AGREEMENT AND PLAN OF MERGER AMONG

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

Firstbank Corporation | ICNB Financial Corporation

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN OF MERGER AMONG
Governing Law: Michigan Date: 2/2/2007
Industry: Regional Banks Law Firm: Warner Norcross Sector: Financial

AGREEMENT AND PLAN OF MERGER AMONG

ICNB FINANCIAL CORPORATION

AND

FIRSTBANK CORPORATION

DATED AS OF FEBRUARY 1, 2007

Table of Contents



PRELIMINARY STATEMENT		1

ARTICLE 1 - THE TRANSACTION		1

1.1	Merger	1
1.2	The Closing	2
1.3	Effective Time of Merger	2
1.4	Additional Actions	2
1.5	Surviving Corporation	2

ARTICLE 2 - CONVERSION AND EXCHANGE OF SHARES		3

2.1	Conversion of Shares	3
2.2	Upset Provision	6
2.3	Adjustment to Cure the Upset Condition	7
2.4	Adjustments	7
2.5	Postponement of Closing	8
2.6	Increase in Outstanding Shares of ICNB Common Stock	8
2.7	Cessation of Shareholder Status	8
2.8	Surrender of Old Certificates and Payment of Merger Consideration	9

ARTICLE 3 - ACQUIRER'S REPRESENTATIONS AND WARRANTIES		10

3.1	Authorization, No Conflicts, Etc	10
3.2	Organization and Good Standing	11
3.3	Subsidiaries	12
3.4	Capital Stock	12
3.5	Acquirer Common Stock	12
3.6	Financial Statements	13
3.7	Absence of Undisclosed Liabilities	13
3.8	Absence of Material Adverse Changes	14
3.9	Legal Proceedings	14
3.10	Regulatory Filings	14
3.11	No Indemnification Claims	14
3.12	Conduct of Business	14
3.13	Proxy Statement, Etc	15
3.14	Agreements with Bank Regulators	15
3.15	Tax Matters	16
3.16	Investment Bankers and Brokers	16
3.17	Necessary Capital	16
3.18	Reorganization	16
3.19	Allowance for Loan Losses	16
3.20	Public Communications; Securities Offering	16
3.21	Fairness Opinion	16

ARTICLE 4 - ICNB'S REPRESENTATIONS AND WARRANTIES		17

4.1	Authorization, No Conflicts, Etc	17
4.2	Organization and Good Standing	18
4.3	Subsidiaries	18
4.4	Capital Stock	19
4.5	Financial Statements	19
4.6	Absence of Undisclosed Liabilities	20
4.7	Absence of Material Adverse Changes	20
4.8	Legal Proceedings	20
4.9	Regulatory Filings	21
4.10	No Indemnification Claims	21
4.11	Conduct of Business	21
4.12	Proxy Statement, Etc	22
4.13	Agreements with Bank Regulators	22
4.14	Tax Matters	22
4.15	Title to Properties	24
4.16	Condition of Real Property	24
4.17	Real and Personal Property Leases	25
4.18	Required Licenses, Permits, Etc	25
4.19	Material Contracts and Change of Control	25
4.20	Certain Employment Matters	27
4.21	Employee Benefit Plans	28
4.22	Environmental Matters	30
4.23	Duties as Fiduciary	31
4.24	Investment Bankers and Brokers	31
4.25	Fairness Opinion	32
4.26	ICNB-Related Persons	32
4.27	Change in Business Relationships	32
4.28	Insurance	32
4.29	Books and Records	33
4.30	Loan Guarantees	33
4.31	Events Since January 1, 2006	33
4.32	Allowance for Loan Losses	34
4.33	Loan Origination and Servicing	34
4.34	Public Communications; Securities Offering	35
4.35	No Insider Trading	35
4.36	Joint Ventures; Strategic Alliances	35
4.37	Policies and Procedures	35

ARTICLE 5 - COVENANTS PENDING CLOSING		35

5.1	Disclosure Statements; Additional Information	35
5.2	Changes Affecting Representations	36
5.3	ICNB's Conduct of Business Pending the Effective Time	36
5.4	Approval of Plan of Merger by ICNB Shareholders	40
5.5	Regular Dividends	41
5.6	Technology-Related Contracts	41
5.7	Indemnification and Insurance	42
5.8	Exclusive Commitment	42
5.9	Other Filings	43
5.10	Miscellaneous Agreements and Consents	44
5.11	Registration Statement	44
5.12	Access and Investigation	44
5.13	Confidentiality	45
5.14	Environmental Investigation	45
5.15	Termination of Employee Benefit Plans	48
5.16	Bank	49
5.17	Public Announcements	49
5.18	Regulatory and Shareholder Approvals	49
5.19	Update of Titles, Rights, Etc	49
5.20	Exchange of Financial Information	49
5.21	Certain Employment Covenants	50
5.22	Board Matters	50
5.23	Affiliates	50
5.24	NASDAQ Approval	50
5.25	Charter and Name Change	51

ARTICLE 6 - CONDITIONS PRECEDENT TO ACQUIRER'S OBLIGATIONS		51

6.1	Renewal of Representations and Warranties, Etc	51
6.2	Opinion of Legal Counsel	51
6.3	Required Regulatory Approvals	51
6.4	Shareholder Approval	52
6.5	Order, Decree, Etc	52
6.6	Proceedings	52
6.7	Certificate as to Outstanding Shares	52
6.8	Change of Control Waivers	52
6.9	Other Agreements	52
6.10	Fairness Opinion	52
6.11	Registration Statement	53
6.12	NASDAQ Approval	53
6.13	Closing Equity	53
6.14	Sarbanes-Oxley Certification of Financial Statements	53

ARTICLE 7 - CONDITIONS PRECEDENT TO ICNB'S OBLIGATIONS		53

7.1	Renewal of Representations and Warranties, Etc	54
7.2	Opinion of Legal Counsel	54
7.3	Tax Matters	54
7.4	Required Regulatory Approvals	55
7.5	Shareholder Approval	55
7.6	Order, Decree, Etc	55
7.7	Proceedings	55
7.8	Fairness Opinion	55
7.9	Registration Statement	56
7.10	NASDAQ Approval	56
7.11	Other Agreements	56

ARTICLE 8 - ABANDONMENT OF MERGER		56

8.1	Mutual Abandonment	56
8.2	Upset Date	56
8.3	Acquirer's Rights to Terminate	56
8.4	ICNB's Rights to Terminate	57
8.5	Effect of Termination	57

ARTICLE 9 - MISCELLANEOUS		59

9.1	Material Adverse Effect Defined	59
9.2	Knowledge Defined; Person Defined; Affiliate Defined	59
9.3	Nonsurvival of Representations, Warranties, and Agreements	59
9.4	Amendment	60
9.5	Expenses	60
9.6	Specific Enforcement	60
9.7	Waiver	60
9.8	Notices	60
9.9	Governing Law	61
9.10	Entire Agreement; Amendment	61
9.11	Third Party Beneficiaries	61
9.12	Counterparts	61
9.13	Headings, Etc	61
9.14	Calculation of Dates and Deadlines	61
9.15	Severability	62
9.16	Further Assurances; Privileges	62

GLOSSARY OF TERMS

Acquisition Proposal, 43
Acquisition Transaction, 43
Acquirer, 1
Acquirer Common Stock, 3
Acquirer Disclosure Statement, 10
Acquirer's Financial Statements, 13
Adjusted Cash Election, 6
Adjusted Stock Election, 5
Affiliate, 59
Affiliated, 59
Austin, 16
Bank, 17
Bank Index, 7
BEA, 46
Business Day, 2
Call Reports, 13
Cash Consideration, 3
Cash Election, 4
Cash Election Number, 5
CERCLA, 31
Certificate of Merger, 2
Closing, 2
Closing Equity, 53
Code, 1
Constituent Corporation, 1
Control, 18
Designated Contracts, 52
Effective Time, 2
Election Deadline, 4
Election Form, 4
Employee Benefit Plan, 28
Employment-Related Payments, 27
Environmental Laws, 31
Environmental Risk, 46
ERISA, 28
Exchange Agent, 9
Exchange Ratio, 3
Exchange Schedule, 4
Excess Parachute Payment, 24
FDIA, 11
Federal Bank Holding Company Act, 11
Federal Reserve Board, 11
Fiduciary Event, 40
Final Acquirer Price, 7
Final Index Value, 7
Floor Acquirer Price, 6
GAAP, 13
Hazardous Substance, 31
HIPAA, 22
ICNB, 1
ICNB Common Stock, 3
ICNB Disclosure Statement, 17
ICNB Plan, 48

ICNB's Financial Statements, 19
ICNB's Leased Real Property, 24
ICNB's Leases, 25
ICNB's Real Property, 24
ICNB-Related Person, 32
Index Value Ratio, 7
Initial Acquirer Price, 6
Initial Index Value, 7
Insurance Amount, 42
IRS, 23
Joint Environmental Consultant, 46
Knowledge, 59
MDEQ, 46
Merger, 1
Merger Consideration, 3
Michigan Act, 1
NASDAQ, 2
National Bank Act, 11
Non-Election, 4
PBGC, 28
Person, 59
Plan of Merger, 1
Premises, 30
Pricing Period, 7
Prospectus and Proxy Statement, 15
Old Certificates, 8
Registration Statement, 15
Remediation Cost Deadline, 48
Remediation Estimate, 46
Representative, 4
Revised Stock Consideration, 7
SAMCO, 31
Securities Act, 50
Shareholders' Meetings, 15
Stock Consideration, 3
Stock Election, 4
Stock Election Number, 5
Subsidiary, 17
Subsidiaries, 17
Superior Proposal, 40
Surviving Corporation, 1
Tax Return, 23
Taxes, 23
Technology-Related Contracts, 41
Termination Fee, 58
Third Party Expert, 47
Transaction Documents, 15
Upset Condition, 6
Upset Date, 56
USTs, 48

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this " Plan of Merger ") is made as of February 1, 2007, by and among ICNB Financial Corporation, a Michigan corporation, located at 302 W. Main Street, P.O. Box 501, Ionia, Michigan 48846-0501 (" ICNB ") and Firstbank Corporation, a Michigan corporation, located at 311 Woodworth, Alma, Michigan 48801 (" Acquirer ").

PRELIMINARY STATEMENT

1. The Boards of Directors of ICNB and Acquirer have determined that it is in the best interests of their respective companies and their shareholders to consummate the strategic business combination transaction provided for in this Plan of Merger in which ICNB will, on the terms and subject to the conditions set forth in this Plan of Merger, merge with and into Acquirer (the "Merger"), so that Acquirer is the surviving corporation in the Merger; and

2. For federal income tax purposes, it is intended that the Merger shall qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement is intended to be and is adopted as a "Plan of Reorganization" for the purposes of Sections 354 and 361 of the Code; and

3. The parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

In consideration of the representations, warranties, mutual covenants and agreements contained in this Plan of Merger, the parties agree as follows:

ARTICLE 1 - THE TRANSACTION

Subject to the terms and conditions of this Plan of Merger, the Merger shall be carried out in the following manner:

1.1. Merger. Subject to the terms and conditions herein, at the Effective Time (defined below), ICNB shall be merged with and into Acquirer and the separate corporate existence of ICNB shall then cease. ICNB and Acquirer are each sometimes referred to as a " Constituent Corporation " prior to the Merger. At the Effective Time, the Constituent Corporations shall become a single corporation, which corporation shall be Acquirer (the "Surviving Corporation "). The effect of the Merger upon each of the Constituent Corporations and the Surviving Corporation shall be as provided in Chapter Seven of the Michigan Business Corporation Act of the State of Michigan, as amended (the " Michigan Act ") with respect to the merger of domestic corporations. If Acquirer is advised by its independent tax accountants that a different corporate structure for the transactions contemplated by this Plan of Merger would be more advantageous to Acquirer from a financial, tax, or accounting perspective, then ICNB shall cooperate with Acquirer to effect a restructuring of these transactions provided, that such restructuring is presented prior to the Shareholders’ Meeting (defined below), the Merger continues to qualify as a tax free reorganization under the Internal Revenue Code, the Effective Time of the Merger is not delayed by more than thirty (30) days and the alternative structure does not alter or change the amount of consideration or kind of consideration to be issued to ICNB’s shareholders.

1.2. The Closing. The " Closing " for the Merger shall be held at such time, date, and location as may be mutually agreed by the parties. In the absence of such agreement, the Closing shall be held at the offices of Varnum, Riddering, Schmidt & Howlett, LLP, commencing at 11 a.m. on a date specified by ICNB and Acquirer, but no later than upon five (5) Business Days’ (defined below) written notice after the last to occur of the following events: (a) receipt of all consents and approvals of government regulatory authorities, and the expiration of all related statutory waiting periods, legally required to consummate the Merger; and (b) approval of this Plan of Merger by the shareholders of ICNB. Scheduling or commencing the Closing shall not, however, constitute a waiver of the conditions precedent of either Acquirer or ICNB as set forth in Articles 6 and 7, respectively. Upon completion of the Closing, ICNB and Acquirer shall each promptly execute and file the certificate of merger as required by the Michigan Act to effect the Merger (the " Certificate of Merger "). No party shall take any action to revoke the Certificate of Merger after its filing without the written consent of the other party.

1.3. Effective Time of Merger. The Merger shall be consummated following the Closing by filing the Certificate of Merger in the manner required by law. The " Effective Time " of the Merger shall be as of the time and date when the Merger becomes effective as set forth in the Certificate of Merger, but not later than five (5) Business Days after the Closing occurs. As used in this Plan of Merger, the term " Business Day " means any day other than a day on which The NASDAQ Stock Market (" NASDAQ ") is closed.

1.4. Additional Actions. At any time after the Effective Time, the Surviving Corporation may determine that deeds, assignments, or assurances or any other acts are necessary or desirable to vest, perfect, or confirm, of record or otherwise, in the Surviving Corporation its rights, title, or interest in, to, or under any of the rights, properties, or assets of ICNB acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger, or to otherwise carry out the purposes of this Plan of Merger. ICNB grants to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments, and assurances and to do all acts necessary, proper, or convenient to accomplish this purpose. This irrevocable power of attorney shall only be operative following the Effective Time and at such time, the officers and directors of the Surviving Corporation shall be fully authorized in the name of ICNB to take any and all such actions contemplated by this Plan of Merger.

1.5. Surviving Corporation. As of and immediately after the Effective Time, the Surviving Corporation shall have the following attributes until they are subsequently changed in the manner provided by law.

1.5.1 Name . The name of the Surviving Corporation shall be Firstbank Corporation.

1.5.2 Articles of Incorporation . The Articles of Incorporation of the Surviving Corporation shall be the Articles of Incorporation of Acquirer as in effect immediately prior to the Effective Time without change.

1.5.3 Bylaws . The Bylaws of the Surviving Corporation shall be the Bylaws of Acquirer as in effect immediately prior to the Effective Time, without change.

1.5.4 Officers . The officers of Acquirer immediately prior to the Effective Time shall be the officers of the Surviving Corporation and shall hold with the Surviving Corporation the same offices as they hold with Acquirer.

1.5.5 Directors . Subject to Section 5.22, the directors of Acquirer immediately prior to the Effective Time shall be the directors of the Surviving Corporation.

ARTICLE 2 — CONVERSION AND EXCHANGE OF SHARES

2.1. Conversion of Shares. Subject to the terms and conditions of this Plan of Merger and except as provided below, at the Effective Time, by virtue of the Merger and without any further action on the part of Acquirer, ICNB or the holders of any shares thereof, the shares of the Constituent Corporations shall be converted as follows:

2.1.1 Each share of common stock of Acquirer (" Acquirer Common Stock ") issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time.

2.1.2 Subject to the potential adjustment provided for in Sections 2.2 through 2.4 below, each share of common stock of ICNB (" ICNB Common Stock ") (excluding shares held by ICNB or any of its affiliates, other than in a fiduciary capacity or as a result of debts previously contracted) issued and outstanding at the Effective Time shall cease to be outstanding and shall be converted into and exchanged for the right to receive shares of Acquirer Common Stock and/or cash as set forth in this Section 2.1 (the " Merger Consideration ").

2.1.3 Holders of ICNB Common Stock may elect to receive shares of Acquirer Common Stock or cash in exchange for their shares of ICNB Common Stock. The total number of shares of ICNB Common Stock to be converted into Acquirer Common Stock (the " Stock Consideration ") shall equal 50% of the total outstanding shares of ICNB Common Stock, or such larger number of shares as results from rounding up fractional shares pursuant to Section 2.8.8. All shares of ICNB Common Stock not exchanged for Acquirer Common Stock shall be exchanged for $31.50 in cash per share (the " Cash Consideration ").

2.1.4 At the election of each holder of ICNB Common Stock, each share of ICNB Common Stock held by that holder may be exchanged for 1.407 shares of Acquirer Common Stock (the " Exchange Ratio "), subject to the election restrictions set forth above and below.

2.1.5 An Election Form, in such form as Acquirer and ICNB mutually agree (" Election Form "), will be included in and sent with the Prospectus and Proxy Statement, which shall be mailed to each holder of record of ICNB Common Stock entitled to vote at the ICNB Shareholders’ Meeting, permitting such holder, subject to the allocation and election procedure set forth herein:

(a) to specify the number of shares of ICNB Common Stock owned by such holder with respect to which the holder desires to receive Cash Consideration (a " Cash Election ") in accordance with the provisions stated herein;

(b) to specify the number of shares of ICNB Common Stock owned by such holder with respect to which such holder desires to receive Stock Consideration (a " Stock Election "); or

(c) to indicate that such record holder has no preference as to the receipt of Stock Consideration or Cash Consideration for such shares (a " Non-Election ").

Holders of record of shares of ICNB Common Stock who hold such shares as nominees, trustees or in other representative capacities (a " Representative ") may submit multiple Election Forms, provided that each such Election Form covers all the shares of ICNB Common Stock held by each representative for a particular beneficial owner.

Any shares of ICNB Common Stock with respect to which the holder thereof has not, as of the Election Deadline (defined below), made an election by submission to ICNB of an effective, properly completed Election Form shall be deemed Non-Election shares.

Each holder of ICNB Common Stock will have the right to change his or her election to a Cash Election or Stock Election at any time prior to the Election Deadline (as defined in subparagraph 2.1.6 below) by submitting a new Election Form to ICNB.

2.1.6 The term " Election Deadline " shall mean the same deadline as for the return of the proxy card relating to the shareholder vote pursuant to the proposed Merger at the ICNB Shareholders’ Meeting. An election will have been properly made only if ICNB has actually received a properly completed Election Form by the Election Deadline. Subject to the terms of this Plan of Merger and of the Election Form, Acquirer and the Exchange Agent will have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any decisions of Acquirer regarding such matters shall be binding and conclusive. None of ICNB, Acquirer or the Exchange Agent shall be under any obligation to notify any person of any defect in an Election Form.

2.1.7 As soon as practicable, but in no event more than three (3) Business Days after the Election Deadline, Acquirer and Exchange Agent shall prepare a schedule (the " Exchange Schedule "), calculating the amount of cash and Acquirer Common Stock that each ICNB shareholder will be entitled to receive, listed by ICNB stock certificate number, pursuant to the provisions of Article 2 hereof. Such Exchange Schedule shall be delivered to ICNB within one (1) business day after it has been prepared. ICNB shall have three (3) Business Days to provide Acquirer and the Exchange Agent with any objections, comments or questions concerning the Exchange Schedule.

2.1.8 The " Stock Election Number " means the aggregate number of shares of ICNB Common Stock with respect to which Stock Elections have been made. The " Cash Election Number " means the aggregate number of shares of ICNB Common Stock with respect to which Cash Elections have been made.

2.1.9 If the Stock Election Number exceeds 621,706 (50% of the total outstanding shares of ICNB Common Stock), then:

(a) All Non-Election shares of each holder of ICNB Common Stock shall be converted into the right to receive the Cash Consideration; and

(b) All Stock Election shares of each holder of ICNB Common Stock will be adjusted, on a pro-rata basis, such that the aggregate number of shares of ICNB Common Stock electing Stock Consideration equals 621,706(50% of the total outstanding shares of ICNB Common Stock), or such larger number of shares as results from rounding up fractional shares. Such adjustment (the " Adjusted Stock Election ") shall be determined as follows: the number of Adjusted Stock Election shares that each holder of ICNB Common Stock who properly elected Stock Consideration will be entitled to receive shall equal the product obtained by multiplying (x) the number of Stock Election shares held by such holder by (y) a fraction, the numerator of which is 621,706 (50% of the total outstanding shares of ICNB Common Stock) and the denominator of which is the Stock Election Number. The Adjusted Stock Election shares shall then be converted into the right to receive shares of Acquirer Common Stock determined by multiplying the number of Adjusted Stock Election shares by the Exchange Ratio, with any fractional shares being rounded up to the nearest whole number. The remaining number of such holder’s Stock Election shares shall be converted into the right to receive the Cash Consideration.

2.1.10 If the Stock Election Number is less than 621,706 (50% of the total outstanding shares of ICNB Common Stock), then:

(a) All Non-Election shares of each holder of ICNB Common Stock or, if less than all, such number of Non-Election shares as necessary to reduce the aggregate number of shares of ICNB Common Stock receiving Cash Consideration to 621,706 (50% of the total outstanding shares of ICNB Common Stock) (allocated on a pro-rata basis), shall be converted into the right to receive the Stock Consideration; and

(b) To the extent that the aggregate number of shares of ICNB Common Stock that are to be allocated Stock Consideration after the conversion (noted in paragraph (a) above) of Non-Election shares still is less than 621,706 (50% of the total outstanding shares of ICNB Common Stock); then the Cash Election shares of each holder of ICNB Common Stock, will be adjusted such that the aggregate number of shares of ICNB Common Stock converting to Stock Consideration equals 621,706 (50% of the total outstanding shares of ICNB Common Stock), or such larger number of shares as results from rounding up fractional shares. Such adjustment (the " Adjusted Cash Election ") shall be determined as follows: the number of Adjusted Cash Election shares that each holder of ICNB Common Stock will be entitled to exercise shall equal the product obtained by multiplying (x) the number of Cash Election shares held by such holder by (y) a fraction, the numerator of which is 621,706 (50% of the total outstanding shares of ICNB Common Stock) and the denominator of which is the Cash Election Number. The Adjusted Cash Election shares are then converted into the right to receive Cash Consideration by multiplying the Adjusted Cash Election shares by $31.50. The remaining number of such holder’s Stock Election shares shall be converted into the right to receive the Stock Consideration.

2.1.11 If the Stock Election Number equals 621,706(50% of the total outstanding shares of ICNB Common Stock), then all holders who have submitted a proper and timely Election Form shall be converted into the right to receive Stock Consideration and/or Cash Consideration as they have properly elected. In such event, all Non-Election Shareholders shall be converted into the right to receive the Cash Consideration only.

2.1.12 ICNB represents that there are no outstanding options or warrants to purchase ICNB Common Stock. Any outstanding and unexercised options to purchase shares of ICNB Common Stock will be cancelled and cease to represent an option to purchase ICNB Common Stock at the Effective Time. ICNB agrees that prior to the Effective Time it will amend the ICNB Amended and Restated Deferred Compensation and Deferred Stock Purchase Plan to require that all distributions be in cash and not in the form of common stock.

2.2. Upset Provision . On the date of the Closing, ICNB shall have the right to terminate this Plan of Merger upon written notice to the Acquirer if the Upset Condition (defined below) then exists.

2.2.1 The " Upset Condition " shall have occurred if both of the following conditions exist:

(a) The Final Acquirer Price (as defined below) is less than $18.40 (the " Floor Acquirer Price "); and

(b) The number determined by dividing the Final Acquirer Price by $21.65(the " Initial Acquirer Price ") is less than the number obtained by subtracting (i) 0.15 from (ii) the quotient obtained by dividing the Final Index Value (as defined below) by the Initial Index Value (as defined below) (" Index Value Ratio ").

2.2.2 The " Final Acquirer Price " means the average of the closing prices per share of Acquirer Common Stock reported on the NASDAQ during the ten consecutive full trading days on which Acquirer’s stock is actually traded prior to the date of the Closing (the " Pricing Period ").

2.2.3 The " Initial Index Value " means the closing value of the NASDAQ Bank Index (CBNK:IND), a Sector Index maintained by the NASDAQ (" Bank Index ") on January 31, 2007.

2.2.4 The " Final Index Value " means the closing value of the Bank Index at the end of the Pricing Period.

2.3. Adjustment to Cure the Upset Condition . If the Upset Condition exists and ICNB provides written notice to the Acquirer of ICNB’s desire to exercise its right to terminate this Plan of Merger, Acquirer shall have the option, exercisable within five Business Days of receipt thereof, to increase the Stock Consideration to the Revised Stock Consideration. For purposes of this Agreement, the " Revised Stock Consideration " shall equal the product of the Stock Consideration multiplied by the a number (rounded to three decimals) equal to a quotient, the numerator of which is the Floor Acquirer Price multiplied by the Exchange Ratio and the denominator of which is the Final Acquirer Price. If Acquirer elects to exercise its option to increase the Stock Consideration, Acquirer shall provide prompt written notice to ICNB of such election and the amount of the Revised Stock Consideration, at which time the ICNB shall have no further right to terminate this Agreement pursuant to an Upset Condition, and this Agreement shall remain in effect in accordance with its terms (except the Stock Consideration shall have been modified as provided in this Section 2.3, and any references in this Agreement to the "Stock Consideration" shall thereafter be deemed to refer to the Revised Stock Consideration).

2.4. Adjustments . The Stock Consideration and Cash Consideration and the related computations described in Sections 2.1 and 2.2 shall be adjusted in the manner provided in this Section 2.4 upon the occurrence of any of the following events:

2.4.1 Changes in Number of Outstanding Shares . If either ICNB or Acquirer changes (or establishes a record date for changing) the number of shares of Acquirer Common Stock or the number of shares of ICNB Common Stock, issued and outstanding as of the date of this Plan of Merger, as a result of a stock dividend, stock split, recapitalization or similar transaction with respect to such issued and outstanding shares, and the record date for such transaction is after the date of this Plan of Merger and prior to the Effective Time, then the Stock Consideration and the Cash Consideration shall be appropriately and proportionately adjusted as such that the actual aggregate consideration to be paid by Acquirer to holders of shares of ICNB Common Stock pursuant to Section 2.1 above would be the same as would have been paid if the Effective Time had been the close of business on the date of this Plan of Merger.

2.4.2 Adjustments for the Upset Condition . If Acquirer declares a stock dividend, stock split, or other general distribution of Acquirer Common Stock to holders of Acquirer Common Stock prior to the date of the Effective Time, then the Floor Acquirer Price and the Initial Acquirer Price shall each be adjusted by multiplying them by a fraction (i) the numerator of which shall be the total number of shares of Acquirer Common Stock outstanding immediately prior to such dividend, split, or distribution; and (ii) the denominator of which shall be the total number of shares of Acquirer Common Stock that are or will be outstanding immediately after such dividend, split, or distribution. For the purposes of this Section, the number of outstanding shares shall be computed as of the record date of the distribution.

2.4.3 Authorized Issuances . Notwithstanding any other provisions of this Section, no adjustment shall be made in the event of the issuance of additional shares of Acquirer Common Stock pursuant to the dividend reinvestment plan of Acquirer, if any, pursuant to the exercise of stock options awarded under director or employee stock option plans of Acquirer, if any, or upon the grant or sale of shares or rights to receive shares to, or for, the account of Acquirer’s directors or employees pursuant to their restricted stock, deferred stock compensation, thrift, employee stock purchase and other compensation or benefit plans of Acquirer, if any.

2.4.4 Changes in Capital. Subject only to making any adjustment provided above in related computations prescribed in this Section, nothing contained in this Plan of Merger shall preclude Acquirer from amending its Articles of Incorporation to change its capital structure or from issuing additional shares of Acquirer Common Stock, preferred stock, shares of other capital stock or securities that are convertible into shares of capital stock.

2.5. Postponement of Closing . Acquirer and ICNB agree not to convene the Closing at any time that would result in there being a record date, ex-dividend date, or ex-distribution date for any transaction described in Sections 2.4.1 ( Changes in Number of Outstanding Shares ) at any time after the beginning of the Pricing Period.

2.6. Increase in Outstanding Shares of ICNB Common Stock. If the number of shares of ICNB Common Stock outstanding is greater than 1,243,412 for any reason whatsoever (whether or not such increase constitutes a breach of this Plan of Merger), then the Stock Consideration and Cash Consideration shall be adjusted by multiplying each by a fraction (a) the numerator of which shall be 1,243,412, and (b) the denominator of which shall be the total number of shares of ICNB Common Stock outstanding as of the Effective Time of the Merger.

2.7. Cessation of Shareholder Status . As of the Effective Time, each record holder of shares of ICNB Common Stock outstanding immediately prior to the Effective Time shall cease to be a shareholder of ICNB and shall have no rights as a shareholder of ICNB. Each stock certificate representing shares of ICNB Common Stock outstanding immediately prior to the Effective Time (" Old Certificates ") shall then be considered to represent the right to receive the Merger Consideration as provided in this Plan of Merger.

2.8. Surrender of Old Certificates and Payment of Merger Consideration. After the Effective Time, Old Certificates shall be exchangeable by holders for the Merger Consideration to which such holders shall be entitled in the following manner:

2.8.1 Available Shares and Funds. At the Effective Time, Acquirer shall make available to Exchange Agent an amount of cash and a number of shares of Acquirer Common Stock sufficient to make payments of the Merger Consideration for each outstanding share of ICNB Common Stock.

2.8.2 Transmittal Materials . As soon as practicable after the Effective Time, but no later than five (5) Business Days after the date of the Closing, Acquirer shall send or cause to be sent to each record holder of ICNB Common Stock as of the Effective Time transmittal materials for use in exchanging that holder’s Old Certificates and receiving the Merger Consideration.

2.8.3 Exchange Agent . On or prior to the Effective Time, Acquirer will deliver to Registrar and Transfer Company, or such other bank or trust company as Acquirer may designate (the "Exchange Agent" ), written notice of the number of shares of Acquirer Common Stock issuable in the Merger and a commitment to pay the amount of cash payable in the Merger when and as determined. Acquirer and the Exchange Agent shall have discretion to determine reasonable procedures relating to the issuance and delivery of certificates of Acquirer Common Stock and cash and governing the payment for fractional shares.

The Exchange Agent shall not be entitled to vote or exercise any rights of ownership with respect to such shares of Acquirer Common Stock, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the account of the record holders entitled to such shares.

2.8.4 New Stock Registrations . Acquirer shall cause the Exchange Agent to promptly cause to be paid to the persons entitled thereto a check in the amount of the Cash Consideration to which the persons are entitled, after giving effect to any required tax withholding, and register the shares of Acquirer Common Stock issuable to former ICNB shareholders of record in such manner, in the names and to the addresses that appear on ICNB’s stock records as of the Effective Time, or in such other name or to such other address as may be specified by the shareholder of record in transmittal documents received by the Exchange Agent; provided, that with respect to each former ICNB shareholder, the Exchange Agent shall have received all of the Old Certificates held by that shareholder, or an affidavit of loss and indemnity bond for such certificate or certificates, together with properly executed transmittal materials; and such certificates, transmittal materials, affidavits, and bonds are in a form and condition reasonably acceptable to Acquirer and the Exchange Agent.

2.8.5 Dividends Pending Surrender . Whenever a dividend is declared by Acquirer on Acquirer Common Stock that is payable to shareholders of record of Acquirer’s Common Stock as of a record date after the Effective Time, the declaration shall include dividends on all shares issuable under this Plan of Merger. No former shareholder of ICNB shall be entitled to receive a distribution of any such dividend until the Exchange Agent has received all of that shareholders’ Old Certificates (or an affidavit of loss and indemnity bond for such certificates) pursuant to properly submitted transmittal materials. Upon the exchange of that shareholder’s Old Certificates (or an affidavit of loss and indemnity bond for such certificates), the shareholder shall be entitled to receive from Acquirer an amount equal to all such dividends (without interest thereon and less the amount of taxes, if any, that may have been imposed or paid thereon) declared and paid with respect to the shares of Acquirer Common Stock represented thereby. If such a shareholder has then elected to enroll in Acquirer’s dividend reinvestment program, such amount shall be credited as a cash purchase for investment at the plan’s next regular investment date.

2.8.6 Stock Transfers. After the Effective Time, there shall be no transfers on ICNB’s transfer books of the shares of ICNB Common Stock that were issued and outstanding immediately prior the Effective Time. If, after the Effective Time, Old Certificates are properly presented for transfer, they shall be canceled and exchanged for the shares of Acquirer Common Stock as provided in this Plan of Merger. After the Effective Time, ownership of such shares as represented by any Old Certificates may be transferred only on the stock records of Acquirer.

2.8.7 Exchange Agent Expenses . Acquirer shall pay all charges and expenses, including those of the Exchange Agent, in connection with the payment of the Merger Consideration in exchange for the ICNB Common Stock.

2.8.8 No Fractional Shares. No certificates or scrip representing fractional shares of Acquirer Common Stock shall be issued in the Merger upon the surrender of Old Certificates. No fractional interest in any share of Acquirer Common Stock resulting from the Merger shall be entitled to any part of a dividend, distribution or stock split with respect to shares of Acquirer Common Stock nor entitle the record holder to vote or exercise any rights of a shareholder with respect to that fractional interest. In lieu of issuing any fractional share, the number of shares of Acquirer Common Stock to be issued to each holder of an Old Certificate who would otherwise have been entitled to a fractional share of Acquirer Common Stock upon surrender of all Old Certificates for exchange shall be rounded up to the nearest whole number.

ARTICLE 3 ACQUIRER’S REPRESENTATIONS AND WARRANTIES

Except as disclosed in a correspondingly numbered section of the disclosure schedule (the "Acquirer Disclosure Statement ") delivered by Acquirer to ICNB prior to the execution of this Agreement, Acquirer represents and warrants to ICNB as follows; provided, however, the disclosure in the Acquirer Disclosure Statement of an item or matter in response or in reference to one provision or representation shall be deemed responsive to other provisions and representations where the applicability of such item or matter to other provision(s) is reasonably apparent:

3.1. Authorization, No Conflicts, Etc.

3.1.1 Authorization of Agreement . Acquirer has all requisite corporate power and authority to execute and deliver this Plan of Merger and to consummate the Merger. This Plan of Merger and consummation of the Merger have been duly authorized by the Board of Directors of Acquirer. The Board of Directors of Acquirer have determined that this Agreement and the transactions contemplated in this Plan of Merger are in the best interests of Acquirer and its shareholders and no other corporate proceedings on the part of Acquirer are necessary to authorize this Plan of Merger or to consummate the Merger. This Plan of Merger has been duly executed and delivered by, and (assuming due authorization, execution and delivery by ICNB) constitutes valid and binding obligations of Acquirer and is enforceable against Acquirer in accordance with its terms.

3.1.2 No Conflict, Breach, Violation, Etc . The execution, delivery, and performance of this Plan of Merger by Acquirer, and the consummation of the Merger by Acquirer, do not and will not violate, conflict with, or result in a breach of: (a) any provision of Acquirer’s restated Articles of Incorporation or Bylaws; or (b) any statute, code, ordinance, rule, regulation, judgment, order, writ, memorandum of understanding, arbitral award, decree, or injunction applicable to Acquirer or its subsidiaries, assuming the timely receipt of each of the approvals referred to in this Section.

3.1.3 Regulatory Restrictions . The execution, delivery, and performance of this Plan of Merger by Acquirer, and the consummation of the Merger by Acquirer, do not and will not violate, conflict with, result in a breach of, constitute a default under, or require any consent, approval, waiver, extension, amendment, authorization, notice, or filing under, any memorandum of understanding or similar regulatory consent agreement to which Acquirer is a party or subject, or by which Acquirer is bound or affected.

3.1.4 Required Approvals . No notice to, filing with, authorization of, exemption by, or consent or approval of, any public body or authority is necessary for the consummation of the Merger by Acquirer other than in connection or compliance with the provisions of the Michigan Act, compliance with federal and state securities laws, compliance with Bylaws and rules of the NASD, and receipt of approvals required under the Bank Holding Company Act of 1956, as amended (the " Federal Bank Holding Company Act "), the Federal Deposit Insurance Act, as amended (the " FDIA "), and the National Bank Act (the " National Bank Act "). Acquirer knows of no reason why the regulatory approvals referred to in this Section cannot be obtained or why the process would be materially impeded.

3.2. Organization and Good Standing . Acquirer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Michigan. Acquirer has all requisite corporate power and authority to own, operate, and lease its properties and assets and to carry on its business as it is now being conducted in all material respects, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary. Acquirer is a financial holding company and a bank holding company duly registered as such with the Board of Governors of the Federal Reserve System (the " Federal Reserve Board ") under the Federal Bank Holding Company Act.

3.3. Subsidiaries . Acquirer owns, directly or indirectly, all of the common stock of its subsidiaries indicated in Acquirer’s Financial Statements (as defined below) for the quarter ended September 30, 2006 free and clear of all claims, security interests, pledges, or liens of any kind. Each of Acquirer’s subsidiaries (i) is duly organized and validly existing under the laws of its jurisdiction of organization; (ii) is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified, and (iii) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted, except in each of (i) through (iii) as would not be reasonably likely to have either individually or in the aggregate a Material Adverse Effect on Acquirer.

3.4. Capital Stock .

3.4.1 Classes and Shares . The authorized capital stock of Acquirer consists of 20,000,000 shares of common stock, no par value, and 300,000 shares of preferred stock, no par value.

3.4.2 No Other Capital Stock . There is no security or class of securities outstanding that represents or is convertible into capital stock of Acquirer, except (i) as described in, or as contemplated by, this Plan of Merger; (ii) stock options ordered pursuant to stock option plans for directors, officers or employees of Acquirer or its affiliate(s); (iii) provisions for the grant or sale of shares or the right to receive shares to, or for the account of, employees and directors pursuant to restricted stock, deferred stock compensation, stock purchase and other benefit plans; (iv) shares of Acquirer Common Stock issuable under agreements entered into or in connection with mergers or acquisitions of direct or indirect subsidiaries or assets and transactions approved by Acquirer’s Board of Directors or a committee of such board; and (v) shares of Acquirer Common Stock issuable under dividend reinvestment and employee stock purchase plans, if any.

3.4.3 No Beneficial Ownership. Acquirer is not the beneficial owner, directly or indirectly, of more than 10% of ICNB’s common stock and Acquirer has not and is not an Affiliate of any person or entity which has at any time within the preceding two (2) year period been the beneficial owner, directly or indirectly, of 10% or more of ICNB’s common stock.

3.5. Acquirer Common Stock . The shares of Acquirer Common Stock to be issued in the Merger in accordance with this Plan of Merger, when issued as contemplated by this Plan of Merger, will be validly issued, fully paid, and nonassessable shares.

3.6 Financial Statements.

3.6.1 Financial Statements . The consolidated financial statements of Acquirer as of and for the each of three years ended December 31, 2005, 2004, and 2003, as reported on by Acquirer’s independent accountants, and the financial statements of Acquirer and its subsidiaries as of and for each month and quarter ended before the date of this Plan of Merger, including all schedules and notes relating to such statements, as previously delivered to ICNB (collectively, " Acquirer’s Financial Statements "), and the unaudited consolidated financial statements of Acquirer as of and for the quarters ended March 31, 2006, June 30, 2006, September 30, 2006, and December 31, 2006, including all schedules and notes relating to such statements, fairly present the financial condition and the results of operations, changes in shareholders’ equity, and cash flows of Acquirer as of the respective dates of and for the periods referred to in such financial statements, all in accordance with accounting principles generally accepted in the United States, consistently applied (" GAAP "), subject, in the case of unaudited interim financial statements, to normal, recurring year-end adjustments (the effect of which would not, individually or in the aggregate, have a Material Adverse Effect on Acquirer) and the absence of notes (that, if presented, would not differ materially from those included in Acquirer’s Financial Statements). No financial statements of any entity or enterprise other than the subsidiaries are required by GAAP to be included in the consolidated financial statements of Acquirer.

3.6.2 Call Reports . The following reports (including all related schedules, notes, and exhibits) were prepared and filed in conformity with applicable regulatory requirements and were correct and complete in all material respects when filed:

(a) The consolidated reports of condition and income of each of Acquirer’s subsidiary banks (including any amendments) as of and for each of the fiscal years ended December 31, 2005, 2004, and 2003, and as of and for the fiscal quarter ended September 30, 2006, as filed with the FDIC; and

(b) The FR Y-9C and FR Y-9LP (including any amendments) for Acquirer as of and for each of the fiscal years ended December 31, 2005, 2004, and 2003, as filed with the Federal Reserve Board.

All of such reports required to be filed prior to the Effective Time by Acquirer and/or the Bank will be prepared and filed in conformity with applicable regulatory requirements applied consistently throughout their respective periods (except as otherwise noted in such reports) and will be correct and complete in all material respects when filed. All of the reports identified in this Section are collectively referred to as the " Call Reports ."

3.7. Absence of Undisclosed Liabilities. Except as and to the extent reflected or reserved against in Acquirer’s Financial Statements as of December 31, 2005, or September 30, 2006, neither Acquirer nor its subsidiaries had, as of such date, liabilities or obligations, secured or unsecured (whether accrued, absolute, or contingent) that, as of such date, would be reasonably likely to have a Material Adverse Effect on Acquirer.

3.8. Absence of Material Adverse Changes. Since December 31, 2005, there has been no change in the financial condition, income, expenses, assets, liabilities or business of Acquirer or any of its subsidiaries that had or in the future is reasonably likely to have a Material Adverse Effect on Acquirer, other than such changes that are caused by events and circumstances generally affecting the banking industry as a whole. No facts or circumstances have been discovered from which it reasonably appears that there is a reasonable probability that there will occur a change that could have a Material Adverse Effect on Acquirer, other than such changes that are caused by events and circumstances generally affecting the banking industry as a whole.

3.9. Legal Proceedings. There is no action, suit, proceeding, claim, arbitration, or investigation pending or to the knowledge of Acquirer threatened by any person, including without limitation any governmental or regulatory agency, against Acquirer or any of the subsidiaries, or the assets or business of Acquirer or any of its subsidiaries, any of which is reasonably likely to have a Material Adverse Effect on Acquirer. There is no factual basis that presents a reasonable potential for any such action, suit, proceeding, claim, arbitration, or investigation.

3.10. Regulatory Filings . In the last four (4) years:

3.10.1 SEC Filings . Acquirer has filed, and will in the future continue to file, in a timely manner all material required filings with the SEC;

3.10.2 Regulatory Filings. Acquirer has filed in a timely manner all other material filings with other regulatory bodies for which filings are required; and

3.10.3 Complete and Accurate . All such filings, as of their respective filing dates, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except for any such misstatements or omissions that are not reasonably likely to have a Material Adverse Effect on Acquirer.

3.11. No Indemnification Claims . To the knowledge of Acquirer, there has been no event, action, or omission by or with respect to any director, officer, employee, trustee, agent, or other person who may be entitled to receive indemnification or reimbursement of any claim, loss, or expense under any agreement, contract, or arrangement providing for corporate indemnification or reimbursement of any such person.

3.12. Conduct of Business . Each of Acquirer and the subsidiaries has conducted its business and used its properties in compliance with all federal, state, and local laws, civil or common, ordinances and regulations, including without limitation applicable federal and state laws and regulations concerning banking, securities, truth-in-lending, truth-in-savings, mortgage origination and servicing, usury, fair credit reporting, consumer protection, privacy, occupational safety, fair lending, civil rights, employee protection, fair employment practices, fair labor standards, real estate settlement and procedures, and insurance; and Environmental Laws (defined below); except for violations (individually or in the aggregate) that would not have a Material Adverse Effect on Acquirer.

3.13. Proxy Statement, Etc.

3.13.1 Transaction Documents . The term " Transaction Documents " shall collectively mean: (i) the Form S-4 registration statement to be filed by Acquirer with the SEC (the " Registration Statement ") in connection with the Acquirer Common Stock to be issued in the Merger; (ii) the prospectus and proxy statement (the "Prospectus and Proxy Statement ") to be mailed to ICNB shareholders in connection with its shareholders’ meeting to consider approval of the Merger ; and (iii) any other documents to be filed with the SEC, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Michigan Office of Financial and Insurance Services, the State of Michigan, or any other regulatory agency in connection with the Merger.

3.13.2 Accurate Information . The information to be supplied by Acquirer for inclusion or incorporation by reference in any Transaction Document will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a) at the respective times such Transaction Documents are filed; (b) with respect to the Registration Statement, when it becomes effective; and (c) with respect to the Prospectus and Proxy Statement, when it is mailed and at the time of the meeting of the shareholders of ICNB with respect to the Merger (the " Shareholders’ Meeting ").

3.13.3 Compliance of Filings . All Transaction Documents that Acquirer is responsible for filing with the SEC or any regulatory agency in connection with the Merger will comply as to form in all material respects with the provisions of applicable law and regulation.

3.14. Agreements with Bank Regulators . Neither Acquirer nor any of its subsidiaries is a party to any agreement or memorandum of understanding with, or a party to any commitment letter, board resolution or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, any governmental authority that restricts materially the conduct of its business, or is material and in any manner relates to its capital adequacy, its credit or reserve policies or its management, nor has Acquirer nor any of its subsidiaries been advised by any governmental authority that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter or similar submission, except where such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter or similar submission are not reasonably likely to have a Material Adverse Effect on Acquirer. Neither Acquirer nor any of its subsidiaries is required by applicable law to give prior notice to any Federal banking agency of the proposed addition of an individual to its Board of Directors or the employment of an individual as a senior or executive officer. As of the date of this Plan of Merger, Acquirer knows of no reason why the regulatory approvals referred to in Section 3.1.4 (Required Approvals) cannot be obtained or why the process would be materially impeded.

3.15. Tax Matters . Each of Acquirer and its subsidiaries has duly filed all federal, state, foreign and local information returns and Tax Returns (defined below) required to be filed by it on or prior to the date of this Plan of Merger (all such returns being accurate and complete in all material respects) and has duly paid or made provision for the payment of all Taxes that have been incurred or are due or claimed to be due from it by federal, state, foreign or local taxing authorities other than (i) Taxes or other governmental charges that are not yet delinquent or are being contested in good faith, have not been finally determined and have been adequately reserved against, or (ii) information returns, Tax Returns or Taxes as to which the failure to file, pay or make provision for is not reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect on Acquirer.

3.16. Investment Bankers and Brokers. Acquirer has not employed any broker, finder, or investment banker in connection with the Merger except Austin Associates, LLC. Acquirer has no other express or implied agreement with any other person or company relative to any commission or finder’s fee payable with respect to this Plan of Merger or the transactions contemplated by it.

3.17. Necessary Capital . Based on the financial condition of Acquirer as reflected in Acquirer’s Financial Statements, Acquirer has the necessary capital required by the regulations of the Federal Reserve Board and the Federal Deposit Insurance Corporation to consummate the transactions contemplated by this Plan of Merger and remain "well-capitalized" according to applicable banking laws and regulations. If external financing is required by Acquirer to consummate the transactions contemplated in this Plan of Merger, Acquirer has or will provide to ICNB sufficient adequate evidence of a binding commitment between Acquirer and its financing source.

3.18. Reorganization. Acquirer has no knowledge of any reason why the Merger would fail to qualify as a reorganization under Section 368(a) of the Internal Revenue Code.

3.19. Allowance for Loan Losses. The allowance for loan losses as reflected in Acquirer’s Financial Statements and Call Reports for the fiscal year ended December 31, 2005, and the fiscal quarter ended September 30, 2006, was in the reasonable opinion of management (a) adequate to meet all reasonably anticipated loan and lease losses, net of recoveries related to loans previously charged off as of those dates, and (b) consistent with GAAP and safe and sound banking practices.

3.20. Public Communications; Securities Offering . Each annual report, quarterly report, proxy material, press release, or other communication previously sent or released by Acquirer to Acquirer’s shareholders or the public did not contain any untrue statement of material fact or omit a statement of material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except for any such misstatement or omission that is not reasonably likely to have a Material Adverse Effect on Acquirer.

3.21. Fairness Opinion. Acquirers’ Board of Directors have received an oral opinion of Austin Associates, LLC (" Austin ") in its capacity as Acquirer’s financial adviser, substantially to the effect that the terms of the Merger are fair to Acquirer’s shareholders and Austin shall deliver a written opinion containing substantially the same opinion as its oral opinion dated as of the date of this Plan of Merger and renewed as of a date of approximately the date of the Prospectus and Proxy Statement. A true and complete copy of the written opinion of Austin confirming the same will be provided to ICNB promptly upon receipt by Acquirer.

ARTICLE 4 ICNB’S REPRESENTATIONS AND WARRANTIES

Except as disclosed in a correspondingly numbered section of the disclosure schedule (the " ICNB Disclosure Statement ") delivered by ICNB to Acquirer prior to the execution of this Agreement, ICNB represents and warrants to Acquirer as follows; provided, however, the disclosure in the ICNB Disclosure Statement of an item or matter in response or in reference to one provision or representation shall be deemed responsive to other provisions and representations where the applicability of such item or matter to other provision(s) is reasonably apparent:

4.1. Authorization, No Conflicts, Etc.

4.1.1 Authorization of Agreement . ICNB has the requisite corporate power and authority to execute and deliver this Plan of Merger, and subject to approval by ICNB’s shareholders, to consummate the Merger. This Plan of Merger has been duly adopted and the consummation of the Merger has been duly authorized by the Board of Directors of ICNB. The Board of Directors of ICNB have determined that this Plan of Merger and the transactions contemplated hereby are in the best interests of ICNB and have directed that this Plan of Merger and the transactions contemplated by this Plan of Merger be submitted to ICNB shareholders for approval at a duly held meeting of such shareholders, and except for approval of this Plan of Merger and the transaction contemplated by this Plan of Merger, no other corporate proceedings on the part of ICNB are necessary to authorize this Plan of Merger or to consummate the Merger. This Plan of Merger has been duly executed and delivered by, and (assuming due authorization, execution and delivery by Acquirer) constitutes valid and binding obligations of, ICNB and is enforceable against ICNB in accordance with its terms.

4.1.2 No Conflict, Breach, Violation, Etc . The execution, delivery, and performance of this Plan of Merger by ICNB, and the consummation of the Merger, do not and will not violate, conflict with, or result in a breach of any provision of: (a) the Articles of Incorporation, charter, Bylaws, or similar organizational documents of ICNB or ICNB’s direct or indirect wholly owned or partially owned subsidiaries, The Ionia County National Bank of Ionia (the " Bank "), Austin Mortgage Company, LLC, ICNB Mortgage Company, LLC and ICNB Lending Services, Inc., Accord Financial Services, Inc. (each a "Subsidiary ," and collectively, the " Subsidiaries "); or (b) any statute, code, ordinance, rule, regulation, judgment, order, writ, memorandum of understanding, arbitral award, decree, or injunction applicable to ICNB or any Subsidiary, assuming the timely receipt of each of the approvals referred to in Section 4.1.4 (Required Approvals).

4.1.3 Regulatory Restrictions . The execution, delivery, and performance of this Plan of Merger by ICNB, and the consummation of the Merger, do not and will not violate, conflict with, result in a breach of, constitute a default under, or require any consent, approval, waiver, extension, amendment, authorization, notice, or filing under, any memorandum of understanding or any regulatory agreement or commitment to which ICNB or any Subsidiary is a party or subject, or by which it is bound or affected.

4.1.4 Required Approvals . No notice to, filing with, authorization of, exemption by, or consent or approval of, any public body or authority is necessary for the consummation of the Merger by ICNB other than in connection or compliance with the provisions of the Michigan Act, compliance with federal and state securities laws, and the consents, authorizations, approvals, or exemptions required under the Federal Bank Holding Company Act, the FDIA, and the National Bank Act.

4.2. Organization and Good Standing . ICNB is a corporation duly organized, validly existing, and in good standing under the laws of the State of Michigan. ICNB has all requisite corporate power and authority to own, operate, and lease its properties and assets and to carry on its business as it is now being conducted in all material respects, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary. ICNB is a bank holding company duly registered as such with the Federal Reserve Board under the Federal Bank Holding Company Act.

4.3. Subsidiaries . The only direct or indirect subsidiaries (i.e., direct or indirect equity interest of 20% or more) of ICNB are the Subsidiaries.

4.3.1 Ownership . Except for the Subsidiaries, ICNB does not have " Control " (as defined in Section 2(a)(2) of the Federal Bank Holding Company Act, using 5 percent rather than 25 percent), either directly or indirectly, of any corporation, general or limited partnership, limited liability company, trust or other entity engaged in an active trade or business or that holds any significant assets. ICNB owns all of the issued and outstanding shares of capital stock of the Bank and of ICNB Lending Services, Inc. and all of the issued and outstanding membership interests of Austin Mortgage Company, LLC and ICNB Mortgage Company, LLC, in each case free and clear of any claim, security, interest, pledge, or lien of any kind. There is no legally binding and enforceable subscription, option, warrant, right to acquire, or any other similar agreement pertaining to ownership of the capital stock or membership interest of any Subsidiary.

4.3.2 Qualification and Power of the Bank . The Bank is duly organized, validly existing, and in good standing as a national bank under the laws of the United States of America. The Bank is qualified or admitted to conduct business in each state where such qualification or admission is required except that state or those states where the failure to be so qualified or admitted would not have a Material Adverse Effect on ICNB. The Bank has full corporate power and authority to carry on its business as and where it is now being conducted.

4.3.3 Deposit Insurance; Other Assessments . The Bank maintains in full force and effect deposit insurance through the Bank Insurance Fund and the Savings Association Insurance Fund of the FDIC. The Bank has fully paid to the FDIC as and when due all assessments with respect to its deposits as are required to maintain such deposit insurance in full force and effect. The Bank has paid as and when due all material fees, charges, assessments, and the like to each and every governmental or regulatory agency having jurisdiction as required by law, regulation, or rule.

4.4. Capital Stock .

4.4.1 Classes and Shares . The authorized capital stock of ICNB consists of 3,000,000 shares of common stock, par value $1.00 per share, all of which are designated as shares of common stock. As of the date of this Plan of Merger, a total of 1,243,412 shares of ICNB Common Stock were validly issued and outstanding, no shares of preferred stock are issued or outstanding, and no shares of ICNB Common Stock are subject to outstanding options under the option plans as of the date of this Plan of Merger.

4.4.2 No Other Capital Stock . There is no security or class of securities outstanding that represents or is convertible into capital stock of ICNB. There is no outstanding subscription, option, warrant, or right to acquire any capital stock of ICNB, or any agreement to which ICNB is a party or by which it is or may be bound to issue capital stock.

4.4.3 Issuance of Shares . After the date of this Plan of Merger, the number of issued and outstanding shares of ICNB Common Stock is not subject to change before the Effective Time.

4.4.4 Voting Rights . Other than the shares of ICNB Common Stock described in this Section, neither ICNB nor the Subsidiaries have outstanding any security or issue of securities the holder or holders of which have the right to vote on the approval of the Merger or this Plan of Merger or that entitle the holder or holders to consent to, or withhold consent on, the Merger or this Plan of Merger.

4.5. Financial Statements.

4.5.1 Financial Statements . The consolidated financial statements of ICNB as of and for the each of three years ended December 31, 2005, 2004, and 2003, as reported on by ICNB’s independent accountants, including all schedules and notes relating to such statements, as previously delivered to Acquirer (collectively, " ICNB’s Financial Statements "), fairly present the financial condition and the results of operations, changes in shareholders’ equity, and cash flows of ICNB as of the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, consistently applied. The unaudited consolidated financial statements of ICNB and its Subsidiaries as of and for the quarters ended March 31, 2006, June 30, 2006, September 30, 2006, and December 31, 2006, fairly present, are correct and complete in all material respects, and are generally consistent with GAAP, consistently applied. The unaudited consolidated financial statements of ICNB as of and for each month ended from January through November, 2006 are correct and complete in all material respects. No financial statements of any entity or enterprise other than the Subsidiaries are required by GAAP to be included in the consolidated financial statements of ICNB.

4.5.2 Call Reports . The following reports (including all related schedules, notes, and exhibits) were prepared and filed in conformity with applicable regulatory requirements and were correct and complete in all material respects when filed:

(a) The consolidated reports of condition and income of the Bank (including any amendments) as of and for each of the fiscal years ended December 31, 2006, 2005, and 2004, as filed with the FDIC; and

(b) The FR Y-9C (including any amendments) for ICNB as of and for each of the fiscal years ended December 31, 2005, 2004, and 2003, as filed with the Federal Reserve Board.

All of such reports required to be filed prior to the Effective Time by ICNB and/or the Bank will be prepared and filed in conformity with applicable regulatory requirements applied consistently throughout their respective periods (except as otherwise noted in such reports) and will be correct and complete in all material respects when filed. All of the reports identified in this Section are collectively referred to as the Call Reports.

4.5.3 Benefit Plan Accruals. ICNB has accrued on its Financial Statements all accrued liabilities related to any of its deferred compensation plans to the extent required by GAAP.

4.6. Absence of Undisclosed Liabilities. Except as and to the extent reflected or reserved against in ICNB’s Financial Statements as of December 31, 2005, or September 30, 2006, neither ICNB nor the Subsidiaries had, as of such date, liabilities or obligations, secured or unsecured (whether accrued, absolute, or contingent) that, as of such date, would be reasonably likely to have a Material Adverse Effect on ICNB.

4.7. Absence of Material Adverse Changes. Since December 31, 2005, there has been no change in the financial condition, income, expenses, assets, liabilities or business of ICNB or any Subsidiary that had or in the future is reasonably likely to have a Material Adverse Effect on ICNB, other than such changes that are caused by events and circumstances generally affecting the banking industry as a whole. No facts or circumstances have been discovered from which it reasonably appears that there is a reasonable probability that there will occur a change that could have a Material Adverse Effect on ICNB, other than such changes that are caused by events and circumstances generally affecting the banking industry as a whole.

4.8. Legal Proceedings. There is no action, suit, proceeding, claim, arbitration, or investigation pending or to the knowledge of ICNB threatened by any person, including without limitation any governmental or regulatory agency, against ICNB or any of the Subsidiaries, or the assets or business of ICNB or any of the Subsidiaries, any of which is reasonably likely to have a Material Adverse Effect on ICNB. To the knowledge of ICNB, there is no factual basis that presents a reasonable probability that any such action, suit, proceeding, claim, arbitration, or investigation will be commenced. The ICNB Disclosure Statement contains copies of all shareholder proposals and director nominations received by ICNB since January 1, 2006, and copies of all correspondence received by ICNB or its directors from the persons making such proposals and/or director nominations.

4.9. Regulatory Filings . In the last four (4) years:

4.9.1 Regulatory Filings. ICNB has filed in a timely manner all material filings with regulatory bodies for which filings are required; and

4.9.2 Complete and Accurate. All such filings, as of their respective filing dates, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except for any such misstatements or omissions that are not reasonably likely to have a Material Adverse Effect on ICNB.

4.10. No Indemnification Claims . There is no action, suit, proceeding, claim, arbitration, or investigation pending or to the knowledge of ICNB threatened by any person, including without limitation any governmental or regulatory agency, against any director, officer, employee, trustee, agent, or other person who may be entitled to receive indemnification or reimbursement of any claim, loss, or expense under any agreement, contract, or arrangement providing for corporate indemnification or reimbursement of any such person from ICNB.

4.11. Conduct of Business . Each of ICNB and the Subsidiaries has conducted its business and used its properties in compliance with all federal, state, and local laws, civil or common, ordinances and regulations, including without limitation applicable federal and state laws and regulations concerning banking, securities, truth-in-lending, truth-in-savings, mortgage origination and servicing, usury, fair credit reporting, consumer protection, occupational safety, fair lending, civil rights, employee protection, fair employment practices, fair labor standards, real estate settlement and procedures, and insurance; and Environmental Laws; except for violations (individually or in the aggregate) that would not have a Material Adverse Effect on ICNB. Without limiting and notwithstanding the foregoing, in each case with respect to Sections 4.11.1 through 4.11.4 below where such violation would be reasonably likely to have a Material Adverse Effect on ICNB, neither ICNB nor any Subsidiary, to ICNB’s knowledge:

4.11.1 Privacy – Unaffiliated Third Parties . Has shared non public personal information regarding consumers or customers with any unaffiliated third party except as would be permitted under Title V of the Financial Services Modernization Act and in compliance with the applicable privacy laws of any state, or other applicable laws, statutes, regulations or ordinances;

4.11.2 Privacy – Affiliates . Has shared personal information regarding consumers or customers other than experience information, with any affiliated third party except as would be permitted under the Fair Credit Reporting Act and in compliance with the applicable privacy laws of any state, or other applicable laws, statutes, regulations or ordinances;

4.11.3 Privacy – HIPAA Compliance . Has (i) share or use, or permit its business associates to share or use, protected health information except as would be permitted under the Health Insurance Portability and Accountability Act of 1996 (" HIPAA "), or (ii) engaged in any business activities that would cause it to be a "covered entity" under HIPAA; and

4.11.4 Lending Practices . Has engaged in lending practices that would violate the guidelines issued by Fannie Mae to combat predatory lending (#LL03-00), the Michigan Consumer Mortgage Protection Act, or the laws regarding lending practices of any state in which the property securing a loan is located.

4.12. Proxy Statement, Etc.

4.12.1 Accurate Information . The information to be supplied by ICNB for inclusion or incorporation by reference in any Transaction Document will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a) at the respective times such Transaction Documents are filed; and (b) with respect to the Prospectus and Proxy Statement, when it is mailed and at the time of the Shareholders’ Meeting.

4.12.2 Compliance of Filings . All documents that ICNB or any Subsidiary is responsible for filing with any regulatory agency in connection with the Merger will comply as to form in all material respects with the provisions of applicable law and regulation.

4.13. Agreements with Bank Regulators . Neither ICNB nor any Subsidiary is a party to any agreement or memorandum of understanding with, or a party to any commitment letter, board resolution or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, any governmental authority that restricts materially the conduct of its business, or is material and in any manner relates to its capital adequacy, its credit or reserve policies or its management, nor has ICNB nor any Subsidiary have been advised by any governmental authority that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter or similar submission, except where such order, decree, agreement, memorandum of understanding, extraordinary supervisor letter, commitment letter or similar submission would not have a Material Adverse Effect on ICNB. Neither ICNB nor any Subsidiary is required by applicable law to give prior notice to any Federal banking agency of the proposed addition of an individual to its Board of Directors or the employment of an individual as a senior or executive officer. As of the date of this Plan of Merger, ICNB knows of no reason attributable to ICNB why the regulatory approvals referred to in Section 4.1.4 (Required Approvals) cannot be obtained or why the process would be materially impeded.

4.14. Tax Matters .

4.14.1 Taxes Defined . " Taxes " means federal, state, local, or foreign income, gross receipts, payroll, employment, excise, stamp, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative or add-on minimum, estimated, or other tax of any kind, including any interest, penalty, or addition thereto, whether disputed or not.

4.14.2 Tax Returns . ICNB and each Subsidiary have filed all federal income Tax Returns and all other material Tax Returns that they were required to file. All such Tax Returns were correct and complete in all material respects. " Tax Return " shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

4.14.3 Tax Assessments and Payments . All material Taxes due and payable by ICNB and the Subsidiaries have been paid or deposited in full as and when due, including applicable extension periods. Each of ICNB and the Subsidiaries has withheld and paid over all material Taxes required to have been withheld and paid over, and complied with all material information reporting and backup withholding requirements, including maintenance of required records with respect thereto, in connection with amounts paid or owing to any employee, creditor, independent contractor or other third parties. The provisions made for Taxes on ICNB’s Financial Statements as of December 31, 2005, are sufficient for the payment of all accrued but unpaid Taxes as of the date indicated, whether or not disputed, with respect to all periods through December 31, 2005. There is no lien on any of ICNB’s or the Subsidiaries’ assets or properties with respect to Taxes, except for liens for Taxes not yet due and payable.

4.14.4 Tax Audits . None of the Tax Returns of ICNB and the Subsidiaries filed for any of the last five tax years has been audited by the Internal Revenue Service (the " IRS ") or any state or local taxing authority. There is no tax audit or legal or administrative proceeding concerning the accuracy of tax or information returns or the assessment or collection of Taxes pending or, to ICNB’s knowledge, threatened with respect to ICNB or any Subsidiary. No claim concerning the calculation, assessment or collection of taxes has been asserted with respect to ICNB or any Subsidiary except for any claim that has been fully resolved and the costs of such resolution reflected in ICNB’s Financial Statements. No waiver or extension of any statute of limitations is in effect with respect to Taxes or Tax Returns of ICNB or any Subsidiary.

4.14.5 Tax Accounting . Neither ICNB nor any Subsidiary have been required to include in income any adjustment pursuant to Section 481 of the Internal Revenue Code by reason of a voluntary change in accounting method initiated by ICNB or a Subsidiary and the IRS has not initiated or proposed any such adjustment or change in accounting method. Neither ICNB nor any Subsidiary has entered into a transaction which is being accounted for as an installment obligation under Section 453 of the Internal Revenue Code.

4.14.6 Excess Parachute Payments . To ICNB’s knowledge, no compensation that will be payable (whether in cash, stock, options, or other property or the vesting of property or other rights) by ICNB, any Subsidiary, their affiliates, or any of their respective successors under any employment, option, benefit plan, severance, termination or other compensation arrangement currently in effect is, or will be, an " Excess Parachute Payment " (as defined in Section 280G of the Internal Revenue Code).

4.14.7 Tax Positions . The tax and audit positions taken by ICNB and the Subsidiaries in connection with Tax Returns were reasonable and asserted in good faith.

4.15. Title to Properties . ICNB and the Subsidiaries have good, sufficient, and marketable title to all of their material properties and assets, whether real, personal, or a combination thereof, reflected in their books and records as being owned (including those reflected in ICNB’s Financial Statements as of December 31, 2005, except as since disposed of in the ordinary course of business), free and clear of all liens and encumbrances, except:

4.15.1 Reflected on Balance Sheet. As reflected on ICNB's Financial Statements as of September 30, 2006;

4.15.2 Normal to Business. Liens for current Taxes not yet delinquent, and liens or encumbrances that are normal to the business of ICNB and that would not have a Material Adverse Effect on ICNB;

4.15.3 Immaterial Imperfections. Such imperfections of title, easements, restrictions, and encumbrances, if any, as are not material in character, amount, or extent, and do not materially detract from the value, or materially interfere with the present use, of the properties subject thereto or affected thereby; and

4.15.4 Public Easements, Etc . Such public easements, public rights of way, and interests of units of government of record, if any, as are not material in character, amount, or extent, and do not materially detract from the value, or materially interfere with the present use, of the properties subject thereto or affected thereby.

4.16. Condition of Real Property . With respect to each parcel of real property owned, legally or beneficially, by ICNB or any Subsidiary, including other real estate owned (" ICNB’s Real Property ") and also with respect to each parcel of real property leased by ICNB or any Subsidiary (" ICNB ’s Leased Real Property "), all of which are listed on the ICNB Disclosure Statement, to ICNB’s knowledge:

4.16.1 Zoning . None of ICNB, the Subsidiaries, ICNB’s Real Property, or ICNB’s Leased Real Property is in material violation of any applicable zoning regulation, building restriction, restrictive covenant, ordinance, or other law, order, regulation, or requirement.

4.16.2 Buildings . All buildings and improvements to ICNB’s Real Property and ICNB’s Leased Real Property are in good condition (normal wear and tear excepted), are structurally sound and are not in need of material repairs, are fit for their intended purposes, and are adequately serviced by all utilities necessary for the effective operation of business as presently conducted at that location.

4.16.3 No Condemnation . None of ICNB’s Real Property or ICNB’s Leased Real Property is the subject of any pending condemnation action. To ICNB’s Knowledge, there is no proposal under active consideration by any public or governmental authority or entity to acquire ICNB’s Real Property or ICNB’s Leased Real Property for any governmental purpose.

4.16.4 Assessments . There is no pending or to ICNB’s Knowledge proposed special assessment affecting or which may affect ICNB’s Real Property or ICNB’s Leased Real Property, except as listed on the ICNB Disclosure Statement.

4.17. Real and Personal Property Leases . With respect to each lease and license pursuant to which ICNB or any Subsidiary, as lessee or licensee, has possession of real or material personal property (" ICNB’s Leases "):

4.17.1 Valid . Each of ICNB’s Leases is valid, effective, and enforceable against the lessor or licensor in accordance with its terms, except as limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the rights of creditors generally and the availability of equitable remedies.

4.17.2 No Default . There is no existing and declared default under any of ICNB’s Leases or any event that with notice or passage of time, or both, would constitute a default with respect to ICNB, any Subsidiary, or, to the knowledge of ICNB, any other party to the contract, which default could have a Material Adverse Effect on ICNB.

4.17.3 Assignment . None of ICNB’s Leases contain a prohibition against assignment by ICNB or any Subsidiary, by operation of law or otherwise, or any provision that would materially interfere with the possession, use, or rights with respect to the property by the Subsidiaries for the same purposes and upon the same rental and other terms following consummation of the Merger as are applicable the Subsidiaries prior to the Effective Time.

4.18. Required Licenses, Permits, Etc . ICNB and the Subsidiaries hold all licenses, certificates, permits, franchises, and rights from all appropriate federal, state, and other public authorities necessary for the conduct of its business as presently conducted, the lack of which could have a Material Adverse Effect on ICNB. All such licenses, certificates, franchises, and rights are in full force and effect, except where effect of which would not, individually or in the aggregate, have a Material Adverse Effect.

4.19. Material Contracts and Change of Control . Except as contained in the ICNB Disclosure Statement, neither ICNB nor any of the Subsidiaries are a party to any agreement or understanding described below.

4.19.1 Borrowing Commitments . Any agreement or commitment made to ICNB or the Subsidiaries permitting it to borrow money in excess of $250,000 as to which ICNB or the Subsidiaries are a debtor, pledgor or obligor.

4.19.2 Benefit Plans . Any profit-sharing, group insurance, bonus, deferred compensation, stock option, severance pay, pension, retirement, or any other employee benefit plan or any plan, agreement, contract, authorization, or arrangement pursuant to which any person is or will become entitled to any benefit upon a change in control of ICNB or the Subsidiaries.

4.19.3 Correspondents. Any written correspondent banking contracts.

4.19.4 Asset Transactions . Any agreement or understanding (i) for the sale of its assets in excess of $50,000 outside of the ordinary course of business; (ii) for the grant of any preferential right to purchase any of its assets, properties, or rights in excess of $50,000; or (iii) which requires the consent of any third party to the transfer and assignment of any assets, properties, or rights in excess of $50,000.

4.19.5 Long-term Contracts . Any agreement which obligates ICNB or the Subsidiaries for a period in excess of one year, which has a value in excess of $50,000, to purchase services, materials, supplies, merchandise, facilities, or equipment and which is not terminable without cost or penalty on not more than sixty (60) days’ notice.

4.19.6 Capital Expenditures . Any agreement for any one capital expenditure or a series of capital expenditures, the aggregate amount of which is in excess of $50,000.

4.19.7 Unfunded Loan Commitments . Any agreement or understanding entered into to make a loan not yet fully disbursed or funded as of December 31, 2006, to any person, wherein the undisbursed or unfunded amount exceeds $150,000.

4.19.8 Participation Agreements . Any loan participation agreement with any other person entered into subsequent to December 31, 2005, in excess of $150,000 and on the books at December 31, 2006.

4.19.9 Other Contracts . Any agreement or understanding not otherwise disclosed or excepted pursuant to this Section 4.19 (Material Contracts and Change of Control) which is material to the properties, financial condition, business, or results of operations of ICNB and the Subsidiaries, taken as a whole.

4.19.10 Data Processing Contracts . Except as described in the ICNB Disclosure Statement, all data processing contracts of ICNB or the Subsidiaries are cancelable by ICNB or the Subsidiaries on or before the Effective Time without cost, penalty, or further obligation.

4.19.11 Contract Affected by the Merger . There is no other agreement, contract, loan, mortgage, deed of trust, lease, commitment, indenture, note, or other instrument under which (a) a consent or approval is required, (b) a prohibited assignment by operation of law could occur, (c) a waiver or loss of any right could occur, or (d) acceleration of any obligation could occur, in each case as a result of the execution and delivery of this Plan of Merger, or the change of control, or merger of ICNB or any Subsidiary or the liquidation of ICNB upon consummation of the Merger where any of the following: (w) the failure to obtain such consent or approval, (x) the violation of the prohibition against assignment, (y) the waiver or loss of any material right, or (z) the acceleration of any obligation could materially interfere with the ordinary course of business by ICNB or any Subsidiary (or Acquirer or any of its subsidiaries as their successors) or have a Material Adverse Effect on ICNB.

4.20. Certain Employment Matters .

4.20.1 Employment Policies, Programs, and Procedures . The policies, programs, and practices of ICNB and the Subsidiaries relating to equal opportunity and affirmative action, wages, hours of work, employee disabilities, and other terms and conditions of employment are in compliance in all material respects with applicable federal, state, and local laws, orders, regulations, and ordinances governing or relating to employment and employer practices and facilities.

4.20.2 Record of Payments . There is no existing or outstanding material obligation of ICNB or the Subsidiaries, whether arising by operation of law, civil or common, by contract, or by past custom, for any Employment-Related Payment (as defined in Section 4.20.3 (Employment-Related Payments)) to any trust, fund, company, governmental agency, or any person that has not been duly recorded on the books and records of ICNB and/or its Subsidiaries and paid when due or duly accrued in the ordinary course of business in accordance with GAAP.

4.20.3 Employment-Related Payments . For purposes of this Plan of Merger, " Employment-Related Payments " include any payment to be made with respect to any contract for employment; unemployment compensation benefits; profit sharing, pension, or retirement benefits; social security benefits; fringe benefits, including vacation or holiday pay, bonuses, and other forms of compensation; or for medical insurance or medical expenses; any of which are payable with respect to any present or former director, officer, employee, or agent, or his or her survivors, heirs, legatees, or legal representatives.

4.20.4 Employment Claims . There is no dispute, claim, or charge, pending or, to ICNB’s knowledge, threatened, alleging breach of any express or implied employment contract or commitment, or breach of any applicable law, order, regulation, public policy, or ordinance relating to employment or terms and conditions of employment. To the knowledge of ICNB, there is no factual basis for any valid claim or charge with regard to such employment-related matters that could result in a loss to ICNB or the Subsidiaries which would have a Material Adverse Effect on ICNB.

4.20.5 Employment Related Agreements . ICNB and the Subsidiaries are not parties to, or bound by, any oral or written, except as contained in the ICNB Disclosure Statement:

(a) Employment contract or agreement, or guarantee of job security, made with or to any past or present employee of ICNB or any Subsidiary that is not terminable by ICNB or such Subsidiary upon 60 days’ or less notice without penalty or obligation;

(b) Plan, contract, arrangement, understanding, or practice providing for bonuses, pensions, options, stock purchases, deferred compensation, retirement payments, retirement benefits of the type described in Statement of Financial Accounting Standard No. 106, or profit sharing;

(c) Plan, agreement or practice with respect to payment of medical expenses, insurance (except insurance continuation limited to that required under provisions of the Consolidated Omnibus Budget Reconciliation Act), or other benefits for any former employee or any spouse, child, member of the same household, estate, or survivor of any employee or former employee; or

(d) Any collective bargaining agreement with respect to any of their employees or any labor organization to which their employees or any of them belong.

4.21. Employee Benefit Plans . With respect to any "employee welfare benefit plan," any "employee pension benefit plan," or any "employee benefit plan" within the respective meanings of Sections 3(1), 3(2), and 3(3) of the Employee Retirement Income Security Act of 1974, as amended (" ERISA "), or any stock purchase, stock option, severance, change-in-control, bonus, incentive, deferred compensation or other employee benefit plan or arrangement, whether or not subject to ERISA (each referred to as an " Employee Benefit Plan "), maintained by or for the benefit of ICNB or any Subsidiary or their predecessors or to which ICNB or any Subsidiary or their predecessors has made payments or contributions on behalf of its employees or directors, each of which is listed on the ICNB Disclosure Statement:

4.21.1 ERISA Compliance . ICNB, the Subsidiaries, each Employee Benefit Plan, and all trusts created thereunder are in substantial compliance with ERISA, and all other applicable laws and regulations insofar as such laws and regulations apply to such plans and trusts.

4.21.2 Internal Revenue Code Compliance . ICNB, the Subsidiaries, each Employee Benefit Plan that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code, and all trusts created thereunder are in substantial compliance with the applicable provisions of the Internal Revenue Code.

4.21.3 Prohibited Transactions . No Employee Benefit Plan and no trust created thereunder has been involved, subsequent to June 30, 1974, in any nonexempt "prohibited transaction" as defined in Section 4975 of the Internal Revenue Code and in Sections 406, 407, and 408 of ERISA.

4.21.4 Plan Termination . No Employee Benefit Plan that is a qualified plan under Section 401(a) of the Internal Revenue Code and no trust created thereunder has been terminated, partially terminated, curtailed, discontinued, or merged into another plan or trust after January 1, 1997, except in compliance with notice and disclosure to the IRS and the Pension Benefit Guaranty Corporation (the " PBGC "), where applicable, as required by the Internal Revenue Code and ERISA. With respect to each plan termination, all termination procedures have been completed and there is no pending or potential liability to the PBGC, to any plan, or to any participant under the terminated plan. Each plan termination, partial termination, curtailment, discontinuance, or consolidation has been accompanied by the issuance of a current favorable determination letter by the IRS and, where applicable, has been accompanied by plan termination proceedings with and through the PBGC.

4.21.5 Multiemployer Plan . No Employee Benefit Plan is a "multiemployer plan"within the meaning of Section 3(37)(A) of ERISA.

4.21.6 Defined Benefit Plan . No Employee Benefit Plan in effect as of the date of this Plan of Merger is a "defined benefit plan" within the meaning of Section 3(35) of ERISA.

4.21.7 Payment and Accrual of Contributions . ICNB has made when due, or fully accrued for, all contributions required under each Employee Benefit Plan and under applicable laws and regulations.

4.21.8 Payment of Benefits . There is no payment that has become due from any Employee Benefit Plan, any trust created thereunder, or from ICNB or any Subsidiary that has not been paid through normal administrative procedures to the plan participants or beneficiaries entitled thereto, except for claims for benefits for which administrative claims procedures under such plan have not been exhausted.

4.21.9 Accumulated Funding Deficiency . No Employee Benefit Plan that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code and no trust created thereunder has incurred, subsequent to June 30, 1974, an "accumulated funding deficiency" as defined in Section 412(a) of the Internal Revenue Code and Section 302 of ERISA (whether or not waived).

4.21.10 Funding . Neither ICNB nor any Subsidiary owes premiums to the PBGC that are due but unpaid or has been determined by the PBGC to be liable for a funding deficiency with respect to a plan termination under Title IV of ERISA.

4.21.11 Filing of Reports . Each of ICNB and the Subsidiaries have filed or caused to be filed, and will continue to file or cause to be filed, in a timely manner all filings pertaining to each Employee Benefit Plan with the IRS, the United States Department of Labor, and the PBGC as prescribed by the Internal Revenue Code, ERISA, and the regulations issued thereunder. All such filings, as amended, were complete and accurate in all material respects as of the dates of such filings, and there were no material misstatements or omissions in any such filing which would have a Material Adverse Effect.

4.22. Environmental Matters .

4.22.1 Owned or Operated Property . With respect to: (i) the real estate owned or leased by ICNB or any Subsidiary or used in the conduct of their businesses; (ii) any other real estate owned by any Subsidiar

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates