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EXHIBIT 4.1
PREFERRED UNIT PURCHASE
AGREEMENT dated as of July 7, 2000,
among DONJOY, L.L.C., a Delaware
limited liability company (the
"Company"), and THE PURCHASERS
IDENTIFIED ON ANNEX I HERETO
(collectively, the "Purchasers").
The Company desires to purchase certain assets and assume certain
liabilities of the business of DePuy Orthopaedic Technology, Inc., a Delaware
corporation (the "Seller"), pursuant to the terms and conditions of the Asset
Purchase Agreement dated as of July 7, 2000 (the "Asset Purchase Agreement"),
among the Seller, dj Orthopedics, LLC, a Delaware limited liability company
("DJ"), and the Company.
In order to obtain a portion of the funds required to pay the
purchase price for such assets pursuant to the Asset Purchase Agreement, the
Company desires to raise approximately $3,594,000 in preferred equity financing,
and the Purchasers, severally, desire to purchase from the Company, an aggregate
of 4,221 Preferred Units (as defined herein) (the "Purchased Units") in
connection therewith, all on the terms and subject to the conditions set forth
herein.
NOW THEREFORE, in consideration of the foregoing and the
covenants, agreements, representations and warranties contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the parties hereto
hereby agree as follows:
ARTICLE I
ISSUANCE AND SALE OF THE PURCHASED UNITS
1.1 OPERATING AGREEMENT; AUTHORIZATION.
Simultaneously with or prior to the execution and delivery of this
Agreement, (i) the Company's Board of Managers (the "Board of Managers") has
approved in writing (the "Board Approval") (x) the amendment and restatement of
the Second Amended and Restated Operating Agreement dated as of July 30, 1999 of
the Company, among the parties listed on Schedule I thereto, as heretofore
amended, supplemented or otherwise modified, to read as set forth on EXHIBIT A
(as so amended and restated, the "Operating Agreement"), (y) the execution,
delivery and performance by the Company of this Agreement (including the
issuance, sale and delivery of the Purchased Units to the Purchasers) and (z)
the admission of First Union as a member of the Company, and (ii) all the
members of the Company have executed and delivered the Operating Agreement. The
Operating Agreement designates 100,000 Units as Preferred Units and sets forth
the powers, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof.
1.2 SALE OF THE PURCHASED UNITS.
Upon the terms and subject to the satisfaction or waiver of the
conditions set forth in Article IV, and in reliance upon the representations and
warranties hereinafter set forth, at the
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Closing, the Company shall issue, sell and deliver to each Purchaser, and each
Purchaser shall purchase from the Company, that number of Purchased Units set
forth opposite such Purchaser's name on ANNEX I, for the aggregate purchase
price set forth opposite such Purchaser's name on ANNEX I, free and clear of all
Liens (other than pursuant to the Operating Agreement and the Members'
Agreement). Each Purchaser hereby (i) consents, for purposes of the Operating
Agreement (including, but not limited to, Section 3.6 thereof), to the offer,
issuance and sale by the Company to the Purchasers of the Purchased Units in
accordance with the provisions of this Agreement, (ii) waives any rights such
Purchaser may have in connection with such offer, issuance and sale under the
Members' Agreement and (iii) approves the admission of First Union as a member
of the Company.
1.3 CLOSING.
The closing (the "Closing") with respect to the issuance and sale of the
Purchased Units being purchased by the Purchasers and the consummation of the
related transactions contemplated hereby shall, subject to the satisfaction or
waiver of the applicable conditions set forth in Article IV, take place at the
offices of O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New
York 10112, at 10:00 a.m., New York City time, on the date of the closing of the
transactions contemplated by the Asset Purchase Agreement, or at such other
time, date or place as agreed to by the parties hereto (such date, the "Closing
Date").
1.4 CLOSING DELIVERIES.
At the Closing, the Company shall deliver to each Purchaser a
certificate, registered in such Purchaser's name, representing the Purchased
Units set forth opposite each such Purchaser's name on ANNEX I, against receipt
by the Company of a wire transfer of immediately available funds to an account
or accounts designated in writing by the Company of an aggregate amount equal to
the purchase price for the Purchased Units being purchased by such Purchaser at
the Closing, net of the Application Fee and Closing Fee payable by the Company
to such Purchaser in accordance with Section 1.6. Upon the receipt by the
Company of the purchase price for the Purchased Units being purchased by each
Purchaser at the Closing, the Company shall treat such purchase as a
contribution by such Purchaser to the Company pursuant to Section 721 of the
Code and, in accordance with the provisions of the Operating Agreement, credit
the amount of such purchase price to such Purchaser's capital account on the
books of the Company.
1.5 USE OF PROCEEDS.
The proceeds (net of Application Fees and Closing Fees) from the sale of
the Purchased Units shall be used by the Company solely as set forth under
"Sources and Uses of Funds" on SCHEDULE 1.5.
1.6 APPLICATION FEE; CLOSING FEE.
At the Closing, each Purchaser shall receive (i) an application fee
(each, an "Application Fee") equal to one percent (1.0%) of the aggregate amount
of the purchase price for the Purchased Units being purchased by such Purchaser
at the Closing, and (ii) a closing fee (each, a "Closing Fee") equal to three
and one-half percent (3.5%) of the aggregate amount of the purchase price for
the Purchased Units being purchased by such Purchaser at the Closing. The
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Application Fee and the Closing Fee shall be deducted from the aggregate
purchase price payable by each Purchaser.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with,
the Purchasers, as follows:
2.1 ORGANIZATION AND QUALIFICATION.
The Company and each of its Subsidiaries have been duly incorporated or
formed and are validly existing as limited liability companies or corporations
in good standing under the laws of their respective jurisdictions of
incorporation or formation, are duly qualified to do business and are in good
standing as foreign limited liability companies or corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect").
2.2 AUTHORITY; ACTIONS; ENFORCEABILITY.
The Company has the requisite limited liability company power and
authority to execute and deliver this Agreement and the Related Agreements to
which it is a party and to perform its obligations hereunder and thereunder. The
execution, delivery and performance by the Company of this Agreement and the
Related Agreements to which it is a party and the performance of its obligations
hereunder and thereunder have been duly authorized by all necessary limited
liability company action and no other limited liability company proceedings are
necessary to authorize this Agreement or any of the Related Agreements to which
it is a party or the performance of its obligations hereunder or thereunder. The
Company has duly executed and delivered this Agreement and the Related
Agreements to which it is a party, and this Agreement and the Related Agreements
to which it is a party each constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be subject to (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (whether considered in a proceeding in equity or at law).
2.3 NO CONFLICTS; CONSENTS
The execution and delivery by the Company of this Agreement and the
Related Agreements to which it is a party and the performance by the Company of
its obligations hereunder and thereunder will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give rise to a right of termination,
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cancellation or acceleration of any obligation or a loss of a benefit under, or,
except for those existing on the Closing Date and permitted under the Credit
Agreement and those created pursuant to the Credit Agreement, result in the
creation or imposition of any Lien upon any property or assets of the Company or
any of its Subsidiaries pursuant to, any provision of (i) the limited liability
company agreement, operating agreement, certificate or articles of
incorporation, bylaws or other similar organizational documents, as applicable,
of the Company or any of its Subsidiaries, (ii) any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject, except for such conflicts, breaches,
violations or defaults which would not, singularly or in the aggregate, have a
Material Adverse Effect, or (iii) any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties or assets (assuming compliance by each Purchaser with its
representations and warranties set forth in Article III); and (assuming
compliance by each Purchaser with its representations and warranties set forth
in Article III) no consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or governmental agency or body
under any such statute, judgment, order, decree, rule or regulation is required
for the execution and delivery by the Company of this Agreement or any Related
Agreement to which it is a party or the performance by the Company of its
obligations hereunder or thereunder, except for such consents, approvals,
authorizations, filings, registrations or qualifications (i) which shall have
been obtained or made on or prior to the Closing Date, (ii) as may be required
under state securities laws, and (iii) as may be required to perfect Liens
granted under the Credit Agreement.
2.4 CAPITALIZATION.
(a) The authorized capital stock of the Company immediately
after the Closing shall consist of 3,000,000 Units, of which (i) 2,900,000 Units
shall be designated Common Units, of which (A) 793,891 Common Units shall be
duly and validly issued and outstanding, all of which shall be held of record by
the Persons and in the amounts set forth on SCHEDULE 2.4, (B) no Common Units
shall be held by the Company in its treasury, (C) 138,770 Common Units shall be
duly and validly reserved for issuance pursuant to outstanding options granted
by the Company pursuant to the Amended and Restated DonJoy, L.L.C. 1999 Option
Plan (the "Option Plan"), (D) 10,030 Common Units shall be duly and validly
reserved for issuance pursuant to options that may be granted after the Closing
pursuant to the Option Plan, and (E) no additional Common Units shall be
reserved for issuance and (ii) 100,000 Units shall be designated Preferred
Units, of which (A) 44,405 Preferred Units shall be duly and validly issued and
outstanding, all of which shall be held of record by the Persons and in the
amounts set forth on SCHEDULE 2.4, and (B) no Preferred Units shall be held by
the Company in its treasury or reserved for issuance. As of immediately after
the Closing, all outstanding Units of the Company have been duly and validly
authorized and issued and are not subject to assessment by the Company for
additional capital contributions; provided, however, that each member of the
Company would be liable for the amount of any distribution to such member (or
its predecessor in interest) made in violation of Section 18-607 or Section
18-804 of the Limited Liability Company Act of the State of Delaware (the "LLC
Act") to the extent the same is required to be returned to or for the account of
the Company as provided in such Section of the LLC Act, potentially with
interest.
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(b) All of the outstanding units or shares of capital stock of
each Subsidiary of the Company have been duly and validly authorized and issued,
and, in the case of any such shares, are fully paid and non-assessable or, in
the case of the units of DJ, are not subject to assessment by DJ for additional
capital contributions; provided, however, that each member of DJ will be liable
for the amount of any distribution to such member (or its predecessor in
interest) made in violation of Section 18-607 or Section 18-804 of the LLC Act
to the extent the same is required to be returned to or for the account of the
Company as provided in such Section of the LLC Act, potentially with interest;
and are owned by the Company, either directly or indirectly through its
Subsidiaries, free and clear of any Liens, other than those Liens created
pursuant to the Related Agreements or described in the Offering Memorandum. DJ
is a wholly owned Subsidiary of the Company and has no Subsidiaries other than
DJ Orthopedics Capital Corporation, a Delaware corporation ("DJ Capital"), and
dj Orthopedics de Mexico, S.A. de C.V., a Mexican corporation.
(c) There are no outstanding subscriptions, preemptive rights,
warrants, calls, options or other rights to acquire, or instruments convertible
into or exchangeable for, or agreements or understandings with respect to the
transfer, sale or issuance of, any shares, units, limited liability company
interests or other equity or ownership interests of the Company or any of its
Subsidiaries granted or issued by, or binding upon, the Company or any of its
Subsidiaries, or to which the Company or any of its Subsidiaries is a party,
other than those (i) provided for in the Operating Agreement, the Members'
Agreement, the Credit Agreement or the Option Plan or (ii) as otherwise
described in the Offering Memorandum. Neither the Company nor any of its
Subsidiaries has any equity appreciation rights, phantom equity plan or similar
rights outstanding.
2.5 PRIVATE SALE.
Assuming the accuracy of the representations and warranties of the
Purchasers contained in Section 3.2, the offering, issuance and sale of the
Purchased Units will be exempt from registration under the Securities Act and
applicable state securities laws and the rules and regulations promulgated
thereunder.
2.6 INVESTMENT COMPANY ACT.
Neither the Company nor any of its Subsidiaries is (i) an "investment
company" or a company "controlled by" an investment company within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission promulgated thereunder, or (ii) a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
2.7 BROKERS.
Neither the Company nor any of its Subsidiaries is a party to any
contract, agreement or understanding with any Person that would give rise to a
valid claim against the Company, any of the Company's Subsidiaries or any
Purchaser for a brokerage commission, finder's fee or like payment in connection
with the offering, issuance and sale of the Purchased Units.
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2.8 SELLER'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by the Seller in Article V of
the Asset Purchase Agreement are true and correct in all material respects
(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 of such earlier date).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
Each Purchaser represents and warrants severally, and not jointly
as to any other Purchaser, as follows:
3.1 AUTHORITY; ACTIONS; ENFORCEABILITY.
Such Purchaser has the requisite power and authority to execute and
deliver this Agreement and the Related Agreements to which it is a party and to
perform its obligations hereunder and thereunder. The execution, delivery and
performance by such Purchaser of this Agreement and the Related Agreements to
which it is a party and the performance of its obligations hereunder and
thereunder have been duly authorized by all requisite action on its part and no
other proceedings on its part are necessary to authorize this Agreement or any
of the Related Agreements to which it is a party or the performance of its
obligations hereunder or thereunder. Such Purchaser has duly executed and
delivered this Agreement and the Related Agreements to which it is a party, and
this Agreement and the Related Agreements to which it is a party each
constitutes the legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms, except to the
extent that such enforceability may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (whether considered in a proceeding in equity or at law).
3.2 INVESTMENT REPRESENTATIONS.
Solely for establishing that the issuance, offer or sale of the
Purchased Units to such Purchaser is exempt from the registration requirements
of the Securities Act and comparable provisions of state securities laws and not
in any way to mitigate the responsibility or liability of the Company for any
breach of the representations and warranties made by it in this Agreement, on
which such Purchaser is relying in full in connection with its decision to
invest in the Company:
(a) Such Purchaser is acquiring the Purchased Units for its
own account, for investment and not with a view to the distribution thereof in
violation of the Securities Act or applicable state securities laws;
(b) Such Purchaser (A) understands that (i) the Purchased
Units have not been registered under the Securities Act or applicable state
securities laws by reason of their issuance by the Company in a transaction
exempt from the registration requirements of the Securities Act
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and applicable state securities laws and (ii) the Purchased Units must be held
by such Purchaser indefinitely unless a subsequent disposition thereof is
registered under the Securities Act and applicable state securities laws or is
exempt from such registration and (B) has had the opportunity to ask questions
of, and receive answers from, the Company and its management relating to the
business and financial condition of the Company and its Subsidiaries;
(c) Such Purchaser further understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to such
Purchaser) promulgated under the Securities Act depends on the satisfaction of
various conditions, and that, if applicable, Rule 144 may afford the basis for
sales of the Purchased Units in limited amounts;
(d) Such Purchaser has not employed any broker or finder in
connection with the transactions contemplated by this Agreement;
(e) Such Purchaser is an "accredited investor" (as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act) and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the risks and merits of its investment in the Purchased Units,
provided, that such Purchaser's representations in this Section 3.2(d) shall in
no way limit the enforceability of any representations made by the Company in
this Agreement or any of the Related Agreements to which it is a party; and
(f) Such Purchaser was not formed for the purpose of
consummating the transactions contemplated hereby.
ARTICLE IV
CONDITIONS TO CLOSING
4.1 CONDITIONS TO PURCHASERS' OBLIGATIONS.
The obligation of each Purchaser to purchase and pay for the Purchased
Units to be purchased hereunder at the Closing is subject to the satisfaction of
the following conditions precedent (unless waived by such Purchaser):
(a) The Company shall have duly issued and delivered to each
Purchaser a certificate, registered in such Purchaser's name, representing the
Purchased Units set forth opposite such Purchaser's name on ANNEX I
(b) The Company shall have performed its obligations under,
and shall have complied with, all the covenants and agreements set forth in this
Agreement and the Related Agreements to which it is a party and all
representations and warranties contained in Article II shall be true and correct
as of the date hereof and at and as of the Closing Date with the same effect as
if such representations and warranties had been made at and as of the Closing
Date, and each Purchaser shall have received a certificate to that effect signed
by an officer of the Company.
(c) The Company shall have (i) completed SBA Forms 480 and 652
and Parts A and B of SBA Form 1031, executed such SBA Forms where specified, and
delivered such SBA
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Forms to CB Capital and (ii) executed and delivered to CB Capital the letter,
substantially in the form attached hereto as EXHIBIT B, from the Company to CB
Capital.
(d) Each Purchaser shall have received (i) an original
executed counterpart from each party to each Related Agreement (including the
Operating Agreement), (ii) a revised version of Schedule I to the Operating
Agreement (prepared and delivered by the Company) which identifies each
Purchaser as the holder of (A) the Purchased Units being purchased by such
Purchaser at the Closing and (B) the other Units (if any) held of record by such
Purchaser immediately prior to the Closing and (iii) an original certificate
from the Secretary, or an Assistant Secretary, of the Company, dated as of the
Closing Date, certifying (A) that a true and complete copy of the Certificate of
Formation of the Company, as certified by the Secretary of State of the State of
Delaware as of date not more than five (5) days prior to the Closing Date and in
full force and effect on the Closing Date, is attached thereto, (B) that a true
and complete copy of the Limited Liability Company Agreement of the Company, as
in full force and effect on the Closing Date, (being the Operating Agreement) is
attached thereto, (C) that a true and complete copy of a Certificate of Good
Standing of the Company, as issued by the Secretary of State of the State of
Delaware as of date not more than five (5) days prior to the Closing Date, is
attached thereto, (D) as to the genuineness of the resolutions (attached
thereto) of the Board of Managers which authorize the execution, delivery and
performance of this Agreement (including the issuance and sale of the Purchased
Units to the Purchasers) and the Related Agreements to which the Company is a
party and the consummation of the transactions contemplated hereby and thereby,
and (E) as to the incumbency and genuineness of the signatures of each Person,
on behalf of the Company, executing this Agreement and the Related Agreements to
which the Company is a party.
(e) Each of the conditions to the obligations of the Seller,
the Company and DJ under the Asset Purchase Agreement shall have been satisfied,
each of the conditions to the obligations of the Company and the "Purchasers"
under the Common Unit Purchase Agreement shall have been satisfied, and each of
the conditions to the obligations of the "Lenders" under the Credit Agreement to
the making of the New Term Loans shall have been satisfied, in each case without
waiver or amendment (except as disclosed to and reasonably satisfactory to the
Purchasers), and the Purchasers shall be satisfied that the closings under the
Asset Purchase Agreement and the Common Unit Purchase Agreement and the closing
of the making of the New Term Loans under the Credit Agreement will take place
concurrently with the Closing.
(f) Each of the Related Agreements shall be in full force and
effect and no term or condition thereof shall have been amended, waived or
otherwise modified without the prior written consent of each Purchaser.
(g) The issuance and sale of the Purchased Units to the other
Purchasers shall have been consummated simultaneously with the Closing.
4.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS.
The obligation of the Company to issue and sell the Purchased Units at
the Closing is subject to the satisfaction of the following conditions precedent
(unless waived by the Company):
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(a) Each Purchaser and each other member of the Company shall
have duly executed and delivered to the Company a counterpart to the Operating
Agreement.
(b) Each Purchaser shall have performed its obligations under,
and shall have complied with, all the covenants and agreements set forth in this
Agreement and the Related Agreements to which it is a party and all
representations and warranties contained in Article III shall be true and
correct as of the date hereof and at and as of the Closing Date with the same
effect as if such representations and warranties had been made at and as of the
Closing Date.
(c) Each Purchased shall have delivered to the Company, by
wire transfer of immediately available funds to an account or accounts
designated by the Company, an aggregate amount equal to the purchase price for
the Purchased Units being purchased by such Purchaser, net of the Application
Fee and Closing Fee payable by the Company to such Purchaser in accordance with
Section 1.6.
(d) The Company shall be satisfied that the closing under the
Asset Purchase Agreement and that the closing of the making of the New Term
Loans under the Credit Agreement shall take place concurrently with the Closing.
ARTICLE V
TRANSFER OF PURCHASED UNITS
5.1 RESTRICTION ON TRANSFER.
The Purchased Units shall be restricted from transfer as set forth in
the Operating Agreement and the Members' Agreement.
5.2 RESTRICTIVE LEGENDS.
Each certificate evidencing Purchased Units shall be stamped or
otherwise imprinted with a legend as set forth in the Members' Agreement.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 INFORMATION RIGHTS.
The Company shall furnish each Purchaser with the following:
(a) Monthly Reports. As soon as available, but not later than
30 days after the end of each fiscal month, a consolidated balance sheet of the
Company as of the end of such period and consolidated statements of income of
the Company for such period and for the period commencing at the end of the
previous fiscal year and ending with the end of such period, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, and including comparisons to the budget or
business plan and an analysis of the variances from the budget or plan, all
prepared in accordance with generally accepted accounting principles
consistently applied with past practices (except for the absence of footnotes
and year-end adjustments).
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(b) Quarterly Reports. As soon as available, but not later
than 45 days after the end of each quarterly accounting period, (i) a
consolidated balance sheet of the Company as of the end of such period and
consolidated statements of income, cash flows and changes in members' equity for
such quarterly accounting period and for the period commencing at the end of the
previous fiscal year and ending with the end of such period, setting forth in
each case in comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, and including comparisons to the budget or
business plan and an analysis of the variances from the budget or plan, all
prepared in accordance with generally accepted accounting principles
consistently applied with past practices (except for the absence of footnotes
and year-end adjustments) and (ii) a report by management of the Company of the
operating and financial highlights of the Company and its Subsidiaries for such
period.
(c) Annual Audit. As soon as available, but not later than 120
days after the end of each fiscal year of the Company, audited consolidated
financial statements of the Company, which shall include statements of income,
cash flows and changes in members' equity for such fiscal year and a balance
sheet as of the last day thereof, each prepared in accordance with generally
accepted accounting principles, consistently applied, and accompanied by the
report of a "Big 5" firm of independent certified public accountants selected by
the Board of Managers (the "Accountants"). The Company and its Subsidiaries
shall maintain a system of accounting sufficient to enable its Accountants to
render the report referred to in this Article VI.
(d) Budgets. As soon as available, but not more than 90 days
after the commencement of each new fiscal year, a business plan and projected
financial statements for such new fiscal year.
(e) Miscellaneous. Promptly upon becoming available, the
Company shall provide to each Purchaser copies of all financial statements,
reports, press releases, notices, proxy statements and other documents sent by
the Company or its Subsidiaries to its members generally or released to the
public and copies of all regular and periodic reports, if any, filed by the
Company or its Subsidiaries with the Commission, any securities exchange or The
National Association of Securities Dealers, Inc.
6.2 COMPLIANCE WITH INDENTURE COVENANTS.
So long as any Purchased Units (other than Purchased Units which
constitute Paid Preferred Units) are outstanding, the Company shall cause DJ to
perform its obligations under Section 4.03, Section 4.05, Section 4.06, Section
4.07, Section 4.09 and Section 4.12 of the Indenture dated June 30, 1999, among
DJ and DJ Capital, as issuers, the Company, as guarantor, and The Bank of New
York as trustee, with respect to the 12 5/8% Senior Subordinated Notes due 2009
issued by DJ and DJ Capital.
6.3 COMPLIANCE WITH CREDIT AGREEMENT COVENANTS.
So long as any Purchased Units (other than Purchased Units which
constitute Paid Preferred Units) are outstanding, the Company will perform its
obligations under Section 6.01(b), Section 6.03(b) and Section 6.09 of the
Credit Agreement, as in effect on the date hereof.
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ARTICLE VII
MISCELLANEOUS
7.1 EXPENSES, ETC.
The Company will pay (i) all reasonable costs and other expenses
incurred from time to time by the Company in connection with the Company's
performance of and compliance with all agreements and conditions contained
herein on its part to be performed or complied with (including the reasonable
costs and expenses of its counsel incurred in connection with the review and
negotiation of this Agreement and the Related Agreements), (ii) all reasonable
out-of-pocket costs and expenses incurred by CB Capital in connection with the
transactions contemplated by this Agreement and the Related Agreements
(including all reasonable fees and expenses incurred by CB Capital in connection
with its due diligence investigation of the Company and all reasonable fees and
expenses of O'Sullivan Graev & Karabell, LLP (counsel to CB Capital)), (iii) the
actual costs and expenses (including fees and expenses of counsel) incurred by
the Purchasers in connection with any amendment or waiver of, or enforcement of,
this Agreement, the Related Agreements or any other agreement relating to the
transactions contemplated hereby or thereby, (iv) any stamp or similar taxes
which may be determined to be payable in connection with the execution, delivery
or performance of this Agreement or any of the Related Agreements or any
modification, amendment or alteration of the terms or provisions hereof or
thereof, (v) any issue taxes which may be determined to be payable in respect of
the issuance and sale of the Purchased Units to the Purchasers, and (vi) the
reasonable costs and expenses incurred by each Purchaser in any filing with any
governmental authority with respect to its investment in the Company or in any
other filing with any governmental authority with respect to the Company that
mentions such Purchaser.
7.2 INDEMNIFICATION.
The Company shall indemnify each Purchaser and its affiliates and their
respective officers, directors, partners, employees, agents and representatives
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, actions, damages,
liabilities and related expenses (including, without limitation and as incurred,
reasonable costs of investigating, preparing or defending any such claim or
action, whether or not such Indemnitee is a party thereto), including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution, delivery or performance of this
Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby, or (ii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto. All amounts due under this Section shall be
payable promptly after written demand therefor. Any indemnification of an
Indemnitee by the Company pursuant to this Section shall be effected by wire
transfer of immediately available funds from the Company to an account
designated by the Indemnitee within 15 days after the determination thereof. No
right of any Indemnitee for indemnification pursuant to this Agreement shall be
affected by any examination made for or on behalf of any Purchaser, the
knowledge of any Purchaser's officers, directors, partners, employees, agents or
representatives or the acceptance by any Purchaser of any certificate or
opinion.
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7.3 FURTHER ASSURANCES.
The Company shall duly execute and deliver, or cause to be duly executed
and delivered, at its own cost and expense, such further instruments and
documents and to take all such action, in each case as may be necessary or
proper in the reasonable judgment of the Purchasers to carry out the provisions
and purposes of this Agreement and the Related Agreements.
7.4 SPECIFIC PERFORMANCE; REMEDIES.
Damages in the event of a breach by the Company of this Agreement or any
other Related Agreement to which the Company is a party would be difficult, if
not impossible, to ascertain, and it is therefore agreed that the Purchasers, in
addition to and without limiting any other remedy or right any of them may have,
will have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and enforcing specifically
the terms and provisions hereof and thereof, and the Company hereby waives any
and all defenses it may have on the ground of lack of jurisdiction or competence
of the court to grant such an injunction or other equitable relief. The
existence of this right to specific performance will not preclude the Purchasers
from pursuing any other rights and remedies at law or in equity which the
Purchasers may have.
7.5 SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of the Company and
the Purchasers and their respective successors, permitted assigns, heirs and
personal representatives. Upon the transfer of any Purchased Units in accordance
with the terms of this Agreement, the transferee shall be bound by, and entitled
to the benefits of, this Agreement with respect to such transferred Purchased
Units, in the same manner as the transferring Purchaser.
7.6 ENTIRE AGREEMENT.
This Agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and thereof and supersede all
prior and contemporaneous arrangements or understandings with respect thereto.
7.7 NOTICES.
Any notices, demands, consents or other communications that are
given or made hereunder shall be in writing and shall be given or made to any
party hereto by physical delivery, U.S. mail (registered or certified mail,
postage prepaid, return receipt requested) or overnight courier or by
transmission by facsimile to such party at its, his or her address (or facsimile
number) set forth below, or such other address (or facsimile number) as shall
have been specified by like notice by such party:
(i) if to the Company, to
DonJoy, L.L.C.
2985 Scott Street
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Vista, California 92083-8229
Attention: Chief Executive Officer
Telephone: (760) 727-1280
Facsimile: (760) 734-3536
with a copy (which shall not constitute notice) to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: John J. Suydam, Esq.
Telephone: (212) 408-2400
Facsimile: (212) 408-2420
(ii) if to any Purchaser, to such Purchaser's address
set forth on ANNEX I.
Each such notice, demand, consent or other communication shall be effective upon
receipt in the case of physical delivery or overnight courier, upon confirmation
of receipt by or on behalf of the addressee in the case of transmission by
facsimile if received prior to 5:00 p.m., New York City time, and, if received
after 5:00 p.m., New York City time, on the next Business Day immediately after
the date of such receipt, and five Business Days after deposit in the U.S. mails
in the case of mailing.
7.8 AMENDMENTS, MODIFICATIONS AND WAIVERS.
The terms and provisions of this Agreement may not be modified or
amended, nor any of the provisions hereof waived, temporarily or permanently,
except pursuant to a written instrument executed by the Company and the holders
of a majority of the Purchased Units; provided, however, that any such
amendment, modification or waiver that would adversely affect the rights
hereunder of any Purchaser, in its capacity as a Purchaser, without similarly
affecting the rights hereunder of all Purchasers, in their capacities as
Purchasers, shall not be effective as to such Purchaser without its prior
written consent. No waiver by any party shall operate or be construed as a
waiver of any subsequent breach by any other party.
7.9 GOVERNING LAW, WAIVER OF JURY TRIAL; JURISDICTION.
(a) All questions concerning the construction, interpretation
and validity of this Agreement shall be governed by and construed and enforced
in accordance with the domestic laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether in the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware. In furtherance of the
foregoing, the internal law of the State of Delaware will control the
interpretation and construction of this Agreement, even if under such
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily or necessarily apply.
(b) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
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APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
(c) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any court of the State of New York or Federal court of the
United States of America sitting in the State of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in any
such court of the State of New York or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(d) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
of the State of New York or Federal court. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
7.10 CERTAIN DEFINITIONS.
Capitalized terms used and not otherwise defined in this Agreement have
the meanings ascribed to them below:
"Asset Purchase Agreement" has the meaning assigned to such term in the
first paragraph of the preamble to this Agreement.
"Business Day" means any day, other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"CB Capital" means CB Capital Investors, LLC, a Delaware limited
liability company, and any successors or assigns of its Interest (as defined in
the Operating Agreement).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal statute, and the rules and regulations promulgated thereunder,
all as the same may from time to time be in effect.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
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"Common Unit" has the meaning ascribed to such term in the Operating
Agreement.
"Common Unit Purchase Agreement" means the Common Unit Purchase
Agreement dated as of the date hereof, among the Company, Chase DJ Partners,
LLC, the Leslie H. Cross & Deborah L. Cross Family Trust, Michael R. McBrayer
and Cyril Talbot III.
"Credit Agreement" shall mean the Credit Agreement dated as of June 30,
1999, among the Company, as Parent, DJ, as Borrower, the lenders party thereto,
First Union National Bank, as Administrative Agent, Documentation Agent and
Collateral Agent, The Chase Manhattan Bank, as Syndication Agent, Issuing Bank
and Swingline Lender, and Chase Securities Inc., as Arranger and Book Manager,
as amended by Amendment No. 1 dated as of May 25, 2000, and as the same may be
further amended, supplemented or otherwise modified from time to time.
"DJ" has the meaning assigned to such term in the first paragraph of the
preamble to this Agreement.
"First Union" means First Union Capital Partners, LLC.
"Lien" means any security interest, lien, pledge, claim, charge, escrow,
encumbrance, option, right of first offer, right of first refusal, preemptive
right, mortgage, indenture, security agreement or other similar agreement,
arrangement, contract, commitment, understanding or obligation, whether written
or oral and whether or not relating in any way to credit or the borrowing of
money.
"Members' Agreement" means the Members' Agreement dated as of June 30,
1999, among the Company, the Purchasers and the other parties thereto, as
amended, supplemented or otherwise modified from time to time.
"New Term Loans" has the meaning ascribed to such term in the Credit
Agreement.
"Offering Memorandum" means the offering memorandum dated June 17, 1999,
for the 12 5/8% Senior Subordinated Notes due 2009 issued and sold by DJ and DJ
Capital on June 30, 1999, as the same may have been amended, supplemented or
otherwise modified prior to such issuance and sale.
"Person" shall be construed as broadly as possible and shall include an
individual or natural person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental authority.
"Paid Preferred Unit" has the meaning ascribed to such term in the
Operating Agreement.
"Preferred Unit" has the meaning ascribed to such term in the Operating
Agreement.
"Purchased Units" has the meaning assigned to such term in the second
paragraph of the preamble to this Agreement.
"Related Agreements" means the Operating Agreement and the Asset
Purchase Agreement.
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"Rule 144" shall mean Rule 144 promulgated under the Securities Act, or
any successor rule thereto.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same may from time to time be in effect.
"security" has the meaning given to the term "security" in Section 2(1)
of the Securities Act.
"Seller" has the meaning assigned to such term in the first paragraph of
the preamble to this Agreement.
"Subsidiary" means, with respect to any Person, any other Person of
which more than fifty percent (50%) of the shares of capital stock or other
interests entitled to vote in the election of directors or comparable Persons
performing similar functions are at the time owned or controlled, directly or
indirectly through one or more Subsidiaries, by such Person. As used in this
definition, the term "control" means the possession, directly or indirectly, of
the power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Unit" has the meaning ascribed to such term in the Operating Agreement.
7.11 NO THIRD PARTY RELIANCE.
Anything contained herein to the contrary notwithstanding, the
representations and warranties of the Company contained in this Agreement (i)
are being given by the Company as an inducement to the Purchasers to enter into
this Agreement and the Related Agreements (and the Company acknowledges that the
Purchasers have expressly relied thereon) and (b) are solely for the benefit of
the Purchasers and their respective successors and assigns. Accordingly, no
third party (including, without limitation, any holder of capital stock of the
Company) or anyone acting on behalf of any thereof, other than the Purchasers
and their respective successors and assigns, shall be a third party or other
beneficiary of such representations and warranties and no such third party shall
have any rights of contribution against the Company or the Purchasers with
respect to such representations or warranties or any matter subject to or
resulting in indemnification under this Agreement or otherwise.
7.12 SEVERABILITY.
It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the law and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction,
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be so narrowly drawn, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
7.13 INTERPRETATION.
The term "this Agreement" means this agreement, together with all
schedules and exhibits hereto, as the same may from time to time be amended,
modified, supplemented or restated in accordance with the terms hereof. The use
in this Agreement of the term "including" means "including, without limitation."
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole, including the schedules and exhibits, as the
same may from time to time be amended, modified, supplemented or restated, and
not to any particular section, subsection, paragraph, subparagraph or clause
contained in this Agreement. All references to sections, annexes, schedules and
exhibits mean the sections of this Agreement and the annexes, schedules and
exhibits attached to this Agreement, except where otherwise stated. The title of
and the section headings in this Agreement are for convenience of reference only
and shall not govern or affect the interpretation of any of the terms or
provisions of this Agreement. The use herein of the masculine, feminine or
neuter forms shall also denote the other forms, as in each case the context may
require or permit. Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Unless expressly provided
otherwise, the measure of a period of one month or year for purposes of this
Agreement shall be that date of the following month or year corresponding to the
starting date, provided that if no corresponding date exists, the measure shall
be that date of the following month or year corresponding to the next day
following the starting date. For example, one month following February 18 is
March 18, and one month following March 31 is May 1.
7.14 INDEPENDENCE OF AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES.
All agreements and covenants hereunder shall be given independent effect
so that if a certain action or condition constitutes a default under a certain
agreement or covenant, the fact that such action or condition is permitted by
another agreement or covenant shall not affect the occurrence of such default,
unless expressly permitted under an exception to such initial covenant. In
addition, all representations and warranties hereunder shall be given
independent effect so that if a particular representation or warranty proves to
be incorrect or is breached, the fact that another representation or warranty
concerning the same or similar subject matter is correct or is not breached will
not affect the incorrectness of or a breach of a representation and warranty
hereunder.
7.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All of the representations and warranties of the parties hereto set
forth in this Agreement or in any other instrument delivered pursuant to this
Agreement shall be deemed to have been relied upon by the party or parties to
whom such representations and warranties were made. Notwithstanding any
investigation made at any time by or on behalf of any party hereto, the
representations and warranties contained in this Agreement or in any other
instrument delivered pursuant to this Agreement shall survive the Closing and
shall terminate in their entirety on the
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date which is 15 months following the Closing Date; provided, however, the
representations and warranties of the Company set forth in Section 2.8 shall
survive the Closing Date and terminate in their entirety at such time as the
representations and warranties of the Seller contained in Article V of the Asset
Purchase Agreement cease to survive (before giving effect to any waiver,
modification or amendment thereof by the Company or DJ which would reduce such
survival period); and provided, further, however, (i) each representation and
warranty of the Company set forth in Sections 2.1, 2.2, 2.3 and 2.4, (ii) each
representation and warranty of each Purchaser set forth in Sections 3.1 and 3.2
and (iii) any representation or warranty of the Company or any Purchaser which
is breached if such breach involves fraud or intentional misrepresentation by
the Company or any such Purchaser shall survive the Closing Date until the
expiration of the applicable statute of limitations governing claims for breach
of such representation and warranty. Notwithstanding any investigation made at
any time by or on behalf of any party hereto, the covenants and agreements
contained in this Agreement or in any other instrument delivered pursuant to
this Agreement shall survive the Closing. Any claim for which the party
asserting such claim shall have given proper notice in accordance with the terms
of this Agreement on or prior to the expiration of the survival period shall
survive until such claim is resolved pursuant to the terms of this Agreement.
7.16 COUNTERPART; FACSIMILE SIGNATURES.
This Agreement may be executed in any number of counterparts, and
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. This Agreement, and
any amendments, modifications or waivers hereof, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
COMPANY
DONJOY, L.L.C.
By: /s/ LESLIE H. CROSS
------------------------------------
Name: Leslie H. Cross
Title: President & CEO
20
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
PURCHASER
CB CAPITAL INVESTORS, LLC
BY: CHASE CAPITAL PARTNERS,
AS INVESTMENT MANAGER
By: /s/ MITCHELL BLUTT
------------------------------------
Name: Mitchell Blutt
Title: General Partner
21
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
PURCHASER
FIRST UNION CAPITAL PARTNERS, LLC
By: /s/ DAVID F. GRAMS, JR.
------------------------------------
Name: David F. Grams, Jr.
Title: Principal
22
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
PURCHASER
DJC, INC.
By: /s/ JOHN C. ROCCHIO
------------------------------------
Name: John C. Rocchio
Title: Managing Director
23
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
PURCHASER
TCW/CRESCENT MEZZANINE TRUST II
BY: TCW/CRESCENT MEZZANINE II, L.P.,
AS GENERAL PARTNER OR MANAGING OWNER
BY: TCW/CRESCENT MEZZANINE, L.L.C.,
ITS GENERAL PARTNER
By: /s/ JOHN C. ROCCHIO
------------------------------------
Name: John C. Rocchio
Title: Managing Director
24
IN WITNESS WHEREOF, the parties hereto have executed this
Preferred Unit Purchase Agreement as of the date first above written.
PURCHASER
TCW LEVERAGED INCOME TRUST II, L.P.
BY: TCW INVESTMENT MANAGEMENT COMPANY,
AS INVESTMENT ADVISOR
By: /s/ JOHN C. ROCCHIO
------------------------------------
Name: John C. Rocchio
Title: Managing Director
BY: TCW (LINC II), L.P.,
AS GENERAL PARTNER
BY: TCW ADVISORS (BERMUDA), LTD.,
AS ITS GENERAL PARTNER
By: /s/ DARRYL L. SCHALL
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
25
ANNEX I
NUMBER OF
PURCHASER PURCHASED UNITS PURCHASE PRICE
- --------- --------------- --------------
CB CAPITAL INVESTORS, LLC 2,146 $1,827,627.98
c/o Chase Capital Partners
1221 Avenue of the Americas
New York, NY 10020-1080
Attention: Eric Green
Tel: (212) 899-3400
Fax: (212) 899-3401
with a copy (which shall not constitute notice) to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza, 24th Floor
New York, NY 10112
Attention: John J. Suydam, Esq.
Telephone: (212) 408-2400
Facsimile: (212) 408-2420
FIRST UNION CAPITAL PARTNERS, LLC 668 $ 568,898.18
301 South College Street
Charlotte, NC 28288-0732
Attention: David F. Grams, Jr.
Telephone: (704) 715-1780
Facsimile: (704) 374-6711
DJC, INC. 1,068 $ 909,555.77
c/o TCW/Crescent Mezzanine LLC
11100 Santa Monica Blvd., Suite 2000
Los Angeles, CA 90025
Attention: Jim Shevlet
Telephone: (310) 235-5978
Facsimile: (310) 235-5967
26
NUMBER OF
PURCHASER PURCHASED UNITS PURCHASE PRICE
- --------- --------------- --------------
TCW/CRESCENT MEZZANINE TRUST II 233 $ 198,433.05
c/o TCW/Crescent Mezzanine LLC
11100 Santa Monica Blvd., Suite 2000
Los Angeles, CA 90025
Attention: Jim Shevlet
Telephone: (310) 235-5978
Facsimile: (310) 235-5967
TCW LEVERAGED INCOME TRUST II, L.P. 106 $ 90,274.26
c/o TCW/Crescent Mezzanine LLC
11100 Santa Monica Blvd., Suite 2000
Los Angeles, CA 90025
Attention: Jim Shevlet
Telephone: (310) 235-5978
Facsimile: (310) 235-5967
TOTAL: 4,221 $3,594,789.24
===== =============
27
SCHEDULE 1.5
SOURCES AND USES OF FUNDS
28
SCHEDULE 2.4
CAPITALIZATION
PURCHASER PREFERRED UNITS COMMON UNITS
- --------- --------------- ------------
CB Capital Investors, LLC 22,573 --
DJ Investment, LLC 6,362 --
First Union Capital Partners, LLC 668 --
DJC, Inc. 10,699 --
TCW/Crescent Mezzanine Trust II 2,323 --
TCW Leveraged Income Trust II, L.P. 1,110 --
Crescent/Mach I Partners, L.P. 670 --
Chase DJ Partners, LLC -- 771,770
Leslie H. Cross & Deborah L. Cross Family Trust -- 14,946
Michael R. McBrayer -- 3,587
Cyril Talbot III -- 3,587
TOTAL: 44,405 793,890
====== =======
29
CONSENT AND WAIVER
The undersigned, being a member of DonJoy, L.L.C., a Delaware
limited liability company (the "Company"), and a holder of the Company's
Preferred Units, hereby (i) consents, for purposes of the Operating Agreement
(including, but not limited to, Section 3.6 thereof), to the offer, issuance and
sale by the Company to the Purchasers of the Purchased Units in accordance with
the provisions of the Preferred Unit Purchase Agreement dated as of July 7,
2000, to which this Consent and Waiver is attached (the "Unit Purchase
Agreement"), (ii) waives any rights the undersigned may have in connection with
such offer, issuance and sale under the Members' Agreement, and (iii) approves
the admission of First Union as a member of the Company.
Capitalized terms used and not otherwise defined in this Consent
and Waiver have the meanings ascribed to them in the Unit Purchase Agreement.
Dated: July 7, 2000
CRESCENT/MACH I PARTNERS, L.P.
BY: TCW ASSET MANAGEMENT
COMPANY, AS PORTFOLIO MANAGER AND AS
ATTORNEY-IN-FACT FOR THE PARTNERSHIP
By: /s/ JOHN C. ROCCHIO
------------------------------------
Name: John C. Rocchio
Title: Managing Director
30
CONSENT AND WAIVER
The undersigned, being a member of DonJoy, L.L.C., a Delaware
limited liability company (the "Company"), and a holder of the Company's
Preferred Units, hereby (i) consents, for purposes of the Operating Agreement
(including, but not limited to, Section 3.6 thereof), to the offer, issuance and
sale by the Company to the Purchasers of the Purchased Units in accordance with
the provisions of the Preferred Unit Purchase Agreement dated as of July 7,
2000, to which this Consent and Waiver is attached (the "Unit Purchase
Agreement"), (ii) waives any rights the undersigned may have in connection with
such offer, issuance and sale under the Members' Agreement, and (iii) approves
the admission of First Union as a member of the Company.
Capitalized terms used and not otherwise defined in this Consent
and Waiver have the meanings ascribed to them in the Unit Purchase Agreement.
Dated: July 7, 2000
DJ INVESTMENT, LLC
BY: FIRST UNION INVESTORS, INC.,
AS MANAGER
By: /s/ DAVID F. GRAMS, JR.
------------------------------------
Name: David F. Grams, Jr.
Title: Principal
31
CONSENT AND WAIVER
The undersigned, being a member of DonJoy, L.L.C., a Delaware
limited liability company (the "Company"), and a holder of the Company's Common
Units, hereby (i) consents, for purposes of the Operating Agreement, to the
offer, issuance and sale by the Company to the Purchasers of the Purchased Units
in accordance with the provisions of the Preferred Unit Purchase Agreement dated
as of July 7, 2000, to which this Consent and Waiver is attached (the "Unit
Purchase Agreement"), (ii) waives any rights the undersigned may have in
connection with such offer, issuance and sale under the Members' Agreement and
(iii) approves the admission of First Union as a member of the Company.
Capitalized terms used and not otherwise defined in this Consent
and Waiver have the meanings ascribed to them in the Unit Purchase Agreement.
Dated: July 7, 2000
LESLIE H. CROSS & DEBORAH L. CROSS
FAMILY TRUST
By: /s/ LESLIE H. CROSS
------------------------------------
Name: Leslie H. Cross
Title: President & CEO
32
CONSENT AND WAIVER
The undersigned, being a member of DonJoy, L.L.C., a Delaware
limited liability company (the "Company"), and a holder of the Company's Common
Units, hereby (i) consents, for purposes of the Operating Agreement, to the
offer, issuance and sale by the Company to the Purchasers of the Purchased Units
in accordance with the provisions of the Preferred Unit Purchase Agreement dated
as of July 7, 2000, to which this Consent and Waiver is attached (the "Unit
Purchase Agreement"), (ii) waives any rights the undersigned may have in
connection with such offer, issuance and sale under the Members' Agreement and
(iii) approves the admission of First Union as a member of the Company.
Capitalized terms used and not otherwise defined in this Consent
and Waiver have the meanings ascribed to them in the Unit Purchase Agreement.
Dated: July 7, 2000
/s/ MICHAEL R. MCBRAYER
----------------------------------------
Michael R. McBrayer
33
CONSENT AND WAIVER
The undersigned, being a member of DonJoy, L.L.C., a Delaware
limited liability company (the "Company"), and a holder of the Company's Common
Units, hereby (i) consents, for purposes of the Operating Agreement, to the
offer, issuance and sale by the Company to the Purchasers of the Purchased Units
in accordance with the provisions of the Preferred Unit Purchase Agreement dated
as of July 7, 2000, to which this Consent and Waiver is attached (the "Unit
Purchase Agreement"), (ii) waives any rights the undersigned may have in
connection with such offer, issuance and sale under the Members' Agreement and
(iii) approves the admission of First Union as a member of the Company.
Capitalized terms used and not otherwise defined in this Consent
and Waiver have the meanings ascribed to them in the Unit Purchase Agreement.
Dated: July 7, 2000
/s/ CYRIL TALBOT III
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Cyril Talbot III
34
Exhibit A
Third Amended and Restated Operating Agreement
35
Exhibit B
SBIC Side Letter