EXHIBIT 10.27
WARRANT TO PURCHASE COMMON STOCK
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS WARRANT IS ISSUED
SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED HEREIN. THIS WARRANT MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THIS INSTRUMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH THIS INSTRUMENT WILL BE VOID.
WARRANT
to purchase
Shares of Common Stock of
MIDDLEFIELD BANC CORP.

      No. 001   Issue Date:                     , 2011

Name of Warrantholder: Bank Opportunity Fund LLC
1. Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated.
“Affiliate” has the meaning ascribed to it in the Stock Purchase Agreement.
“Board of Directors” means the board of directors of the Company, including any
duly authorized committee thereof.
“business day” means any day except Saturday, Sunday and any day on which
banking institutions in the State of Ohio generally are authorized or required
by law or other governmental actions to close.
“Charter” means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.
“Common Stock” means the common stock, no par value , of the Company.
“Company” means Middlefield Banc Corp., an Ohio corporation.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
“Exercise Price” means $16.00 per share of Common Stock.

 

 

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“Expiration Time” has the meaning set forth in Section 3.
“Issue Date” means                     , 2011.
“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
“Regulatory Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant for
shares of Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the receipt of any
necessary approvals and authorizations of, filings and registrations with,
notifications to the the Board of Governors of the Federal Reserve System, or
any other federal, state, county, local or other governmental or regulatory
agencies, authorities (including self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction over the
Company, the Warrantholder or any Affiliate of the Company or the Warrantholder.
“Shares” has the meaning set forth in Section 2.
“Stock Purchase Agreement” means the Stock Purchase Agreement dated as of
August 15, 2011 between the Company and Warrantholder.
“Warrantholder” has the meaning set forth in Section 2.
“Warrant” means this Warrant, issued pursuant to the Stock Purchase Agreement.
2. Number of Shares; Exercise Price. This certifies that, for value received,
Bank Opportunity Fund LLC, or its permitted assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
acquire from the Company, in whole or in part, after the receipt of all
applicable Regulatory Approvals, if any, up to ___________ fully paid and
nonassessable shares of Common Stock at a purchase price per share of Common
Stock equal to the Exercise Price, provided that the Warrantholder does not own
or control more than 24.9% of Common Stock upon such acquisition , taking into
consideration the shares issued upon exercise in whole or part of the Warrant.
The number of shares of Common Stock (the “Shares”) and the Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.
3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by
this Warrant is exercisable, in whole or in part by the Warrantholder, at any
time or from time to time after the execution and delivery of this Warrant by
the Company on the date hereof, but in no event later than 5:00 p.m., Eastern
time on the tenth anniversary of the Issue Date (the “Expiration Time”), by
(A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly
completed and executed on behalf of the Warrantholder, at the principal
executive office of the Company located at 15985 East High Street, Middlefield,
Ohio 44062 (or such other office or agency of the Company in the United States
as it may designate by notice in writing to the Warrantholder at the address of
the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire
transfer of immediately available funds to an account designated by the Company.
If not exercised before the Expiration Time the Warrant shall become void and
all rights thereunder shall cease at the Expiration Time.

 

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If the Warrantholder exercises this Warrant in part, the Warrantholder will be
entitled to receive from the Company within a reasonable time, and in any event
not exceeding three business days, a new warrant in substantially identical form
and expiring at the Expiration Time for the purchase of that number of Shares
equal to the difference between the number of Shares subject to this Warrant and
the number of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby acknowledges
and agrees that its exercise of this Warrant for Shares is subject to the
condition that the Warrantholder will have first received any applicable
Regulatory Approvals, if any, which are required to exercise this Warrant.
4. Issuance of Shares; Authorization. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or
Persons within a reasonable time, not to exceed three business days after the
date on which this Warrant has been duly exercised in accordance with the terms
of this Warrant, together with cash, as provided below in Section 5, in respect
of any fractional Shares otherwise issuable upon such exercise. The Company
hereby represents and warrants that, upon payment by the Warrantholder of the
Warrant exercise price in full in accordance with Section 3, any Shares issued
upon the exercise of this Warrant in accordance with the provisions of Section 3
will be duly and validly authorized and issued, fully paid and nonassessable and
free from all taxes, liens and charges (other than liens or charges created by
the Warrantholder, income and franchise taxes incurred in connection with the
exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will
be deemed to have been issued to the Warrantholder as of the close of business
on the date on which this Warrant and payment of the Exercise Price are
delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep available, out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock
then issuable upon exercise of this Warrant at any time. The Company will use
reasonable best efforts to ensure that the Shares may be issued without
violation of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.
5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. If any
fraction of a Share would be issuable on the exercise of this Warrant in full or
in part, the Company shall pay an amount in cash equal to the then current
market price per Share multiplied by such fraction.
6. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
7. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to
the Warrantholder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.
8. Restrictions on Transfer. Warrantholder will not transfer, sell, assign or
otherwise dispose of this Warrant or any portion thereof, except as follows:(i)
to any Affiliate of Warrantholder under common control with Warrantholder’s
ultimate parent, general partner, managing member, or investment advisor (any
such transferee shall be included in the term “Warrantholder”), (ii) to any
limited partner or shareholder of Warrantholder, but in each case only if the
transferee agrees in writing for the benefit of the Company (with a copy thereof
to be furnished to the Company) to be bound by the terms of this Warrant, or
(iii) to any Person with the prior written consent of the Company, which shall
not be unreasonably withheld, conditioned or delayed.

 

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9. Exchange and Registry of Warrant. Until the Expiration Time this Warrant is
exchangeable, upon the surrender hereof by the Warrantholder to the Company, for
a new warrant or warrants of like tenor and representing the right to purchase
the same aggregate number of Shares. The Company shall maintain a registry
showing the name and address of the Warrantholder as the registered holder of
this Warrant. This Warrant may be surrendered for exchange or exercise in
accordance with its terms, at the office of the Company, and the Company shall
be entitled to rely in all respects, prior to written notice to the contrary,
upon such registry.
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, until the Expiration Time the
Company shall make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of Shares as provided for in such lost,
stolen, destroyed or mutilated Warrant.
11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a business day, then such action may be taken or such right may be
exercised on the next succeeding day that is a business day.
12. Adjustments and Other Rights. For so long as the Warrantholder holds this
Warrant or any portion thereof, if any event occurs that, in the good faith
judgment of the Board of Directors of the Company, would require adjustment of
the Exercise Price or number of Shares into which this Warrant is exercisable in
order to fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of the Stock Purchase
Agreement and this Warrant, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board of Directors, to protect such purchase rights as
aforesaid. The good faith determination made by the Board of Directors about
whether an adjustment is necessary and about the terms of any adjustment shall
be final and binding.
Whenever the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be adjusted as provided in this Section 12, the Company shall
forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price
that shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment, and the Company shall also cause a copy of
such statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.
13. No Impairment. The Company will not, by amendment of its Charter or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Warrantholder.

 

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14. Governing Law. This Warrant will be governed by and construed in accordance
with the federal law of the United States if and to the extent such law is
applicable, and otherwise in accordance with the laws of the State of Ohio
applicable to contracts made and to be performed entirely within such State.
Each of the Company and the Warrantholder agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the
NorthernDistrict of Ohio for any civil action, suit or proceeding arising out of
or relating to this Warrant or the transactions contemplated hereby, and
(b) that notice may be served upon the Company at the address in Section 18
below and upon the Warrantholder at the address for the Warrantholder set forth
in the registry maintained by the Company pursuant to Section 9 hereof. To the
extent permitted by applicable law, each of the Company and the Warrantholder
hereby unconditionally waives trial by jury in any civil legal action or
proceeding relating to the Warrant or the transactions contemplated hereby or
thereby.
15. Binding Effect. This Warrant shall be binding upon any successors or assigns
of the Company.
16. Amendments. This Warrant may be amended and the observance of any term of
this Warrant may be waived only with the written consent of the Company and the
Warrantholder.
17. Prohibited Actions. The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise Price if
the total number of shares of Common Stock issuable after such action upon
exercise of this Warrant, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon the exercise of
all outstanding options, warrants, conversion and other rights, would exceed the
total number of shares of Common Stock then authorized by its Charter.
18. Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt, (b) on the first business day following
the date of dispatch if delivered by a recognized next day courier service, or
(c) on the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth in Section 7.05 of the Stock
Purchase Agreement, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice.
19. Entire Agreement. This Warrant and the forms attached hereto contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer.
Dated:                     , 2011

            COMPANY: MIDDLEFIELD BANC CORP.
      By:           Name:   Thomas G. Caldwell        Title:   President and
Chief Executive Officer        Attest:
      By:           Name:           Title:      

 

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[Form of Notice of Exercise]
Date:                     

     
TO:
  MIDDLEFIELD BANC CORP
Attention: Thomas G. Caldwell
15985 East High Street
Middlefield, Ohio 44062
 
   
RE:
  Election to Purchase Common Stock

The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price
for such shares of Common Stock in the manner set forth below. A new warrant
evidencing the remaining shares of Common Stock covered by such Warrant, but not
yet subscribed for and purchased, if any, should be issued in the name set forth
below.

         
Number of Shares of Common Stock
       
 
       
 
       
Aggregate Exercise Price:
       
 
       

                 
 
  Holder:                          
 
  By:                          
 
      Name:        
 
               
 
      Title: