1
EXHIBIT 4.11
AMENDED AND RESTATED
SECURED PROMISSORY NOTE
$1,052,705.56 New York, New York
Originally Issued: June 30, 1999
Amended and Restated: June 28, 2000
SECTION 1. GENERAL.
(a) For value received, the Leslie H. Cross & Deborah L. Cross
Family Trust (the "Cross Trust") and Leslie H. Cross ("Cross"; and together with
the Cross Trust, collectively, the "Payors") hereby promise to pay in cash to
the order of DonJoy, L.L.C., a Delaware limited liability company, or its
successors and assigns (the "Payee"), the principal amount of ONE MILLION FIFTY
TWO THOUSAND SEVEN HUNDRED FIVE DOLLARS AND FIFTY SIX CENTS ($1,052,705.56) or
such greater or lesser principal amount which may be outstanding hereunder
(including as a result of the exercise of the PIK Option), on June 30, 2006
(including any date upon which either Payor actually repays the obligations
hereunder, the "Maturity Date"). All payments hereunder shall be made in such
coin or currency of the United States of America as at the time of payment shall
be legal tender therein for the payment of public and private debts. The Payors
shall pay interest on June 30 of each calendar year (the "Interest Payment
Date"), commencing June 30, 2001, and on the Maturity Date, payable in cash
(unless the Payors elect to exercise the PIK Option in the manner set forth
below), on the unpaid balance of the principal amount of this Note at the rate
of 5.30% from the date hereof through and including the Maturity Date. Interest
hereunder shall accrue on a daily basis, computed on the basis of a 360-day year
and the actual number of days elapsed. Notwithstanding the foregoing, the Payors
shall have the option on any Interest Payment Date to pay the interest due on
such date (the "Scheduled Interest Payment") by electing (the "PIK Option") to
increase the principal amount due under this Note by the amount of such
Scheduled Interest Payment, whereupon, immediately thereafter, the principal
amount of this Note shall be increased by the amount of such Scheduled Interest
Payment and interest thereafter shall accrue on the principal amount of this
Note as so increased. The principal of, and interest on, this Note shall be
payable by wire transfer of immediately available funds to the account of the
Payee or by check payable to the Payee.
(b) This Amended and Restated Promissory Note (this "Note") is an
amendment, restatement and renewal of the Promissory Note dated June 30, 1999 in
the original principal amount of $1,000,000 which was executed and delivered by
the Payor to the Payee on June 30, 1999 (the "Original Note"). The original
principal amount of this Note ($1,052,705.56) represents the sum of (i) the
unpaid principal amount on the date hereof of the Original Note ($1,000,000) and
(ii) the accrued and unpaid interest on such unpaid principal amount on the date
hereof ($52,705.56). Upon execution and delivery of this Note, a copy of the
Original Note shall be attached hereto and marked "Amended, restated, renewed
and reevidenced by a promissory note dated June 28, 2000, which is substituted
herefor."
2
SECTION 2. PREPAYMENT. The Payors may prepay the principal amount due
under this Note in whole or in part at any time without premium or penalty,
provided that such prepayment is accompanied by the payment of interest accrued
through the date of such prepayment.
SECTION 3. EVENTS OF DEFAULT.
(a) Definitions. In each case of the happening of the following
events (each of which is an "Event of Default"):
(i) if a default occurs in the payment of any premium,
installment of, principal of, interest on, or other obligation with
respect to, this Note, whether at the due date thereof or upon
acceleration thereof, and such default shall continue for more than ten
(10) days after notice thereof from the Payee;
(ii) if either Payor shall (1) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of its or
his property, (2) admit in writing its or his inability to pay its or
his debts as they mature, (3) make a general assignment for the benefit
of creditors, or (4) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with
creditors, or to take advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation laws or
statutes, or an answer admitting the material allegations of a petition
filed against it or him in any proceeding under any such law; or
(iii) there shall be filed against either Payor an
involuntary petition seeking the appointment of a receiver, trustee,
custodian or liquidator of such Payor or a substantial part of such
Payor's assets, or an involuntary petition under any bankruptcy,
reorganization or insolvency law of any jurisdiction, whether now or
hereafter in effect (any of the foregoing petitions being hereinafter
referred to as an "Involuntary Petition") and such Involuntary Petition
shall not have been dismissed within sixty (60) days after it was filed;
then, upon each and every such Event of Default and at any time thereafter
during the continuance of such Event of Default, at the election of the Payee,
this Note shall immediately become due and payable, both as to principal and
interest (including any deferred interest and any accrued and unpaid interest),
without presentment, demand, or protest, all of which are hereby expressly
waived, anything contained herein or other evidence of such indebtedness to the
contrary notwithstanding (except in the case of an Event of Default under
paragraphs (ii) or (iii) of this Section 3(a), in which event such indebtedness
shall automatically become due and payable).
(b) Remedies on Default, Etc. In case any one or more Events of
Default shall occur and be continuing and acceleration of this Note shall have
occurred, the Payee may, inter alia, proceed to protect and enforce its rights
by an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained in this Note, or for an
injunction against a violation of any of the terms hereof or thereof or in and
of the exercise of any power granted hereby or thereby or by law. No right
conferred upon the Payee hereby shall be exclusive of any other right referred
to herein or now or hereafter available at
2
3
law, in equity, by statute or otherwise.
SECTION 4. ACCELERATION. In each case of the happening of the following
events (each of which is an "Acceleration Event"):
(i) the termination of Cross' employment with the Payee or
any of its Affiliates either as a result of Cross' Resignation (as such
term is defined in the Employment Agreement dated as of June 30, 1999
(the "Employment Agreement") between Cross and DJ Orthopedics, LLC) or
Termination for Cause (as such term is defined in the Employment
Agreement); or
(ii) the occurrence of any event, or series of events
pursuant to which Chase DJ Partners, LLC and/or its affiliates shall
cease to beneficially own and/or control (i) at least 20% of the issued
and outstanding equity interests of the Payee or (ii) all or
substantially all of the assets of the Payee or any of its subsidiaries;
then, upon each such Event of Acceleration and at any time thereafter, at the
election of the Payee, this Note shall immediately become due and payable, both
as to principal and interest (including any deferred interest and any accrued
and unpaid interest), without presentment, demand or protest, all of which are
hereby expressly waived, anything contained herein or other evidence of such
indebtedness to the contrary notwithstanding.
SECTION 5. DEFENSES. The obligations of the Payors under this Note shall
not be subject to reduction, limitation, impairment, termination, defense,
set-off, counterclaim or recoupment for any reason.
SECTION 6. REPLACEMENT OF NOTES. Upon receipt by the Payors of evidence
satisfactory to the Payors of the loss, theft, destruction, or mutilation of
this Note, and (in case of loss, theft or destruction) of an indemnity
reasonably satisfactory to the Payors, and upon surrender and cancellation of
this Note, if mutilated, the Payors will deliver a new Note of like tenor in
lieu of this Note. Any Note delivered in accordance with the provisions of this
Section 6 shall be dated as of the date of this Note.
SECTION 7. EXTENSION OF MATURITY. Should the principal of or interest on
this Note become due and payable on other than a business day, the maturity date
thereof shall be extended to the next succeeding business day, and, in the case
of principal, interest shall be payable thereon at the rate per annum herein
specified during such extension. For the purposes of this Note, a business day
shall be any day that is not a Saturday, Sunday, or legal holiday in the State
of New York.
SECTION 8. ATTORNEYS' AND COLLECTION FEES. Should the indebtedness
evidenced by this Note or any part hereof be collected at law or in equity or in
bankruptcy, receivership or other court proceedings, or this Note be placed in
the hands of attorneys for collection, the Payors agree to pay, in addition to
principal and interest due and payable hereon, all costs of collection,
including reasonable attorneys' fees and expenses, incurred by the Payee in
collecting or enforcing this Note.
3
4
SECTION 9. WAIVERS. Each of the Payors hereby waives presentment, demand
for payment, notice of dishonor, notice of protest and all other notices or
demands in connection with the delivery, acceptance, performance or default of
this Note.
No delay by the Payee in exercising any power or right hereunder
shall operate as a waiver of any power or right, nor shall any single or partial
exercise of any power or right preclude other or further exercise thereof, or
the exercise of any other power or right hereunder or otherwise; and no waiver
whatsoever or modification of the terms hereof shall be valid unless set forth
in writing by the Payee and then only to the extent set forth therein.
SECTION 10. RECOURSE. The obligations of the Payors under this Note are
secured as set forth in the Amended and Restated Pledge Agreement, dated as of
the date hereof, among the Payee and the Payors, a copy of which is attached
hereto and incorporated herein as Exhibit A (the "Pledge Agreement"). The
Payee's recourse on a default under this Note will be to first fully exercise
its remedies under the Pledge Agreement with respect to the Pledged Securities
(as such term is defined therein), before the Payors will be liable for any
deficiency remaining after such a foreclosure and application of the proceeds.
SECTION 11. AMENDMENTS AND WAIVERS. No provision of this Note may be
amended or waived without the express written consent of the Payors and the
Payee.
SECTION 12. GOVERNING LAW. This Note is made and delivered in, and shall
be governed by and construed in accordance with the laws of, the State of New
York (without giving effect to principles of conflicts of laws).
* * * *
4
5
IN WITNESS WHEREOF, the Payors have duly executed and delivered
this Amended and Restated Secured Promissory Note as of the date first written
above.
LESLIE H. CROSS & DEBORAH L. CROSS
FAMILY TRUST
By: /s/ LESLIE H. CROSS
---------------------------------
Name: Leslie H. Cross
Title: Co-Trustee
/s/ LESLIE H. CROSS
------------------------------------
Leslie H. Cross