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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
Pursuant to Section 13 of 15(d)
of the Securities and Exchange Act of 1934
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Date of Report: July 12, 1996
BAYLAKE CORPORATION
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Wisconsin 0-8679 39-1268055
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
217 NORTH FOURTH AVENUE, STURGEON BAY, WISCONSIN 54235
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(Address of principal executive officers)
Registrant's telephone number, including area code (414)-743-5551
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Item 2. Acquisition or Disposition of Assets
On July 1, 1996, Baylake Corp. ("Baylake") consummated its previously
announced acquisition of Four Seasons of Wis., Inc. ("Four Seasons"). Four
Seasons owns 100% of the shares of The Bank ("Bank"), with two full service
offices in Manawa, which is approximately 35 miles west of Green Bay and King,
a nearby community. Plans for the acquisition were previously announced by
Baylake.
Baylake acquired Four Seasons pursuant to a Agreement and Plan of
Acquisition dated as of March 13, 1996. To consummate the acquisition, Baylake
has paid thus far an aggregate of $13,875,000, including $13,800,000 plus 50%
(or $75,000) of the estimated income of Four Seasons for 1996 up to the
effective date of the transaction. The remaining 50% of estimated net income
is placed in escrow with Baylake Bank until completion and review of a
certified audit confirming financial data for Four Seasons for the six months
ended June 30, 1996. Any adjustment to final net income due shall be made at
that time and the remaining income shall be paid out. To the extent that there
is any increase in actual income which exceeds the amount held in escrow,
Baylake has agreed to pay such increase at that time.
The acquisition was negotiated at arm's length between Baylake and the
representatives of Four Seasons (who are not affiliated with Baylake). The
transaction is being accounted for by Baylake using the purchase method of
accounting.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial statements of business acquired:
When available, Baylake will file the following audited financial
statements of Four Seasons:
Consolidated Balance Sheet at June 30, 1996
Consolidated Statements of Income for the Year Ended June 30, 1996
Consolidated Statement of Cash Flows for the Year Ended June 30, 1996
Baylake is unable to include the above financial statements at this time
because of their incomplete availability. The financial statements will be
filed as soon as possible, not more than 60 days
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after the filing hereof.
(b) Pro forma financial information
It is impractical for Baylake to prepare pro forma financial information,
giving effect to the Four Seasons acquisition, at this time. Baylake will
provide pro forma statements as soon as practicable, not more than 60 days
after the filing hereof. The following unaudited pro forma financial
statements of Baylake are to be included in the future amendment:
Pro Forma Consolidated Balance Sheet of Baylake at June 30, 1996
Pro Forma Consolidated Statements of Income of Baylake for the six months
ended June 30, 1996
(c) Exhibits
Exhibit 2.1 Agreement and Plan of Acquisition dated March 13, 1996
between Baylake and Four Seasons.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BAYLAKE CORP.
Date: July 12, 1996 By: Steven D. Jennerjohn
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Steven D. Jennerjohn
Treasurer
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EXHIBIT 2.1
BAYLAKE BANK MERGER APPLICATION
AGREEMENT AND PLAN OF ACQUISITION
AGREEMENT made this 13th day of March, 1996 by and between Baylake Corp., a
Wisconsin corporation ("Baylake"), and Four Seasons of Wis. Corp., a Wisconsin
corporation ("Four Seasons").
WHEREAS, Baylake and Four Seasons are Wisconsin corporations and registered
bank holding companies under the Bank Holding Company Act of 1956, as amended,
and
WHEREAS, Four Seasons controls The Bank, a Wisconsin state chartered bank ("The
Bank"), and Baylake desires to acquire The Bank through purchase of Four
Seasons in accordance with the terms and conditions of this Agreement and Plan
of Acquisition ("Agreement") in a transaction in which all of the outstanding
shares of Four Seasons will be acquired by Baylake, and
WHEREAS, following the Acquisition and dissolution of Four Seasons, Baylake
shall be the sole owner of Four Seasons, including all of its assets and
subsidiaries, all rights under contract, liens, security interests, mortgages,
and other encumbrances thereof, and all other claims and interests in assets or
properties then existing, which properties and liabilities shall vest in and
become the property and liabilities of Baylake without the requirement for any
other transfer, order of any court or regulatory body, or consent of any other
party, and
WHEREAS, upon the completion of the Acquisition and dissolution of Four
Seasons, Baylake shall thereafter hold and exercise all of the various rights,
interests, and ownership in and to the assets and liabilities of Four Seasons
in the same manner and to the same extent, without interference therewith, as
Four Seasons or its subsidiary may hold or exercise the same as of the
Effective Date hereof, and
WHEREAS, upon the Effective Date, at the sole direction of Baylake pursuant to
the joint application with its subsidiary, Baylake Bank, for regulatory
approval, the existence and holding company status of Four Seasons and the bank
charter of The Bank shall thereupon be terminated. Four Seasons shall be
dissolved and cease to exist, and the assets, liabilities, and properties of
The Bank shall be merged with Baylake's subsidiary, Baylake Bank, which shall
succeed to and possess all of its assets, liabilities, branches, rights,
privileges, and powers,
NOW, THEREFORE, in consideration of the terms and covenants set forth herein
and, further, of the mutual benefit accruing to the parties under this
Agreement, it is hereby agreed as follows:
1. ACQUISITION. Subject to the terms and conditions hereof and in reliance
upon the covenants, representations and warranties herein made by each to the
other, the parties commit to the following principals of purchase and
obligations of the parties ("Acquisition"):
1.1 Purchase Price. On the Effective Date, Baylake agrees to pay the sum of
THIRTEEN
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MILLION EIGHT HUNDRED THOUSAND and no/100 DOLLARS plus the net ordinary income
of The Bank for 1996 up to the Effective Date as full and final compensation
("Purchase Price") for the stock of Four Seasons.
1.2 Obligation of Baylake. Baylake agrees to approve the Agreement by March
19, 1996, to pay the Purchase Price and to complete the Acquisition, subject to
and in accordance with the obligations identified under the terms and
conditions of the Agreement.
1.3 Obligation of Four Seasons. Four Seasons agrees to execute the Agreement
based upon the unanimous affirmative vote of its directors to approve this
Agreement and to effect the Acquisition, subject to and in accordance with the
obligations outlined herein.
2. PLAN OF ACQUISITION. The parties agree that, pursuant to the Agreement and
execution of other documents necessary therefor, the Acquisition will have the
following legal effect and result:
2.1 Requirements for Completion. Following the final approval of the Board of
Governors of the Federal Reserve System ("Federal Reserve") and the Office of
the Wisconsin Commissioner of Banking ("Wisconsin Banking Commission"), and
subject to compliance with the other regulatory agencies, including the Federal
Deposit Insurance Corporation ("FDIC") and Securities Exchange Commission
("SEC"), and the requirements, terms, and conditions set forth in the
Agreement, the Acquisition shall be consummated as of the Effective Date.
2.2 Effective Date. The Effective Date shall be the date of the final
execution by the parties of all required related agreements and issuance by the
Federal Reserve and Wisconsin Banking Commission of documents approving the
acquisition of Four Seasons.
2.3 Transfer of Ownership. Upon payment of the Purchase Price to the
shareholders, all issued and outstanding shares of common stock shall be
conveyed, transferred, and otherwise delivered to Baylake.
3. REPRESENTATIONS AND WARRANTIES OF BAYLAKE. Baylake represents, warrants and
agrees as follows:
3.1 Corporate Matters. Baylake is a corporation duly organized, validly
existing and operating under the laws of the State of Wisconsin and a
registered bank holding company under the BHC Act. Baylake is duly authorized
to conduct its business and has full power and authority, including all
licenses, franchises, permits and other governmental authorizations required by
law, to engage in the business and activities now conducted by it and to own
the properties now owned by it.
3.2 Validity of Corporate Action. Baylake has all necessary corporate power
and authority to enter into this Agreement and to perform all of the
obligations under this Agreement. This Agreement constitutes a valid and
legally binding obligation of Baylake and has been duly authorized and approved
on behalf of Baylake by all requisite corporate action. Provided the
regulatory approvals have been obtained, the performance of this Agreement and
carrying out of the Acquisition will not conflict with the terms of any law or
any rule or regulation of any
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governmental agency or authority, or any judgment, order or decree of any court
or other governmental agency to which Baylake, or any Baylake subsidiary may be
subject.
3.3 Accuracy of Information. The statements made by Baylake in this
Agreement, and in any other written disclosures or documents executed and/or
delivered by or on behalf of Baylake to Four Seasons pursuant to the terms of
this Agreement, are true and correct in all material respects and do not omit
any material facts necessary to make such statements not misleading. All such
statements which are not set forth in this Agreement shall nevertheless
constitute representations and warranties of Baylake hereunder to the same
extent as if set forth in full in this Agreement.
3.4 Capacity to Complete the Transaction. Baylake affirms that it has the
ability to perform its obligations under the Agreement, that it has sufficient
financial capacity to acquire the stock of Four Seasons, and that it knows of
no reason why it will not receive the regulatory approvals necessary to
complete the transaction.
4. REPRESENTATIONS AND WARRANTIES OF FOUR SEASONS. Four Seasons represents,
warrants and agrees as follows:
4.1 Four Seasons Corporate Matters. Four Seasons is a corporation duly
organized, validly existing and in active status under the laws of the State of
Wisconsin and is a registered bank holding company under the BHC Act. Four
Seasons is duly authorized to conduct its business and has full power and
authority, including all licenses, permits and other authorizations required by
law where the failure to do so would materially and adversely affect Four
Seasons or its financial condition, to engage in the business and activities
now conducted by it and to own the properties now owned by it. Four Seasons is
not qualified to do business in any jurisdiction other than the State of
Wisconsin and such business, activities and property ownership do not require
any such qualifications to do business as a foreign corporation. Four Seasons
has no subsidiaries other than The Bank. Four Seasons owns all of the issued
and outstanding shares of capital stock of The Bank.
4.2 The Bank Corporate Matters. The Bank is duly organized, validly existing
and in good standing under the laws of the State of Wisconsin, is duly
authorized to conduct a general banking business, subject to the supervision of
the Wisconsin Banking Commission and the FDIC, its deposits are insured under
the Federal Deposit Insurance Act, has its main office in Manawa, Wisconsin and
a fully authorized branch office in King, Wisconsin. The Bank has full power
and authority, including all licenses, franchises, permits and other
governmental authorizations required by law, to engage in the business and
activities now conducted by it and to own the properties now owned by it.
4.3 Validity of Corporate Action. Four Seasons has all necessary corporate
power and authority to enter into this Agreement in conformity with the
applicable law, and to perform all of its obligations hereunder. This
Agreement constitutes a valid and legally binding obligation of Four Seasons in
accordance with its terms and subject to its conditions, and is duly authorized
and approved on behalf of Four Seasons by all requisite corporate action.
Subject to identified regulatory approval, performance of this Agreement will
not conflict with, result in the breach of, constitute a default under, or
accelerate the performance provided by, the terms of any law or any rule or
regulation of any governmental agency or authority, or any judgment, order or
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decree.
4.4 Accuracy of Information. The statements made by Four Seasons in this
Agreement, and in any other written disclosures or documents executed and/or
delivered by or on behalf of it to Baylake in connection with or pursuant to
the terms of this Agreement, are true and correct in all material respects and
do not omit any material facts necessary to make such statements not
misleading. All such statements which are not set forth in this Agreement
shall nevertheless constitute representations and warranties of Four Seasons
hereunder to the same extent as if set forth in full in this Agreement.
4.5 Capitalization. The capital stock of Four Seasons consists of 4000
authorized shares of Common Stock, no par value per share, 3,241 shares of
which are issued and outstanding. The capital stock of The Bank consists of 4
authorized shares of Common Stock, $100,000 par value per share, all of which
shares are issued and outstanding and owned by Four Seasons. All of the
outstanding shares of Four Seasons and The Bank are validly issued, fully paid
and nonassessable except to the extent described below, and were not issued in
violation of the preemptive rights of any shareholder. The outstanding stock
of Four Seasons and the capital stock of The Bank may be subject to liability
for certain unpaid employee claims as provided in Section 180.0622 (2)(b) of
the Wisconsin Business Corporation Law; the outstanding stock of The Bank is
subject to sale to satisfy any assessment made to remedy an impairment or
deficiency of capital, to the extent provided in Section 220.07 of the
Wisconsin Statutes. There are no outstanding options, warrants, conversion
rights, subscriptions or other commitments of any kind directly or indirectly
obligating Four Seasons or The Bank to issue any additional shares of its
capital stock or other equity securities.
4.6 Financial Statements. Four Seasons has heretofore made available to
Baylake copies of financial statements pursuant to the "Due Diligence"
examination, including without limitation its unaudited consolidated financial
statements and The Bank's unaudited financial statements, together with copies
of financial reports, applications and documents filed by Four Seasons and/or
The Bank with applicable regulatory agencies within the past three years. Each
such financial statement and report is true and correct in all material
respects. Each report complies as of its respective date in all material
respects with all of the laws, rules and regulations of the regulatory
authority with which it was filed. Each financial statement fairly presents,
in accordance with an accounting method prescribed or accepted by bank
regulatory authorities, the financial position and results of operations of The
Bank as of the respective dates thereof. As of such dates, the financial
statements and reports do not include any material assets or omit to state any
material liabilities, absolute or contingent, or other facts, which inclusion
or omission would render such financial statements or reports materially
misleading.
4.7 Property and Title. Each of Four Seasons and The Bank has good and
marketable title to all assets and properties which it purports to own,
including without limitation all assets and properties reflected in the
December 31, 1995 financial statements (except to the extent that such assets
and properties have been disposed of for fair value in the ordinary course of
business since the dates thereof), and such assets and properties are not
subject to any liens, mortgages, security interests, encumbrances or charges of
any kind, except (i) as may be noted in the financial statements; (ii)
statutory liens for taxes not yet delinquent; (iii) security interests granted
by The Bank to federal, state or other government agencies; and (iv) minor
defects and irregularities in
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title and encumbrances which do not materially impact the use thereof for the
purposes for which they are held.
4.8 Contracts and Obligations. Neither Four Seasons nor The Bank is a party
to or bound by any written or oral lease, license, contract, or commitment with
respect to any property, real or personal, requiring payments to any one
supplier for the performance of services nor has either of them contracted for
the purchase or sale of any real or personal property other than in the
ordinary course of business which have not already been disclosed to Baylake.
Four Seasons and The Bank have performed in all material respects all
obligations under existing contracts by which either of them is bound which are
required to be performed on its part to date, and is not in default under any
outstanding mortgage, lease, contract, commitment or agreement to which either
is bound.
4.9 Allowance for Loan Losses. To the best of the knowledge of Four Seasons,
the allowance for loan losses shown on the most recent financial statement of
The Bank is adequate in all respects to provide for all losses, net of
recoveries, on loans outstanding as of that date, including any amounts charged
off to the date of this Agreement. To the best of the knowledge of Four
Seasons, the loan portfolio of The Bank, to the extent the aggregate amount
thereof exceeds such allowance, at the date of such most recent financial
statement, was fully collectible.
4.10 Taxes. Four Seasons and The Bank have filed with appropriate governmental
agencies all material federal, state, and local income, franchise, excise, real
and personal property and other tax returns and reports required to be filed by
it. Four Seasons affirms the following with respect to itself and The Bank:
(a) Neither is delinquent in the payment of any taxes shown on such returns
or reports or on any assessments received by it for any such taxes;
(b) Neither is subject to any pending examination of income taxes by the
Internal Revenue Service or any state tax agency;
(c) Neither has executed or filed with the Internal Revenue Service or any
state tax agency any agreement extending the period for assessment and
collection of any federal or state tax;
(d) Neither is a party to any action or proceeding or has had any claim
asserted against it by any governmental authority for assessment or collection
of taxes.
The financial statements include adequate reserves for the payment of all
accrued but unpaid federal, state and local taxes, including interest and
penalties, whether or not disputed, for all periods through the respective
dates of such statements.
4.11 Employees and Benefits. Four Seasons affirms the following with respect
to itself and The Bank:
(a) Neither is a party to any written or oral (i) employment or consulting
contract which is not terminable without penalty, (ii) employee bonus, deferred
compensation, pension, profit sharing, retirement, stock purchase, or stock
option plan, or (iii) other employee benefit or welfare plan; and
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(b) No person or governmental agency has made any claim against Four Seasons
or The Bank arising out of any statute, ordinance or regulation concerning
discrimination to employees, employee practices, occupational or safety and
health standards, or unfair labor practices.
4.12 Insurance. Until the Effective Date, Four Seasons and The Bank will
maintain all insurance policies and bonds in full force and effect, with all
premiums due thereon on or prior to such date having been paid as and when due.
Neither Four Seasons nor The Bank has been informed by any insurer that any
insurance coverage would not be renewed and has not had an application for any
proposed insurance coverage rejected by any insurer.
4.13 Litigation and Claims. Four Seasons affirms the following with respect to
itself and The Bank:
(a) There is no claim, action, suit, litigation, proceeding or investigation
formally instituted, pending, or, to the best of the knowledge of Four Seasons,
threatened against or affecting Four Seasons or The Bank, or any of their
respective assets, at law, or in equity, or before any court, arbitration panel
or other governmental authority which, if determined adversely to Four Seasons
or The Bank, would have a material adverse effect on its financial condition,
assets, business prospects or results of operations. (For such purpose,
aggregate potential liability not exceeding $20,000 shall be deemed not to have
a material adverse effect.); and
(b) Neither Four Seasons nor The Bank is subject to any outstanding judgment,
order, writ, injunction, or decree of any court, arbitration panel, or other
governmental authority.
4.14 Environmental Matters. To the best of the knowledge of Four Seasons, no
hazardous materials have been stored or disposed of on any real property
currently owned, leased, used, operated or occupied by Four Seasons or The Bank
or on any property acquired, or to be acquired, in foreclosure or in lieu of
foreclosure, in any manner or amount which would require reporting, clean-up or
remediation under any environmental laws. Four Seasons and The Bank know of no
circumstances with respect to any of the aforesaid properties that could
reasonably be anticipated to form the basis of an environmental claim or
restriction on ownership, occupancy, use of or transferability under any
applicable environmental law.
4.15 Legal Compliance. Four Seasons and The Bank have complied with, and
conducted its operations in accordance with, all applicable laws, regulations
and other legal requirements of all authorities having jurisdiction over it, in
all material respects.
4.16 Regulatory Compliance. Four Seasons affirms the following with respect to
itself and The Bank, that they are substantially in compliance with applicable
federal and state regulations affecting banking activities, including the Bank
Secrecy Act and applicable securities and insurance regulations. Neither Four
Seasons nor The Bank knows of any violations or conditions which may lead to
violations, or of any patterns or practices which may be deemed violations of
any of the above identified laws or regulations, except those which have been
identified under the most current state and federal bank regulatory agency
reports of examination.
4.17 Reporting and Withholding of Interest. Four Seasons and The Bank have
fully complied
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with the Internal Revenue Code, as amended, and all rules and regulations of
the Internal Revenue Service with respect to the reporting of payments of
interest, and other payments, by it, and has complied with all provisions
requiring the withholding for income taxes on such amounts when required. Four
Seasons and The Bank have instituted adequate procedures to assure compliance
with such provisions.
4.18 Interim Events. Four Seasons affirms the following with respect to itself
and The Bank, since December 31, 1995 there has not occurred any event or
condition of any material substance relating to Four Seasons or The Bank
adversely affecting the financial condition, results of operations, business or
prospects of Four Seasons and The Bank on a consolidated basis.
5. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date of this
Agreement and until the Effective Date, the parties shall perform in accordance
with the following provisions:
5.1 Access to Books and Records. Baylake and its authorized representatives
shall, to the extent not prohibited by law, have full access to the premises
and to the contracts, commitments, books and records of Four Seasons and The
Bank including the right to receive notice and attend board and committee
meetings of Four Seasons and The Bank. Baylake shall receive such financial,
technical and operating data and other information as shall from time to time
be reasonably requested. Baylake agrees that until the Acquisition has been
consummated, it and its representatives will hold in strict confidence all data
and information so obtained, except for such data and information that are in
the public domain or acquired from a source having no duty of confidentiality,
and if the transactions herein provided for are not consummated, Baylake will
return all such data and will continue to respect such confidence and will in
no manner make use of the information it obtained.
5.2 Ordinary Course of Business. Four Seasons and The Bank shall carry on
their respective businesses diligently and substantially in the same manner as
heretofore and shall not make or institute any extraordinary or unusual changes
in their methods of operations, management or accounting or take any action
which would cause any representation or warranty in Paragraph 4 hereof to be
breached, except with the prior written consent of Baylake or as expressly
contemplated by this agreement.
5.3 Contracts and Indebtedness. Without the prior written consent of Baylake,
neither Four Seasons nor The Bank shall enter into any contract or commitment
or engage in any transaction not in the usual and ordinary course of business
and consistent with current business practices, or create any indebtedness
other than that incurred in the usual and ordinary course of business.
5.4 Payments. Neither Four Seasons nor The Bank shall, without the prior
written consent of Baylake, declare or pay any dividend or make any
distribution in respect of its capital stock; directly or indirectly redeem,
purchase or otherwise acquire any of its own stock; grant any stock options;
issue any additional shares of its own stock; or accept any capital
contributions.
5.5 Preservation of Organization and Properties. The Bank shall use its best
efforts (without making any commitments on behalf of Baylake) to preserve its
business organization intact, to keep available to it the present officers and
employees thereof, and to preserve the loans and
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deposits, present relationships of it with its customers, and others having
business relationships with it.
5.6 Other Discussions. Neither Four Seasons and The Bank shall, nor any of
the directors, officers or other representatives thereof, provide any
information to, or conduct any discussions or negotiations with, any other
party relating to any possible acquisition of Four Seasons or The Bank, or the
transfer of any material part of either of their respective assets in a
transaction other than the ordinary course of business, by any party not
affiliated with Baylake. In the event Four Seasons or The Bank becomes aware
of any request for information by any such other party, or any attempt at
commencement of discussions or negotiations, Four Seasons shall immediately
notify Baylake of such event and identify the party and the circumstances
relating to such event. As result of the considerable cost and expense
incurred and to be incurred by Baylake in consummating the transactions
contemplated hereby, Baylake shall be entitled, in addition to any other rights
or remedies it may have under paragraph 9.2, to receive from Four Seasons a
termination fee of $500,000.00 upon a breach of this Paragraph resulting in the
termination of this Agreement.
6. ACTIONS PRIOR TO CLOSING. Each and all obligations of Baylake and Four
Seasons shall be performed prior to or as of the Effective Date:
6.1 Regulatory Approvals and Compliance. Baylake shall prepare and file, and
shall diligently seek favorable action upon applications for required
regulatory approvals. Four Seasons shall promptly provide all such information
as Baylake shall reasonably request in order to do so. Baylake shall provide
Four Seasons with copies of all filings, regulatory responses, and related
correspondence in that regard.
6.2 Fulfillment of Representations and Warranties. The parties shall use
their best efforts to fulfill prior to the Effective Date each of the
representations and warranties set forth in Paragraphs 3 and 4.
6.3 Satisfaction of Conditions Precedent. Each party agrees diligently to use
its best efforts to satisfy prior to the Effective Date each of the conditions
set forth in Paragraph 8 hereof which are precedent to the obligations of the
other party to be performed on or before the Effective Date.
7. CONDITIONS PRECEDENT TO EFFECTIVE DATE. It is understood by the parties
that the obligations of Four Seasons are limited to those required to meet the
requirements of Baylake and effect the Acquisition. The items set forth herein
shall constitute the conditions to be met, fulfilled, or complied with in
anticipation of the Acquisition, prior to or as of the Effective Date.
7.1 Conditions Precedent to Both Parties. Each obligation of each party to
this Agreement to be performed as of the Effective Date shall be subject to the
prior satisfaction of the following conditions:
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(a) Representations, Warranties, Covenants, and Conditions. All
representations and warranties of Baylake and Four Seasons in this Agreement
shall be true, accurate and complete in all material respects both as of the
date hereto and as of the Effective Date, with the same force and effect as if
made anew as of the Effective Date, except as affected by the transactions
contemplated by this Agreement, and in all material respects Baylake and Four
Seasons shall have performed or complied with all of the covenants, agreements
and conditions to be performed or complied with on its part, and each shall
have furnished the other a certificate signed by an executive officer to the
foregoing effect.
(b) Governmental Compliance. The Federal Reserve and the Wisconsin Banking
Commission shall have approved the acquisition by Baylake of Four Seasons and
The Bank, all necessary waiting periods shall have expired, and Baylake shall
be in compliance with other applicable governmental agencies.
c) Approvals of Experts and Legal Counsel. Actions, proceedings, instruments
and documents required to carry out the transactions contemplated by this
Agreement and other related legal matters shall have been accomplished in a
manner satisfactory to the experts and counsel to Four Seasons and Baylake,
such counsel have been furnished with certified copies of actions and
proceedings and such other documents and instruments as may have been
reasonably requested.
7.2 Conditions Precedent to Baylake Obligation. Each and every obligation of
Four Seasons to be performed on the Effective Date shall be subject to the
prior satisfaction of the following conditions, any one or more of which may be
waived by Baylake.
(a) Surrender of Certificates. Four Seasons shall deliver to Baylake at the
Effective Date certificates of ownership of all outstanding shares of Four
Seasons, duly executed in blank by all of the shareholders, for transfer of
ownership upon payment of the Purchase Price.
(b) Audited Financial Statements. Four Seasons shall have furnished to
Baylake, at Baylake's option and expense, Audited Financial Statements as
requested for the years from 1994 and 1995. The Audited Financial Statements
shall not be materially different from financial statements as of and for the
years ended 1994 and 1995, and Baylake shall be reasonably satisfied with the
results thereof and information contained therein. The Audited Financial
Statements shall have been prepared by Smith & Gesteland, Madison, Wisconsin,
or another independent certified public accounting firm reasonably acceptable
to Baylake, which shall have expressed an unqualified opinion thereon.
(c) Comfort Letter of Independent Public Accountants. Baylake shall have
received a letter from a certified public accounting firm in form and substance
reasonably satisfactory to Baylake and Four Seasons providing positive and
negative assurances in customary form regarding financial statements of Four
Seasons and statistical data relating to Four Seasons and The Bank. The Letter
shall have been prepared by Smith & Gesteland, Madison, Wisconsin, or another
independent certified public accounting firm reasonably acceptable to Baylake.
(d) Opinion of Counsel for Four Seasons. Baylake shall have received from
legal counsel for Four Seasons, as of the Effective Date, a written opinion
dated as of that date addressed to Baylake and satisfactory to Baylake in form
and substance substantially similar to the form attached hereto.
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(e) No Litigation. Unless waived by Baylake as to any specific matter or
matters, as of the Effective Date, no suit shall be pending or threatened
before any court in which it will be or it is sought, by anyone to restrain,
prohibit or obtain damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated hereby.
8. AMENDMENT. The parties agree that any modification of this Agreement shall
be accomplished solely under the provisions of this Article.
8.1 Method of Amendment. The parties shall not amend this agreement except
upon the mutual written and signed modification to such extent and in such
written form as the parties may agree.
8.2 Effect of Amendment. The effect of any amendment shall be limited solely
to application of the terms contained therein and no such amendment shall
constitute a waiver of the enforceability of any other provision of the
Agreement.
9. TERMINATION AND ABANDONMENT. The parties acknowledge that the
responsibility of Baylake shall rest principally upon its payment of the
Purchase Price pursuant to the provisions of the Agreement and the ability of
Four Seasons to terminate without default or penalty shall be limited as
follows:
9.1 Method of Termination. The Agreement may be terminated by either party
without penalty in the event the other party fails to fulfill or
materially comply with any of the conditions precedent set forth in
Paragraph 8 or other terms of the Agreement. This Agreement shall
terminate without penalty to Four Seasons only in the event of the failure
of the conditions precedent set forth in Paragraph 1.2, Paragraph 3,
Paragraph 7.1, upon the mutual consent of the parties, or in the event,
absent the default of Four Seasons, the Effective Date is not achieved by
September 30, 1996.
9.2 Notice of Default. The parties acknowledge the opportunity for each to
cure any default and each shall have 30 days following the receipt of written
notice of default in which to cure the same before termination shall take
effect.
9.3 Effect of Termination. Upon termination, this Agreement shall cease to be
enforceable and it shall become void, except as to liquidated or other damages
payable to or recoverable by either party hereunder, such provisions surviving
the termination with full force and effect. and without limitation. In the
event of any material default, either party shall be entitled to remedies and
damages provided for by law, contract, or this Agreement, but in no event shall
damages exceed: (i) liquidated damages in the sum of $100,000; actual expenses
incurred in excess of $100,000; and, (iii) additional liquidated damages
available to Baylake under paragraph 5.6; provided however that Baylake shall
nuot receive liquidated damages under (i) above in the event it receives the
liquidated damages called for under Paragraph 5.6 above.
10. MISCELLANEOUS PROVISIONS.
10.1 Applicable Law. This and other agreements entered into in the course of
this Acquisition
<PAGE> 11
shall be construed, interpreted, and enforced in accordance with the laws of
the State of Wisconsin.
10.2 Complete Agreement. This Agreement shall constitute the initial and
entire agreement between the parties, except as to such other agreements,
warranties and representations, and conditions required to be made or performed
hereunder and which shall, upon the mutual written agreement of the parties,
become a part hereof.
10.3 Notice and Delivery. All delivery of notices, documentation, or other
communications required under this Agreement shall be in writing and deemed
made upon personal service or mailing, postage prepaid, by registered or
certified mail, addressed:
If to Baylake: Baylake Corp.
P.O. Box 9
217 North Fourth Avenue
Sturgeon Bay, WI 54235-0009
Attn: Thomas L. Herlache
If to Four Seasons: Four Seasons of Wis., Inc.
c/o KPMG Peat Marwick LLP
303 East Wacker Drive
Chicago, IL 60601
Attn: John Palmer
10.4 Assignment and Rights of Third Parties. The rights of either of the
parties hereto shall not be assignable to any third party except upon the
express written consent of the other party hereto. Nothing contained in this
Agreement is intended to or shall be construed as giving or providing to any
other person, firm, corporation, or entity any rights or remedies hereunder.
10.5 Survival of Representations, Warranties, and Obligations. All
representations, warranties, and other obligations, whether made directly by
the parties hereto or indirectly on behalf of interested parties benefitting
under this Agreement, shall survive for a period of one year following the
Effective Date.
IN WITNESS WHEREOF, the parties have hereby caused this Agreement to be duly
executed and attested to as of and effective upon the date first set forth
above.
BAYLAKE CORP.
By: /S/
------------------------------------------
Richard A. Braun, Executive Vice President
By: /S/
------------------------------------------
Daniel F. Maggle, Secretary
<PAGE> 12
FOUR SEASONS OF WIS., INC.
By: /S/
---------------------------------------
Charles J. Posnanski, President
By: /S/
---------------------------------------
Lois E. Posnanski, Secretary
ACKNOWLEDGEMENT AND CONSENT TO AGREEMENT
The undersigned, being all of the shareholders of Four Seasons of Wis., Inc.,
owning all of the common stock of the corporation, hereby acknowledge their
agreement and consent to the Agreement and Plan of Acquisition, dated March 13,
1996 and agree that they will surrender and deliver all of their shares in the
corporation to Baylake Corp. on the Effective Date in exchange for the Purchase
Price in accordance with the performance of the principal parties as set forth
in the aforementioned Agreement.
Dated this 13th day of March, 1996.
/S/
--------------------------
Charles J. Posnanski
/S/
--------------------------
Lois E. Posnanski
