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EXHIBIT 10.1
AMENDMENT NO. 1 dated as of May 25, 2000 (this "Amendment
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 the Credit Agreement dated as of June 30, 1999 (the
"Credit Agreement"), among Holdings, the Borrower, the financial institutions
party thereto (the "Existing Lenders"), the Syndication Agent and the
Administrative Agent, the Existing 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. Holdings and the Borrower have requested that the Required Lenders
agree to amend certain provisions of the Credit Agreement to (a) increase the
aggregate principal amount of the Term Loans available under the Credit
Agreement by $24,000,000 in the form of New Term Loans (as defined below) so
that the total availability of (i) the Term Loans under the Credit Agreement
will be $39,500,000 and (ii) the Loans under the Credit Agreement will be
$64,500,000, (b) permit the Borrower to effect the Orthotech Acquisition (as
defined below) and (c) effect the related amendments set forth herein. The
proceeds of the New Term Loans will be used to finance part of the
consideration for the Orthotech Acquisition.
C. The Required Lenders are willing to so amend the Credit Agreement,
pursuant to the terms and subject to the conditions set forth herein, and the
applicable Lenders are willing to extend credit in the form of New Term Loans.
D. Capitalized terms used and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Amendments. (a) Section 1.01 of the Credit Agreement is
hereby amended by adding the following defined terms after "Alternate Base
Rate" and before "Applicable Percentage."
"Amendment No. 1" means the Amendment No. 1 dated as of May 25, 2000,
among the Borrower, Holdings, the Lenders party thereto, the
Administrative Agent and the Syndication Agent.
"Amendment Date" means the Amendment Date as defined in the Amendment
No. 1.
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(b) Section 1.01 of the Credit Agreement is hereby amended by adding
the following defined term after "Obligations" and before "Other Taxes".
"Orthotech Acquisition" means the acquisition by the Borrower pursuant
to the Asset Purchase Agreement to be entered into amount the Borrower,
Holdings and the Seller (as such term is defined therein) of the assets of
Seller specified therein for a total purchase price of approximately
$54,697,000.
(c) Section 1.01 of the Credit Agreement is hereby amended by adding
the following defined term after "Net Working Capital" and before "Obligations".
"New Term Loans" means Loans made on the Amendment Date in an
aggregate amount not to exceed $24,000,000 pursuant to clause (a) of
Section 2.01.
(d) The defined term "Effective Date" in Section 1.01 of the Credit
Agreement is hereto amended by adding at the end thereof the text ", which the
parties hereto agree is June 30, 1999."
(e) The defined term "Permitted Acquisition" in Section 1.01 of the
Credit Agreement is hereby amended by adding at the end thereof the text
"Notwithstanding any of the foregoing to the contrary, the Orthotech
Acquisition shall be deemed a Permitted Acquisition".
(f) The defined term "Term Commitment" in Section 1.01 of the Credit
Agreement is hereby amended by (i) adding the text ", or in the case of New
Term Loans, on the Amendment Date" after the text "Effective Date" and before
the text ",expressed" and (ii) replacing the last sentence thereof with the
text "The aggregate amount of the Lenders' Term Commitments as of the Amendment
Date is $39,500,000."
(g) Section 2.01 of the Credit Agreement is hereby amended by adding
the text ", or in the case of New Term Loans, on the Amendment Date," after the
text "Effective Date" and before the text "in".
(h) Section 2.08 of the Credit Agreement is hereby amended by adding
the text ", or in the case of New Term Loans on the Amendment Date," after the
text "Effective Date" and before the text "and",
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(i) Section 2.10 of the Credit Agreement is hereby amended by
replacing the table in clause (a) thereof with the following table:
Amount Allocated Amount Allocated
to Term Loans to Term Loans
made on made on
Date Amount Effective Date Effective Date
- --------------- --------------- ----------------- -----------------
September, 1999 $125,000.00 $125,000.00
December, 1999 $125,000.00 $125,000.00
March, 2000 $125,000.00 $125,000.00
June, 2000 $125,000.00 $125,000.00
September, 2000 $318,548.39 $125,000.00 $193,548.39
December, 2000 $318,548.39 $125,000.00 $193,548.39
March, 2001 $318,548.39 $125,000.00 $193,548.39
June, 2001 $318,548.39 $125,000.00 $193,548.39
September, 2001 $318,548.39 $125,000.00 $193,548.39
December, 2001 $318,548.39 $125,000.00 $193,548.39
March, 2002 $318,548.39 $125,000.00 $193,548.39
June, 2002 $318,548.39 $125,000.00 $193,548.39
September, 2002 $318,548.39 $125,000.00 $193,548.39
December, 2002 $318,548.39 $125,000.00 $193,548.39
March, 2003 $318,548.39 $125,000.00 $193,548.39
June, 2003 $318,548.39 $125,000.00 $193,548.39
September, 2003 $318,548.39 $125,000.00 $193,548.39
December, 2003 $318,548.39 $125,000.00 $193,548.39
March, 2004 $318,548.39 $125,000.00 $193,548.39
June, 2004 $318,548.39 $125,000.00 $193,548.39
September, 2004 $8,282,258.06 $3,250,000.00 $5,032,258.06
December, 2004 $8,282,258.06 $3,250,000.00 $5,032,258.06
March, 2004 $8,282,258.06 $3,250,000.00 $5,032,258.06
Term Maturity Date $9,056,451.61 $3,250,000.00 $5,806.451.61
-------------- -------------- --------------
$39,500,000.00 $15,500,000.00 $24,000,000.00
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(j) Section 2.10 of the Credit Agreement is hereby amended by adding
the text "or in the case of New Term Loans, on the Amendment Date," after the
text "Effective Date," and before the text "then".
(k) Section 5.11 of the Credit Agreement is hereby amended by
deleting the first sentence thereof and replacing it with the text "The
proceeds of the Loans and each Letter of Credit will be used only for the
purposes set forth in the preamble of this Agreement or, in the case of New
Term Loans, in Amendment No. 1."
SECTION 2. Representations and Warranties. Each of Holdings and the
Borrower hereby represent and warrant to the Lenders as of the Amendment Date
as follows:
(a) This Amendment Agreement has been duly executed and delivered by
it and constitutes its legal, valid and binding obligation enforceable against
it in accordance with its terms, except as enforceability may be limited by
bankruptcy,
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insolvency, moratorium, reorganization or other similar laws affecting
creditors' rights generally and except as enforceability may be limited by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) After giving effect to this Amendment Agreement, each of the
representations and warranties set forth in Article III of the Credit Agreement
is true and correct in all material respects with the same effect as if made on
the Amendment Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects as to such
earlier date).
(c) After giving effect to this Amendment Agreement, no Default or Event
of Default has occurred and is continuing.
(d)(i) The Borrower is permitted to borrow the entire amount of the New
Term Loans in reliance upon Sections 4.03(vi) and (ix) of the Senior
Subordinated Notes Indenture, (ii) the Borrower has not incurred any
Indebtedness under Sections 4.03(vi) and (ix) of the Senior Subordinated Notes
Indenture and (iii) all Loans made hereunder and Letters of Credit issued
hereunder are "Senior Indebtedness" as such term is defined in the Senior
Subordinated Notes Indenture.
SECTION 3. Conditions to Effectiveness. This Amendment Agreement shall
become effective as of the date first above written (the "Amendment Date")
when:
(a) The Syndication Agent shall have received duly executed counterparts
of this Amendment Agreement bearing the authorized signatures of the Required
Lenders, Holdings, the Borrower and each Lender committing to the Term Loan
Increase.
(b) Each of the representations and warranties contained in Section 2
hereof shall be true and correct, and the Syndication Agent shall have received
a certificate, dated the Amendment Date and signed by the President, a Vice
President or a Financial Officer of the Borrower to such effect.
(c) All fees and expenses required to be paid or reimbursed by the
Borrower pursuant hereto or to the Credit Agreement shall have been paid or
reimbursed, as applicable.
(d)(i) The Syndication Agent shall be satisfied with the terms and
conditions of the Orthotech Acquisition, (ii) the proceeds of the New Term
Loans shall be used solely to finance part of the consideration for the
Orthotech Acquisition and (iii) the Orthotech Acquisition shall be consummated
simultaneously with the closing under the New Term Loans.
SECTION 4. Applicable Law. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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SECTION 5. Effect of Amendment. Except as expressly set forth
herein, this Amendment Agreement shall not be implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders, the Administrative Agent, the Syndication Agent or the Borrower
under the Credit Agreement or any other Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle the
Borrower to a consent to, a waiver, amendment, modification or other change of,
any of the terms, conditions, obligations, covenants or agreements contained in
the Credit Agreement or any other Loan Document in similar or different
circumstances. After the date hereof, any reference to the Credit Agreement
shall mean the Credit Agreement as modified hereby. This Amendment Agreement
shall constitute a "Loan Document" for all purposes of the Credit Agreement and
the other Loan Documents. This Amendment Agreement may not be amended nor may
any provision hereof be waived except pursuant to a writing signed by each of
the parties hereto.
SECTION 6. Notices. All notices hereunder shall be given in
accordance with the provisions of Section 9.01 of the Credit Agreement.
SECTION 7. Counterparts. This Amendment Agreement may be executed by
one or more of the parties to this Amendment Agreement on any number of separate
counterparts (including by facsimile transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument, and
shall become effective as provided in Section 3 hereof.
SECTION 8. Headings. The headings of this Amendment Agreement are
for convenience of reference only, are not part of this Amendment Agreement and
are not to be taken into consideration in interpreting this Amendment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed by their duly authorized officers, all as of the date any
year first above written.
DJ ORTHOPEDICS, LLC,
by /s/ CYRIL TALBOT III
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Name: Cyril Talbot III
Title: Vice President--Finance,
CFO & Secretary
DONJOY, L.L.C.,
by /s/ CYRIL TALBOT III
-----------------------------------
Name: Cyril Talbot III
Title: Vice President--Finance,
CFO & Secretary
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
and Collateral Agent,
by /s/ ANN M. DODD
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Name: Ann M. Dodd
Title: Senior Vice President
THE CHASE MANHATTAN BANK,
individually and as Syndication Agent,
Issuing Bank and Swingline Lender,
by /s/ LAURIE B. PERPER
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Name: Laurie B. Perper
Title: Vice President
[Name of Institution]
by /s/ ANDREW T. BRODE
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Name: Andrew T. Brode
Title: Vice President
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CONFIDENTIAL
May 25, 2000
DJ Orthopedic, LLC
$24,00,000 New Term Loans
Summary of Principal Terms and Conditions
Borrower: DJ Orthopedic, LLC, a Delaware limited liability
company (the "Borrower").
Amendment: The Credit Agreement dated as of June 20, 1999
(the "Credit Agreement"), among Donjoy, L.L.C.,
a Delaware limited liability company
("Holdings"), the Borrower, the financial
institutions party thereto, 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"), will be
amended (the "Amendment") (i) to permit the
acquisition by the Borrower pursuant to the
Asset Purchase Agreement to be entered into
among the Borrower, Holdings and the Seller (as
such term is defined therein) of the assets of
Seller specified therein for a total purchase
price of approximately $54,697,000 (the
"OrthoTech Acquisition"), (ii) to provide for
the New Term Loans (as defined below) and (iii)
to effect certain other related changes to the
Credit Agreement. Capitalized terms used but not
defined herein have the meanings assigned
thereto in the Credit Agreement.
New Term Loans: Increase the aggregate principal amount of the
Term Loans available under the Credit Agreement
by $24,000,000 so that the total availability of
(i) the Term Loans under the Credit Agreement
will be $39,500,000 and (ii) the aggregate Loans
under the Credit Agreement will be $64,500,000.
The New Term Loans will be part of the existing
Term Loan Facility under the Credit Agreement
and, except for the amortization adjustments
described below, the New Terms Loans will have
terms identical to the existing Term Loans under
the Credit Agreement.
Book Manager, Syndication Chase Securities Inc. will continue to act as
Agent and Lead Arranger: sole and exclusive book manager, syndication
agent, lead arranger and documentation agent
under the Credit Agreement.
Administrative Agent: First Union National Bank will continue to act
as
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administrative agent under the Credit Agreement.
Purpose: The proceeds of New Term Loans shall be used
solely to finance part of the consideration for
the OrthoTech Acquisition. The estimated sources
and uses of funds necessary to consummate the
OrthoTech Acquisition are set forth on Annex I
hereto.
Availability: The full amount of the New Term Loans must be
drawn in a single drawing on the date the
OrthoTech Acquisition is consummated and the
Amendment goes into effect.
Final Maturity: June 20, 2005, which is the date all Term Loans
mature under the Credit Agreement.
Amortization: As set forth on Annex I hereto.
Conditions Precedent to The borrowing of the New Term Loans will be
Borrowing under the New subject to the applicable conditions to
Term Loans: effectiveness set forth in the Amendment
including (a) the Syndication Agent shall be
satisfied with the terms and conditions of the
OrthoTech Acquisition, (b) the proceeds of the
New Term Loans shall be used solely to finance
part of the consideration of the OrthoTech
Acquisition and (c) the OrthoTech Acquisition
shall be consummated simultaneously with the
closing under the New Term Loans.
Other Provisions: As noted above, the other provisions relating to
the New Term Loans (including with respect to
interest rates and fees, guarantees, security,
mandatory and voluntary prepayments,
representations and warranties, affirmative and
negative covenants, events of default,
indemnification and voting provisions) will be
identical to the terms of the Credit Agreement.
Governing Law and Forum: New York.
Counsel to Arranger: Cravath, Swaine & Moore.
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ANNEX I
Estimated Sources and Uses of Funds*
(in millions of dollars)
For Consolidated Entity
Use of Funds Sources of Funds
- ------------ ----------------
Purchase Price 51.500 Cash 0.197
Management Promissory 0.197 Revolving Facility 16.000
Note
Transactions Costs 3.000 Term Loan 24.000
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Redeemable Preferred Units 4.413
Management Equity 0.260
Rollover Equity 0.759
Equity Contribution 9.068
(excluding Rollover Equity) -----
Total Uses $54.697 Total Sources $54.697
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