EXHIBIT 10.3
                                                                    ------------

                       FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as
of December 22, 2004, 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 February 26, 2004 (the "Credit
Agreement");

         WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement as provided herein; and

         WHEREAS, the Lenders have agreed to amend the 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

         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 Credit Agreement (as amended hereby).

                                     PART II
                         AMENDMENTS TO CREDIT AGREEMENT

         SUBPART 2.1 Section 8.3 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  No Credit Party will, nor will it permit its Subsidiaries to,
         alter the character of its business from that conducted as of the
         Closing Date or engage in any business other than the business
         conducted as of the Closing Date, which with respect to Signal shall be
         limited to the ownership of trademarks and tradenames for the purpose
         of licensing (a) any or all of such trademarks and tradenames to the
         Borrower or any other Credit Party and (b) any or all of such
         trademarks and tradenames that are not registered in the United States
         or Canada to any Foreign Subsidiary of the Borrower.

         SUBPART 2.2 Section 8.5 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  No Credit Party will, nor will it permit any of its
         Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of,
         in one transaction or a series of transactions, all or any part of its
         business or assets whether now owned or hereafter acquired, including,
         without limitation, inventory, receivables, real property, leasehold
         interests, equipment and securities other than (a) any inventory or
         other assets sold, leased or disposed of (or simultaneously replaced
         with like goods) in
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         the ordinary course of business, (b) obsolete, idle or worn-out assets
         no longer used or useful in its business, (c) the sale, lease or
         transfer or other disposal by a Credit Party other than the Borrower of
         any or all of its assets to the Borrower or to any other Credit Party,
         (d) the sale, transfer or other disposition of "margin stock" within
         the meaning of Regulation U, (e) the non-recourse sale of trade
         accounts receivable to a Person that is not an Affiliate of the
         Borrower provided that (i) at the time of the sale (and after giving
         effect thereto) no Default or Event of Default exists, (ii) as a result
         of such sale, no Material Adverse Effect would occur or be reasonably
         expected to occur, and (iii) the amount of such receivables subject to
         such sales do not exceed, in the aggregate, $7,000,000 at any time
         outstanding, (f) other sales of equipment provided that (i) the sale is
         for fair market value, (ii) the sale is for cash consideration, (iii)
         at the time of the sale (and after giving effect thereto) no Default or
         Event of Default exists, (iv) as a result of such sale, no Material
         Adverse Effect would occur or be reasonably expected to occur and (v)
         such sales do not exceed, in the aggregate, $250,000 during any fiscal
         year, (g) sales of product lines (or the right to produce a consumer
         product or products) provided that (i) the dispositions permitted under
         this subparagraph (g) shall not exceed $10,000,000 during any fiscal
         year and, (ii) the dispositions permitted under this subparagraph (g)
         during any fiscal year shall be limited to product lines (or the right
         to produce a consumer product or products) having aggregate sales for
         the twelve-month period ending on the fiscal quarter ending immediately
         preceding the sale in an aggregate amount not exceeding ten percent
         (10%) of EBITDA for such twelve month period and (iii) the Credit
         Parties shall have delivered to the Agent a Pro Forma Compliance
         Certificate demonstrating that after giving effect to any such
         disposition 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, (h) the transfer by the Borrower
         of the Capital Stock of Chattem (U.K.) Limited to Chattem Global
         Consumer Products Limited and (i) the sale, lease or transfer or other
         disposal by a Foreign Subsidiary of the Borrower of any or all of its
         assets to any other Foreign Subsidiary of the Borrower.

         SUBPART 2.3 Section 8.8 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

                  No Credit Party will, nor will it permit its Subsidiaries to,
         enter into any transaction or series of transactions, whether or not in
         the ordinary course of business, with any officer, director,
         shareholder, Subsidiary or Affiliate other than on terms and conditions
         substantially as favorable as would be obtainable in a comparable
         arm's-length transaction with a Person other than an officer, director,
         shareholder, Subsidiary or Affiliate except for (a) transactions set
         forth on Schedule 8.8 and (b) intercompany transactions that are
         otherwise permitted by this Credit Agreement.

                                    PART III
                           CONDITIONS TO EFFECTIVENESS

         SUBPART 3.1 Effective Date. This Amendment shall be and become
effective as of November 1, 2004, subject to the satisfaction of the following
conditions:

                  (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 this Amendment,
         including without limitation the reasonable fees and expenses of the
         Agent's legal counsel.

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<PAGE>

                                     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 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 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 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 Credit Agreement. This Amendment is
a Credit Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the 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 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:
--------                               CHATTEM, INC.,
                                       a Tennessee corporation


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


GUARANTORS:                            SIGNAL INVESTMENT & MANAGEMENT CO.,
----------                             a Delaware corporation


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       SUNDEX, LLC,
                                       a Tennessee limited liability company


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       CHATTEM (CANADA) HOLDINGS, INC.,
                                       a Delaware corporation


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

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AGENT:                                 BANK OF AMERICA, N.A.,
-----                                  in its capacity as Agent


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


LENDERS:                               BANK OF AMERICA, N.A.,
-------                                in its capacity as a Lender


                                       By:
                                          --------------------------------------
                                       Name:  John M. Hall
                                       Title:    Senior Vice President


                                       SUNTRUST BANK


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       BRANCH BANKING AND TRUST


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       NATIONAL CITY BANK


                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


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