On May 31, 2024, The Middlefield Banking Company (the “Bank”), the subsidiary of Middlefield Banc Corp. (the “Company”), entered into an Agreement for the Exchange of Real Estate (the “Agreement”) with City of Westerville, Ohio, an Ohio Municipal Corporation (“Westerville”). Under the terms of the Agreement, the Bank will transfer to Westerville certain tracts of real estate on which the Bank’s Westerville branch office at 17 State Street, Westerville, Ohio, is located (the “Middlefield Parcel”), in exchange for approximately 1.06 acres of undeveloped real estate located within the Westar Place master planned development in Westerville, Delaware County, Ohio. Upon completion of the Bank’s development of the Westerville Parcel, the Bank intends to move its business operations from the Bank’s existing Westerville branch office to a new branch office on the Westerville Parcel.
The Westerville city council approved for execution of the Agreement on May 21, 2024. Westerville’s obligations under the Agreement are conditioned upon Westerville’s satisfaction, within two hundred seventy days after the effective date of the Agreement (the “Inspection Period”), with the results of Westerville’s physical inspections (which may include such tests, investigations, surveys and reports as Westerville deems appropriate) of the Middlefield Parcel and any other due diligence as Westerville elects to perform with respect to the Middlefield Parcel (the “Westerville Contingencies”).
The Bank’s obligations under the Agreement are conditioned upon (i) the Bank’s satisfaction, within the Inspection Period, with the results of the Bank’s physical inspections (which may include such tests, investigations, surveys and reports as Westerville deems appropriate) of the Westerville Parcel and any other due diligence as the Bank elects to perform with respect to the Westerville Parcel, and (ii) the Bank’s satisfaction, within the Inspection Period, that the Bank has all permits, approvals and authorizations necessary for its intended use of the Westerville Parcel (the “Bank Contingencies”). Within one hundred fifty days after the later of (a) the effective date of the Agreement and (b) the Bank’s receipt from Westerville of all due diligence and inspection reports relating to the Westerville Parcel (the “Application Deadline”), the Bank must submit the Bank’s development plan application for the new Westerville branch office to the City of Westerville Planning Commission. If the Bank fails to submit its application to the Westerville Planning Commission by the Application Deadline, Westerville may terminate the Agreement at any time prior to the Bank submitting its application.
Under the Agreement, the Bank shall have the right for the sum of One Dollar to continue to operate the existing Westerville branch office pursuant to a lease agreement with Westerville until the earlier of: (a) the Bank’s relocation of the Bank’s business operations to an office within the improvements on the redeveloped Westerville Parcel; or (b) two hundred twenty days following the closing date of the real estate exchange, which shall be a date which is thirty days after the Westerville Contingencies and the Bank Contingencies have been satisfied or waived (the “Interim Operation Period”). If the Bank is not able to relocate its business operations to the Westerville Parcel prior to the expiration of the Interim Operation Period despite the Bank’s diligent efforts to do so, the Bank may extend the Interim Operation Period for up to three additional periods of thirty days each.
