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EXHIBIT 4.16
AMENDED AND RESTATED
PLEDGE AGREEMENT dated as of June
28, 2000, among XXXXXX X. XXXXX
("Cross"), XXXXXX X. XXXXX &
XXXXXXX X. XXXXX FAMILY TRUST (the
"Pledgor"; and together with Cross,
collectively, the "Obligors"), and
DONJOY, L.L.C., a Delaware limited
liability company (the "Company").
The Company and Cross are parties to a Pledge Agreement dated as
of June 30, 1999 (the "Existing Pledge Agreement"), whereby Cross pledged to the
Company 12,500 Common Units of the Company (the "Initial Pledged Securities") as
security for Cross' due and punctual payment and performance of his obligations
under the promissory note dated as of June 30, 1999 in the aggregate principal
amount of $1,000,000 issued by Cross in favor of the Company in partial payment
for the purchase price of the Initial Pledged Securities (the "Initial Note").
Prior to the date hereof, Cross has, with the consent of the Company and one or
more of its members, assigned all of his right, title and interest to the
Initial Pledged Securities to the Pledgor, whereupon the Pledgor then assumed,
on a joint and several basis with Cross, the rights and obligations of Cross as
"Payor" under the Initial Note and as "Pledgor" under the Existing Pledge
Agreement.
On the date hereof, the Obligors, with the consent of the
Company, have amended and restated the Initial Note (as so amended and restated,
and as further amended, supplemented, restated or otherwise modified from time
to time in accordance with its terms, the "Amended Note") to, among other
things, (i) add the accrued and unpaid interest on the Initial Note on the date
hereof ($52,705.56) to the unpaid principal amount of the Initial Note on the
date hereof ($1,000,000) and (ii) permit the Obligors to elect, on any date on
which a payment of interest on the Initial Note is scheduled to be made, to
increase the unpaid principal amount of the Initial Note by the amount of such
interest in lieu of the payment thereof.
The Pledgor now proposes to purchase 1,017 Common Units of the
Company (the "Additional Pledged Securities"; and together with the Initial
Pledged Securities, the "Pledged Securities") from Xxxxx & Nephew Disposal, Inc.
("S&N"), pursuant to a certain Unit Purchase Agreement dated as of the date
hereof, among S&N, the Pledgor and certain other members of the Company. In
order to fund a portion of the aggregate purchase price being paid by the
Pledgor for the Additional Pledged Securities, the Pledgor desires to borrow
$88,644.58 (the "Additional Loan") from the Company, against the issuance by the
Obligors in favor of the Company of a promissory note dated as of the date
hereof in the aggregate principal amount of the Additional Loan (as amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms, the "Additional Note"; and together with the Amended Note, the
"Notes").
As a material inducement to the Company to make the Additional
Loan, the Obligors have agreed with the Company to amend and restate the
Existing Pledge Agreement to provide for the Pledgor's pledge of the Pledged
Securities to the Company as security for the due and punctual payment and
performance of the Obligors' obligations under each of the Notes and
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the Existing Pledge Agreement. This Agreement shall amend and restate the
Existing Pledge Agreement in its entirety as and pursuant to this Agreement.
ACCORDINGLY, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. PLEDGE.
The Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Securities as security for the
prompt and complete payment when due of the unpaid principal and of interest on
each of the Notes.
SECTION 2. DELIVERY OF PLEDGED SECURITIES.
The Obligors confirm that certificates representing the Initial
Pledged Securities, together with duly executed forms of assignment sufficient
to transfer title thereto to the Company, have previously been delivered to the
Company.
Upon the execution of this Agreement, the Pledgor shall deliver
to the Company the certificates representing the Additional Pledged Securities,
together with duly executed forms of assignment sufficient to transfer title
thereto to the Company.
SECTION 3. VOTING RIGHTS; CASH DISTRIBUTIONS.
Notwithstanding anything to the contrary contained herein, during
the term of this Agreement until such time as there exists a default in the
payment of principal or interest on either Note or any other default under
either Note, the Pledgor shall be entitled to all voting rights with respect to
the Pledged Securities and shall be entitled to receive all cash distributions
paid in respect of the Pledged Securities. Upon the occurrence of and during the
continuance of any such default, the Company shall retain all such cash
distributions payable on the Pledged Securities as additional security
hereunder.
SECTION 4. STOCK DIVIDENDS; DISTRIBUTIONS ETC.
If, while this Agreement is in effect, the Pledgor becomes
entitled to receive or receives any securities or other property in addition to,
in substitution of, or in exchange for any of the Pledged Securities (whether as
a distribution in connection with any recapitalization, reorganization or
reclassification, distributions or otherwise), the Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for the Obligors' obligations under the Notes and shall
promptly deliver such additional security to the Company together with duly
executed forms of assignment, and such additional security shall be deemed to be
part of the Pledged Securities hereunder.
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SECTION 5. DEFAULT.
If the Obligors default in the payment of the principal or
interest under either Note as it becomes due (whether upon demand, acceleration
or otherwise) or any other event of default under either Note occurs and has not
been remedied within the 10 day period provided in Section 3(a)(i) of such Note
(including the bankruptcy or insolvency of either Obligor) (each such occurrence
shall be deemed a "Default"), the Company may exercise any and all of the
rights, powers and remedies of an owner of the Pledged Securities (including the
right to vote the shares and receive dividends and distributions with respect to
such shares) and shall have and may exercise without demand any and all the
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code of the State of New York or otherwise available to the Company
under applicable law. Without limiting the foregoing, if a Default occurs, the
Company is authorized to sell, assign and deliver at its discretion, from time
to time, all or any part of the Pledged Securities at any private sale or public
auction, on not less than ten days written notice to the Obligors, at such price
or prices and upon such terms as the Company may deem advisable. Neither Obligor
shall have any right to redeem the Pledged Securities after any such sale or
assignment. At any such sale or auction, the Company or any other holder of
Units of the Company may bid for, and become the purchaser of, the whole or any
part of the Pledged Securities offered for sale. In case of any such sale, after
deducting the costs, attorneys' fees and other expenses of sale and delivery,
the remaining proceeds of such sale shall be applied to the principal of and
accrued interest on each Note; provided, however, that after payment in full of
the indebtedness evidenced by each Note, the balance of the proceeds of sale
then remaining shall be paid to the Pledgor and the Pledgor shall be entitled to
the return of any of the Pledged Securities remaining in the hands of the
Company. The Obligors shall be liable for any deficiency if the remaining
proceeds are insufficient to pay the indebtedness under each Note in full,
including the fees of any attorneys employed by the Company to collect such
deficiency.
SECTION 6. COSTS AND ATTORNEYS' FEES.
All costs and expenses, including reasonable attorneys' fees,
incurred in exercising any right, power or remedy conferred by this Agreement or
in the enforcement thereof, shall become part of the indebtedness secured
hereunder and shall be paid by the Obligors or repaid from the proceeds of the
sale of the Pledged Securities hereunder.
SECTION 7. PAYMENT OF INDEBTEDNESS AND RELEASE OF PLEDGED SECURITIES.
Upon payment in full of the indebtedness evidenced by each Note,
the Company shall surrender the Pledged Securities to the Pledgor together with
all forms of assignment.
SECTION 8. FURTHER ASSURANCES.
Each Obligor agrees that at any time and from time to time upon
the written request of the Company, such Obligor will execute and deliver such
further documents and do such further acts and things as the Company may
reasonably request in order to effect the purposes of this Agreement.
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SECTION 9. SEVERABILITY.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10. NO WAIVER; CUMULATIVE REMEDIES.
The Company shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder, and no waiver
shall be valid unless in writing, signed by the Company, and then only to the
extent therein set forth. A waiver by the Company of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Company would otherwise have on any future occasion. No failure
to exercise nor any delay in exercising on the part of the Company, any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by law.
SECTION 11. WAIVERS, AMENDMENTS; APPLICABLE LAW.
None of the terms or provisions of this Agreement may be waived,
altered, modified or amended except by an instrument in writing, duly executed
by the parties hereto. This Agreement and all obligations of the Obligors
hereunder shall together with the rights and remedies of the Company hereunder,
inure to the benefit of the Company and its successors and assigns. This
Agreement and the rights and obligations hereunder shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 12. ENTIRE AGREEMENT.
This Agreement amends and restates the Existing Pledge Agreement
in its entirety, and this Agreement contains the sole and entire agreement among
the Company and the Obligors with respect to the subject matter hereof and
thereof and supersedes all prior or contemporaneous arrangements or
understandings with respect hereto or thereto.
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IN WITNESS WHEREOF, this Amended and Restated Pledge Agreement
has been executed as of the date first above written.
/s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
XXXXXX X. XXXXX & XXXXXXX X. XXXXX
FAMILY TRUST
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Co-Trustee
DONJOY, L.L.C.
By: /s/ XXXXX XXXXXX III
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Name: Xxxxx Xxxxxx III
Title: V.P. Finance/CFO/Secretary
