Document:

Exhibit 4.1

 

ZQ00001122MSBAC01CUSC0000009903CAPIN002626010329   COMMON STOCK PAR VALUE $0.01 RESTRICTED LEGEND ON REVERSE 103319 SIDE COMMON   STOCK THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND   COLLEGE STATION, TX Shares Certificate Number ZQ00001122 Midland States   Bancorp, Inc. MIDLAND STATES BANCORP, INC. INCORPORATED UNDER THE LAWS OF THE   STATE OF ILLINOIS THIS CERTIFIES THAT COMPUTERSHARE SHAREHOLDER SERVICES INC   SPECIMEN CERTIFCATE is the owner of **ONE** CUSIP 597742 10 5 SEE REVERSE FOR   CERTAIN DEFINITIONS SHARES OF THE $0.0 PAR VALUE COMMON STOCK OF MIDLAND   STATES BANCORP, INC. hereinafter called the "corporation,"   transferable only on the books of the corporation by the holder hereof in   person, or by duly authorized attorney, upon the surrender of this   certificate properly endorsed. The amount of the Common Stock of the   corporation is set forth on the books of the corporation, and the par value   of the shares of Common Stock of the corporation is set forth in the Articles   of Incorporation of the corporation, as amended or to be amended hereafter,   which Articles of Incorporation and any and all amendments thereof are on   file at the office of the corporation and are hereby expressly incorporated   herein by reference and to all of which the holder hereby agrees and assents.   IN WITNESS WHEREOF, the corporation has caused this certificate to be signed   by its duly authorized officers and its seal to be hereunder affixed.   President DATE 30-SEP-2015 COUNTERSIGNED AND REGISTERED COMPUTERSHARE TRUST   COMPANY, N.A. TRANSFER AGENT AND REGISTRAR. By AUTHORIZED SIGNATURE Assistant   Secretary SECURITY INSTRUCTIONS ON REVERSE Midland States Bancorp, Inc. PO   BOX 43004, Providence, RL 02940-3004 CUSIP 597742105 Holder ID C0000009903   Insurance Value $0.00 Number of Shares 1 Certificate Numbers Num/No. Denom.   Total ZQ00001122 1 1 1 Total Transaction 1 MSBA DOUGLAS TUCKER SVP C/O   MIDLAND STATES BANK 1201 NETWORK CENTRE DR EFFINGHAM IL 62401

    

 

 

MIDLAND STATES   BANCORP, INC. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN   REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES   ACT"), 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. The   following abbreviations, when used in the inscription on the face of this   certificate, shall be construed as though they were written out in full   according to applicable laws or regulations: TEN COM - as tenants in common   TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right   of survivorship and not as tenants in common UNIF GIFT MIN ACT - Custodian   (Cust) (Minor) under Uniform Gifts to Minors Act (State) UNIF TRF MIN ACT -   Custodian (until age) (Cust) (Minor) under Uniform Transfers to Minors Act   (State) Additional abbreviations may also be used though not in the above   list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE   For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR   TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) of the   capital stock represented by the within Certificate, and do hereby   irrevocably constitute and appoint Shares to transfer the said stock on the   books of the within-named Corporation with full power of substitution in the   premises. Attorney Dated: 20 Signature: Signature: Notice: The signature to   this assignment must correspond with the name as written upon the face of the   certificate, in every particular, without alteration or enlargement, or any   change whatever. Signature(s) Guaranteed: Medallion Guarantee Stamp THE   SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION   (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions WITH   MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO   SEC RULE 17Ad-15. The IRS requires that we report the cost basis of certain   shares acquired after January 1, 2011. If your shares were covered by the   legislation and you have sold or transferred the shares and requested a   specific cost basis calculation method, we have processed as requested. If   you did not specify a cost basis calculation method, we have defaulted to the   first in, first out (FIFO) method. Please visit our website or consult your   tax advisor if you need additional information about cost basis. If you do   not keep in contact with us or do not have any activity in your account for   the time periods specified by state law, your property could become subject   to state unclaimed property laws and transferred to the appropriate state. SECURITY   INSTRUCTIONS THIS IS WATERMARKED PAPER, DO NOT ACCEPT WITHOUT NOTING   WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK.Exhibit 4.2

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SHARES UNDER THE ACT AND ANY REQUIRED QUALIFICATION UNDER APPLICABLE STATE AND FOREIGN LAW OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.

 

MIDLAND STATES BANCORP, INC.

 

STOCK PURCHASE WARRANT

 

	
Warrant No. CBC-001
    	
 
    	
Original Issue Date:   March 25, 2013
    

 

FOR VALUE RECEIVED, MIDLAND STATES BANCORP, INC., an Illinois corporation (the “Company”), hereby certifies that COMMUNITY BANCAPITAL, L.P., a Delaware limited partnership (together with its registered assignees as hereinafter provided, the “Holder”) is entitled to purchase from the Company One Hundred Twenty-Five Thousand (125,000) duly authorized, validly issued, fully paid and nonassessable shares of Common Stock at a per share price equal to the Exercise Price, all subject to the terms, conditions and adjustments set forth below in this Warrant.  Certain capitalized terms used herein are defined in Section 1.

 

This Warrant has been issued in exchange for the cash payment from the Holder to the Company of One Hundred Dollars ($100.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company.

 

Section 1.                  Definitions.  As used in this Warrant, the following terms have the respective meanings set forth below:

 

“Aggregate Exercise Price” means an amount equal to the product of:  (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3, multiplied by (b) the Exercise Price.

 

“Bank” means Midland States Bank, an Illinois-chartered commercial, member bank with its main office located in Effingham, Illinois.

 

“Board” means the board of directors of the Company.

 

“Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in the city of Effingham, Illinois, are authorized or obligated by law or executive order to close.

 

“Common Stock” means the common stock, $0.01 par value per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

 

“Common Stock Deemed Outstanding” means, at any given time, the sum of:  (a) the number of shares of Common Stock actually outstanding at such time; plus (b) the number of shares of Common Stock issuable upon exercise of Options actually outstanding at such time; plus (c) the number of shares of Common Stock issuable under existing unvested awards of restricted stock that are not treated as outstanding; plus (d) the number of shares of Common Stock issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless of whether the Options or Convertible Securities are actually exercisable at such

 

 

time; provided, that Common Stock Deemed Outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly owned subsidiaries.

 

“Company” has the meaning set forth in the preamble.

 

“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

 

“Excluded Issuances” means any issuance or sale by the Company after the Original Issue Date of:  (a) shares of Common Stock issued upon the exercise of this Warrant; (b) shares of Common Stock issued directly or upon the exercise of Options to directors, officers, consultants or employees, in connection with their service as directors of the Company or their employment by or consulting services to the Company, in each case authorized by the Board and issued pursuant to any of the Company’s equity incentive plans authorized and adopted by the Board (collectively, the “Plans”), including all such shares of Common Stock and Options outstanding prior to the Original Issue Date; (c) shares of Common Stock issued upon the vesting of restricted stock awards made under the Plans; or (d) shares of Common Stock issued upon the conversion or exercise of Options (other than Options covered by clause (b) above) or Convertible Securities issued prior to the Original Issue Date provided that such securities are not amended after the date hereof to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof.

 

“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Chicago, Illinois, time, on a Business Day, including the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price.

 

“Exercise Agreement” has the meaning set forth in Section 3(a)(i).

 

“Exercise Period” has the meaning set forth in Section 2.

 

“Exercise Price” shall be equal to Sixteen Dollars ($16.00), subject to adjustment as provided for in Section 4.

 

“Expiration Date” has the meaning set forth in Section 2.

 

“Fair Market Value” means, as of any particular date, the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed, averaged over thirty (30) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading.  If at any time the Common Stock is not listed on any domestic securities exchange, the “Fair Market Value” of the Common Stock shall be equal to the higher of:  (i) 1.13 times the consolidated tangible book value per share of the Common Stock as of the end of the most recently ended calendar quarter; or (ii) the fair market value determined by an appraisal, if any, requested by the Holder and performed by a third-party mutually acceptable to the Holder and the Company.

 

“Holder” has the meaning set forth in the preamble.

 

“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

 

“Original Issue Date” means March 25, 2013.

 

“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.

 

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“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

 

“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

 

Section 2.                  Term of Warrant.  Subject to the terms and conditions hereof, including Section 3(g), at any time or from time to time after the first (1st) anniversary of the Original Issue Date, and prior to 5:00 p.m., Chicago, Illinois, time, on the eighth (8th) anniversary of the Original Issue Date or, if such day is not a Business Day, on the next succeeding Business Day (the “Expiration Date”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein), provided, however, that the Holder of this Warrant may exercise this Warrant at any time after:  (a) an application has been filed with the Board of Governors of the Federal Reserve System requesting prior approval for the acquisition of control of greater than fifty percent (50%) of the voting stock of either the Company or the Bank; or (b) the Company has completed an initial public offering of its Common Stock.  The period during which the Holder of this Warrant may exercise this Warrant as described in this Section 2 is referred to herein as (the “Exercise Period”).

 

Section 3.                  Exercise of Warrant.

 

(a)         Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

 

(i)                         surrender of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking in form and substance satisfactory to the Company with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

 

(ii)                      payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).

 

(b)         Payment of the Aggregate Exercise Price.  Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Agreement, by the following methods:

 

(i)                         by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price;

 

(ii)                      by instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price;

 

(iii)                   by surrendering to the Company:   (x) Warrant Shares (or other shares of Common Stock) previously acquired by the Holder with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price; and/or (y) any subordinated debenture of even date herewith issued by the Company to the Holder having a value as of the Exercise Date equal to the Aggregate Exercise Price (which value shall be the principal amount thereof plus accrued and unpaid interest); or

 

(iv)                  any combination of the foregoing.

 

In the event of any withholding of Warrant Shares or surrender of other equity securities pursuant to clause (ii), (iii) or (iv) above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by or surrendered to the Company shall be rounded up to the nearest whole share and the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by or

 

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surrendered to the Company in an amount equal to the product of:  (x) such incremental fraction of a share being so withheld or surrendered; multiplied by (y) in the case of Common Stock, the Fair Market Value per Warrant Share as of the Exercise Date, and, in all other cases, the value thereof as of the Exercise Date determined in accordance with clause (iii)(y) above.

 

(c)          Delivery of Stock Certificates.  Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a)), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(d). The stock certificate or certificates so delivered shall bear such legends as the Company may require under applicable securities laws and shall be, to the extent possible, in such denomination or denominations as the exercising the Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 6, such other Person’s name as shall be designated in the Exercise Agreement. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

 

(d)         Fractional Shares.  The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of:  (i) such fraction; multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.

 

(e)          Delivery of New Warrant.  Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3(c), deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

 

(f)           Valid Issuance of Warrant and Warrant Shares; Payment of Taxes.  With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

 

(i)                         This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

 

(ii)                      All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance against receipt of the Exercise Price, and the Company shall take all such actions as may be necessary or appropriate so that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any pre-emptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens and charges.

 

(iii)                   The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

 

(iv)                  The Company shall use its best efforts to cause the Warrant Shares, immediately upon such exercise, to be listed on any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares are listed at the time of such exercise.

 

(v)                     The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be

 

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imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.

 

(g)          Conditional Exercise.  Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be made at any time prior to the Expiration Date, including prior to the first (1st) anniversary of the Original Issue Date, and further, may be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

 

(h)         Reservation of Shares.  During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. Unless required by law or governmental authority, the Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

Section 4.                  Adjustment to Exercise Price and Number of Warrant Shares.  To prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4.

 

(a)         Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock.  If the Company shall, at any time or from time to time after the Original Issue Date:  (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities; or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately increased.  If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately decreased. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

(b)         Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger.  In the event of any:  (i) capital reorganization of the Company; (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares); (iii) consolidation or merger of the Company with or into another Person; (iv) sale of all or substantially all of the Company’s assets to another Person; or (v) other similar transaction (other than any such transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, each Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment shall be made with respect to the Holder’s rights under this Warrant to insure that the provisions of this Section 4 shall thereafter be 

 

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applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Common Stock reflected by the terms of such consolidation, merger, sale or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale or similar transaction). The provisions of this Section 4(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4(b) with respect to this Warrant.

 

(c)          Certain Events.  If any event of the type contemplated by the provisions of this Section 4 but not expressly provided for by such provisions (including the granting of stock appreciation rights, phantom stock rights or other rights with equity features (other than pursuant to the Plans) occurs, then the Board shall make an appropriate adjustment in the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant so as to protect the rights of the Holder in a manner consistent with the provisions of this Section 4; provided, that no such adjustment pursuant to this Section 4(c) shall increase the Exercise Price or decrease the number of Warrant Shares issuable as otherwise determined pursuant to this Section 4.

 

(d)         Certificate as to Adjustment.

 

(i)                         As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than forty-five (45) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

 

(ii)                      As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than forty-five (45) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

 

(e)          Notices.  In the event:

 

(i)                         that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(ii)                      of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or sale of all or substantially all of the Company’s assets to another Person; or

 

(iii)                   of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

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then, and in each such case, the Company shall send or cause to be sent to the Holder at least sixty (60) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be:  (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent; or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.

 

(f)                       Exceptions to Adjustment Upon Issuance of Common Stock.  Anything herein to the contrary notwithstanding, there shall be no adjustment to the Exercise Price upon exercise of this Warrant with respect to any Excluded Issuance.

 

Section 5.                  Purchase Rights.  In addition to any adjustments pursuant to Section 4, if at any time the Company grants, issues or sells any shares of Common Stock, Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Anything herein to the contrary notwithstanding, the Holder shall not be entitled to the Purchase Rights granted herein with respect to any Excluded Issuance.

 

Section 6.                  Transfer of Warrant.  Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices (or, if the Company designates a transfer agent for this Warrant, at the offices of such transfer agent) with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes as described in Section 3(f)(v) in connection with the making of such transfer.  Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

 

Section 7.                  Holder Not Deemed a Stockholder; Limitations on Liability.  Prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any obligations on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such obligations are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.

 

Section 8.                  Replacement on Loss; Division and Combination.

 

(a)         Replacement of Warrant on Loss.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity agreement 

 

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reasonably satisfactory to it accompanied by a bond in customary form and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

 

(b)         Division and Combination of Warrant.  Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

 

Section 9.                  No Impairment.  The Company shall not, by amendment of its articles of incorporation or bylaws or other similar charter documents, 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 by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

 

Section 10.           Compliance with the Securities Act.

 

(a)         Agreement to Comply with the Securities Act; Legend.  By acceptance of this Warrant, the Holder, agrees to comply in all respects with the provisions of this Section 10 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless issued in a transaction registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

 

“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER THE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SHARES UNDER THE ACT AND ANY REQUIRED QUALIFICATION UNDER APPLICABLE STATE AND FOREIGN LAW OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW.”

 

(b)         Representations of the Holder.  In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

 

(i)                         The Holder is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act.  The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

 

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(ii)                      The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

(iii)                   The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares.  The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

 

Section 11.           Warrant Register.  Unless it has designated a transfer agent to do so, the Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company (and any transfer agent) may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company (and any transfer agent) shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

 

Section 12.           Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given:  (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the fifth (5th) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).

 

	
if to the Company:
    	
 
    	
Midland States Bancorp, Inc.
    
	
 
    	
 
    	
1201 Network Centre Drive
    
	
 
    	
 
    	
Effingham, Illinois 62401
    
	
 
    	
 
    	
Telephone:  (217) 342-2141
    
	
 
    	
 
    	
Facsimile:    (217)   342-9462
    
	
 
    	
 
    	
Electronic Mail:    dtucker@midlandstatesbank.com
    
	
 
    	
 
    	
Attention:    Douglas J.   Tucker, Esq.
    
	
 
    	
 
    	
 
    
	
and
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
if to the Holder:
    	
 
    	
CBC Management Partners, LLC
    
	
 
    	
 
    	
1000 SW Broadway, Suite 1010
    
	
 
    	
 
    	
Portland, Oregon 97205-3062
    
	
 
    	
 
    	
Attn:     Frank Reppenhagen
    
	
 
    	
 
    	
Telephone No.: 503-227-1400
    
	
 
    	
 
    	
Fax No.:  503-228-7105
    
	
 
    	
 
    	
E-Mail Address: far@cbancap.com
    

 

Section 13.           Cumulative Remedies.  Except to the extent expressly provided in this Warrant to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

 

Section 14.           Equitable Relief.  Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the 

 

9

 

event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

 

Section 15.           Entire Agreement.  This Warrant constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

 

Section 16.           Successor and Assigns.  This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

 

Section 17.           No Third-Party Beneficiaries.  This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

 

Section 18.           Amendment and Modification; Waiver.  Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 19.           Severability.  Any provision of this Warrant which is unenforceable or invalid or contrary to law, or the inclusion of which would adversely affect the validity, legality or enforcement of this Warrant, shall be of no effect and, in such case, all the remaining terms and provisions of this Warrant shall subsist and be fully effective according to the tenor of this Warrant the same as though any such invalid portion had never been included herein.  Notwithstanding any of the foregoing to the contrary, if any provisions of this Warrant or the application thereof are held invalid or unenforceable only as to particular persons or situations, the remainder of this Warrant, and the application of such provision to persons or situations other than those to which it shall have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable to the fullest extent permitted by law.

 

Section 20.           Governing Law.  This Warrant shall be governed by and construed in accordance with the internal laws of the State of Illinois.  Nothing herein shall be deemed to limit any rights, powers or privileges which the Holder may have pursuant to any law of the United States of America or any rule, regulation or order of any department or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by the Holder which is lawful pursuant to, or which is permitted by, any of the foregoing.

 

Section 21.           Submission to Jurisdiction.  Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Illinois in each case located in the city of Chicago and County of Cook, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

10

 

Section 22.           Waiver of Jury Trial.  Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

 

Section 23.           Construction.  In this Warrant, unless otherwise stated or the context otherwise requires, the following uses apply:  (a) actions permitted under this Warrant may be taken at any time and from time to time in the actor’s reasonable discretion; (b) references to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time; (c) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”; (d) “including” means “including, but not limited to”; (e) all references to sections, paragraphs, clauses and exhibits are to sections, paragraphs, clauses and exhibits in, of or to this Warrant unless otherwise specified; (f) all words used in this Warrant will be construed to be of such gender or number as the circumstances and context require; (g) the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Warrant have been inserted solely for convenience of reference and shall not be considered a part of this Warrant nor shall any of them affect the meaning or interpretation of this Warrant or any of its provisions; and (h) any reference to a document or set of documents in this Warrant, and the rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof.  The Company and the Holder further agree that this Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

 

[THIS SPACE LEFT INTENTIONALLY BLANK]

 

[SIGNATURE PAGE FOLLOWS]

 

11

 

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

 

	
 
    	
MIDLAND STATES BANCORP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeff Ludwig
    
	
 
    	
 
    	
Name:
    	
Jeff Ludwig
    
	
 
    	
 
    	
Title:
    	
EVP, CFO
    
	
 
    	
 
    
	
ACCEPTED AND AGREED:
    	
 
    
	
 
    	
 
    
	
 
    	
COMMUNITY BANCAPITAL, L.P.,
    
	
 
    	
 
    
	
 
    	
By:
    	
CBC Partners GP, LLC, its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Frank Reppenhagen
    
	
 
    	
 
    	
Name:
    	
Frank Reppenhagen
    
	
 
    	
 
    	
Title:
    	
Managing Partner
    

 

 

EXHIBIT A

 

EXERCISE AGREEMENT

[To be executed only upon exercise of Warrant]

 

The undersigned registered owner of the attached Warrant irrevocably exercises such Warrant for the purchase of                shares of the common stock of MIDLAND STATES BANCORP, INC., an Illinois corporation (the “Common Stock”), and herewith makes payment therefor, all at the price and on the terms and conditions specified in such Warrant, and requests that certificates for the shares of common stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to                                                , whose address is                                                    and, if such shares of common stock shall not include all of the shares of common stock issuable as provided in such Warrant, that a new Warrant of like tenor and date for the balance of the shares of common stock issuable hereunder be delivered to the undersigned.

 

The Warrant Price with respect to the shares of common stock is being paid by:

 

 ̈                                    Wire Transfer in the amount of $

 

 ̈                                   Bank certified, treasurer’s or cashier’s check in the amount of $

 

o                                  Cashless exercise

 

	
 
    	
 
    
	
(Name   of Registered Owner)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Signature   of Registered Owner)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Street   Address)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(City)   (State) (Zip Code)
    	
 
    

 

NOTICE:                                           The signature on this subscription must correspond with the name as written upon the face of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever.

 

 

EXHIBIT B

 

ASSIGNMENT

[To be executed only upon assignment of Warrant]

 

The undersigned registered owner of the attached Warrant (“Assignor”) hereby sells, assigns, transfers and delivers to                                   (“Assignee”), [all] [designated percentage or fraction] of Assignor’s right, title and interest in and to such Warrant and hereby directs MIDLAND STATES BANCORP, INC., an Illinois corporation, to honor and effect such assignment on its Warrant register.

 

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be executed as of                          , 20  .

 

	
ASSIGNOR
    	
 
    	
ASSIGNEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Signature of Assignor
    	
 
    	
 
    	
Signature of Assignee
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Printed name as it appears   on Warrant
    	
 
    	
 
    	
Printed name as it should   appear on Warrant

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