Document:

<PAGE>   1
                                                                    EXHIBIT 10.3

                                AGREEMENT dated as of July 13, 2000 (this
                        "Agreement"), among DONJOY, L.L.C., a Delaware limited
                        liability company ("Holdings"), DJ ORTHOPEDICS, LLC, a
                        Delaware limited liability company (the "Borrower"), the
                        financial institutions listed on the signature pages
                        hereto (the "Lenders"), FIRST UNION NATIONAL BANK, as
                        administrative agent (in such capacity, the
                        "Administrative Agent"), and THE CHASE MANHATTAN BANK,
                        as syndication agent (in such capacity, the "Syndication
                        Agent").

               A. Pursuant to (a) the Credit Agreement dated as of June 30, 1999
(the "Credit Agreement"), among Holdings, the Borrower, the Lenders, the
Administrative Agent and the Syndication Agent and (b) Amendment No. 1 dated as
of May 25, 2000 (the "Amendment Agreement"), to the Credit Agreement among
Holdings, the Borrower, the Lenders, the Administrative Agent and the
Syndication Agent, the Lenders have extended credit to the Borrower, and have
agreed to extend credit to the Borrower, in each case pursuant to the terms and
subject to the conditions set forth therein.

               B. The revised Schedule 2.01 to the Credit Agreement attached
hereto as Exhibit A (the "Revised Schedule 2.01") evidences (a) the initial
amount of each Lender's Term Commitment to make a Term Loan to the Borrower on
the Effective Date, (b) the initial amount of each Lender's Term Commitment to
make a New Term Loan to the Borrower on the Amendment Date and (c) the initial
amount of each Lender's Revolving Commitment.

               Accordingly, the parties hereto hereby agree as follows:

               SECTION 1. The parties hereto hereby agree that Schedule 2.01 to
the Credit Agreement is deleted in its entirety and the Revised Schedule 2.01 is
substituted therefor.

               SECTION 2. Capitalized terms used and not defined herein shall
have the meanings assigned to such terms in the Amendment Agreement.

               SECTION 3. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of such counterparts taken together shall be
deemed to constitute one and the same instrument, and shall become effective as
of the Amendment Date when the Syndication Agent shall have received duly
executed counterparts of this Agreement bearing the authorized signatures of the
Borrower, Holdings, the Required Lenders and each Lender having a commitment to
make New Term Loans.

<PAGE>   2
                                                                               2

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

                         DJ ORTHOPEDICS, LLC,

                              by
                                   /s/  Cyril Talbot
                                  ---------------------------------------
                                  Name:  Cyril Talbot
                                  Title:  Vice President Finance, CFO
                                            and Secretary

                         DONJOY, L.L.C.,

                              by
                                   /s/  Cyril Talbot
                                 ----------------------------------------
                                 Name:  Cyril Talbot
                                 Title:  Vice President Finance, CFO
                                            and Secretary

                         FIRST UNION NATIONAL BANK,
                         individually and as Administrative Agent
                         and Collateral Agent,

                              by
                                   /s/  Ann Dodd
                                 ----------------------------------------
                                 Name:  Ann Dodd
                                 Title:  Senior Vice President

                         THE CHASE MANHATTAN BANK,
                         individually and as Syndication Agent,
                         Issuing Bank and Swingline Lender,

                              by
                                   /s/ Stephen P. Rochford
                                 ----------------------------------------
                                 Name:  Stephen P. Rochford
                                 Title:  Vice President

<PAGE>   3
                                                                               3

                         AMSOUTH BANK,

                              by
                                   /s/  Frank D. Marsicano
                                 ----------------------------------------
                                 Name:  Frank D. Marsicano
                                 Title:  Attorney in Fact

                         BANK AUSTRIA CREDITANSTALT
                         CORPORATE FINANCE INC.,

                                   /s/  Jack Bertges
                                 ----------------------------------------
                                 Name: Jack Bertges
                                 Title:  Executive Vice President

                              by
                                   /s/  Greg Roux
                                 ----------------------------------------
                                 Name:  Greg Roux
                                 Title:  Vice President

                         BANK LEUMI USA,

                              by
                                   /s/  Lisa Sanders
                                 ----------------------------------------
                                 Name:  Lisa Sanders
                                 Title:  Vice President

                         FLEET CAPITAL CORPORATION,

                              by
                                   /s/  Matthew R. Van Steenhuyse
                                 ----------------------------------------
                                 Name: Matthew R. Van Steenhuyse
                                  Title:  Senior Vice President

                         FIRST SECURITY BANK, N.A.,

                              by

<PAGE>   4
                                   /s/  Richard I. Polver
                                 ----------------------------------------
                                 Name:  Richard I. Polver
                                 Title:  Executive Vice President

                         THE PROVIDENT BANK,

                              by
                                   /s/  Steve Touvelle
                                 ----------------------------------------
                                 Name:   Steve Touvelle
                                  Title:  Vice President

                         PROVIDENT BANK OF MARYLAND,

                              by
                                   /s/  Thomas C. Myers
                                 ----------------------------------------
                                 Name: Thomas C. Myers
                                  Title:  Vice President

<PAGE>   5
                                                                       Exhibit A

                                  SCHEDULE 2.01

<TABLE>
<CAPTION>
                                                         Revolving                                                      Total
                                                         Commitment           Term Loan         New Term Loan         Commitment
                                                        --------------      --------------      --------------      --------------
<S>                                                     <C>                 <C>                 <C>                 <C>
Lenders:
First Union National Bank                               $ 5,000,000.00      $         0.00      $ 7,000,000.00      $12,000,000.00
The Chase Manhattan Bank                                $ 1,250,000.00      $         0.00      $ 6,250,000.00      $ 7,500,000.00
AmSouth Bank                                            $ 2,463,503.65      $ 2,036,496.35      $         0.00      $ 4,500,000.00
Bank Austria Creditanstalt Corporate Finance, Inc.      $ 2,463,503.65      $ 2,036,496.35      $         0.00      $ 4,500,000.00
The Provident Bank                                      $ 2,463,503.65      $ 2,036,496.35      $ 5,000,000.00      $ 9,500,000.00
Fleet Capital Corporation                               $ 4,927,007.30      $ 4,072,992.70      $         0.00      $ 9,000,000.00
First Security Bank, N.A                                $ 2,463,503.65      $ 2,036,496.35      $         0.00      $ 4,500,000.00
Provident Bank of Maryland                              $ 2,463,503.65      $ 2,036,496.35      $ 3,500,000.00      $ 8,000,000.00
Bank Leumi USA                                          $ 1,505,474.45      $ 1,244,525.55      $ 2,250,000.00      $ 5,000,000.00
                                                        --------------      --------------      --------------      --------------
   Subtotal                                             $25,000,000.00      $15,500,000.00      $24,000,000.00      $64,500,000.00
</TABLE>AMENDMENT

     AMENDMENT, effective May 12, 2000, to AMENDED AND RESTATED EMPLOYMENT
AGREEMENT, by and between MUELLER INDUSTRIES, INC., a Delaware corporation
having its principal place of business at 8285 Tournament Drive, Memphis,
Tennessee 38125 (the "Employer"), and WILLIAM D. O'HAGAN, an individual
residing at 3281 Remington Trace, Apt. 303, Memphis, TN 38125 (the
"Executive").

                                 WITNESSETH:

     WHEREAS, the parties desire to amend the Amended and Restated
Employment Agreement, dated as of September 17, 1997, between Employer and
Executive ((the "Employment Agreement); the Employment Agreement, as
amended effective May 12, 2000, being hereinafter called the "Agreement").

     NOW, THEREFORE, the parties agree as follows:

 1. Section 1 of the Agreement is amended in its entirety to read as
    follows: "The Employer agrees to employ the Executive, and the
    Executive hereby accepts such employment, as President and Chief
    Executive Officer of the Employer.  This Agreement shall have a
    three-year rolling term, which shall commence as of the date first
    above written and automatically be extended so that the unexpired
    term on any date is always three years (the "Employment Period"),
    until such time as either party gives written notice to the other
    of its election not to extend such term.  The Employment Period
    shall end three years from the date on which such notice is given
    unless it is terminated earlier as provided in Section 4 hereof."

 2. Section 4 e of the Agreement shall be amended in its entirety to
    read as follows: "If the Executive's employment is terminated for
    Cause pursuant to Section 4(b), or if the Executive shall
    voluntarily resign for any reason other than Good Reason, the
    Executive's right to receive the Base Salary (except any accrued
    and unpaid salary), the Bonus, and any other compensation and
    benefits to which he would otherwise be entitled under this
    Agreement shall be forfeited as of the date of termination of
    employment."

 3. Section 4 f of the Agreement shall be deleted in its entirety.

 4. Section 5 of the Agreement shall be amended by changing the address
    of Willkie Farr & Gallagher to 787 Seventh Avenue, New York, New
    York 10019.

 5. Section 7 of the Agreement shall be deleted in its entirety.

 6. Except as expressly amended by this Agreement, the remaining terms
    and provisions of the Employment Agreement shall remain unchanged
    and continue in full force and effect.

                                     -1-
<PAGE>

 7. This Amendment may be executed in counterparts, each of which shall
    be deemed an original but which together shall constitute one and
    the same instrument.

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

MUELLER INDUSTRIES, INC.

By: /S/HARVEY L. KARP                     /S/WILLIAM D. O'HAGAN
Name:  Harvey L. Karp                        William D. O'Hagan
Title: Chairman

                                     -2-

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