EXHIBIT 10.63
AGREEMENT
AGREEMENT dated as of April 4, 2002 (this "Agreement"), between DJ
ORTHOPEDICS, LLC, a Delaware limited liability company (the "Borrower") and
WACHOVIA BANK, NATIONAL ASSOCIATION ("Wachovia") as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
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, DJ Orthopedics,
Inc., a Delaware corporation (successor to Donjoy, LLC), ("New Holdings"), the
lenders from time to time party thereto (the "Lenders"), Wachovia, as
Administrative Agent and Collateral Agent, and JPMorgan Chase Bank f/k/a The
Chase Manhattan Bank, as Syndication Agent and as issuing bank (in such
capacity, the "Issuing Bank"), (b) the Pledge Agreement dated as of June 30,
1999, among the Borrower, New Holdings, and each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a "Subsidiary
Pledgor" and collectively, the "Subsidiary Pledgors"; the Borrower, New Holdings
and Subsidiary Pledgors are referred to collectively herein as the "Pledgors")
and the Collateral Agent for the Secured Parties (as defined in the Credit
Agreement), (c) 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 (d) the
Subsidiary Guarantee Agreement dated as of June 30, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Subsidiary Guarantee
Agreement"; and, collectively with the Parent Guarantee Agreement, the
"Guarantee Agreements") among the Subsidiary Pledgors and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Pledge Agreement and the Credit
Agreement.
C. The Borrower has created a new wholly-owned subsidiary, dj
Orthopedics Development Corporation (the "IP Subsidiary") and plans to transfer
certain of its intellectual property to such IP Subsidiary. Under the Pledge
Agreement, the Borrower agreed to pledge to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in all of its right, title,
and interest in, and to, any shares of capital stock, membership interests, or
other equity interests owned by the Borrower or obtained by the Borrower after
the date thereof, and the certificates representing all such shares, membership
interests or other equity interests. Therefore, the Borrower shall be required
to pledge to the Collateral Agent, for the benefit of the Secured Parties, all
of its right, title, and interest in and to 100% of the capital stock of the IP
Subsidiary (the "Shares") and the certificates representing such Shares. This
Agreement provides that upon the execution and delivery by the Borrower of this
Agreement and delivery by the Borrower of the items set forth in Section 1
below, the Borrower shall be deemed to have
pledged all of its right, title and interest in and to the Shares to the
Collateral Agent, for the benefit of the Secured Parties, as provided under the
Pledge Agreement.
Accordingly, the Collateral Agent and the Borrower agree as follows:
SECTION 1. The Borrower does hereby transfer, grant, bargain, sell,
convey, hypothecate, pledge, set over and deliver unto the Collateral Agent, its
successors and assigns, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in, all of the Borrower's right, title, and interest in and to
the Shares and the certificates representing such Shares. The Borrower agrees to
deliver to the Collateral Agent (a) any certificates representing the Shares,
(b) a stock power in the form of Exhibit A hereto, duly executed in blank, and
(c) an updated schedule (the "Schedule") listing the Pledged Securities
heretofore and now being pledged by the Borrower, which schedule shall be
attached to the Pledge Agreement as Schedule II and made a part thereof, and
which schedule shall supersede any prior schedules so delivered by the Borrower.
SECTION 2. The Borrower represents and warrants to the Collateral Agent
and the other Secured Parties that this Agreement 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 Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement shall become effective when the
Collateral Agent shall have received counterparts of this Agreement that, when
taken together, bear the signatures of the Borrower and the Collateral Agent.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 4. The Borrower hereby represents and warrants that set forth on
the Schedule provided pursuant to Section 1 of this Agreement, is a true and
correct list of all its Pledged Securities.
SECTION 5. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
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.
SECTION 7. The Borrower agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Agreement, including
the reasonable fees, other charges and disbursements of counsel for the
Collateral Agent.
IN WITNESS WHEREOF, the Borrower and the Collateral Agent have duly
executed this Agreement as of the day and year first above written.
DJ ORTHOPEDICS, LLC, a Delaware limited
liability company
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: President and CEO
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Collateral Agent
By: /s/ XXXXX X. XXXXX
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Name: Xxxxx X. Xxxxx
Title: Managing Director, Corporate &
Investment Banking
Exhibit A
Form of Stock Power
Assignment Separate from Certificate
FOR VALUE RECEIVED, DJ ORTHOPEDICS, LLC hereby sells, assigns and
transfers unto ____________________________ ________ (______) shares of the
common stock, $____ par value per share, of DJ ORTHOPEDICS DEVELOPMENT
CORPORATION, standing in the name of DJ ORTHOPEDICS, LLC on the books of the
aforesaid corporation, represented by Certificate No. ___ herewith and does
hereby irrevocably constitute and appoint _____________________________ attorney
to transfer the said stock on the books of the aforesaid corporation with full
power of substitution in the premises.
Dated: ___________________________
DJ ORTHOPEDICS, LLC
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
