EXHIBIT 10
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FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of August 22, 2003, is by and among CHATTEM, INC., a Tennessee corporation (the
"Borrower"), each of the Borrower's Domestic Subsidiaries, individually a
"Guarantor" and collectively with the Borrower, the "Credit Parties"), the
Persons identified as lenders on the signature pages hereto (the "Lenders") and
BANK OF AMERICA, N.A., as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Credit Parties, the Lenders, and the Agent have entered
into that certain Credit Agreement dated as of March 28, 2002 (the "Existing
Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders amend the Existing
Credit Agreement as provided herein; and
WHEREAS, the Lenders have agreed to amend the Existing Credit Agreement
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, the following terms used in this Amendment,
including its preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Amendment No. 1 Effective Date" is defined in Subpart 3.1.
SUBPART 1.2 Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II.
SUBPART 2.1 New Section 6.33. A new Section 6.33 is hereby added to the
Existing Credit Agreement and shall read as follows:
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6.33 TAX SHELTER REGULATIONS.
The Credit Parties do not intend to treat the Loans and/or
Letters of Credit as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4). In the event any
Credit Party determines to take any action inconsistent with such
intention, it will promptly notify the Agent thereof. If a Credit Party
so notifies the Agent, the Borrower acknowledges that one or more of
the Lenders may treat its Loans and/or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1,
and such Lender or Lenders, as applicable, will maintain the lists and
other records required by such Treasury Regulation.
SUBPART 2.2 Amendment to Section 7.1(n). Section 7.1(n) of the Existing
Credit Agreement is hereby renumbered as Section 7.1(o) and a new Section 7.1(n)
is hereby added to the Existing Credit Agreement to read as follows:
(n) Tax Shelter Regulations. Promptly after any Credit Party has
notified the Agent of any intention by a Credit Party to treat the
Loans and/or Letters of Credit as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4), a duly
completed copy of IRS Form 8886 or any successor form.
SUBPART 2.3 Amendment to Section 8.7. The proviso in Section 8.7 of the
Existing Credit Agreement is hereby amended and restated in its entirety to read
as follows:
provided, however, (i) the Subsidiaries of the Borrower may pay
dividends to the Borrower and (ii) the Borrower may purchase, redeem,
acquire or retire shares of its Capital Stock of any class or any
warrants or options to purchase any such shares of its Capital Stock in
an amount not to exceed $10,000,000 in the aggregate during fiscal year
2003 and $5,000,000 in the aggregate in any other fiscal year so long
as the Borrower shall have provided the Agent with satisfactory
evidence demonstrating that after giving effect to any such transaction
on a Pro Forma Basis, the Credit Parties and their Subsidiaries would
have been in compliance with all the financial covenants set forth in
Section 7.12.
SUBPART 2.4 Amendment to Section 8.15. The first sentence in Section
8.15 of the Existing Credit Agreement is hereby amended and restated in its
entirety to read as follows:
The Credit Parties and their Subsidiaries will not make Capital
Expenditures, in any fiscal year, that would exceed $7,500,000 in the
aggregate.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1 Amendment No. 1 Effective Date. This Amendment shall be and
become effective as of the date (the "Amendment No. 1 Effective Date") when all
of the conditions set forth in this Part III shall have been satisfied.
(a) Execution of Counterparts of Amendment. The Agent shall have
received counterparts of this Amendment, which collectively shall have
been duly executed on behalf of the Borrower, the Guarantors, the
Required Lenders and the Agent.
(b) Fees and Expenses. The Borrower shall have paid to the Agent,
all reasonable costs and expenses of the Agent in connection with the
preparation, execution and delivery of
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this Amendment, including without limitation the reasonable fees and
expenses of the Agent's legal counsel.
PART IV
MISCELLANEOUS
SUBPART 4.1 Representations and Warranties. Each Credit Party hereby
represents and warrants to the Agent and the Lenders that (a) no Default or
Event of Default exists under the Credit Agreement or any of the other Credit
Documents on and as of the date hereof, (b) each Credit Party has the requisite
corporate power and authority to execute, deliver and perform this Amendment and
(c) the representations and warranties set forth in Section 6 of the Existing
Credit Agreement are true and correct in all material respects as of the date
hereof (except for those which expressly relate to an earlier date). Each Credit
Party acknowledges and confirms that the Borrower's acknowledges and confirms
that the Borrower's obligations to repay the outstanding principal amount of the
Loans is unconditional and not subject to any offsets, defenses or
counterclaims.
SUBPART 4.2 Acknowledgment. Each Guarantor hereby acknowledges and
consents to all of the terms and conditions of this Amendment and agrees that
this Amendment does not operate to reduce or discharge the Guarantors'
obligations under the Amended Credit Agreement or the other Credit Documents.
SUBPART 4.3 Cross-References. References in this Amendment to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 4.4 Instrument Pursuant to Existing Credit Agreement. This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.
SUBPART 4.5 References in Other Credit Documents. At such time as this
Amendment shall become effective pursuant to the terms of Subpart 3.1, all
references in the Credit Documents to the "Credit Agreement" shall be deemed to
refer to the Credit Agreement as amended by this Amendment.
SUBPART 4.6 Counterparts/Telecopy. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement. Delivery of executed counterparts of the Amendment by telecopy shall
be effective as an original and shall constitute a representation that an
original shall be delivered.
SUBPART 4.7 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TENNESSEE.
SUBPART 4.8 Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 4.9 General. Except as amended hereby, the Existing Credit
Agreement and all other Credit Documents shall continue in full force and
effect.
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IN WITNESS WHEREOF the Borrower, the Guarantors and the Lenders have
caused this Amendment to be duly executed on the date first above written.
BORROWER:
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CHATTEM, INC.,
a Tennessee corporation
By:
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Name:
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Title:
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GUARANTORS: SIGNAL INVESTMENT & MANAGEMENT CO.,
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a Delaware corporation
By:
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Name:
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Title:
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SUNDEX, LLC,
a Tennessee limited liability company
By:
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Name:
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Title:
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AGENT: BANK OF AMERICA, N.A.,
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in its capacity as Agent
By:
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Name:
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Title:
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LENDERS: BANK OF AMERICA, N.A.,
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in its capacity as a Lender
By:
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Name:
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Title:
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FLEET NATIONAL BANK, N.A.
By:
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Name:
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Title:
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SUNTRUST BANK
By:
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Name:
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Title:
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PROVIDENT BANK OF OHIO
By:
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Name:
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Title:
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