Document:

exv10w2

 

Exhibit 10.2

CONSULTING AGREEMENT

     Agreement made this 12th day of August, 2004, by and between Merchants &
Manufacturers Bancorporation, Inc., a Wisconsin corporation, which maintains
its principal office at 19105 West Capitol Drive, Brookfield, Wisconsin,
hereafter referred to as “Merchants”; and Harold Mueller, an individual, who
maintains his residence at 73 East Shore Drive, Random Lake Wisconsin,
hereafter referred to as “Consultant”.

RECITALS

     WHEREAS, Merchants is a multi-bank holding company with several
wholly-owned banking subsidiaries, including Wisconsin State Bank, which was
acquired by Merchants from Random Lake Bancorp Limited, a Wisconsin bank
holding company; and

     WHEREAS, Consultant is experienced in the business of banking and would be
of substantial value to Merchants and its subsidiary banks; and

     WHEREAS, Merchants does desire to engage an independent consultant with
the experience and expertise of Consultant to assist in various activities as
set forth hereunder; and

     WHEREAS, Consultant is willing to assist Merchants on a nonexclusive basis
on certain specific terms and conditions,

     NOW THEREFORE, as an inducement to Consultant to consult with and advise
Merchants in those matters which are within the area of his expertise; and for
good and other valuable consideration; and on the terms, provisions, and
conditions hereof, the parties agree as follows:

SECTION ONE

INCORPORATION BY REFERENCE

     The foregoing recitals are incorporated herein by this reference; and this
agreement shall be construed by reference thereto.

SECTION TWO

NATURE AND TERM OF SERVICE

     Merchants agrees to engage the services of Consultant and Consultant
agrees to perform services as Consultant for a term which shall continue from
the date hereof for a period of sixty (60) months unless terminated by either
party for any reason upon written notice, of not less than sixty (60) days.

     Consultant shall make reasonable efforts to be available to work at
reasonable periods of time, upon reasonable notice, for the purposes of
performing the services required by Merchants,

 

 

the nature of which are described more fully in this agreement; upon the
specific condition however, that such services shall be within the expertise of
consultant as known to Merchants, and as reasonably agreed upon by Merchants
and Consultant.

SECTION THREE

DUTIES AND RESPONSIBILITIES

     During the term of this agreement the Consultant shall devote his
nonexclusive services to the discharge of any duties and responsibilities
delegated to him by the Chairman of Merchants, for the purposes contemplated by
this agreement and specifically within the expertise of Consultant.
Consultant’s duties shall encompass areas including commercial lending,
business development and bank acquisitions.

     Consultant will work closely with the Chairman of Merchants and with other
Officers delegated by him in an effort to efficiently and expertly accomplish
any task that is delegated to him, but that Consultant will use his own
knowledge and skills in the discharge of the duties that are delegated to him,
all within reasonable commercial standards and in compliance with all pertinent
federal and state banking laws and regulations.

SECTION FOUR

COMPENSATION

     In consideration of all services rendered during the term of this
agreement, including any necessary travel time, Consultant shall be compensated
at a rate of $50,000.00 per year, which compensation shall be due and payable
at the end of each month. In the event of the death of Consultant, the
consideration payable for the term of the contract shall be payable to Mueller.
Upon the death of Mueller, should that event occur prior to the end of the
term of this Agreement, Merchants shall make payment of the consideration
payable under this Agreement to a trust, the primary beneficiary of which is
Joyce Mueller. Merchants’ responsibility to make payments under this Agreement
shall terminate upon the death of Joyce Mueller, should that event occur prior
to the end of the original term of this Agreement.

     Merchants will not deduct federal, state, and social security taxes, or
workman’s compensation, or unemployment insurance premiums, from such
compensation, the payment of which shall be the sole and exclusive
responsibility of Consultant as an independent contractor. Consultant shall
also be responsible for any and all pertinent benefit items including, but not
limited to retirement plan contributions, and medical and dental insurance
premiums.

SECTION FIVE

RELATIONSHIP OF PARTIES

     The parties to this agreement stipulate that Consultant is an individual,
and that the relationship created by this agreement is that of a
principal-independent contractor; and that Consultant is not an employee of
Merchants or any of its subsidiaries; and that Consultant is not entitled to
benefits normally provided by Merchants to an employee. It is further agreed
and

 

 

understood that by reason of the independent contractor status of consultant,
Merchants will not withhold from compensation paid to Consultant any sums for
federal and state withholding taxes and/or FICA taxes, and/or unemployment or
workmen’s compensation insurance.

     Consultant may operate his business for the benefit of others during those
periods when consultant is not performing work under this contract for
Merchants.

     Consultant will be responsible for, and shall hold Merchants harmless by
reason of any negligence, or intentional acts or omissions that may cause
damage to any person or party as a result of his performance of this agreement.

SECTION SIX

TERMINATION

     Either party may terminate this agreement upon sixty (60) days written
notice to the other.

SECTION SEVEN

CONFIDENTIALITY

     Consultant acknowledges that any information Consultant has obtained or
will obtain in the future regarding the operation of Merchants or its
affiliates, its products, services, policies or any other aspect of its
business is confidential; and shall not be reveled or disclosed to any person,
company, or other entity without the express written permission of Merchants.
Consultant acknowledges that he is aware of, and will adhere to, the
restrictions of the privacy provisions of the Gramm-Leach-Bliley Act, and as
amended from time-to-time. This provision shall be in full force and effect
from the effective date of this agreement, and shall survive the termination of
this agreement unless extended due to the provisions of any pertinent law or
statute.

SECTION EIGHT

CHANGES AND ALTERATIONS

     No change, alteration, modification, or addition to this agreement shall
be effective unless in writing and properly executed by the parties hereto.

SECTION NINE

ASSIGNMENT

     This agreement may not be assigned or otherwise transferred by either
party hereto.

SECTION TEN

OTHER AGREEMENTS

 

 

     This agreement supersedes all previous agreements and understandings with
respect to the matters covered hereby. Agreements dated prior to the execution
of this agreement between Consultant and Merchants are hereby amended to
conform to this agreement.

SECTION ELEVEN

APPLICABLE LAW

     This agreement and any disputes relating thereto shall be construed under
and pursuant to the laws of the State of Wisconsin.

SECTION TWELVE

CONTRACT TERMS EXCLUSIVE

     This agreement constitutes the entire agreement between the parties hereto
and the parties acknowledge and agree that neither of them has made any
representations with respect to the subject matter of this agreement, or any
representations inducing the execution and delivery hereof; except as
specifically set forth herein; and each of the parties hereto acknowledge that
he or it has relied on its own judgment in entering the same. Further, the
parties acknowledge that this Agreement shall not supercede or diminish in any
way benefits that are to be provided to the Consultant under other agreements
between the parties, including, but not limited to, the Salary Continuation
Agreement entered into between Wisconsin State Bank and the Consultant on
August 6, 1997, the Deferred Compensation Agreement entered into between
Wisconsin State Bank, the Consultant and Joyce Mueller on October 14, 1987, as
amended, and the Severance Agreement and Release entered into between Wisconsin
State Bank and the Consultant on January 6, 1998.

     IN WITNESS WHEREOF, the parties hereto have executed this agreement on the
date first written above.

	 	 	 
	/s/

	 	Harold Mueller
	
 
	Harold Mueller, Consultant
	 
	Merchants & Manufacturers Bancorporation, Inc.

	 
	By:

	 	/s/ Michael Murry
	

	 	
 
	Michael Murry, Chairman of the Board<PAGE>

                                                                    EXHIBIT 10.1

                       FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of September 1, 2004 by and between RENAISSANCE LEARNING, INC., a
Wisconsin corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Bank").

                                    RECITALS

         WHEREAS, Borrower is currently indebted to Bank pursuant to the terms
and conditions of that certain Credit Agreement between Borrower and Bank dated
as of December 1, 2003, as amended from time to time ("Credit Agreement").

         WHEREAS, Bank and Borrower have agreed to certain changes in the terms
and conditions set forth in the Credit Agreement and have agreed to amend the
Credit Agreement to reflect said changes.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:

         1. Section 1.1 is hereby amended by deleting "May 31, 2005" as the last
day on which bank will make advances under the Line of Credit, and by
substituting for said date "May 31, 2006," with such change to be effective upon
the execution and delivery to Bank of a promissory note dated as of September 1,
2004 (which promissory note shall replace and be deemed the Line of Credit Note
defined in and made pursuant to the Credit Agreement) and all other contracts,
instruments and documents required by Bank to evidence such change.

         2. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.

         3. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event or Default.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.

                                             WELLS FARGO BANK, NATIONAL
RENAISSANCE LEARNING, INC.                   ASSOCIATION

By: /s/ Steven A. Schmidt                    By: /s/ Daniel G. Frazier
    -----------------------                      ---------------------
Title: Chief Financial Officer               Title: Vice President
       -----------------------                      ------------------

<PAGE>

                          REVOLVING LINE OF CREDIT NOTE

$15,000,000.00                                             Milwaukee, Wisconsin
                                                           September 1, 2004

         FOR VALUE RECEIVED, the undersigned RENAISSANCE LEARNING, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at 100 East Wisconsin Avenue, Suite 1400,
Milwaukee, Wisconsin, or at such other place as the holder hereof may designate,
in lawful money of the United States of America and in immediately available
funds, the principal sum of Fifteen Million Dollars ($15,000,000.00), or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement as set forth herein.

DEFINITIONS:

         As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

         (a) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in Wisconsin are authorized or required by law to
close.

         (b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2, or 3 months, as designated by Borrower, during which all or
a portion of the outstanding principal balance of this Note bears interest
determined in relation to LIBOR; provided however, that no Fixed Rate Term may
be selected for a principal amount less than One Hundred Thousand Dollars
($100,000.00); and provided further, that no Fixed Rate Term shall extend beyond
the scheduled maturity date hereof. If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.

         (c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) and determined pursuant to the following formula:

                           LIBOR=                    Base LIBOR
                                 -----------------------------------------------
                                          100% - LIBOR Reserve Percentage

                  (i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

                  (ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency

<PAGE>

Liabilities" (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term.

         (d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

         (a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuating rate per annum one percent (1.0%) below the Prime Rate in
effect from time to time, or (ii) at a fixed rate per annum determined by Bank
to be one and one quarter percent (1.25%) above LIBOR in effect on the first day
of the applicable Fixed Rate Term. When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall become
effective on the date each Prime Rate change is announced within Bank. With
respect to each LIBOR selection hereunder, Bank is hereby authorized to note the
date, principal amount, interest rate and Fixed Rate Term applicable thereto and
any payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

         (b) Selection of Interest Rate actions. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.

         (c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any

<PAGE>

manner to LIBOR, and (ii) future, supplemental, emergency or other changes in
the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit
Insurance Corporation, or similar requirements or costs imposed by any domestic
or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority and related in any manner to LIBOR to the
extent they are not included in the calculation of LIBOR. In determining which
of the foregoing are attributable to any LIBOR option available to Borrower
hereunder, any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.

         (d) Payment of Interest. Interest accrued on this Note shall be payable
on the last day of each month, commencing September 30, 2004.

         (e) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

         (a) Borrowing and Repayment. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. The outstanding principal balance of this Note shall be due and
payable in full on May 31, 2006.

         (b) Advances. Advances hereunder, to the total amount of the principal
sum stated above, may be made by the holder at the oral or written request of
(i) John R. Hickey, Steven A. Schmidt or Mary Minch, any one acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.

         (c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

<PAGE>

PREPAYMENT:

         (a) Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

         (b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of One Hundred Thousand Dollars ($100,000.00); provided however,
that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding
principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the Fixed Rate Term applicable
thereto by acceleration or otherwise, Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the discounted monthly differences for
each month from the month of prepayment through the month in which such Fixed
Rate Term matures, calculated as follows for each such month:

                  (i)      Determine the amount of interest which would have
                           accrued each month on the amount prepaid at the
                           interest rate applicable to such amount had it
                           remained outstanding until the last day of the Fixed
                           Rate Term applicable thereto.

                  (ii)     Subtract from the amount determined in (i) above the
                           amount of interest which would have accrued for the
                           same month on the amount prepaid for the remaining
                           term of such Fixed Rate Term at LIBOR in effect on
                           the date of prepayment for new loans made for such
                           term and in a principal amount equal to the amount
                           prepaid.

                  (iii)    If the result obtained in (ii) for any month is
                           greater than zero, discount that difference by LIBOR
                           used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2.0%) above
the Prime Rate in effect from time to time (computed on the basis of a 360-day
year, actual days elapsed). Each change in the rate of interest on any such past
due prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:

         This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of December 1, 2003, as amended from time to time (the "Credit Agreement"). Any
default in the payment or performance of any obligation under this Note, or any
defined event of default under the Credit Agreement, shall constitute an "Event
of Default" under this Note.

<PAGE>

MISCELLANEOUS:

         (a) Remedies. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Wisconsin.

         (d) Business Purpose. Borrower represents and warrants that all loans
evidenced by this Note are for a business, commercial, investment, or other
similar purpose and not primarily for a personal, family or household use.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

RENAISSANCE LEARNING, INC.

By: /s/ Steven A. Schmidt
    -----------------------

Title: Chief Financial Officer
       -------------------------

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