EXHIBIT 10.4
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WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND
SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
dated as of February 25, 2005 to the Credit
Agreement, dated as of February 26,
2004, as amended by a First Amendment to
Credit Agreement dated as of December
22, 2004 (collectively the "Credit
Agreement") by and among CHATTEM, INC. (the
"Borrower"), SIGNAL INVESTMENT &
MANAGEMENT CO., SUNDEX, LLC AND CHATTEM
(CANADA) HOLDINGS, INC. (individually, a
"Guarantor" and collectively, the
"Guarantors") the several bank parties to
the Credit Agreement (the "Lenders"),
and BANK OF AMERICA, N.A., as the Agent (in
such capacity, the "Agent") for all
the Lenders party to the Credit
Agreement.
R E C I T A L S:
WHEREAS, the
Agent, the Lenders, the Borrower and the Guarantors are
parties to the Credit Agreement;
WHEREAS, the
Borrower and the Guarantors have requested certain amendments
to the Credit Agreement and a waiver of
certain provisions of the Credit
Agreement as set forth herein.
NOW, THEREFORE,
in consideration of the premises set forth above, the terms
and conditions contained herein, and other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. Unless
otherwise defined herein, capitalized terms that
are defined in the Credit Agreement are
used herein as therein defined.
2. WAIVER. Subject to the
complete satisfaction of all of the conditions
set forth in Section 4 below and subject to
the other terms herein, the Agent
and the Lenders for the period beginning on
February 26, 2004 and ending on the
Effective Date (as defined below) hereby
waive any Default or Event of Default
which has occurred or which now exists as a
result of the failure of Borrower
and the Guarantors to be in compliance with
Section 8.6, Advances, Investments
and Loans of the Credit Agreement because a
Subsidiary of the Borrower, HBA
Indemnity Company, Ltd., owns securities in
the amount of $1,210,000 issued or
guaranteed by the United States of America
or an agency or instrumentality
thereof with maturities of more than twelve
months from the date of acquisition.
The foregoing waiver is limited to the
matters set forth in this Section 2 and
no provision of this Section 2 shall be
deemed in any way to constitute a waiver
of (except as otherwise set forth in this
Section 2) (i) any Default or any
Event of Default, (ii) any condition
precedent, (iii) any other term or
provision of the Credit Agreement or the
other Credit Documents, or (iv) any
right, power or remedy available to Agent
or any Lender. The Agent and each
Lender reserve all of their rights, powers
and remedies under law, the Credit
Agreement and all other Credit
Documents.
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3. AMENDMENTS. Subject to the
complete satisfaction of all of the
conditions set forth in Section 4 below and
subject to the other terms herein:
3.1 Subpart (a) of the definition of
"Cash Equivalents" in Subsection 1.1
of the Credit Agreement is amended and
restated in its entirety as follows:
(a) securities issued or directly and fully guaranteed or insured
by
the United States of America or any agency or instrumentality
thereof
(provided that the full faith and credit of the United States
of
America is pledged in support thereof) having maturities of not
more
than twelve-months from the date of acquisition, provided that
solely
with respect to HBA Indemnity Company, Ltd ("HBA") such securities
of
a type described in this subpart (a) owned by HBA may have
maturities
of not more than twenty-four months from the date of
acquisition,"
4. CONDITIONS. This Amendment
shall become ef
