EXHIBIT 10.5.1
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MAHASKA INVESTMENT COMPANY
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank
Chicago, Illinois
Ladies and Gentlemen:
Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of June 30, 2000, as amended (the "Credit Agreement"),
between the undersigned, Mahaska Investment Company, an Iowa corporation (the
"Borrower"), and Xxxxxx Trust and Savings Bank (the "Bank"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.
The Borrower has requested that the Bank extend the Termination Date, amend
the Non-Performing Assets ratio, and to waive the Borrower's non-compliance with
certain covenants of the Credit Agreement and the Bank is willing to do so under
the terms and conditions set forth in this agreement (herein, the "Amendment").
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:
1.1. The definition of "Revolving Credit Termination Date" appearing in
Section 4 of the Credit Agreement is hereby amended by striking the date
"June 30, 2002" and inserting the date "September 30, 2003" in lieu thereof.
1.2. Section 7.6 of the Credit Agreement shall be amended in its entirety
and as amended it shall be restated to read as follows:
"Section 7.6. Non-Performing Assets. (a) (Consolidated). The
Borrower shall, as of the last day of each fiscal quarter, maintain on
a consolidated basis with its Subsidiaries (excluding, for purposes of
this determination only, MIC as a Subsidiary of the Borrower), a ratio
of (a) Non-Performing Assets of the Borrower on such consolidated
basis to (b) the sum of (i) the stockholders' equity for the Borrower,
plus (ii) loan loss reserves established by the Borrower on such
consolidated basis in accordance with regulatory accounting principles
applicable to the Borrower in an amount less than or equal to .35 to
1.0.
(b) Banking Subsidiaries. The Borrower shall cause, as of the
last day of each fiscal quarter, each Banking Subsidiary to maintain
as of such day on an individual basis, a ratio of (a) Non-Performing
Assets of such Banking Subsidiary after eliminating non performing
loan pool items, to (b) the sum of (i) core capital for such Banking
Subsidiary, plus (ii) loan loss reserves established by such Banking
Subsidiary, in accordance with regulatory accounting principles
applicable to such Banking Subsidiary in an amount less than or equal
to .20 to 1.0.
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SECTION 2. WAIVERS.
2.1. The Borrower has advised the Bank that as of January 31, 2002 the
Borrower was not in compliance with Section 7.8 of the Credit Agreement (Return
on Assets). Specifically, the Borrower's return on assets was .81%. The Borrower
has requested that the Bank waive the Borrower's non-compliance with Section 7.8
of the Credit Agreement as of January 31, 2002, and by signing in the space
provided for that purpose below, the Bank hereby agrees to waive compliance with
the same for, and only for, the period ended on January 31, 2002. This waiver
shall not become effective unless and until the conditions precedent set forth
in Section 3 below have been satisfied.
2.2. The Borrower has advised the Bank as of January 31, 2002 the Borrower
was not in compliance with Section 7.10 of the Credit Agreement (Dividends and
Certain Other Restricted Payments). Specifically, the Borrower paid $2,400,000
in dividends and repurchased $820,000 of stock, totaling 73.3% of Consolidated
Net Income. The Borrower has requested that the Bank waive the Borrower's
non-compliance with Section 7.10 of the Credit Agreement as of January 31, 2002,
and by signing in the space provided for that purpose below, the Bank hereby
agrees to waive compliance with the same for, and only for, the period ended on
January 31, 2002. This waiver shall not become effective unless and until the
conditions precedent set forth in Section 3 below have been satisfied.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
3.1. The Borrower and the Bank shall have executed and delivered this
Amendment.
3.2. Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Bank and its counsel.
SECTION 4. REPRESENTATIONS.
In order to induce the Bank to execute and deliver this Amendment, the
Borrower hereby represents to the Bank that as of the date hereof the
representations and warranties set forth in Section 5 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 5.5 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Bank) and the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.
SECTION 5. MISCELLANEOUS.
5.1. The Borrower heretofore executed and delivered to the Bank certain
Collateral Documents. The Borrower hereby acknowledges and agrees that the Liens
created and provided for by the Collateral Documents continue to secure, among
other things, the Obligations arising under the Credit Agreement as amended
hereby; and the Collateral Documents and the rights and remedies of the Bank
thereunder, the obligations of the Borrower thereunder, and the Liens created
and provided for thereunder remain in full force and effect and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in any
manner affect or impair the priority of the liens and security interests created
and provided for by the Collateral Documents as to the indebtedness which would
be secured thereby prior to giving effect to this Amendment.
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5.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
5.3. The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Bank.
5.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
This Second Amendment to Amended and Restated Credit Agreement is entered
into as of this 15th day of October, 2002.
MAHASKA INVESTMENT COMPANY
By /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Executive Vice-President and CFO
Accepted and agreed to.
XXXXXX TRUST AND SAVINGS BANK
By /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Vice President
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