Exhibit 10.1

April 30, 2009

Mr. William K. Holmes
Warner, Norcross & Judd, LLP
900 Fifth Third Center
111 Lyon Street, N.W.
Grand Rapids, MI 49503

Dear Bill:

        This letter agreement, when fully executed by the parties and approved by Federal Insurance Company and Progressive Casualty Insurance Company, shall constitute the second amendment to the Settlement and Release Agreement and Stock and Warrant Issuance Agreement executed as of November 12, 2008, and as amended by the First Amended Settlement and Release Agreement and Stock and Warrant Issuance Agreement executed as of January 30, 2009 (collectively, the “Agreement”).

        The Agreement is hereby amended as follows:

        Except as set forth above, the Agreement shall remain unchanged and in full force and effect according to its terms.

        If this letter agreement accurately reflects the new agreement of the parties, please have it executed by your clients and by Mr. Deardorff and return an executed copy to me for my files. Thank you.

Very truly yours,

/s/ Thomas M. Farrell

Thomas M. Farrell

TMF:psf

ACKNOWLEDGED AND AGREED:

/s/ Richard Deardorff
———————————————
Richard Deardorff


/s/ Jon W. Swets, Chief Financial Officer
———————————————
Macatawa Bank


/s/ Jon W. Swets, Chief Financial Officer
———————————————
Macatawa Bank Corporation

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EXHIBIT L

WARRANT AGREEMENT

         THIS WARRANT AGREEMENT (this “Agreement”) is entered into as of the _______ day of _________________, 2009, by and between MACATAWA BANK CORPORATION , a Michigan corporation (the “Company”), and REGISTRAR AND TRANSFER COMPANY , a New Jersey corporation (the “Warrant Agent”).

RECITALS

        A.        The Company is a defendant in a lawsuit pending in the United States District Court for the Western District of Michigan (the “District Court”), entitled In re Trade Partners, Inc. Investor Litigation , Case No. 1:07-MD-1846-RHB (the “Federal Litigation”).

        B.        The Company is a defendant in a lawsuit pending in the Kent County Circuit Court in Grand Rapids, Michigan (the “Circuit Court”), entitled Giese et al v. Macatawa Bank Corp et al, Case No. 06-11707-CZ (the “State Litigation”).

        C.        The parties to the Federal Litigation and the State Litigation have settled the dispute and entered into that certain Amended and Restated Settlement and Release and Stock and Warrant Issuance Agreement, dated January 30, 2009 (the “Settlement Agreement”).

        D.        As part of the transactions to be consummated pursuant to the Settlement Agreement, the Company has issued warrants for the purchase of One Million Five Hundred Thousand (1,500,000) shares of common stock, no par value, of the Company (each, a “Warrant”).

        E.        The Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, division, transfer, exchange and exercise of the Warrants.

AGREEMENT

         NOW, THEREFORE , in consideration of the foregoing and of the mutual promises and covenants contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which hereby are acknowledged, the parties agree as follows:

        1.1       “Business Day” shall mean a day other than (a) a Saturday or Sunday, (b) any day on which banking institutions located in Holland, Michigan are required or authorized by law or by local proclamation to close or (c) any day on which the Nasdaq Stock Market is closed.

        1.2       "Common Stock" shall mean the shares of the Company's common stock, no par value.

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        1.3       “Commercially Reasonable Best Efforts,” when used with respect to any obligation to be performed or term or provision to be complied with under this Agreement, shall mean such efforts as a prudent Person seeking the benefits of such performance or compliance would make, use, apply or exercise to preserve, protect or advance its rights or interests. Such efforts do not require the Person whose performance or compliance is required under this Agreement to incur a material financial cost or a substantial risk of material liability unless such cost or liability (i) is specifically contained in this Agreement or the Settlement Agreement, (ii) would customarily be incurred in the course of performance of or compliance with the relevant obligation, term or provision, (iii) is caused by or results from the wrongful act or negligence of the Person whose performance or compliance is required hereunder, or (iv) is not excessive or unreasonable in view of the rights or interests to be preserved, protected or advanced.

        1.4       “Effective Date” means the first date on which the Company’s Registration Statement is declared effective by the SEC.

        1.5       “Exercise Period” shall mean the period commencing on the later of (a) the date that is 366 days after the Warrants are issued to the initial Holders and (b) the Effective Date and ending at 5:00 p.m., Holland, Michigan time, on the fifth (5th) anniversary of the later of (a) or (b), as such period may be extended pursuant to the terms hereof.

        1.6       “Exercise Price” shall mean the purchase price for each Warrant Share and shall be Nine Dollars ($9.00) per share, as adjusted from time to time pursuant to Sections 8.1 and 8.2 hereof.

        1.7       "Holders" are the registered owners of the Warrants.

        1.8       “Market” shall mean the Nasdaq Stock Market. If the Common Stock is no longer authorized for quotation on the Nasdaq Stock Market, the Market shall be the principal national securities exchange or quotation system on which the Common Stock is quoted or listed or admitted to trading or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, the over-the-counter market.

        1.9       “Material Information” is material nonpublic information concerning the Company, its subsidiaries, or its or their current or prospective business, financial condition, results of operations or prospects.

        1.10       “Person” shall mean a natural person, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, limited liability company, limited liability partnership, government or any agency or political subdivision thereof or any other entity or organization.

        1.11       “Qualifying Prospectus” shall mean a prospectus contained in a Registration Statement that satisfies all legal requirements.

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        1.12       “Registration Statement” shall mean a registration statement relating to the issuance by the Company of the Warrant Shares to the Holders upon exercise of the Warrants pursuant hereto.

        1.13       “SEC” shall mean the United States Securities and Exchange Commission, or any successor governmental agency or authority thereto.

        1.14       "Securities Act" shall mean the Securities Act of 1933, as amended.

        1.15       “Trading Price,” as of any date, shall mean the dollar weighted average trading price per share for all round lot transactions in the Common Stock on the Market for the twenty (20) trading days ending two (2) days prior to that date.

        1.16       “Warrant Shares” are the shares of Common Stock or other securities deliverable upon exercise of a Warrant.

        2.1        Form of Warrant; Execution of Warrants . The certificates evidencing the Warrants (the “Warrant Certificates”) shall be in the form attached to this Agreement. The Warrant Certificates shall be signed on behalf of the Company by its Chief Executive Officer, Chief Financial Officer, President or one of its Vice Presidents. The signature of any such officer on the Warrant Certificates may be manual or by facsimile. Each Warrant Certificate shall be dated the date it is countersigned by the Warrant Agent pursuant to Section 2.3.

        2.2        Registration . The Warrant Certificates shall be numbered and shall be registered on the books of the Company maintained at the principal office of the Warrant Agent initially in Cranford, New Jersey (or such other place in the continental United States as the Warrant Agent shall from time to time notify the Company and the Holders in writing) (the “Warrant Register”) as they are issued. The Company and the Warrant Agent shall be entitled to treat the registered owner of any Warrant as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person.

        2.3        Countersignature of Warrants . The Warrant Certificates shall be countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. Warrant Certificates may be countersigned, however, by the Warrant Agent and may be delivered by the Warrant Agent notwithstanding that the persons whose manual or facsimile signatures appear thereon as proper officers of the Company shall have ceased to be such officers at the time of such countersignature, issuance or delivery. The Warrant Agent shall, upon written instructions of the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company, countersign, issue and deliver Warrant Certificates entitling the Holders thereof to purchase not more than an aggregate of One Million Five Hundred Thousand (1,500,000) Warrant Shares (subject to adjustment pursuant to Section 8) and shall countersign, issue and deliver Warrant Certificates as otherwise provided in this Agreement.

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        3.1        Transfer and Exchange . Subject to the terms of this Agreement, the Warrant Agent shall initially countersign, register in the Warrant Register, and deliver Warrants in accordance with the written instructions of the Company. Subject to the terms of this Agreement and the receipt of such documentation as the Warrant Agent may reasonably require, the Warrant Agent shall thereafter from time to time register the transfer of any outstanding Warrants upon the Warrant Register upon surrender of the Warrant Certificate or Certificates evidencing such Warrants duly endorsed or accompanied (if so required by it) by a written instrument or instruments of transfer in form reasonably satisfactory to the Warrant Agent (which may be in the form attached to this Agreement), duly executed by the registered Holder or Holders thereof, by the duly appointed legal representative of the Holders, or by a duly authorized attorney. Subject to the terms of this Agreement, each Warrant Certificate may be exchanged for another Warrant Certificate or Certificates entitling the Holder to purchase a like aggregate number of Warrant Shares as the Warrant Certificate or Certificates surrendered then entitles such Holder to purchase. Any Holder desiring to exchange a Warrant Certificate or Certificates shall make such request in writing delivered to the Warrant Agent, and shall surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by a written instrument or instruments in form reasonably satisfactory to the Warrant Agent, the Warrant Certificate or Certificates to be so exchanged. Upon registration of transfer or exchange, the Company shall issue and the Warrant Agent shall countersign and deliver by certified mail a new Warrant Certificate or Certificates to the persons entitled thereto.

        3.2        No Service Charges . No service charge shall be made for any exchange or registration of transfer of a Warrant Certificate or of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp tax or other tax or other governmental charge that is imposed in connection with any such exchange or registration of transfer pursuant to Section 5.

        3.3        Acceptance of Terms . By accepting the initial delivery, transfer or exchange of Warrants, each Holder shall be deemed to agree to the terms of this Agreement as it may be in effect from time to time, including any amendments or supplements duly adopted in accordance with Section 12.3. A copy of this Agreement may be obtained by a Holder without cost upon written request to the Company at its principal office or to the Warrant Agent.

        4.1        Term of Warrants . Subject to the terms of this Agreement, each Holder shall have the right, which may be exercised on any Business Day during the Exercise Period, to receive from the Company the number of Warrant Shares which the Holder may at the time be entitled to purchase upon exercise of such Warrants and payment of the Exercise Price then in effect for such Warrant Shares. The Warrant Shares issued to a Holder upon exercise of its Warrants shall be duly authorized, validly issued, fully paid and non-assessable and shall not have been issued in violation of or subject to any preemptive rights. Each Warrant not exercised prior to the expiration of the Exercise Period shall become void, and all rights under such Warrant and under this Agreement shall cease as of the expiration of the Exercise Period, provided, however, that if the Exercise Period ends during a suspension pursuant to Section 4.3, the Exercise Period shall be extended for an additional period of time equal to the longer of the period of such suspension during the Exercise Period and twenty (20) Business Days after the date on which the Warrant Agent sends notice to the Holders of the expiration of such suspension period.

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      4.2        Exercise of Warrants.

              (a)              During the Exercise Period, except as such may be suspended from time to time as set forth in Section 4.3, each Holder may exercise from time to time some or all of the Warrants evidenced by its Warrant Certificate(s) by: (i) surrendering to the Company at the principal office of the Warrant Agent such Warrant Certificate(s) with written notice (in the form attached to this Agreement) duly completed and signed, which signature shall be guaranteed by an eligible guarantor institution (a bank, savings and loan association or credit union with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, and (ii) paying to the Warrant Agent for the account of the Company the aggregate Exercise Price for the number of Warrant Shares in respect of which such Warrants are exercised. Warrants shall be deemed exercised on the date such Warrant Certificate(s) are surrendered to the Warrant Agent and tender of payment of the aggregate Exercise Price is made. Payment of the aggregate Exercise Price shall be made (1) by wire transfer of immediately available funds to the Warrant Agent for the account of the Company, (2) by certified or official bank check or checks payable to the order of the Company (any such payments under subsections (1) or (2) shall be made in lawful money of the United States of America), or (3) by surrender to the Warrant Agent of the right to receive a number of Warrant Shares, calculated to the nearest one one-hundredth of a share, pursuant to the formula below. In the event that a Holder elects to make payment of the aggregate Exercise Price by surrender of the right to receive Warrant Shares as provided in subsection (3) of the preceding sentence, the number of Warrant Shares issuable to such Holder shall be calculated as follows:

              (b)              In the event that less than all of the Warrants evidenced by a Warrant Certificate are exercised, the Holder thereof shall be entitled to receive a new Warrant Certificate or Certificates as specified by such Holder evidencing the remaining Warrant or Warrants, and the Warrant Agent is hereby irrevocably authorized by the Company to countersign, issue and deliver the required new Warrant Certificate or Certificates evidencing such remaining Warrant or Warrants pursuant to Section 4.2 and Section 3 of this Agreement. The Company, whenever requested by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose.

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              (c)              Upon the exercise of any Warrants in accordance with this Agreement, the Company shall cause the Warrant Agent, on the Company’s behalf, to issue and deliver with all reasonable dispatch, to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants and shall take or cause the Warrant Agent to take such other actions as are necessary to complete the exercise of the Warrants (including, without limitation, payment of any cash with respect to fractional interests required under Section 9). The certificate or certificates representing such Warrant Shares shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date the Warrants are exercised.

              (d)              Upon delivery of the Warrant Shares issuable upon exercise of a Warrant in accordance herewith and of any required new Warrant Certificates, the Company shall direct the Warrant Agent by written order to cancel the Warrant Certificates surrendered upon exercise. Such canceled Warrant Certificates shall then be disposed of by the Warrant Agent in a manner permitted by applicable laws and satisfactory to the Company in accordance with its written instructions to the Warrant Agent. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all amounts received by the Warrant Agent upon exercise of such Warrants.

              (e)              The Warrant Agent shall keep copies of this Agreement and any notices given or received pursuant to this Agreement available for inspection by the Holders during normal business hours at its office. The Company shall, at its sole expense, supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may reasonably request.

        4.3        Registration of Warrant Shares; Suspension of Exercise Period .

              (a)              The Company shall use its Commercially Reasonable Best Efforts to (i) file under the Securities Act, within two hundred seventy (270) days of the date hereof, the Registration Statement, (ii) cause such Registration Statement to be declared effective by the SEC within three hundred sixty six (366) days of the date hereof and (iii) keep such Registration Statement effective at all times during the Exercise Period, and will make such number of Qualifying Prospectuses available to Holders as they shall reasonably request. No shares of Common Stock shall be issued, and the right to exercise all Warrants shall be suspended, for all periods during which there is not an effective Registration Statement and/or there is not a Qualifying Prospectus available to Holders. The Company shall promptly notify the Warrant Agent of any such suspension, and the Warrant Agent shall have no duty, responsibility or liability in respect of any shares of Common Stock issued or delivered prior to its receipt of such notice. The Company shall promptly notify the Warrant Agent of the termination of any such suspension, and the Company shall cause the Warrant Agent to notify the Holders of the termination of such suspension promptly following notice to the Warrant Agent by the Company. Should the ability of the Holders to exercise the Warrants be suspended for more than an aggregate of sixty (60) days in any three hundred sixty five (365) day period pursuant to this Section 4.3(a), the Exercise Period shall be extended by the aggregate number of days in such suspension period(s) in excess of sixty (60) days. The Company represents and warrants that the issuance of the Warrants is exempt from registration pursuant to Section 3(a)(10) of the Securities Act.

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              (b)              Notwithstanding the foregoing, the Company shall have the right, exercisable by giving written notice of the exercise of such right to the Warrant Agent, at any time and from time to time, to suspend the Exercise Period or delay filing for a period not in excess of 60 calendar days during any consecutive three hundred sixty-five (365) day period beginning on the date on which such notice is given, or such shorter period of time as may be specified in such notice or in a subsequent notice delivered by the Company to such effect, if (i) the Company is, in its good faith judgment, in possession of Material Information, (ii) such Material Information would, in the judgment of the Company’s board of directors (after consultation with counsel), need to be disclosed so as to permit the Warrant Shares to be sold in compliance with law, and (iii) disclosure of such Material Information would, in the good faith judgment of the Company (after consultation with counsel), be adverse to its interests. Should the ability of the Holders to exercise the Warrants be suspended for more than an aggregate of sixty (60) days in any three hundred sixty five (365) day period pursuant to this Section 4.3(b), the Exercise Period shall be extended by the aggregate number of days in such suspension period(s) in excess of sixty (60) days.

        The Company will pay all documentary stamp and other like taxes, if any, attributable to the initial issuance and delivery of the Warrants and the initial issuance and delivery of the Warrant Shares upon the exercise of Warrants. However, the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer of the Warrants or involved in the issuance or delivery of any Warrant Shares in a name other than that of the Holder of the Warrants being exercised, and the Warrant Agent shall not register any such transfer or issue or deliver any Warrant Certificate(s) or Warrant Shares unless or until the persons requesting the registration or issuance shall have (i) paid to the Warrant Agent for the account of the Company the amount of such tax, if any, (ii) established to the reasonable satisfaction of the Company that such tax, if any, has been paid, or (iii) delivered to the Company an opinion of legal counsel that no such tax is due.

        In the event that any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company shall issue, and the Warrant Agent shall countersign and deliver, a replacement Warrant Certificate representing an equivalent right or interest. The Holder must submit evidence reasonably satisfactory to the Company and the Warrant Agent of such loss, theft or destruction of such Warrant Certificate and an indemnity or bond, if requested by the Company or the Warrant Agent, also reasonably satisfactory to them. An applicant for such a substitute Warrant Certificate shall also comply with such other reasonable procedures as the Company or the Warrant Agent may reasonably require. The Company and Warrant Agent may charge the Holder for their expenses in replacing a Warrant Certificate.

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        7.1        Reservation of Common Stock . The Company shall at all times keep reserved out of its authorized Common Stock, free of all preemptive rights, a number of shares of Common Stock sufficient to provide for the exercise of the rights of purchase represented by the outstanding Warrants. The transfer agent for the Common Stock and every subsequent or other transfer agent for any shares of the Company’s capital stock issuable upon the exercise of the Warrants (each, a “Transfer Agent”) will be and are hereby irrevocably authorized and directed at all times to reserve such number of authorized shares of Common Stock as shall be required for such purpose. The Company will keep a copy of this Agreement on file with each Transfer Agent. The Company will supply its Transfer Agent with duly executed stock certificates for such purposes and will itself provide or otherwise make available any cash which may be payable as provided in Section 9. The Company will furnish to its Transfer Agent a copy of all notices of adjustments, and certificates related thereto, transmitted to each Holder.