Document:

Second Admendment to Credit Agreement

  
 EXHIBIT 10.21

  
 SECOND AMENDMENT TO CREDIT AGREEMENT 
  
 THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”), dated as of November 30, 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”). 
  
 WITNESSETH 
  
 WHEREAS, the Credit Parties, the Lenders, and the Agent have entered
into that certain Credit Agreement dated as of March 28, 2002 (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 ll 
 AMENDMENT TO CREDIT AGREEMENT 
  
 Section 8.16 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 
  
 Neither the Borrower nor any of its Subsidiaries shall create, incur, assume or permit to exist obligations under Operating Leases which
require aggregate annual payments in excess of $2,000,000. 
  
 PART III 
 CONDITIONS TO EFFECTIVENESS 
  
 SUBPART 3.1 Effective Date. This Amendment shall be and become effective as of the date hereof 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
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 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 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.

  
 [The remainder of this page is intentionally left blank.]

  

 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:
	 	RICHARD D. MOSS
	 	 	

	 	 	VP & CFO

  
 GUARANTORS: 
  

			
	 SIGNAL INVESTMENT & MANAGEMENT CO.,
 a Delaware corporation

		
	 By:
	 	SCOTT J. SLOAT
	 	 	

	 Title:
	 	VP & Treasurer

  

			
	 SUNDEX, LLC,
 a Tennessee limited
liability company

		
	 By:
	 	RICHARD D. MOSS
	 	 	

	 Title:
	 	VP & Treasurer

  
 AGENT:

  

			
	 BANK OF AMERICA, N.A.
 In its capacity as Agent

		
	 By:
	 	LAURA B. SCHMUCK
	 	 	

	 Title:
	 	Agency Officer Assistant Vice President

  
 LENDERS: 
  

			
	 BANK OF AMERICA, N.A.
 In its capacity
as a Lender

		
	 By:
	 	JOHN M. HALL
	 	 	

	 Title:
	 	Senior Vice President

  

			
	FLEET NATIONAL BANK, N.A.
		
	 By:
	 	JOHN DUNNE
	 	 	

	 Title:
	 	Senior Vice President

  

			
	SUNTRUST BANK
		
	 By:
	 	CARLOS M. MURGAS
	 	 	

	 Title:
	 	Portfolio Manager

  

			
	PROVIDENT BANK OF OHIO
		
	 By:
	 	JOE NETZEL
	 	 	

	 Title:
	 	Vice PresidentMemorandum of Understanding dated December 19, 2003

  
 EXHIBIT 10.22

  
 MEMORANDUM OF UNDERSTANDING 
  
 WHEREAS, by order dated January 17, 2002, the United States District Court
for the Western District of Washington designated the Plaintiffs’ Steering Committee (“PSC”) in In re Phenylpropanolamine (PPA) Products Liability Litigation, MDL 1407; 
  
 WHEREAS, the undersigned representatives of the PSC (the
“Plaintiffs’ Subcommittee”) were authorized by the PSC to engage in global settlement negotiations with The Delaco Company, successor by merger to Thompson Medical Company, Inc. (“Delaco”) and Chattem, Inc.
(“Chattem”); 
  
 WHEREAS, Delaco, Chattem, and the
Plaintiffs’ Subcommittee have been engaged for nearly one year in highly protracted, arms-length settlement negotiations; 
  
 WHEREAS, in furtherance of ongoing settlement negotiations, Delaco, Chattem, and the Plaintiffs’ Subcommittee desire to memorialize those settlement
terms as to which agreement has been reached, subject to final agreement on all terms of a formal settlement or settlements among the Parties (the “Final Agreement”); 
  
 *  *  *  *  *  *  * 
  
 NOW, THEREFORE, this Memorandum of Understanding (“MOU”) is entered
into this 19th day of December, 2003, among Delaco, Chattem, and the Plaintiffs’ Steering Committee. Delaco, Chattem, and the Plaintiffs’ Steering Committee may hereafter be referred to individually as a “Party” and collectively
as the “Parties.” 
  

	1.	The Released Claims 

  
 1.1 “Dexatrim Products” means all appetite-suppressant products marketed, distributed, formulated and/or manufactured by or on
behalf of Delaco and/or Chattem that 

  

 
contained phenylpropanolamine, including, but not limited to, products with the brand names Dexatrim®, Control®, Appedrine®, Prolamine®, Anorexin®, Coffee, Tea and a New Me®, Grapefruit Plus®
and Vita Slim®. 
  
 1.2 The Settlement Agreements 
  
 The Parties intend to enter into two settlement agreements: one such
settlement agreement shall be the Chattem Settlement Agreement and the other shall be the Delaco Settlement Agreement. Each such Settlement Agreement will provide for a general release and discharge of Released Claims (¶1.4) by Releasing
Persons (¶1.3) against the appropriate Released Parties ( ¶1.5). The releases provided for in such Settlement Agreement(s) will include an acknowledgement and waiver of any rights that the Releasing Persons may have under any statute,
regulation or common law principle that would limit the effect of the releases to those claims actually known or suspected to exist at the time the release is given, including, without limitation, California Civil Code § 1542, and all other
similar state statutes, rules or case law. 
  
 1.2.A. The Chattem Settlement Agreement. 
  
 Under the terms of the Chattem Settlement Agreement, in exchange for a general release and discharge of Released Claims by Releasing Persons, Chattem shall pay to Releasing Persons the compensation to which they are entitled under the
Dexatrim Case Scoring System and Matrix attached hereto as Exhibit A (the “Matrix”). The Matrix has been filed under seal with the Court in In re: Phenylpropanolamine (PPA) Products Liability Litigation, MDL 1407 (W.D.Wa.), and is
subject to a Confidentiality Order entered by that Court on December 18, 2003. The timing, method, and amounts of such payments shall be included in the Chattem Settlement Agreement. 
  

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 1.2.B. The Delaco Settlement Agreement. 
  
 Under the terms of the Delaco Settlement Agreement, in exchange for a
general release and discharge of Released Claims by Releasing Persons, Delaco shall pay to Releasing Persons the compensation to which they are entitled under the Dexatrim Case Scoring System and Matrix attached hereto as Exhibit A (the
“Matrix”). The Matrix has been filed under seal with the Court in In re: Phenylpropanolamine (PPA) Products Liability Litigation, MDL 1407 (W.D.Wa.), and is subject to a Confidentiality Order entered by that Court on December 18,
2003. The timing, method, and amounts of such payments shall be included in the Delaco Settlement Agreement. 
  
 1.3 “Releasing Persons” means all Dexatrim Product Users and Derivative Claimants who do not timely exclude themselves from the
settlement(s) to the extent permitted by the settlement agreement(s) and any applicable law and court orders. 
  

	 	(a)	“Dexatrim Product User” means a person who ingested one or more Dexatrim Products and any estate, administrator, trust, special needs trust or other person
or entity asserting a Released Claim as a representative for a Dexatrim Product User. 

  

	 	(b)	“Derivative Claimant” means any person asserting a Released Claim, independently or derivatively, by reason of their familial or personal relationship with a
Dexatrim Product User and any estate, administrator, trust, special needs trust or other person or entity asserting a Released Claim as a representative for a Derivative Claimant. Derivative Claimants will be bound by all elections permitted under
the settlement agreement(s) or applicable court orders that are made by their respective Dexatrim Product Users. 

  
 1.4 “Released Claims” means any and all claims, including assigned claims, whether known or unknown, suspected or unsuspected,
asserted or unasserted, regardless of the legal 

  

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theory, existing now or arising in the future, relating to or arising out of any Dexatrim Products or their development, manufacture, formulation, testing,
distribution, marketing, labeling, regulatory submissions, advertising, sale or ingestion. “Released Claims” include, without limitation, all claims for damages or remedies of whatever kind or character, known or unknown, suspected or
unsuspected, that are now recognized by law or that may be created or recognized in the future by statute, regulation, judicial decision, administrative adjudication, or in any other manner, for 
  

	 	(a)	personal injury and/or bodily injury, damage, death, fear of disease or injury, mental or physical pain or suffering, emotional or mental harm, or loss of enjoyment of life,

  

	 	(b)	loss of wages, income, earnings or earning capacity, medical expenses, doctor, hospital, nursing and drug bills, 

  

	 	(c)	loss of support, services, consortium, companionship, society or affection, or damage to familial relations, 

  

	 	(d)	wrongful death and survival actions, 

  

	 	(e)	medical screening or monitoring, injunctive, declaratory or equitable relief, 

  

	 	(f)	consumer fraud, refunds, restitution, unfair business practices, deceptive trade practices, unjust enrichment, money had and received and other similar claims,

  

	 	(g)	compensatory damages, punitive or exemplary damages, statutory and other multiple damages or penalties of any kind, 

  

	 	(h)	economic or business losses, diminished value or lost benefit-of-the-bargain, 

  

	 	(i)	attorneys’ fees, costs or court or litigation expenses, and/or 

  

	 	(j)	prejudgment or post judgment interest. 

  

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 1.5 “Released Parties” means 
  

	 	(a)	Delaco and each of its past, present and future direct or indirect parent companies, direct or indirect subsidiaries, affiliates, divisions, joint venturers, predecessors,
successors, assigns, underwriters, Delaco’s insurers (if those insurers contribute consideration to the settlement pursuant to an agreement acceptable to Delaco), Delaco’s suppliers of the raw material phenylpropanolamine hydrochloride
used in the manufacture of Dexatrim Products (if those suppliers contribute consideration to the settlement pursuant to an agreement acceptable to Delaco and the PSC), Delaco’s contract manufacturers of finished Dexatrim Products (if those
contract manufacturers contribute consideration to the settlement pursuant to an agreement acceptable to Delaco and the PSC), and each of the foregoing’s respective past, present and future directors, officers, employees, agents, attorneys,
shareholders, and all of his, her, its, or their respective past, present or future heirs, estates and personal representatives; 

  

	 	(b)	 Chattem and each of its past, present and future direct or indirect parent companies, direct or indirect subsidiaries, affiliates, divisions, joint venturers,
predecessors, successors, assigns, underwriters, Chattem’s insurers (if those insurers contribute consideration to the settlement pursuant to an agreement acceptable to Chattem), Chattem’s suppliers of the raw material phenylpropanolamine
hydrochloride used in the manufacture of Dexatrim Products (if those suppliers contribute consideration to the settlement pursuant to an agreement acceptable to Chattem and the PSC), Chattem’s contract manufacturers of finished Dexatrim
Products (if those contract manufacturers 

  

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contribute consideration to the settlement pursuant to an agreement acceptable to Chattem and the PSC), and each of the foregoing’s respective past,
present and future directors, officers, employees, agents, attorneys, shareholders, and all of his, her, its, or their respective past, present or future heirs, estates and personal representatives; 

  

	 	(d)	any and all distributors of Dexatrim Products (including, without limitation, wholesale distributors, private label distributors, retail distributors, pharmacies and pharmacists)
together with their respective past, present and future directors, officers, employees, agents, attorneys, shareholders, underwriters and insurers, and all of his, her, its, or their respective past, present or future heirs, estates and personal
representatives; 

  

	 	(e)	suppliers of materials other than phenylpropanolamine, machines or equipment used in the manufacture of Dexatrim Products, together with their respective past, present and future
directors, officers, employees, agents, attorneys, shareholders, underwriters and insurers, and all of his, her, its, or their respective past, present or future heirs, estates and personal representatives; and 

  

	 	(f)	 any other person or entity (excluding Consumer Healthcare Products Association and its predecessors (“CHPA”)) involved in the development, design,
manufacture, formulation, testing, distribution, marketing (but excluding any person or entity whose marketing or distributing was the result of its membership in CHPA), labeling, regulatory submissions, advertising or sale of Dexatrim Products
(including, without limitation, consultants to Delaco or Chattem), together with their respective past, present and future directors, officers, 

  

 6 

	 	 
employees, agents, attorneys, shareholders, underwriters, and all of his, her, its, or their respective past, present or future heirs, estates and personal
representatives; provided that this subparagraph 1.5(f) is not intended to include Delaco’s or Chattem’s, insurers, suppliers of phenylpropanolamine hydrochloride, or contract manufacturers of finished Dexatrim Product who do not
contribute consideration to the settlement as provided in subparagraphs 1.5(a) - (b). 

  

	2.	The Settlement Agreements, Settlement Funds and Matrix 

  
 2.1 In General. 
  
 The Chattem and Delaco Settlement Agreements will each provide for the creation, and funding by the appropriate Released Parties, of a Settlement Fund
from which compensation will be paid to Releasing Persons who are Dexatrim Product Users pursuant to terms and provisions set forth in each such Settlement Agreement. Each such Settlement Fund will be structured as qualified settlement fund within
the meaning of section 468B of the Internal Revenue Code and the Treasury Regulations promulgated thereunder. 
  
 2.2 Submission and Determination of Claims. 
  
 Dexatrim Product Users will submit claims to be scored and valued pursuant to the Matrix. Derivative Claimants will be bound by any submission made by
their respective Dexatrim Product Users. 
  
 2.3 The Settlement
Agreements. 
  
 2.3.A. In General.

  
 In addition to any provisions set forth herein, the Chattem
Settlement Agreement and the Delaco Settlement Agreement will each contain provisions for the effectuation of such 

  

 7 

 
Settlement Agreement, administration, funding, claims documentation and any other matter related to implementation and administration of each such Settlement
Agreement. 
  
 2.3.B. Additional
Provisions. 
  
 It is expressly understood that additional
provisions relating to mechanisms of effectuating the Settlement Agreements, implementation, funding, claims documentation, and administration of the settlement, have not yet been agreed to among the Parties, and are to be the subject of good faith
negotiation as described in paragraph 3. It is further understood that the structure of the Settlement Agreements and the mechanisms and timing for effectuating their respective provisions, as well as matters related to the implementation, funding
and administration are expected to differ among the Released Parties. 
  
 2.4 Releasing Persons who receive payment from the settlement shall be responsible for extinction of any liens, subrogation claims or other claims by persons or entities arising out of or related to such Releasing Person’s expenses for
medical services or disability benefits resulting from the subject matter of his or her Released Claims, whether by right of subrogation, assignment, contract, statute or otherwise. The Settlement Agreement will specifically address the mechanism
for extinction of liens. 
  
 2.5 Releasing Persons who receive
payment from the settlement shall be required to indemnify and hold harmless the Released Parties from any and all claims, demands, causes of action, of any and every nature whatsoever, made by any person, entity, firm or corporation claiming by,
through or under such Releasing Person, by right of assignment or subrogation, in connection with the Released Claims, or by virtue of having paid or reimbursed medical expenses arising out of or related to such Releasing Person’s relevant
Dexatrim Product User’s alleged use of Dexatrim Products. 
  

 8 

	3.	General Terms 

  
 3.1 The Parties and their respective counsel acknowledge that this Memorandum of Understanding is not a final settlement agreement, but a memorandum
describing those terms as to which substantial agreement has been reached by counsel for the Parties. The Parties and their respective counsel further acknowledge that substantial issues remain to be determined, and that counsel will continue to
negotiate in good faith to reach agreement on the Chattem and Delaco Settlement Agreements as contemplated in this Memorandum of Understanding. 
  
 3.2 The provisions set forth herein will be superseded by the final Settlement Agreement(s). 
  
 3.3 In the event that the parties are unable to reach the final Settlement Agreements, the Parties shall engage in
non-binding mediation with a mediator who is chosen with the approval of all Parties to work toward a final resolution of all unresolved issues and claims. In the event such mediation is not successful in resolving all issues and claims by and
between the parties, this Memorandum of Understanding shall be null and void and the attempt to negotiate a settlement pursuant to its terms shall not be the subject of litigation. 
  
 3.4 Neither this Memorandum of Understanding nor any subsequent settlement agreement shall be construed as evidence of or an
admission by any of the Released Parties of any liability or wrongdoing or by any Releasing Person of any lack of merit in his, her or its claims. This Memorandum of Understanding shall not be used in any litigation or proceeding, and shall not be
offered or admitted into evidence for any purpose. 
  
 3.5
Consummation of the settlement referenced herein will result in a settlement and release of all claims by and between Delaco and Chattem together with each of the foregoing’s respective past, present and future direct or indirect parent
companies, direct or indirect 

  

 9 

 
subsidiaries, affiliates, divisions, joint venturers, predecessors, successors and assigns and each of the foregoing’s respective past, present and
future directors, officers, employees, agents, attorneys, shareholders, underwriters and insurers and all of his, her, its or their respective past, present or future heirs, estates and personal representatives. 
  
 3.6 Where the context so requires, terms used in the singular in this
Memorandum of Understanding shall be deemed to include the plural and vice versa. 
  
 3.7 This Memorandum of Understanding may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

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 IN WITNESS WHEREOF, counsel for the Parties have caused this Memorandum of Understanding to be executed
as of the date first set forth above, but actually on the dates set forth below. 
  
 Dated this 19th day of December, 2003. 
  
 The MDL 1407 Plaintiffs’
Steering Committee by The Plaintiffs’ Subcommittee 
  

	
	
	  
	

	 Christopher A. Seeger
 Stephen A. Weiss
 Seeger Weiss LLP

  

	
	
	  
	

	 James F. Green
 Michael Heaviside
 Ashcraft & Gerel

  

	
	
	  
	

	 Ron Michael Meneo
 Early, Ludwick & Sweeney, LLC

  

	
	
	  
	

	 Ramon Rossi Lopez
 Lopez, Hodes, Restaino, Milman & Skikos

  

	
	 Counsel for Defendant Chattem, Inc.

	
	  
	

	 Roger Dickson
 C. Crews Townsend

  
 Counsel for The Delaco Company,
successor by merger to Thompson Medical Co., Inc. 
  

	
	
	  
	

	 Shelia L. Birnbaum
 Jeffrey S. Lichtman
 Gregory D. Shelton

  

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