EXHIBIT 10.59
SUPPLEMENT NO. 1 TO
SECURITY AGREEMENT
SUPPLEMENT NO. 1 dated as of April 4, 2002 to the Security Agreement
dated as of June 30, 1999, among DJ ORTHOPEDICS, LLC, a Delaware limited
liability company (the "Borrower"), DJ ORTHOPEDICS, INC., a Delaware corporation
(successor to Donjoy, LLC) ("New Holdings"), each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a "Subsidiary
Guarantor" and collectively, the "Subsidiary Guarantors"; the Subsidiary
Guarantors, New Holdings and the Borrower are referred to collectively herein as
the "Grantors") and WACHOVIA BANK, NATIONAL ASSOCIATION ("Wachovia"), as
collateral agent (in such capacity, the "Collateral Agent") for the Secured
Parties (as defined herein).
A. Reference is made to (a) the Credit Agreement dated as of June 30,
1999 (as amended by Amendment No. 1 dated as of May 25, 2000 and Agreement dated
as of July 13, 2000 and as further amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, New Holdings,
the lenders from time to time party thereto (the "Lenders"), Wachovia, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and as Collateral Agent, and XX Xxxxxx Xxxxx Bank f/k/a The Chase
Manhattan Bank, as Syndication Agent and as issuing bank (in such capacity, the
"Issuing Bank") and (b) the Parent Guarantee Agreement dated as of June 30, 1999
(as amended, supplemented or otherwise modified from time to time, the "Parent
Guarantee Agreement"), between New Holdings and the Collateral Agent and (c) the
Subsidiary Guarantee Agreement dated as of June 30, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"), among the Subsidiary Guarantors and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.12 of the Credit Agreement, the Borrower is
required to cause each Subsidiary that was not in existence or not a Subsidiary
on the date of the Credit Agreement to enter into the Security Agreement as a
Grantor upon becoming a Subsidiary that is a Subsidiary Loan Party. Section 7.15
of Security Agreement provides that additional Subsidiaries of the Borrower may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "New
Grantor") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Grantor under the Security Agreement in order
to induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment and
performance in full of the Obligations, does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all of
the New Grantor's right, title and interest in and to the Collateral of the New
Grantor. Each reference to a "Grantor" in the Security Agreement shall be deemed
to include the New Grantor. The Security Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that set forth
on Schedule I attached hereto is a true and correct schedule of the location of
any and all Collateral of the New Grantor and set forth under its signature
hereto, is the true and correct location of the chief executive office of the
New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
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SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
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IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
DJ ORTHOPEDICS DEVELOPMENT CORPORATION, a
Delaware corporation
By: /s/ XXXXXX X. XXXXX
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and CEO
Address: c/o dj Orthopedics, LLC
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Collateral Agent
By: /s/ XXXXX X. XXXXX
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director, Corporate &
Investment Banking
SCHEDULE I
dj ORTHOPEDICS DEVELOPMENT CORPORATION
Location of Collateral
Chief Executive Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
