate, compounded
quarterly, from the date due until paid.


(g)           For the purposes of this Agreement, “Consolidated EBITDA” has the
meaning specified in that certain Credit Agreement, dated as of November 20,
2007, among ReAble Therapeutics Finance LLC (which, following the consummation
of the Transactions, intends to change its name to “DJO Finance LLC”), as “borrower”; ReAble Therapeutics Holdings
LLC (which, following the consummation of the Transactions, intends to
change its name to “DJO Holdings LLC”), as “holdings”; Credit
Suisse, as “administrative agent, collateral agent, swing line lender and l/c
issuer”; the “lenders” party thereto; and the other parties thereto.


SECTION 5.         Reimbursements.  In addition to the fees payable pursuant to
this Agreement, the Company will pay, or cause to be paid, directly, or
reimburse BMP and each of its Affiliates and their respective Representatives
for, their respective Out-of-Pocket Expenses. For the purposes of this
Agreement, the term “Out-of-Pocket Expenses”
means the out-of-pocket costs and expenses incurred by BMP and its Affiliates
and their respective Representatives in connection with the Transactions and
the Services or any other services provided by them under this Agreement or the
Current Transaction and Monitoring Fee Agreement (including prior to the
Effective Time), or in order to make Securities and Exchange Commission and
other legally required filings relating to the ownership of capital stock of
the Company or DJO Opco Holdings or their respective successors by BMP or its
Affiliates (including, as applicable, the Company), or otherwise incurred by
BMP or its Affiliates or their respective Representatives from time to time in
the future in connection with the ownership or subsequent sale or transfer by
BMP or its Affiliates (including, as applicable, the Company) of capital stock
of the Company or DJO Opco Holdings or their respective successors, including,
without limitation, (a) fees and disbursements of any independent professionals
and organizations, including independent accountants, outside legal counsel or
consultants, retained by BMP or any of its Affiliates or their respective
Representatives, (b) costs of any outside services or independent contractors
such as financial printers, couriers, business publications, on-line financial
services or similar services, retained or used by BMP or any of its Affiliates
or their respective Representatives, and (c) transportation, per diem costs,
word processing expenses or any similar expense not associated with BMP’s or
its Affiliates’ or their respective Representatives ordinary operations.  All payments or reimbursements for
Out-of-Pocket Expenses will be made by wire transfer in same-day funds promptly
upon or as soon as practicable following request for payment or reimbursement
in accordance with this Agreement, to the bank account indicated to the Company
by the relevant payee.


 


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SECTION 6.         Indemnification.


The
Company will indemnify and hold harmless BMP and its Affiliates, and their
respective partners (both general and limited), members (both managing and
otherwise), shareholders and Representatives (each such Person being an “Indemnified Party”) from and
against any and all actions, claims, suits, investigations, proceedings,
losses, damages, costs, expenses and liabilities, including in connection with
seeking indemnification, whether joint or several, and also including, without
limitation, reasonably attorneys’ fees and expenses and other litigation
related expenses (the “Liabilities”),
related to, arising out of or in connection with the Transactions, Services or
any other services or transactions contemplated by this Agreement or the
Current Transaction and Monitoring Fee Agreement (including, in each case,
prior to the Effective Time) or the engagement of BMP pursuant to, and the
performance by BMP or its Affiliates or their respective Representatives of the
Services or other services or transactions contemplated by, this Agreement or
the Current Transaction and Monitoring Fee Agreement (including, in each case,
prior to the Effective Time), whether or not pending or threatened, whether or
not an Indemnified Party is a party, whether or not resulting in any liability and
whether or not such action, claim, suit, investigation or proceeding is
initiated or brought by the Company.  The
Company will reimburse any Indemnified Party for all reasonable costs and
expenses (including reasonable attorneys’ fees and expenses and any other
litigation-related expenses) as they are incurred in connection with
investigating, preparing, pursuing, defending or assisting in the defense of
any action, claim, suit, investigation or proceeding for which the Indemnified
Party would be entitled to indemnification under the terms of the previous
sentence, or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto. 
The Company agrees that it will not, without the prior written consent
of the Indemnified Party, settle, compromise or consent to the entry of any
judgment in any pending or threatened action, claim, suit, investigation or
proceeding relating to the matters contemplated hereby or the Current
Transaction and Monitoring Fee Agreement (including, in each case, prior to the
Effective Time) (if any Indemnified Party is a party thereto or has been
threatened to be made a party thereto) unless such settlement, compromise or
consent includes an unconditional release of the Indemnified Party from all
liability, without future obligation or prohibition on the part of the
Indemnified Party, arising or that may arise out of such action, claim, suit,
investigation or proceeding, and does not contain an admission of guilt or
liability on the part of the Indemnified Party. 
The Company will not be liable under the foregoing indemnification
provision with respect to any particular Liability of an Indemnified Party that
is determined by a court, in a final judgment from which no further appeal may
be taken, to have resulted solely from the gross negligence or willful
misconduct of such Indemnified Party. 
The attorneys’ fees and other expenses of an Indemnified Party shall be
paid by the Company as they are incurred upon receipt, in each case, of an
undertaking by or on behalf of the Indemnified Party to repay such amounts if
it is finally judicially determined that the Liabilities in question resulted
solely from the gross negligence or willful misconduct of such Indemnified
Party.


The
rights of an Indemnified Party to indemnification hereunder will be in addition
to any other rights and remedies any such Person may have under any other
agreement or instrument to which each Indemnified Party is or becomes a party
or is or otherwise becomes a beneficiary or under any law or regulation.


SECTION 7.         Accuracy of
Information. The Company shall furnish or cause to be
furnished to BMP and its Affiliates and their respective Representatives such
information as BMP believes reasonably appropriate to rendering the Services and
other services contemplated by this Agreement and to comply with the Securities
and Exchange Commission or other legal requirements relating to the beneficial
ownership by BMP or its Affiliates (including, as applicable, the Company) of
equity securities of the Company or DJO Opco Holdings or their respective
successors (all such information so furnished, the “Information”).
The Company recognizes and confirms that BMP (i) will use and rely primarily on
the Information and on 


 


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information
available from generally recognized public sources in performing the Services
and other services contemplated by this Agreement without having independently
verified the same, (ii) does not assume responsibility for the accuracy or
completeness of the Information and such other information and (iii) is
entitled to rely upon the Information without independent verification.


SECTION 8.         Term.  This Agreement will become effective as of
the Effective Time and (except as otherwise provided herein) will continue
until the “Termination Date,” which is
the earliest of (i) the twelfth (12th) anniversary of the date hereof and (ii)
such earlier date as the Company and BMP may mutually agree upon in writing; provided,
that (x) the occurrence of the Termination Date will not affect the
obligations of the Company to pay, or cause to be paid, any amounts accrued but
not yet paid as of such date, (y) Section 5 hereof will remain in effect
after the Termination Date with respect to Out-of-Pocket Expenses that were
incurred prior to or within a reasonable period of time after the Termination
Date, but which have not been paid to BMP in accordance with Section 5 hereof,
and (z) the provisions of this Section 8 and Sections 4(e), 4(f)(ii),
4(g)  6, 7, 9 and 10 hereof will survive
after the Termination Date.  The
Monitoring Fee will accrue and be payable with respect to the entire fiscal
year of the Company in which the Termination Date occurs.


SECTION 9.             Disclaimer,
Opportunities, Release and Limitation of Liability.


(a)           Disclaimer; Standard of Care.  BMP makes no representations or warranties,
express or implied, in respect of the Services or any other services to be
provided by it or any transactions (including, without limitation, the Transactions)
with which it, its Affiliates or their respective Representatives have been,
may be or become involved hereunder or under the Current Transaction and
Monitoring Fee Agreement.  In no event
shall BMP or its Affiliates or their respective Representatives be liable to
the Company or any of its Affiliates for any act, alleged act, omission or
alleged omission that does not constitute gross negligence or willful
misconduct of, as applicable BMP, or any such Affiliates or Representatives as
determined by a final, non-appealable determination of a court of competent
jurisdiction.


(b)           Freedom to Pursue Opportunities.  In recognition that BMP and its Affiliates
and their respective Representatives currently have, and will in the future
have or will consider acquiring, investments in numerous companies with respect
to which BMP or its Affiliates or their respective Representatives may serve as
an advisor, a director or in some other capacity, in recognition that BMP and
its Affiliates and their respective Representatives have a myriad of duties to
various investors and partners, in anticipation that the Company, on the one
hand, and BMP (or one or more Affiliates, associated investment funds or
portfolio companies), on the other hand, may engage in the same or similar
activities or lines of business and have an interest in the same areas of
corporate opportunities, in recognition of the benefits to be derived by the
Company hereunder, and in recognition of the difficulties which may confront
any advisor who desires and endeavors fully to satisfy such advisor’s duties in
determining the full scope of such duties in any particular situation, the
provisions of this Section 9(b) are set forth to regulate, define and
guide the conduct of certain affairs of the Company as they may involve BMP and
its Affiliates and their respective Representatives.  Except as BMP may otherwise agree in writing
after the date hereof:


                (i)            BMP and its Affiliates and their respective
Representatives shall have the right: 
(A) to directly or indirectly engage in any business (including, without
limitation, any business activities or lines of business that are the same as
or similar to those pursued by, or competitive with, the Company and its
subsidiaries); (B) to directly or indirectly do business with any client or
customer of the Company and its subsidiaries; (C) to take any other action that
BMP or its Affiliates or their respective Representatives, as applicable,
believes in good faith is necessary to or appropriate to fulfill its obligations
as described 


 


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in
the first sentence of this Section 9(b); and (D) not to present
potential transactions, matters or business opportunities to the Company or any
of its subsidiaries, and to pursue, directly or indirectly, any such
opportunity for themselves, and to direct any such opportunity to another
Person.


                (ii)           BMP and its Affiliates and their respective
Representatives shall have no duty (contractual or otherwise) to communicate or
present any corporate opportunities to the Company or any of its subsidiaries
or to refrain from any actions specified in Section 9(b)(i) hereof, and
the Company, on its own behalf and on behalf of its subsidiaries, hereby
irrevocably waives any right to require BMP or any of its Affiliates or their
respective Representatives to act in a manner inconsistent with the provisions
of this Section 9(b).


                (iii)          Neither BMP nor any of its Affiliates or their respective
Representatives shall be liable to the Company or any of its subsidiaries for
breach of any duty (contractual or otherwise) by reason of any activities or
omissions of the types referred to in this Section 9(b) or of any such
Person’s participation therein.


(c)           Release.  The Company, on behalf of it and its subsidiaries,
hereby irrevocably and unconditionally releases and forever discharges BMP and
its Affiliates and their respective partners (both general and limited),
members (both managing and otherwise), and Representatives from any and all
Liabilities in connection with the Services or any other services or
transactions contemplated by this Agreement or the Current Transaction and
Monitoring Fee Agreement (including, in each case, prior to the Effective Time)
or the engagement of BMP pursuant to, and the performance by BMP and its
Affiliates and their respective Representatives of the Services or any other
services or their respective involvement with any transaction (including,
without limitation, the Transactions) contemplated by, this Agreement or the
Current Transaction and Monitoring Fee Agreement (including, in each case,
prior to the Effective Time) that the Company or any of its subsidiaries may
have, or may claim to have, on or after the date hereof, except with respect to
any act or omission that constitutes gross negligence or willful misconduct as
determined by a final, non-appealable determination of a court of competent
jurisdiction.


(d)           Limitation of
Liability.  In no event will BMP or
any of its Affiliates or any of their respective Representatives be liable to
the Company or any of its subsidiaries for any indirect, special, incidental or
consequential damages, including, without limitation, lost profits or savings,
whether or not such damages are foreseeable, or for any third-party claims
(whether based in contract, tort or otherwise), relating to, in connection with
or arising out of this Agreement or the Current Transaction and Monitoring Fee
Agreement (including, in each case, prior to the Effective Time), including,
without limitation, the services to be provided by BMP or any of its Affiliates
or any of their respective Representatives hereunder or which have been
provided by such Persons under the Current Transaction and Monitoring Fee
Agreement, or for any act or omission that does not constitute gross negligence
or willful misconduct as determined by a final, non-appealable determination of
a court of competent jurisdiction or in excess of the fees actually received by
BMP hereunder.


SECTION
10.           Miscellaneous.


(a)           No amendment or
waiver of any provision of this Agreement, or consent to any departure by any
party hereto from any such provision, will be effective unless it is in writing
and signed by each of the parties hereto. Any amendment, waiver or consent will
be effective only in the specific instance and for the specific purpose for
which given. The waiver by any party of any breach of this Agreement will not
operate as or be construed to be a waiver by such party of any subsequent
breach.


 


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(b)           Any notices or other
communications required or permitted hereunder shall be made in writing and
will be sufficiently given if delivered personally, sent by facsimile or
electronic mail with confirmed receipt of successful transmittal, or sent by overnight
courier, addressed as follows or to such other address of which the parties may
have given written notice:


if to BMP:


 


c/o The Blackstone Group L.P.


345 Park Avenue


31st Floor


New York, New York 10154


Attention: Chinh E. Chu


Facsimile: (212) 583-5573


E-mail: chu@blackstone.com


 


With a copy, which shall not constitute notice to BMP, to:


 


Reed Smith LLP

599 Lexington Ave., 29th Floor


New York, New York 10022


Attention: Mark G. Pedretti, Esq.


Facsimile: (212) 521-5450


E-mail: mpedretti@reedsmith.com


 


if to the Company:


 


ReAble Therapeutics, Inc. (and after the name change referred to above,
to “DJO Incorporated”)


1430 Decision Street


Vista, California 92081


Attention: Donald
M. Roberts, Esq.


Facsimile: (760) 734-3536


E-mail: don.roberts@djortho.com


 


Unless
otherwise specified herein, such notices or other communications will be deemed
received (i) on the date delivered, if delivered personally or sent by
facsimile or electronic mail upon receipt by the sender of successful
transmittal, and (ii) one business day after being sent by overnight courier.


(c)           This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof, and
supersedes all previous oral and written (and all contemporaneous oral)
negotiations, commitments, agreements and understandings relating hereto.


(d)           This Agreement will be governed by,
and construed in accordance with, the laws of the State of New York without
giving effect to any conflicts of law principles that would require the
application of the laws of a jurisdiction other than the State of New York.


(e)           Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York County, New
York for the purpose of any action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation arising out
of or based upon this Agreement or relating to the subject matter hereof,
(ii) hereby waives to the extent not prohibited by applicable law, and
agrees not to assert, and agrees not to allow any of its subsidiaries to
assert, by way of motion, as a defense or otherwise, in any such action, any
claim that it is not subject personally 


 


9

















 


to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that any such proceeding brought in one of
the above-named courts is improper, or that this Agreement or the subject
matter hereof or thereof may not be enforced in or by such court and
(iii) hereby agrees not to commence or maintain any action, claim, cause
of action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Agreement or relating to the
subject matter hereof or thereof other than before one of the above-named
courts nor to make any motion or take any other action seeking or intending to
cause the transfer or removal of any such action, claim, cause of action or
suit (in contract, tort or otherwise), inquiry, proceeding or investigation to
any court other than one of the above-named courts whether on the grounds of
inconvenient forum or otherwise. 
Notwithstanding the foregoing, to the extent that any party hereto is or
becomes a party in any litigation in connection with which it may assert
indemnification rights set forth in this agreement, the court in which such
litigation is being heard shall be deemed to be included in clause
(i) above.  Notwithstanding the
foregoing, any party to this Agreement may commence and maintain an action to
enforce a judgment of any of the above-named courts in any court of competent
jurisdiction.  Each party hereto hereby
consents to service of process in any such proceeding in any manner permitted
by New York law, and agrees that service of process by registered or certified
mail, return receipt requested, at its address specified pursuant to Section
10(b) hereof is reasonably calculated to give actual notice.


(f)            Neither this Agreement nor any of
the rights or obligations hereunder may be assigned by the Company without the
prior written consent of BMP; provided, however, that BMP may,
without the prior consent of the Company, assign or transfer its duties or
interests hereunder to any Affiliate at the sole discretion of BMP. Subject to
the foregoing, the provisions of this Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Subject to the next sentence, no Person or party other than
the parties hereto and their respective successors or permitted assigns is
intended to be a beneficiary of this Agreement. The parties acknowledge and
agree that (i) BAS, with respect to the second sentence of Section 1 hereof,
and (ii) Indemnified Parties that are not parties hereto, with respect to Section
6 hereof, are, in each case, intended to be third-party beneficiaries
hereunder.


(g)           This Agreement may be executed by one
or more parties to this Agreement on any number of separate counterparts
(including by facsimile or electronic mail (via .pdf counterpart)), and all of
said counterparts taken together will be deemed to constitute one and the same
instrument.


(h)           Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction will not invalidate or
render unenforceable such provision in any other jurisdiction.


(i)            Each payment made by the Company
pursuant to this Agreement shall be paid by wire transfer of immediately
available federal funds to such account or accounts as specified by BMP to the
Company prior to such payment.


[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK, SIGNATURE PAGE FOLLOWS]


 


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IN
WITNESS WHEREOF, the undersigned have executed, or have caused to be executed,
this Agreement as of the date first written above.


 


	
   

  	
  BLACKSTONE MANAGEMENT PARTNERS V L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chinh E. Chu

  	
   

  
	
   

  	
   

  	
  Chinh E. Chu

  
	
   

  	
   

  	
  Authorized Person

  
	
   

  	
   

  
	
   

  	
  REABLE THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harry L. Zimmerman

  	
   

  
	
   

  	
   

  	
  Name: Harry L. Zimmerman

  
	
   

  	
   

  	
  Title: Executive Vice President, General Counsel,

  Secretary and Assistant Treasurer

  



 


 


 


 


[Signature Page to Amended and
Restated Transaction and Monitoring Fee Agreement]