INDEPENDENT BANK CORP /MI/, S-2/A, 1996-11-08

INDEPENDENT BANK CORP /MI/
S-2/A, 1996-11-08
STATE COMMERCIAL BANKS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 8, 1996

REGISTRATION NO. 333-14507
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------

AMENDMENT NO. 1

FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------

<TABLE>
<S> <C>
INDEPENDENT BANK CORPORATION IBC CAPITAL FINANCE
(EXACT NAME OF REGISTRANT AS SPECIFIED IN (EXACT NAME OF CO-REGISTRANT AS SPECIFIED
ITS CHARTER) IN ITS CHARTER)
MICHIGAN DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
38-2032782 38-6681043
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>

230 WEST MAIN STREET
IONIA, MICHIGAN 48846
(616) 527-9450

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

------------------------------

WILLIAM R. KOHLS
230 WEST MAIN STREET
IONIA, MICHIGAN 48846
(616) 527-9450
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------------

COPIES TO:

<TABLE>
<S> <C>
MICHAEL G. WOOLDRIDGE JAMES L. NOUSS, JR.
VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP BRYAN CAVE LLP
333 BRIDGE STREET, N.W. 211 N. BROADWAY, SUITE 3600
GRAND RAPIDS, MICHIGAN 49504 ST. LOUIS, MISSOURI 63102-2750
(616) 336-6000 (314) 259-2000
</TABLE>

------------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [ ]

If the Registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES BEING REGISTERED REGISTERED(1) PER UNIT PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Preferred Securities of IBC Capital
Finance(1).............................. 690,000 $25.00 $17,250,000 $5,227.27(2)
Subordinated Debentures of Independent
Bank Corporation(3)..................... (3) -- -- --
Guarantee of Independent Bank Corporation
with respect to Preferred
Securities(4)........................... (4) -- -- --
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes 90,000 Preferred Securities which may be sold by IBC Capital
Finance to cover over-allotments.

(2) Registration fee was previously paid.

(3) The Subordinated Debentures will be purchased by IBC Capital Finance with
the proceeds of the sale of the Preferred Securities. Such securities may
later be distributed for no additional consideration to the holders of the
Preferred Securities of IBC Capital Finance upon its dissolution and the
distribution of its assets.

(4) This Registration Statement is deemed to cover the Subordinated Debentures
of Independent Bank Corporation, the rights of holders of Subordinated
Debentures of Independent Bank Corporation under the Indenture, and the
rights of holders of the Preferred Securities under the Trust Agreement, the
Guarantee, the Expense Agreement entered into by Independent Bank
Corporation and certain backup undertakings as described herein. No separate
consideration will be received for the Guarantee or such backup
undertakings.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

INDEPENDENT BANK CORPORATION

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
FORM S-2 NUMBER AND CAPTION LOCATION IN PROSPECTUS
------------------------------------------- -------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of the
Prospectus................................. Outside Front Cover
2. Inside Front and Outside Back Cover Pages
of Prospectus.............................. Inside Front Cover; Available Information;
Outside Back Cover
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............... Prospectus Summary; Consolidated Financial
Data; Risk Factors
4. Use of Proceeds............................ Prospectus Summary; Use of Proceeds
5. Determination of Offering Price............ Not Applicable
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Not Applicable
8. Plan of Distribution....................... Underwriting
9. Description of Securities to be
Registered................................. Prospectus Summary; Description of
Preferred Securities; Description of
Subordinated Debentures; Description of
Guarantee; Description of Capital Stock;
Book-Entry Issuance
10. Interests of Named Experts and Counsel..... Validity of Securities; Experts
11. Information with Respect to the Company.... Prospectus Summary; Recent Developments;
Capitalization; Selected Consolidated
Financial Data; Management's Discussion and
Analysis of Financial Condition and Results
of Operations; Business; Incorporation of
Certain Documents by Reference; Description
of Preferred Securities; Description of
Subordinated Debentures; Description of
Guarantee; Relationship Among the Preferred
Securities, the Subordinated Debentures and
the Guarantee; Description of Capital
Stock; Consolidated Financial Statements
12. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Not Applicable
</TABLE>

<PAGE> 3

SUBJECT TO COMPLETION, DATED NOVEMBER 8, 1996

PROSPECTUS

600,000 PREFERRED SECURITIES

IBC CAPITAL FINANCE

% CUMULATIVE TRUST PREFERRED SECURITIES

(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)

FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY

INDEPENDENT BANK LOGO

The % Cumulative Trust Preferred Securities ("Preferred Securities")
offered hereby represent beneficial interests in IBC Capital Finance, a trust
created under the laws of the State of Delaware ("IBC Capital"). Independent
Bank Corporation, a Michigan corporation ("Company") will be the owner of all
the beneficial interests represented by common securities of IBC Capital
("Common Securities"). State Street Bank and Trust Company is the Property
Trustee of IBC Capital. IBC Capital exists for the purpose of issuing the
Preferred Securities and investing the proceeds thereof in % Subordinated
Debentures ("Subordinated Debentures"), to be issued by the Company. The
Subordinated Debentures will mature on , 2026, which date may be (1)
shortened to a date not earlier than , 2001, or (2) extended to a
date not later than , 2045, in each case if certain conditions are
met (including, in the case of shortening the Stated Maturity (as defined
herein), the Company having received prior approval of the Board of Governors of
the Federal Reserve System ("Federal Reserve") to do so if then required under
applicable capital guidelines or policies of the Federal Reserve). The Preferred
Securities will have a preference under certain circumstances with respect to
cash distributions and amounts payable on liquidation, redemption or otherwise
over the Common Securities. See "Description of Preferred Securities --
Subordination of Common Securities."

(continued on next page)

------------------------

SEE "RISK FACTORS" COMMENCING ON PAGE 9 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.

------------------------
THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT ACCOUNTS
OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE BANK INSURANCE
FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER GOVERNMENT AGENCY.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

(1) IBC Capital and the Company have each agreed to indemnify the Underwriter
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."

(2) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debentures, the Company has
agreed to pay the Underwriter as compensation ("Underwriter's Compensation")
for its arranging the investment therein of such proceeds, $ per
Preferred Security, or $ in the aggregate, ($ if the over-allotment
option is exercised in full). See "Underwriting."

(3) Expenses of the offering are payable by the Company and are estimated to be
$340,000.

(4) IBC Capital has granted the Underwriter an option exercisable within thirty
(30) days from the date of this Prospectus to purchase up to 90,000
additional Preferred Securities on the same terms and conditions set forth
above to cover over-allotments, if any. If all such additional Preferred
Securities are purchased, the total Price to Public and Proceeds to IBC
Capital will be $17,250,000 and $ respectively. See "Underwriting."

------------------------

The Preferred Securities are offered by the Underwriter subject to receipt
and acceptance by it, prior sale and the Underwriter's right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Preferred Securities will be made in St.
Louis, Missouri on or about , 1996.

STIFEL, NICOLAUS & COMPANY
INCORPORATED

November , 1996

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
<PAGE> 4

(continued from previous page)

Holders of Preferred Securities will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on the last day of March, June, September and
December of each year, commencing March 31, 1997, at the annual rate of %
of the Liquidation Amount of $25 per Preferred Securities ("Distributions"). The
Company has the right to defer payment of interest on the Subordinated
Debentures at any time or from time to time for a period not to exceed 20
consecutive quarters with respect to each deferral period (each, an "Extension
Period"), provided that no Extension Period may extend beyond the Stated
Maturity of the Subordinated Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period subject to the requirements set forth herein. If
interest payments on the Subordinated Debentures are so deferred, Distributions
on the Preferred Securities will also be deferred, and the Company will not be
permitted, subject to certain exceptions described herein, to declare or pay any
cash distributions with respect to its capital stock or debt securities that
rank pari passu with or junior to the Subordinated Debentures. During an
Extension Period, interest on the Subordinated Debentures will continue to
accrue (and the amount of Distributions to which holders of the Preferred
Securities are entitled will accumulate) at the rate of % per annum,
compounded quarterly, and holders of the Preferred Securities will be required
to accrue interest income for United States federal income tax purposes. See
"Description of Subordinated Debentures -- Option to Extend Interest Payment
Period," and "Certain Federal Income Tax Consequences -- Potential Extension of
Interest Payment Period and Original Issue Discount."

The Company has, through the Guarantee, Trust Agreement, Subordinated
Debentures, Indenture and the Expense Agreement (each as defined herein), taken
together, fully, irrevocably and unconditionally guaranteed all of IBC Capital's
obligations under the Preferred Securities. See "Relationship Among the
Preferred Securities, the Subordinated Debentures and the Guarantee -- Full and
Unconditional Guarantee." The Guarantee of the Company guarantees the payment of
Distributions and payments on liquidation or redemption of the Preferred
Securities, but only in each case to the extent of funds held by IBC Capital, as
described herein. See "Description of Guarantee." If the Company does not make
interest payments on the Subordinated Debentures held by IBC Capital, IBC
Capital will have insufficient funds to pay Distributions on the Preferred
Securities. The Guarantee does not cover payments of Distributions when IBC
Capital does not have sufficient funds to pay such Distributions. The
obligations of the Company under the Guarantee and the Preferred Securities are
subordinate and junior in right of payment to all Senior Debt, Subordinated Debt
and, under certain circumstances, Additional Senior Obligations (each as defined
in "Description of Subordinated Debentures -- Subordination") of the Company.

The Preferred Securities are subject to mandatory redemption, in whole or
in part, upon repayment of the Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if then required, the
Subordinated Debentures are redeemable prior to maturity at the option of the
Company (1) on or after , 2001, in whole at any time or in part from
time to time, or (2) at any time, in whole (but not in part), upon the
occurrence and during the continuance of a Tax Event or an Investment Company
Event (as defined herein), in each case at a redemption price equal to the
accrued and unpaid interest on the Subordinated Debentures so redeemed to the
date fixed for redemption, plus 100% of the principal amount thereof. See
"Description of Preferred Securities -- Redemption or Exchange."

The Company will have the right at any time to terminate the Preferred
Securities and cause the Subordinated Debentures to be distributed to holders of
Preferred Securities in liquidation of IBC Capital, subject to the Company
having received prior approval of the Federal Reserve to do so if then required
under applicable capital guidelines or policies of the Federal Reserve. See
"Description of Preferred Securities -- Redemption or Exchange." The
Subordinated Debentures are unsecured and subordinated to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations.

In the event of the termination of IBC Capital, after satisfaction of
liabilities to creditors of IBC Capital as required by applicable law, the
holders of Preferred Securities will be entitled to receive a Liquidation Amount
of $25 per Preferred Security, plus accumulated and unpaid Distributions thereon
to the date of payment, which may be in the form of a distribution of such
amount of a Subordinated Debenture, subject to certain exceptions. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination."

The Preferred Securities have been approved for quotation on the Nasdaq
National Market under the symbol "IBCPP."

<PAGE> 5

map

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.

3
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and notes thereto appearing
elsewhere in this Prospectus or incorporated by reference herein. Unless
otherwise indicated, all information in this Prospectus is based on the
assumption that the Underwriter will not exercise its over-allotment option.

THE COMPANY

The Company is a bank holding company with four wholly owned subsidiary
banks (the "Banks") engaged in the business of retail and commercial banking in
portions of Michigan's lower peninsula. Collectively, the Banks serve over 45
communities, which are principally rural and suburban in nature, through their
four main offices and a total of 45 branches and five loan production offices.

Over the past five years, the Company has experienced significant growth in
its assets while at the same time retaining a net interest margin that has
exceeded 5% of average earning assets. During this time period, the Company's
average return on equity exceeded 15%. Since December 31, 1990, total assets
have increased by 119% to $793.2 million at September 30, 1996. Earnings per
share have grown by a compound annual rate of 14.6% to $2.38 for the year ended
December 31, 1995, from $1.38 in 1991.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- --------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Assets....................... $793,152 $574,988 $590,147 $516,211 $482,027 $403,125 $406,469
Net income................... 5,819 4,987 6,810 6,031 5,606 5,109 4,018
Net income per share......... 2.02 1.74 2.38 2.09 1.95 1.78 1.38
Return on equity............. 15.78% 15.60% 15.59% 15.22% 15.21% 15.88% 13.56%
Net interest margin.......... 5.45 5.69 5.65 5.88 5.85 5.88 5.20
</TABLE>

THE COMPANY'S APPROACH TO COMMUNITY BANKING

The Company attributes its past success to the consistent application of
community banking practices in predominantly rural and suburban markets. The
Company's operating philosophy seeks to preserve those elements of traditional
community banking which management believes create a competitive advantage in
the markets in which it operates. Accordingly, the Banks emphasize personal
service and customer recognition, prompt response to customer needs,
convenience, continuity of personnel and management, and commitment to and
participation in the community.

DECENTRALIZED MANAGEMENT. The Company vests management of the Banks with
the authority to make local pricing and credit decisions to better anticipate
customer needs, respond to customer demands, and identify profitable
opportunities within their respective markets. While management of each of the
Banks is granted the authority to make decisions for its local operations, it is
also held accountable for its performance.

CORPORATE ADMINISTRATIVE AND SUPPORT SERVICES. To complement the Company's
decentralized management structure and preserve its community banking practices
within an expanding franchise, the Company's corporate service departments
provide a variety of services to each of the Banks. The Company believes that
this partnership between the Banks' management and Company personnel allows the
management of each of the Banks to focus on sales and customer service while
providing the Company with internal controls, and the ability to provide
consistent service quality and attain operating efficiencies.

4
<PAGE> 7

BUSINESS STRATEGY

The ability to profitably deploy the capital generated by the Company's
results of operations or otherwise maintain financial leverage is critical to
the Company's mission to create value for its shareholders. Much of the
Company's recent growth has resulted from acquisitions. The Company will
continue to consider opportunities for expansion through selective acquisitions
in markets where management believes its community banking approach creates a
competitive advantage. As part of this strategy, the Company has agreed to
acquire eight branch facilities from First of America Bank -- Michigan, National
Association, including approximately $121.5 million in deposits and $21.5
million in loans. See "Recent Developments."

In the absence of suitable acquisition candidates, the Company will
continue to rely upon the Banks' ability to profitably fund loan growth with
nondeposit funding sources, including advances from the Federal Home Loan Bank,
as well as traditional deposit based funding sources. The cost of such
nondeposit funds is a principal consideration in the Banks' loan and deposit
pricing strategies.

The Company intends to continue to focus on the management of its capital
resources. The Company's dividend policies and share repurchase plan have been
integral components of management's efforts to maintain profitable financial
leverage.

IBC CAPITAL FINANCE

IBC Capital Finance ("IBC Capital") is a statutory business trust formed
under Delaware law pursuant to (i) the Trust Agreement executed by the Company,
as Depositor, State Street Bank and Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, and the Administrative Trustees
named therein ("Trust Agreement"), and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on November 7, 1996. IBC Capital's business
and affairs are conducted by its Property Trustee, Delaware Trustee, and three
individual Administrative Trustees who are employees or officers of or
affiliated with the Company. IBC Capital exists for the exclusive purposes of
(i) issuing and selling the Preferred Securities and Common Securities, (ii)
using the proceeds from the sale of Preferred Securities and Common Securities
to acquire Subordinated Debentures issued by the Company and (iii) engaging in
only those other activities necessary, advisable or incidental thereto (such as
registering the transfer of the Preferred Securities). Accordingly, the
Subordinated Debentures will be the sole assets of IBC Capital, and payments
under the Subordinated Debentures will be the sole revenue of IBC Capital. All
of the Common Securities will be owned by the Company. The Common Securities
will rank pari passu, and payments will be made thereon pro rata, with the
Preferred Securities, except that upon the occurrence and during the continuance
of an event of default under the Trust Agreement resulting from an Event of
Default under the Indenture, the rights of the Company as holder of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
Preferred Securities. See "Description of Preferred Securities -- Subordination
of Common Securities." The Company will acquire Common Securities in an
aggregate liquidation amount equal to 3% of the total capital of IBC Capital.
IBC Capital has a term of 55 years, but may terminate earlier as provided in the
Trust Agreement. The principal executive office of IBC Capital is 230 West Main
Street, Ionia, Michigan 48846, Attention: Secretary, and its telephone number is
(616) 527-9450.

5
<PAGE> 8

PREFERRED SECURITIES OFFERING

Securities Offered............ 600,000 Preferred Securities. The Preferred
Securities represent undivided beneficial
interests in IBC Capital's assets, which will
consist solely of the Subordinated Debentures
and payments thereunder. IBC Capital has
granted the Underwriter an option, exercisable
within 30 days after the date of this
Prospectus, to purchase up to an additional
90,000 Preferred Securities at the initial
offering price, solely to cover
over-allotments, if any.

Distributions................. The distributions payable on each Preferred
Security will be fixed at a rate per annum of
% of the Liquidation Amount of $25 per
Preferred Security, will be cumulative, will
accrue from , 1996, the date of
issuance of the Preferred Securities, and will
be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each
year, commencing March 31, 1997. See
"Description of Preferred
Securities -- Distributions."

Option to Extend Interest
Payment Period................ The Company has the right, at any time, to
defer payments of interest on the Subordinated
Debentures for a period not exceeding 20
consecutive quarters; provided, that no
Extension Period may extend beyond the Stated
Maturity of the Subordinated Debentures. As a
consequence of the Company's extension of the
interest payment period, quarterly
Distributions on the Preferred Securities would
be deferred (though such Distributions would
continue to accrue with interest thereon
compounded quarterly, since interest would
continue to accrue and compound on the
Subordinated Debentures) during any such
Extension Period. During an Extension Period,
the Company will be prohibited, subject to
certain exceptions described herein, from
declaring or paying any cash distributions with
respect to its capital stock or debt securities
that rank pari passu with or junior to the
Subordinated Debentures. Upon the termination
of any Extension Period and the payment of all
amounts then due, the Company may commence a
new Extension Period, subject to the foregoing
requirements. See "Description of Subordinated
Debentures -- Option to Extend Interest Payment
Period."

Should an Extension Period occur, Preferred
Security holders will continue to recognize
interest income for United States federal
income tax purposes. See "Certain Federal
Income Tax Consequences -- Potential Extension
of Interest Payment Period and Original Issue
Discount."

Redemption.................... The Preferred Securities may be redeemed, in
whole or in part, upon repayment of the
Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve
approval, if then required under applicable
capital guidelines or policies of the Federal
Reserve, the Subordinated Debentures are
redeemable prior to maturity at the option of
the Company (1) on or after , 2001,
in whole at any time or in part from time to
time, or (2) at any time, in whole (but not in
part), upon the occurrence and during the
continuance of a Tax Event or an Investment
Company Event, in each case at the redemption
price equal to

6
<PAGE> 9

100% of the principal amount of the
Subordinated Debenture, together with any
accrued but unpaid interest to the date fixed
for redemption. See "Description of
Subordinated Debentures -- Redemption or
Exchange."

Distribution of Subordinated
Debentures.................. The Company has the right at any time to
terminate the Preferred Securities and cause
the Subordinated Debentures to be distributed
to holders of Preferred Securities in
liquidation of IBC Capital, subject to the
Company having received prior approval of the
Federal Reserve to do so if then required under
applicable capital guidelines or policies of
the Federal Reserve. See "Description of
Preferred Securities -- Redemption or
Exchange."

Guarantee..................... Under the terms of its Guarantee, the Company
has guaranteed the payment of Distributions and
payments on liquidation or redemption of the
Preferred Securities, but only in each case to
the extent of funds held by IBC Capital, as
described herein. The Company has, through the
Guarantee, Trust Agreement, Subordinated
Debentures, Indenture and Expense Agreement,
taken together, fully, irrevocably and
unconditionally guaranteed all of IBC Capital's
obligations under the Preferred Securities. The
obligations of the Company under the Guarantee
and the Preferred Securities are subordinate
and junior in right of payment to all Senior
Debt and Subordinated Debt and, under certain
circumstances, Additional Senior Obligations.
See "Description of Guarantee."

Voting Rights................. Generally, the holders of the Preferred
Securities will not have any voting rights. See
"Description of Preferred Securities -- Voting
Rights; Amendment of Trust Agreement."

Use of Proceeds............... The proceeds from the sale of the Preferred
Securities offered hereby will be used by IBC
Capital to purchase the Subordinated Debentures
issued by the Company. The net proceeds to the
Company from the sale of the Subordinated
Debentures will be used to increase its capital
to support recent and pending acquisitions and
for other general corporate purposes. See
"Recent Developments" and "Use of Proceeds."

Nasdaq National Market
Symbol........................ IBCPP

7
<PAGE> 10

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- -------------------------------------------------------------
1996 1995 1995 1994 1993(1) 1992(1) 1991(1)
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF OPERATIONS
Interest income......................... $ 42,598 $ 33,534 $ 45,982 $ 37,820 $ 34,370 $ 36,465 $ 39,175
Interest expense........................ 17,548 12,881 17,900 12,585 12,305 15,150 20,538
------- ------- ------- ------- ------- ------- -------
Net interest income................... 25,050 20,653 28,082 25,235 22,065 21,315 18,637
Provision for loan losses............... 942 477 636 473 657 1,225 1,013
------- ------- ------- ------- ------- ------- -------
Net interest income after provision for
loan losses........................... 24,108 20,176 27,446 24,762 21,408 20,090 17,624
Net gains on sale of securities and real
estate mortgage loans................. 1,121 295 608 75 1,358 324 48
Other noninterest income................ 2,860 2,361 3,158 3,026 2,540 2,418 2,373
Noninterest expense..................... 19,804 15,897 21,702 19,503 17,535 15,703 14,323
------- ------- ------- ------- ------- ------- -------
Income before federal income tax
expense and extraordinary item...... 8,285 6,935 9,510 8,360 7,771 7,129 5,722
Federal income tax expense.............. 2,466 1,948 2,700 2,329 2,165 2,020 1,619
------- ------- ------- ------- ------- ------- -------
Income before extraordinary item...... 5,819 4,987 6,810 6,031 5,606 5,109 4,103
Extraordinary item(2)................... 0 0 0 0 0 0 85
------- ------- ------- ------- ------- ------- -------
Net income........................ $ 5,819 $ 4,987 $ 6,810 $ 6,031 $ 5,606 $ 5,109 $ 4,018
======= ======= ======= ======= ======= ======= =======
PER SHARE DATA(3)
Net income
Primary............................... $ 2.02 $ 1.74 $ 2.38 $ 2.09 $ 1.95 $ 1.78 $ 1.52
Fully diluted......................... 2.02 1.74 2.38 2.09 1.95 1.78 1.38
Cash dividends declared................. 0.74 0.66 0.89 0.72 0.50 0.44 0.39
Book value(4)........................... 17.73 15.81 16.56 14.12 13.57 12.08 10.72
Dividend payment ratio(5)............... 36.52% 37.32% 36.80% 34.62% 25.54% 24.13% 26.53%
Weighted average shares outstanding..... 2,878,174 2,859,794 2,861,898 2,890,368 2,878,386 2,865,902 2,980,657
SELECTED BALANCES(4)
Assets.................................. $793,152 $574,988 $590,147 $516,211 $482,027 $403,125 $406,469
Securities(6)........................... 149,361 116,307 115,459 130,477 136,147 99,798 93,008
Loans and loans held for sale........... 575,807 417,059 434,091 342,658 288,643 261,634 275,144
Allowance for loan losses............... 6,720 5,249 5,243 5,054 5,053 4,023 3,784
Deposits................................ 541,781 408,526 411,624 409,471 423,620 358,874 364,431
Shareholders' equity.................... 50,733 44,906 47,025 40,311 39,049 34,467 30,327
Long-term debt.......................... 7,500 0 0 0 2,750 0 1,287
PERFORMANCE RATIOS(7)
Net interest margin..................... 5.45% 5.69% 5.65% 5.88% 5.85% 5.88% 5.20%
Net income to
Average common equity(8).............. 15.78 15.60 15.59 15.22 15.21 15.88 13.56
Average assets........................ 1.16 1.26 1.25 1.25 1.33 1.26 1.00
Efficiency ratio(9)..................... 66.39 66.24 66.22 66.55 65.27 63.06 65.80
ASSET QUALITY RATIOS(10)
Allowance for loan losses to loans(4)... 1.19% 1.27% 1.25% 1.50% 1.79% 1.58% 1.38%
Nonperforming loans to loans(4)......... 0.61 0.78 0.61 0.84 1.14 1.24 1.74
Allowance for loan losses to
nonperforming loans(4)................ 194.73 164.08 204.80 178.33 157.27 126.75 78.90
Nonperforming assets to total
loans(4).............................. 0.78 0.99 0.79 1.25 2.08 1.99 2.17
Net loan losses to average loans(7)..... 0.11 0.10 0.12 0.16 0.15 0.37 0.30
CAPITAL RATIOS
Average shareholders' equity to average
assets................................ 7.32% 8.04% 8.04% 8.22% 8.72% 7.94% 6.82%
Tier 1 risk-based capital ratio(4)...... 8.18 11.22 11.49 11.90 13.86 14.03 11.90
Total risk-based capital ratio(4)....... 9.44 12.48 12.75 13.03 15.13 15.29 12.56
Leverage ratio(4)....................... 5.23 7.42 7.58 7.40 7.61 8.05 6.88
RATIO OF EARNINGS TO FIXED CHARGES(11)
Including interest on deposits.......... 1.47x 1.54x 1.53x 1.66x 1.63x 1.47x 1.28x
Excluding interest on deposits.......... 2.39 2.88 2.75 6.60 28.95 25.25 10.23
</TABLE>

- -------------------------
(1) Restated to reflect an acquisition accounted for as a pooling of interests.
See Note 2 to the Company's Consolidated Financial Statements.
(2) The cost, net of related taxes, associated with the early retirement of
debt in 1991 is reported as an extraordinary item.
(3) Per share data has been adjusted to give retroactive effect to 5% stock
dividends in 1996 and 1995.
(4) At period end.
(5) For 1991, Common Stock cash dividends as a percentage of net income
adjusted for preferred stock dividends.
(6) Includes securities available for sale.
(7) Ratios for the nine-month periods are annualized.

(8) For 1991, net income to average common equity has been computed by dividing
net income, after deducting dividends on preferred stock then outstanding,
by average common equity.

(9) Efficiency ratio equals noninterest expense divided by the sum of tax
equivalent net interest income, net gains on the sale of securities and
loans and other noninterest income.
(10) Loans exclude loans held for sale.
(11) Earnings consist of income before federal income tax plus interest expense.
Fixed charges consist of interest expense. The Company does not currently
have any preferred stock outstanding.

8
<PAGE> 11

RISK FACTORS

Prospective investors should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors in evaluating the Company and its business and IBC
Capital before purchasing the Preferred Securities offered hereby. In
particular, prospective investors should note that this Prospectus contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and that actual results could differ materially
from those contemplated by such statements. The considerations listed below
represent certain important factors the Company believes could cause such
results to differ. These considerations are not intended to represent a complete
list of the general or specific risks that may affect the Company and IBC
Capital. It should be recognized that other risks may be significant, presently
or in the future, and the risks set forth below may affect the Company and IBC
Capital to a greater extent than indicated.

RISK FACTORS RELATING TO THE PREFERRED SECURITIES

RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES

The obligations of the Company under the Guarantee issued by the Company
for the benefit of the holders of Preferred Securities and under the
Subordinated Debentures are unsecured and rank subordinate and junior in right
of payment to all Senior Debt and Subordinated Debt of the Company and, in
certain circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Company, to all Additional Senior Obligations of the
Company. At September 30, 1996, the aggregate outstanding Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company was
approximately $750 million. Because the Company is a holding company, the right
of the Company to participate in any distribution of assets of any of the Banks
upon such Bank's liquidation or reorganization or otherwise (and thus the
ability of holders of the Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that Bank, except
to the extent that the Company may itself be recognized as a creditor of that
Bank. Accordingly, the Subordinated Debentures will be effectively subordinated
to all existing and future liabilities of the Banks, and holders of Subordinated
Debentures and Preferred Securities should look only to the assets of the
Company for payments on the Subordinated Debentures. Neither the Indenture, the
Guarantee nor the Trust Agreement places any limitation on the amount of secured
or unsecured debt, including Senior Debt, Subordinated Debt and Additional
Senior Obligations, that may be incurred by the Company. See "Description of
Guarantee -- Status of the Guarantee" and "Description of Subordinated
Debentures -- Subordination."

The ability of IBC Capital to pay amounts due on the Preferred Securities
is solely dependent upon the Company making payments on the Subordinated
Debentures as and when required.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES

So long as no Event of Default under the Indenture has occurred or is
continuing, the Company has the right under the Indenture to defer the payment
of interest on the Subordinated Debentures at any time or from time to time for
a period not exceeding 20 consecutive quarters with respect to each Extension
Period, provided that no Extension Period may extend beyond the Stated Maturity
of the Subordinated Debentures. As a consequence of any such deferral, quarterly
Distributions on the Preferred Securities by IBC Capital will be deferred (and
the amount of Distributions to which holders of the Preferred Securities are
entitled will accumulate additional Distributions thereon at the rate of %
per annum, compounded quarterly from the relevant payment date for such
Distributions) during any such Extension Period. During any such Extension
Period, the Company may not, and may not permit any subsidiary of the Company to
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in interest to the Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks pari
passu with or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in Common

9
<PAGE> 12

Stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee and (d) purchases of Common Stock related to
the rights under any of the Company's benefit plans for its directors, officers
or employees). Prior to the termination of any such Extension Period, the
Company may further defer the payment of interest, provided that no Extension
Period may exceed 20 consecutive quarters or extend beyond the Stated Maturity
of the Subordinated Debentures. Upon the termination of any Extension Period and
the payment of all interest then accrued and unpaid (together with interest
thereon at the annual rate of % compounded quarterly, to the extent permitted
by applicable law), the Company may elect to begin a new Extension Period
subject to the above requirements. There is no limitation on the number of times
that the Company may elect to begin an Extension Period. See "Description of
Preferred Securities -- General" and "Description of Subordinated Debentures --
Option to Extend Interest Payment Period."

Should an Extension Period occur, a holder of Preferred Securities will be
required to accrue and recognize income (in the form of original issue discount)
in respect of its pro rata share of the interest accruing on the Subordinated
Debentures held by IBC Capital for United States federal income tax purposes. As
a result, a holder of Preferred Securities will include such income in gross
income for United States federal income tax purposes in advance of the receipt
of cash, and will not receive the cash related to such income from IBC Capital
if the holder disposes of the Preferred Securities prior to the record date for
the payment of the related Distributions. See "Certain Federal Income Tax
Consequences -- Potential Extension of Interest Payment Period and Original
Issue Discount."

The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A holder that disposes of its Preferred Securities during
an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer interest
payments, the market price of the Preferred Securities may be more volatile than
the market prices of other securities on which original issue discount accrues
that are not subject to such optional deferrals.

TAX EVENT OR INVESTMENT COMPANY EVENT -- REDEMPTION

Upon the occurrence and during the continuance of a Tax Event or Investment
Company Event (whether occurring before or after , 2001) the Company
has the right to redeem the Subordinated Debentures in whole (but not in part)
within 90 days following the occurrence of such Tax Event or Investment Company
Event and therefore cause a mandatory redemption of the Preferred Securities.
The exercise of such right is subject to the Company having received prior
approval of the Federal Reserve to do so if then required under applicable
guidelines or policies of the Federal Reserve.

A "Tax Event" means the receipt by IBC Capital of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) IBC Capital is, or will be within 90 days of the
date of such opinion, subject to United States federal income tax with respect
to income received or accrued on the Subordinated Debentures, (ii) interest
payable by the Company on the Subordinated Debentures is not, or within 90 days
of such opinion, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes, or (iii) IBC Capital is, or will
be within 90 days of the date of the opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.

An "Investment Company Event" means the receipt by IBC Capital of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in

10
<PAGE> 13

interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, IBC Capital is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act, which change becomes effective on or after the date of
original issuance of the Preferred Securities.

See "Risk Factors -- Possible Tax Law Changes Affecting the Preferred
Securities" for a discussion of certain legislative proposals that, if adopted,
could give rise to a Tax Event, which may permit the Company to cause a
redemption of the Preferred Securities prior to , 2001.

EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES

The Company will have the right at any time to terminate IBC Capital and
cause the Subordinated Debentures to be distributed to the holders of the
Preferred Securities in liquidation of IBC Capital. The exercise of such right
is subject to the Company having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve. See "Description of Preferred Securities -- Redemption or Exchange."

SHORTENING OF STATED MATURITY OF SUBORDINATED DEBENTURES

The Company will have the right at any time to shorten the maturity of the
Subordinated Debentures to a date not earlier than , 2001. The
exercise of such right is subject to the Company having received prior approval
of the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.

EXTENSION OF STATED MATURITY OF SUBORDINATED DEBENTURES

The Company will also have the right to extend the maturity of the
Subordinated Debentures whether or not IBC Capital is terminated and the
Subordinated Debentures are distributed to holders of the Preferred Securities
to a date no later than the 49th anniversary of the initial issuance of the
Preferred Securities, provided that the Company can extend the maturity only if
at the time such election is made and at the time of such extension (i) the
Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii) the
Company is not in default in the payment of any interest or principal on the
Subordinated Debentures, and (iii) IBC Capital is not in arrears on payments of
Distributions on the Preferred Securities and no deferred Distributions are
accumulated.

RIGHTS UNDER THE GUARANTEE

The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). State Street Bank and Trust
Company ("State Street") will act as the indenture trustee under the Guarantee
(the "Guarantee Trustee") for the purposes of compliance with the Trust
Indenture Act and will hold the Guarantee for the benefit of the holders of the
Preferred Securities. State Street will also act as Debenture Trustee for the
Subordinated Debentures and as Property Trustee; Wilmington Trust Company will
act as Delaware Trustee under the Trust Agreement. The Guarantee guarantees to
the holders of the Preferred Securities the following payments, to the extent
not paid by IBC Capital: (i) any accumulated and unpaid Distributions required
to be paid on the Preferred Securities, to the extent that IBC Capital has funds
on hand available therefor at such time, (ii) the redemption price with respect
to any Preferred Securities called for redemption, to the extent that IBC
Capital has funds on hand available therefor at such time, and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of IBC Capital
(unless the Subordinated Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment to the extent that
IBC Capital has funds on hand available therefor at such time and (b) the amount
of assets of IBC Capital remaining available for distribution to holders of the
Preferred Securities. The holders of not less than a majority in aggregate
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee

11
<PAGE> 14

Trustee in respect of the Guarantee or to direct the exercise of any trust power
conferred upon the Guarantee Trustee under the Guarantee. Any holder of the
Preferred Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee without first instituting a
legal proceeding against IBC Capital, the Guarantee Trustee or any other person
or entity. If the Company were to default on its obligation to pay amounts
payable under the Subordinated Debentures, IBC Capital would lack funds for the
payment of Distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of Preferred Securities
would not be able to rely upon the Guarantee for such amounts. Instead, in the
event a Debenture Event of Default shall have occurred and be continuing and
such event is attributable to the failure of the Company to pay interest on or
principal of the Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Preferred Securities may institute
a legal proceeding directly against the Company for enforcement of payment to
such holder of the principal of or interest on such Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities of such holder (a "Direct Action"). In connection with such
Direct Action, the Company will have a right of set-off under the Indenture to
the extent of any payment made by the Company to such holder of Preferred
Securities in the Direct Action. Except as described herein, holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures or assert directly any
other rights in respect of the Subordinated Debentures. See "Description of
Subordinated Debentures -- Enforcement of Certain Rights by Holders of Preferred
Securities" and "-- Debenture Events of Default" and "Description of Guarantee."
The Trust Agreement provides that each holder of Preferred Securities by
acceptance thereof agrees to the provisions of the Guarantee and the Indenture.

LIMITED VOTING RIGHTS

Holders of Preferred Securities will generally have limited voting rights
relating only to the modification of the Preferred Securities and the exercise
of IBC Capital's rights as holder of Subordinated Debentures and the Guarantee.
Holders of Preferred Securities will not be entitled to vote to appoint, remove
or replace the Property Trustee or the Delaware Trustee, and such voting rights
are vested exclusively in the holder of the Common Securities except upon the
occurrence of certain events described herein. The Property Trustee, the
Administrative Trustees and the Company may amend the Trust Agreement without
the consent of holders of Preferred Securities to ensure that IBC Capital will
be classified for United States federal income tax purposes as a grantor trust
even if such action adversely affects the interests of such holders. See
"Description of Preferred Securities -- Voting Rights; Amendment of Trust
Agreement" and "-- Removal of IBC Capital Trustees."

POSSIBLE TAX LAW CHANGES AFFECTING THE PREFERRED SECURITIES

On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released which would, among other things, generally deny interest deductions for
interest on an instrument issued by a company that has a maximum weighted
average maturity of more than 40 years. The Bill would also generally deny
interest deductions for interest on an instrument, issued by a company, that has
a maximum term of more than 20 years and that is not shown as indebtedness on
the separate balance sheet of the issuer or, where the instrument is issued to a
related party (other than a corporation), where the holder or some other related
party issues a related instrument that is not shown as indebtedness on the
issuer's consolidated balance sheet. If either provision were to apply to the
Subordinated Debentures, the Company would be unable to deduct interest on the
Subordinated Debentures. However, on March 29, 1996, the Chairmen of the Senate
Finance and House Ways and Means Committees issued a joint statement to the
effect that it was their intention that the effective date of the President's
legislative proposals, if adopted, will be no earlier than the date of
appropriate Congressional action. Under current law, the Company will be able to
deduct interest on the Subordinated Debentures. There can be no assurance,
however, that current or future legislative proposals or final legislation will
not affect the ability of the Company to deduct interest on the Subordinated
Debentures. Such a change could give rise to a Tax Event, which may permit the
Company, upon approval of the Federal Reserve if then required under applicable
capital guidelines or policies of the Federal Reserve, to cause a redemption of
the Preferred Securities before, as well as after , 2001. See
"Description of

12
<PAGE> 15

Subordinated Debentures -- Redemption" and "Description of Preferred
Securities--Redemption or Exchange -- Tax Event Redemption." See also "Certain
Federal Income Tax Consequences -- Effect of Proposed Changes in Tax Laws."

RISK FACTORS RELATING TO THE COMPANY

NO ASSURANCE OF SUCCESSFUL INTEGRATION OF BRANCHES

Based on September 30, 1996 financial information, the acquisition of the
eight branches from First of America Bank -- Michigan, National Association
("FOA Branches") by Independent Bank East Michigan ("IBEM"), a subsidiary of the
Company, would increase the assets of IBEM by approximately 107% to $239.4
million. See "Recent Developments." Although the Company has successfully
integrated other acquired banks and branch facilities into its operations in the
recent past without adversely affecting the profitability of such operations,
IBEM's ability to integrate the FOA Branches into its current operations without
adversely affecting the level of profitability of IBEM or the Company as a whole
cannot be assured.

IMPACT OF INTEREST RATE CHANGES

The Company's results of operations are derived from the operations of the
Banks and are principally dependent on net interest income, calculated as the
difference between interest earned on loans and investments and the interest
expense paid on deposits and other borrowings. Like other banks and financial
institutions, the Company's interest income and interest expense are affected by
general economic conditions and by the policies of regulatory authorities,
including the monetary policies of the Federal Reserve. While management has
taken measures intended to manage the risks of operating in a changing interest
rate environment, there can be no assurance that such measures will be effective
in avoiding undue interest rate risk. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Asset/Liability Management."

CREDIT RISKS

As a financial institution, the Company is exposed to the risk that
customers to whom the Banks have made loans will be unable to repay those loans
according to their terms and that collateral securing such loans (if any) may
not be sufficient in value to assure repayment. Credit losses could have a
material adverse effect on the Company's operating results.

REGULATORY RISK

The banking industry is heavily regulated. These regulations are primarily
intended to protect depositors and the Federal Deposit Insurance Corporation
("FDIC"), not shareholders or other creditors. Regulations affecting the
financial institutions industry are undergoing continuous change, and the
ultimate effect of such changes cannot be predicted. Regulations and laws
affecting the Company and the Banks may be modified at any time, and new
legislation affecting financial institutions may be proposed and enacted. There
is no assurance that such modifications or new laws will not materially and
adversely affect the business, condition or operations of the Company and the
Banks. See "Supervision and Regulation."

COMPETITION

The banking business is highly competitive. The Banks compete with other
commercial banks, savings and loan associations, credit unions, mortgage banking
companies, securities brokerage companies, insurance companies, and money market
mutual funds. Many of these competitors have substantially greater resources
than the Company and the Banks and offer certain services that the Company and
the Banks do not currently provide. Such competitors may also have greater
lending limits than the Banks. The number of competitors may increase as a
result of the easing of restrictions on interstate banking effected under the
Riegle-Neal Interstate Banking and Efficiency Act of 1994. In addition, non-bank
competitors are generally not subject to the extensive regulations applicable to
the Company and the Banks. See "Supervision and Regulation."

13
<PAGE> 16

MARKET PRICES

There can be no assurance as to the market prices for Preferred Securities
or Subordinated Debentures that may be distributed in exchange for Preferred
Securities if a liquidation of IBC Capital occurs. Accordingly, the Preferred
Securities that an investor may purchase, whether pursuant to the offer made
hereby or in the secondary market, or the Subordinated Debentures that a holder
of Preferred Securities may receive on liquidation of IBC Capital, may trade at
a discount to the price that the investor paid to purchase the Preferred
Securities offered hereby. In addition, there can be no assurance that the
Company will not exercise its option to change the maturity of the Subordinated
Debentures as permitted by the terms thereof and of the Indenture. Because
holders of Preferred Securities may receive Subordinated Debentures on
liquidation of IBC Capital, prospective purchasers of Preferred Securities are
also making an investment decision with regard to the Subordinated Debentures
and should carefully review all the information regarding the Subordinated
Debentures contained herein. See "Description of Subordinated Debentures."

TRADING CHARACTERISTICS OF PREFERRED SECURITIES

The Preferred Securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying Subordinated
Debentures. A holder of Preferred Securities that disposes of its Preferred
Securities between record dates for payments of Distributions (and consequently
does not receive a Distribution from IBC Capital for the period prior to such
disposition) will nevertheless be required to include accrued but unpaid
interest on the Subordinated Debentures through the date of disposition in
income as ordinary income and to add such amount to its adjusted tax basis in
the Preferred Securities disposed of. Such holder will recognize a capital loss
to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than its adjusted tax basis (which will
include accrued but unpaid interest). Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes. See "Certain Federal Income Tax Consequences."

LACK OF MARKET FOR THE PREFERRED SECURITIES

There is no current market for the Preferred Securities. Although the
Preferred Securities have been approved for quotation on the Nasdaq National
Market, there can be no assurance that an active public market will develop or
be maintained for the Preferred Securities. Stifel, Nicolaus & Company,
Incorporated has informed the Company that it presently intends to make a market
in the Preferred Securities, but no assurance can be given as to the liquidity
of the Preferred Securities in the market. See "Market for the Preferred
Securities" and "Underwriting."

EXPOSURE TO LOCAL ECONOMIC CONDITIONS

The success of the Company and the Banks is dependent to a certain extent
upon the general economic conditions of the state of Michigan and the geographic
markets served by the Banks. No assurance can be given that favorable economic
conditions will continue to exist in such markets.

PREFERRED SECURITIES ARE NOT INSURED

The Preferred Securities are not insured by the Bank Insurance Fund ("BIF")
or the Savings Association Insurance Fund ("SAIF") of the FDIC or by any other
governmental agency.

14
<PAGE> 17

RECENT DEVELOPMENTS

The discussion of recent developments contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those projected in such
forward-looking statements as a result of, among other things, the factors set
forth in the section entitled "Risk Factors."

Effective September 18, 1996, Independent Bank East Michigan ("IBEM"), a
subsidiary of the Company, agreed to acquire eight branch banking facilities
from First of America Bank -- Michigan, National Association ("FOA Branches").
The FOA Branches are located in the thumb region of eastern Michigan, in the
counties of Huron and Tuscola. Two of the FOA Branches are located in the City
of Bad Axe and one each in the townships or communities of Caseville, Elkton,
Kinde, Ubly, Sebewaing, and Gagetown. As of September 30, 1996, the FOA Branches
had approximately $121.5 million of deposits and $21.5 million of loans. The
acquisition, which is subject to regulatory approval, is expected to be
consummated in December 1996, and will be supported by proceeds from this
offering. See "Use of Proceeds." The real and personal property of the FOA
Branches are being acquired at net book value, and IBEM will pay a loan premium
of 1% on the loans to be acquired and a deposit premium of 6.875% on the
deposits to be assumed. The Company anticipates amortizing the core deposit
premium on a straight line basis over 12 years.

The acquisition of the FOA Branches allows the Company to continue to
expand its branch banking network and further leverage the managerial resources
of the Company and IBEM. The FOA Branches are located in markets similar to
those historically served by the Banks and are contiguous to the communities
that are currently served by IBEM. The acquisition of the FOA Branches will
assist in establishing IBEM as a prominent provider of banking services in the
thumb region of eastern Michigan.

The following pro forma financial information reflects the impact of the
issuance of the Preferred Securities by IBC Capital (and the related issuance of
the Subordinated Debentures by the Company) and the purchase of the FOA Branches
as if they were acquired by IBEM as of September 30, 1996. This pro forma
information is presented for informational purposes only as the purchase of the
FOA Branches is not considered the acquisition of a business.

<TABLE>
<CAPTION>
PRO FORMA
COMPANY FOA BRANCHES ADJUSTMENTS COMBINED
-------- ------------ ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Cash & due from banks......................... $ 26,601 $ 98,954 $ (93,454)(1)(2) $ 32,101
Securities.................................... 159,559 0 (1)
Loans and loans held for sale (net of
allowance for loan losses).................. 569,087 21,546 215 (2) 590,848
Intangible assets............................. 9,737 0 8,355 (2) 18,092
Other assets.................................. 28,168 1,581 29,749
-------- -------- -------- --------
TOTAL ASSETS........................... $793,152 $122,081 $ $
======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing......................... $ 68,685 $ 10,470 $ 79,155
Savings and NOW............................. 263,841 53,398 317,239
Time........................................ 209,255 57,613 266,868
-------- -------- --------
TOTAL DEPOSITS......................... 541,781 121,481 663,262
Other borrowings.............................. 190,959 0 $ (13,300)(1) 177,659
Other liabilities............................. 9,679 600 10,279
-------- -------- -------- --------
TOTAL LIABILITIES...................... 742,419 122,081 (13,300) 851,200
Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust
Holding Solely Junior Subordinated
Debentures.................................. (1)
Shareholders' equity.......................... 50,733 0 (3)
-------- -------- -------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY.............................. $793,152 $122,081 $ $
======== ======== ======== ========
</TABLE>

- -------------------------

(1) To reflect the anticipated deployment of the cash proceeds from the FOA
Branches and the issuance of the Preferred Securities.

(2) To reflect fair value adjustments relating to assets purchased and
liabilities assumed.

(3) To reflect the costs related to the issuance of the Preferred Securities.

15
<PAGE> 18

USE OF PROCEEDS

All of the proceeds from the sale of Preferred Securities will be invested
by IBC Capital in the Subordinated Debentures. The net proceeds to the Company
from the sale of Subordinated Debentures are estimated to be $ ($ if
the Underwriter's over-allotment option is exercised in full). The Company will
use the proceeds to increase the capital base of IBEM in contemplation of the
pending acquisition of the FOA Branches. See "Capitalization." In addition, the
proceeds from the offering will assist the Company in maintaining a Tier 1
capital leverage ratio of approximately 5.2% following the pending acquisition
of the FOA Branches and the recent acquisition of North Bank Corporation, and
may be used for other general corporate purposes. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Financial
Condition -- Capital Resources." Other than the pending acquisition of the FOA
Branches, the Company has no current or contemplated agreements or
understandings for any acquisitions. The Preferred Securities are expected to
qualify as Tier 1 capital.

MARKET FOR THE PREFERRED SECURITIES

The Preferred Securities have been approved for quotation on the Nasdaq
National Market under the symbol IBCPP. Stifel, Nicolaus & Company, Incorporated
has informed the Company that it presently intends to make a market in the
Preferred Securities. There can be no assurance, however, that an active and
liquid trading market will develop or, if developed, that such a market will
continue. The offering price and distribution rate have been determined by
negotiations among representatives of the Company and the Underwriter, and the
offering price of the Preferred Securities may not be indicative of the market
price following the offering. See "Underwriting."

ACCOUNTING TREATMENT

For financial reporting purposes, IBC Capital will be treated as a
subsidiary of the Company and, accordingly, the accounts of IBC Capital will be
included in the consolidated financial statements of the Company. The Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company under the caption "Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust Holding Solely Junior Subordinated
Debentures," and appropriate disclosures about the Preferred Securities, the
Guarantee and the Subordinated Debentures will be included in the notes to
consolidated financial statements. For financial reporting purposes, the Company
will record Distributions payable on the Preferred Securities as an expense in
the consolidated statements of operations.

16
<PAGE> 19

CAPITALIZATION

The following table sets forth (i) the consolidated capitalization of the
Company at September 30, 1996, and (ii) the consolidated capitalization of the
Company on an as adjusted basis giving effect to the issuance of the Preferred
Securities hereby offered by IBC Capital and receipt by the Company of the net
proceeds from the corresponding sale of the Subordinated Debentures to IBC
Capital, as if the sale of the Preferred Securities had been consummated on
September 30, 1996, and assuming the Underwriter's over-allotment option was not
exercised.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT
Total long-term debt.................................................. $ 7,500 $ 7,500
Company Obligated Mandatorily Redeemable Preferred Securities of
Subsidiary Trust Holding Solely Junior Subordinated Debentures........ 0
SHAREHOLDERS' EQUITY
Preferred Stock, no par value; 200,000 shares authorized, none issued
and outstanding....................................................... 0 0
Common Stock, par value $1.00 per share; 14,000,000 shares authorized,
2,861,399 shares issued and outstanding............................... 2,861
Capital surplus......................................................... 24,256 (1)
Retained earnings....................................................... 23,447
Net unrealized gain on securities available for sale, net of related tax
effect................................................................ 169
------- -------
Total shareholders' equity......................................... 50,733
------- -------
Total capitalization............................................... $58,233 $
======= =======
</TABLE>

- -------------------------

(1) Expenses in the amount of $ relating to the issuance of the Preferred
Securities have been netted against capital surplus.

The following table sets forth the consolidated capital ratios of the
Company (i) at September 30, 1996, (ii) as adjusted giving effect to the
issuance of the Preferred Securities hereby offered by IBC Capital and receipt
by the Company of the net proceeds from the corresponding sale of the
Subordinated Debentures to IBC Capital (assuming the Underwriter's
over-allotment option was not exercised), and (iii) pro forma as adjusted giving
effect to (ii) and to the acquisition of the FOA Branches, as if both
transactions had been consummated on September 30, 1996. See "Recent
Developments."

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
---------------------------------------
PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
------ ----------- --------------
<S> <C> <C> <C>
CAPITAL RATIOS
Shareholders' equity to total assets......................... 6.40% % %
Leverage ratio(1)(2)......................................... 5.43
Risk-based capital ratios(2)
Tier 1 capital to risk-weighted assets..................... 8.18
Total risk-based capital to risk-weighted assets........... 9.44
</TABLE>

- -------------------------
(1) The leverage ratio is Tier 1 capital divided by the difference between
quarterly average total assets less intangibles. See "Supervision and
Regulation -- The Banks."

(2) The capital ratios, as adjusted, are computed including the total estimated
net proceeds from the sale of the Preferred Securities, in a manner
consistent with Federal Reserve guidelines.

17
<PAGE> 20

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below, insofar as it
relates to the five years ended December 31, 1995, are derived from the audited
consolidated financial statements of the Company. The data for the nine-month
periods ended September 30, 1995 and 1996, have been derived from unaudited
interim financial statements; however, in the opinion of the Company, such
unaudited interim statements include all adjustments (consisting of normal
recurring accruals) necessary to fairly present the data for such periods. The
results of operations for the nine-month period ended September 30, 1996, are
not necessarily indicative of results to be achieved for the full year. Such
data are qualified by reference to the consolidated financial statements
included elsewhere in this Prospectus or incorporated by reference and should be
read in conjunction with such financial statements and related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- -----------------------------------
1996 1995 1995 1994 1993(1)
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF OPERATIONS
Interest income..................................................... $ 42,598 $ 33,534 $ 45,982 $ 37,820 $ 34,370
Interest expense.................................................... 17,548 12,881 17,900 12,585 12,305
-------- -------- -------- -------- --------
Net interest income............................................... 25,050 20,653 28,082 25,235 22,065
Provision for loan losses........................................... 942 477 636 473 657
-------- -------- -------- -------- --------
Net interest income after provision for loan losses............... 24,108 20,176 27,446 24,762 21,408
Net gains on sale of securities and real estate mortgage loans...... 1,121 295 608 75 1,358
Other noninterest income............................................ 2,860 2,361 3,158 3,026 2,540
Noninterest expense................................................. 19,804 15,897 21,702 19,503 17,535
-------- -------- -------- -------- --------
Income before federal income tax expense and extraordinary item... 8,285 6,935 9,510 8,360 7,771
Federal income tax expense.......................................... 2,466 1,948 2,700 2,329 2,165
-------- -------- -------- -------- --------
Income before extraordinary item.................................. 5,819 4,987 6,810 6,031 5,606
Extraordinary item(2)............................................... 0 0 0 0 0
-------- -------- -------- -------- --------
Net income...................................................... $ 5,819 $ 4,987 $ 6,810 $ 6,031 $ 5,606
======== ======== ======== ======== ========
PER SHARE DATA(3)
Net income
Primary........................................................... $ 2.02 $ 1.74 $ 2.38 $ 2.09 $ 1.95
Fully diluted..................................................... 2.02 1.74 2.38 2.09 1.95
Cash dividends declared............................................. 0.74 0.66 0.89 0.72 0.50
Book value(4)....................................................... 17.73 15.81 16.56 14.12 13.57
Dividend payment ratio(5)........................................... 36.52% 37.32% 36.80% 34.62% 25.54%
Weighted average shares outstanding................................. 2,878,174 2,859,794 2,861,898 2,890,368 2,878,386
SELECTED BALANCES(4)
Assets.............................................................. $793,152 $574,988 $590,147 $516,211 $482,027
Securities(6)....................................................... 149,361 116,307 115,459 130,477 136,147
Loans and loans held for sale....................................... 575,807 417,059 434,091 342,658 288,643
Allowance for loan losses........................................... 6,720 5,249 5,243 5,054 5,053
Deposits............................................................ 541,781 408,526 411,624 409,471 423,620
Shareholders' equity................................................ 50,733 44,906 47,025 40,311 39,049
Long-term debt...................................................... 7,500 0 0 0 2,750
PERFORMANCE RATIOS(7)
Net interest margin................................................. 5.45% 5.69% 5.65% 5.88% 5.85%
Return on average equity(8)......................................... 15.78 15.60 15.59 15.22 15.21
Return on average assets............................................ 1.16 1.26 1.25 1.25 1.33
Efficiency ratio(9)................................................. 66.39 66.24 66.22 66.55 65.27
ASSET QUALITY RATIOS(10)
Allowance for loan losses to loans(4)............................... 1.19% 1.27% 1.25% 1.50% 1.79%
Nonperforming loans to loans(4)..................................... 0.61 0.78 0.61 0.84 1.14
Allowance for loan losses to nonperforming loans(4)................. 194.73 164.08 204.80 178.33 157.27
Nonperforming assets to total loans(4).............................. 0.78 0.99 0.79 1.25 2.08
Net loan losses to average loans(7)................................. 0.11 0.10 0.12 0.16 0.15
CAPITAL RATIOS
Average equity to average assets.................................... 7.32% 8.04% 8.04% 8.22% 8.72%
Tier 1 risk-based capital ratio(4).................................. 8.18 11.22 11.49 11.90 13.86
Total risk-based capital ratio(4)................................... 9.44 12.48 12.75 13.03 15.13
Leverage ratio(4)................................................... 5.23 7.42 7.58 7.40 7.61
RATIO OF EARNINGS TO FIXED CHARGES(11)
Including interest on deposits...................................... 1.47x 1.54x 1.53x 1.66x 1.63x
Excluding interest on deposits...................................... 2.39 2.88 2.75 6.60 28.95

1992(1) 1991(1)
--------- ---------

<S> <C> <C>
SUMMARY RESULTS OF OPERATIONS
Interest income..................................................... $ 36,465 $ 39,175
Interest expense.................................................... 15,150 20,538
-------- --------
Net interest income............................................... 21,315 18,637
Provision for loan losses........................................... 1,225 1,013
-------- --------
Net interest income after provision for loan losses............... 20,090 17,624
Net gains on sale of securities and real estate mortgage loans...... 324 48
Other noninterest income............................................ 2,418 2,373
Noninterest expense................................................. 15,703 14,323
-------- --------
Income before federal income tax expense and extraordinary item... 7,129 5,722
Federal income tax expense.......................................... 2,020 1,619
-------- --------
Income before extraordinary item.................................. 5,109 4,103
Extraordinary item(2)............................................... 0 85
-------- --------
Net income...................................................... $ 5,109 $ 4,018
======== ========
PER SHARE DATA(3)
Net income
Primary........................................................... $ 1.78 $ 1.52
Fully diluted..................................................... 1.78 1.38
Cash dividends declared............................................. 0.44 0.39
Book value(4)....................................................... 12.08 10.72
Dividend payment ratio(5)........................................... 24.13% 26.53%
Weighted average shares outstanding................................. 2,865,902 2,980,657
SELECTED BALANCES(4)
Assets.............................................................. $403,125 $406,469
Securities(6)....................................................... 99,798 93,008
Loans and loans held for sale....................................... 261,634 275,144
Allowance for loan losses........................................... 4,023 3,784
Deposits............................................................ 358,874 364,431
Shareholders' equity................................................ 34,467 30,327
Long-term debt...................................................... 0 1,287
PERFORMANCE RATIOS(7)
Net interest margin................................................. 5.88% 5.20%
Return on average equity(8)......................................... 15.88 13.56
Return on average assets............................................ 1.26 1.00
Efficiency ratio(9)................................................. 63.06 65.80
ASSET QUALITY RATIOS(10)
Allowance for loan losses to loans(4)............................... 1.58% 1.38%
Nonperforming loans to loans(4)..................................... 1.24 1.74
Allowance for loan losses to nonperforming loans(4)................. 126.75 78.90
Nonperforming assets to total loans(4).............................. 1.99 2.17
Net loan losses to average loans(7)................................. 0.37 0.30
CAPITAL RATIOS
Average equity to average assets.................................... 7.94% 6.82%
Tier 1 risk-based capital ratio(4).................................. 14.03 11.90
Total risk-based capital ratio(4)................................... 15.29 12.56
Leverage ratio(4)................................................... 8.05 6.88
RATIO OF EARNINGS TO FIXED CHARGES(11)
Including interest on deposits...................................... 1.47x 1.28x
Excluding interest on deposits...................................... 25.25 10.23
</TABLE>

(8) For 1991, net income to average common equity has been computed by dividing
net income, after deducting dividends on preferred stock then outstanding,
by average common equity.

18
<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and results of
operations contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Actual results could differ materially from
those projected in such forward-looking statements as a result of, among other
things, the factors set forth in the section entitled "Risk Factors."

The following presents management's discussion and analysis of the
Company's consolidated financial condition and results of operations as of the
dates and for the periods indicated. This discussion should be read in
conjunction with the Company's Consolidated Financial Statements and the
accompanying notes, and other financial data appearing elsewhere in this
Prospectus.

OVERVIEW

Over the past five years, the Company has experienced a significant growth
in its assets while at the same time retaining a net interest margin that has
exceeded 5% of average earning assets. Since December 31, 1990, total assets
have increased by 119% to $793.2 million at September 30, 1996. During this same
time period, the Company's average return on equity exceeded 15%. Earnings per
share have grown by a compounded annual rate of 14.6% to $2.38 for the year
ended December 31, 1995, from $1.38 for the year ended December 31, 1991.
Earnings per share for the nine months ended September 30, 1996 totaled $2.02,
an increase of 16.1% from earnings of $1.74 per share for the first nine months
of 1995.

Acquisitions of other banks and bank branches accounted for approximately
59% of the $430.7 million increase in total assets from December 31, 1990, to
September 30, 1996. Effective May 31, 1996, the Company acquired North Bank
Corporation ("NBC") in exchange for cash consideration totaling $15.8 million.
On the effective date of that transaction ("NBC Acquisition"), NBC's assets and
shareholders' equity totaled $152.0 million and $9.5 million, respectively, and
the Company recorded goodwill totaling $7.5 million.

On March 7, 1994, the Company acquired KSB Financial, Inc. ("KSB") in
exchange for shares of the Company's Common Stock having an aggregate value of
$4.4 million. The transaction ("KSB Acquisition") was accounted for as a pooling
of interests and, at the effective date of the transaction, KSB's assets and
shareholders' equity totaled $37.2 million and $2.8 million, respectively.
During 1993, the Company acquired American Home Bank and Pioneer Bank ("1993
Acquisitions") in exchange for cash consideration totaling $7.1 million. On the
effective date of these transactions, aggregate assets and shareholders' equity
totaled $66.7 million and $6.6 million, respectively, and the Company recorded
goodwill totaling approximately $500,000.

The Banks' ability to originate and fund rate-sensitive loans with other
borrowings has also provided an opportunity to profitably deploy the capital
generated by the retention of earnings ("Alternate Loan Funding Strategy").
Other borrowings and federal funds purchased totaled $191.0 million at September
30, 1996, compared to $14.1 million at December 31, 1993. The use of non-deposit
sources of funds is structured to complement the Banks' interest-rate risk
profile, and the cost of such borrowings is a principal consideration in the
Banks' loan and deposit pricing.

RESULTS OF OPERATIONS

SUMMARY. Net income increased by 16.7% to $5.8 million during the nine
months ended September 30, 1996, from $5.0 million during the comparable period
of 1995. Earnings per share during those periods were equal to $2.02 and $1.74
in 1996 and 1995, respectively. During 1995, net income increased by 12.9% to a
record $6.8 million or $2.38 per share. A year earlier, net income increased by
7.6% to $6.0 million, equal to $2.09 per share, from $5.6 million or $1.95 per
share in 1993.

The increases in net income principally reflect increases in average
earning assets that resulted from the acquisition of banks as well as the
successful implementation of the Alternate Loan Funding Strategy. Average
earning assets grew by 61.6% to $634.1 million during the first nine-month
period of 1996 from

19
<PAGE> 22

$392.4 million for the year ended December 31, 1993. Over that same period, the
Company's annualized net interest income increased by 51.6% to $33.5 million in
1996 from $22.1 million in 1993. In addition to an increase in the absolute
level of average earning assets since 1993, the mix of average earning assets
has shifted toward higher yielding loans from other earning assets. During the
nine months ended September 30, 1996, loans comprised 76.6% of total average
earning assets, up from 66.1% for the year ended December 31, 1993.

As a result of the Banks' ability to generate loans, principally single
family residential real estate mortgage loans, average earning assets increased
by 26.5% to $634.1 million during the nine-month period in 1996, from $501.3
million during the comparable period in 1995, and by 15.1% to $513.4 million
during 1995, from $446.0 million in 1994. During those respective periods, net
interest income increased by 21.3% and 11.3%. The recent NBC Acquisition also
contributed to the increase in average earning assets and net interest income
during 1996.

KEY PERFORMANCE RATIOS

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------- -----------------------
1996 1995 1995 1994 1993
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Return on
Average assets......................................... 1.16% 1.26% 1.25% 1.25% 1.33%
Average common equity.................................. 15.78 15.60 15.59 15.22 15.21
Income per common share(1)............................... $2.02 $1.74 $2.38 $2.09 $1.95
</TABLE>

- -------------------------
(1) Adjusted to give retroactive effect to 5% stock dividends in 1996 and 1995.

The increase in the Company's return on average equity, relative to its
return on average assets, reflects management's efforts to profitably maintain
or enhance financial leverage within management's established risk parameters.
As a result of the NBC Acquisition and the Alternate Loan Funding Strategy, the
Company's leverage ratio (average assets divided by average equity) increased to
13.66 during the nine months ended September 30, 1996. During 1995, the leverage
ratio was equal to 12.44, compared to 12.16 and 11.47 in 1994 and 1993,
respectively.

NET INTEREST INCOME. Tax equivalent net interest income increased by 21.1%
to $25.9 million during the nine months ended September 30, 1996, from $21.3
million during the comparable period a year earlier. The increase principally
reflects the $132.9 million increase in average earning assets generated by the
Alternate Loan Funding Strategy and the NBC Acquisition. Tax equivalent net
interest income as a percent of average earning assets declined to 5.45% during
the nine months ended September 30, 1996, from 5.69% during the comparable
period in 1995. Management attributes a portion of the 24 basis point decline to
the cost of non-deposit funds that were used to implement the Alternate Loan
Funding Strategy. The interest paid on unsecured borrowings that were used to
fund the NBC Acquisition offset a portion of the increase in tax equivalent net
interest income.

20
<PAGE> 23

The following table sets forth the average balance, the interest earned or
paid thereon and the effective interest rate for each major category of
interest-earning assets and interest-bearing liabilities for the nine months
ended September 30, 1996 and 1995.

AVERAGE BALANCES AND TAX EQUIVALENT RATES

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------
1996 1995
------------------------------------- -------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST YIELD/COST(3) BALANCE INTEREST YIELD/COST(3)
-------- -------- ------------- -------- -------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans -- all domestic(1)(2).... $485,407 $ 35,367 9.73% $369,777 $ 27,225 9.84%
Taxable securities............. 98,326 4,873 6.62 95,985 4,572 6.37
Tax-exempt securities(2)....... 37,618 2,522 8.96 30,315 2,163 9.54
Other investments.............. 12,777 636 6.65 5,197 264 6.79
-------- ------- -------- -------
Interest earning assets...... 634,128 43,398 9.14 501,274 34,224 9.13
------- -------
Cash and due from banks........ 19,792 15,944
Other assets, net.............. 18,913 14,046
-------- --------
Total assets.............. $672,833 $531,355
======== ========
LIABILITIES
Savings and NOW................ $242,641 4,484 2.47 $219,985 4,227 2.57
Time deposits.................. 178,671 7,114 5.32 138,871 4,966 4.78
Long-term debt................. 4,518 241 7.13 0 0 --
Other borrowings............... 133,447 5,709 5.72 80,178 3,688 6.15
-------- ------- -------- -------
Interest bearing
liabilities............... 559,277 17,548 4.19 439,034 12,881 3.92
------- -------
Demand deposits................ 56,687 44,022
Other liabilities.............. 7,603 5,559
Shareholders' equity........... 49,266 42,740
-------- --------
Total liabilities and
shareholders' equity.... $672,833 $531,355
======== ========
Net interest income....... $ 25,850 $ 21,343
======= =======
Net interest income as a
percent of earning
assets.................. 5.45% 5.69%
==== ====
</TABLE>

- -------------------------
(1) Interest on loans includes net origination fees totaling $2.4 million and
$2.0 million for the nine-month periods in 1996 and 1995, respectively.

(2) Interest on tax-exempt securities has been adjusted to reflect preferential
taxation. The adjustment assumes a marginal tax rate of 34% for each of the
nine-month periods.

(3) Interest income and expense for the nine-month periods have been annualized.

21
<PAGE> 24

Tax equivalent net interest income increased by 10.7% to $29.0 million
during 1995 and by 14.1% to $26.2 million in 1994. Such increases reflect
double-digit percentage increases in average earning assets during those
periods. Average earning assets increased by 15.1% to $513.4 million during
1995, and by 13.6% to $446.0 million during 1994. The Alternate Loan Funding
Strategy accounted for approximately 90% of the $67.4 million increase in
average earning assets during 1995, while the 1993 Acquisitions accounted for
approximately 70% of the $53.5 million increase in average earning assets for
the prior year.

AVERAGE BALANCES AND TAX EQUIVALENT RATES

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1995 1994 1993
---------------------------- ---------------------------- ----------------------------
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST COST BALANCE INTEREST COST BALANCE INTEREST COST
-------- -------- ------ -------- -------- ------ -------- -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans -- all
domestic(1)(2)............ $382,644 $ 37,654 9.84% $294,968 $ 28,936 9.81% $259,334 $ 26,001 10.03%
Taxable securities.......... 93,064 5,919 6.36 108,905 6,537 6.00 88,869 5,976 6.73
Tax-exempt securities(2).... 31,516 2,914 9.25 29,763 2,857 9.60 28,881 2,761 9.56
Other investments........... 6,153 421 6.84 12,335 460 3.73 15,359 535 3.48
-------- ------- -------- ------- -------- -------
Interest earning assets... 513,377 46,908 9.14 445,971 38,790 8.70 392,443 35,273 8.99
------- ------- -------
Cash and due from banks..... 16,091 14,359 13,996
Other assets, net........... 14,115 21,491 16,226
-------- -------- --------
Total assets.......... $543,583 $481,821 $422,665
======== ======== ========
LIABILITIES
Savings and NOW............. $217,721 5,515 2.53 $213,590 4,819 2.26 $185,419 4,887 2.64
Time deposits............... 141,292 6,955 4.92 150,036 6,273 4.18 150,536 7,140 4.74
Long-term debt.............. 0 0 -- 2,195 120 5.47 525 28 5.33
Other borrowings............ 89,048 5,430 6.10 28,481 1,373 4.82 8,010 250 3.12
-------- ------- -------- ------- -------- -------
Interest bearing
liabilities............. 448,061 17,900 4.00 394,302 12,585 3.19 344,490 12,305 3.57
------- ------- -------
Demand deposits............. 46,539 41,910 37,426
Other liabilities........... 5,296 5,989 3,900
Shareholders' equity........ 43,687 39,620 36,849
-------- -------- --------
Total liabilities and
shareholders'
equity............. $543,583 $481,821 $422,665
======== ======== ========
Net interest income... $ 29,008 $ 26,205 $ 22,968
======= ======= =======
Net interest income as
a percent of
earning
assets............. 5.65% 5.88% 5.85%
==== ==== ====
</TABLE>

- -------------------------
(1) Interest on loans includes net origination fees totaling $2.7 million, $2.6
million, and $2.2 million in 1995, 1994, and 1993, respectively.

(2) Interest on tax-exempt securities has been adjusted to reflect preferential
taxation. The adjustment assumes a marginal tax rate of 34% for each of the
three years. For purposes of analysis, tax-exempt loans are included in tax-
exempt securities.

22
<PAGE> 25

Tax equivalent net interest income was equal to 5.65% of average earning
assets during 1995 compared to 5.88% and 5.85% in 1994 and 1993, respectively.
Management attributes the 23 basis point decline during 1995 to the average cost
of other borrowings utilized to fund its Alternate Loan Funding Strategy. In
view of the respective contributions to net income and the Company's return on
average equity, management believes that its Alternate Loan Funding Strategy is
consistent with its goal to profitably deploy capital.

The following table sets forth certain information regarding changes in
interest income and interest expense of the Company for the periods indicated.
For each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to: (i) changes in volume
(changes in volume multiplied by the prior period's rate); and (ii) changes in
rates (changes in rate multiplied by the prior period's volume).

CHANGE IN TAX EQUIVALENT NET INTEREST INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED ---------------------------------------------------------------
SEPTEMBER 30,
1996 COMPARED TO 1995 1995 COMPARED TO 1994 1994 COMPARED TO 1993
--------------------------- ----------------------------- -----------------------------
VOLUME RATE NET VOLUME RATE NET VOLUME RATE NET
------ ----- ------ ------ ------- ------ ------ ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
interest income(1)
Loans -- all domestic........ $8,428 $(286) $8,142 $8,627 $ 91 $8,718 $3,506 $ (571) $2,935
Taxable securities........... 113 188 301 (991) 373 (618) 1,255 (694) 561
Tax-exempt securities(2)..... 496 (137) 359 165 (108) 57 85 11 96
Other investments............ 377 (5) 372 (303) 264 (39) (111) 36 (75)
------ ----- ------ ------ ------- ------ ------ ------- ------
Total interest income.... 9,414 (240) 9,174 7,498 620 8,118 4,735 (1,218) 3,517
------ ----- ------ ------ ------- ------ ------ ------- ------
Increase (decrease) in
interest expense
Savings and NOW.............. 423 (166) 257 95 601 696 688 (756) (68)
Time deposits................ 1,539 609 2,148 (382) 1,064 682 (24) (843) (867)
Long-term debt............... 241 0 241 (120) 0 (120) 91 1 92
Other borrowings............. 2,295 (274) 2,021 3,594 463 4,057 930 193 1,123
------ ----- ------ ------ ------- ------ ------ ------- ------
Total interest expense... 4,498 169 4,667 3,187 2,128 5,315 1,685 (1,405) 280
------ ----- ------ ------ ------- ------ ------ ------- ------
Net interest income...... $4,916 $(409) $4,507 $4,311 $(1,508) $2,803 $3,050 $ 187 $3,237
====== ===== ====== ====== ======= ====== ====== ======= ======
</TABLE>

- -------------------------
(1) The change in interest due to changes in both balance and rate has been
allocated to change due to balance and change due to rate in proportion to
the relationship to the absolute dollar amounts of change in each.

(2) Interest on tax exempt securities has been adjusted to reflect preferential
taxation. The adjustment assumes a marginal tax rate of 34% for each of the
three years.

The following table sets forth the composition of average interest-earning
assets and interest-bearing liabilities as a percent of average total
interest-earning assets for each of the periods indicated.

COMPOSITION OF AVERAGE EARNING ASSETS AND INTEREST PAYING LIABILITIES

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------- ----------------------------
1996 1995 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
As a percent of average earning assets
Loans -- all domestic.................................................. 76.55% 73.77% 74.53% 66.14% 66.08%
Other earning assets................................................... 23.45 26.23 25.47 33.86 33.92
------ ------ ------ ------ ------
Average earning assets............................................. 100.00% 100.00% 100.00% 100.00% 100.00%
====== ====== ====== ====== ======
Savings and NOW........................................................ 38.26% 43.89% 42.41% 47.89% 47.25%
Time deposits.......................................................... 28.18 27.70 27.52 33.64 38.36
Other borrowings and long-term debt.................................... 21.76 16.00 17.35 6.88 2.17
------ ------ ------ ------ ------
Average interest bearing liabilities............................... 88.20% 87.59% 87.28% 88.41% 87.78%
====== ====== ====== ====== ======
Earning asset ratio..................................................... 94.25% 94.34% 94.44% 92.56% 92.85%
Free-funds ratio(1)..................................................... 11.80 12.41 12.72 11.59 12.22
</TABLE>

- -------------------------
(1) Represents the percentage of average earning assets that are funded by
non-interest bearing liabilities and capital.

23
<PAGE> 26

Increases in loans as a percent of average earning assets has had a
favorable impact on tax equivalent net interest income as a percent of average
earning assets. For the first nine months of 1996 and 1995, loans were equal to
approximately 76.6% and 73.8% of average earning assets, respectively. Loans
were equal to approximately 74.5% of average earning assets in 1995 and 66.1% in
both 1994 and 1993. Management expects that the consummation of the pending
acquisition of the FOA Branches will initially reduce loans as a percent of
average earning assets and will have a corresponding negative impact on the
Company's tax equivalent net interest income as a percent of average earning
assets. Over time, management expects to reinvest the assets into loans
following consummation of the transaction.

PROVISION FOR LOAN LOSSES. In addition to a subjective analysis of general
and local economic conditions, management's assessment of the allowance for loan
losses is based upon the amount and composition of loan balances, a systematic
review of specific credits and historical loss experience, as well as the
absolute level of nonperforming and impaired loans.

The provision for loan losses totaled $942,000 during the nine months ended
September 30, 1996. The increase from $477,000 during the comparable period in
1995 resulted from the application of management's allocation methodology (as
described above) to the loans associated with the NBC Acquisition and the
increase in loans, excluding loans held for sale ("Portfolio Loans").

The provision for loan losses totaled $636,000 in 1995, compared to
$473,000 in 1994 and $657,000 in 1993. Increases in the provision during 1995
principally reflect the increase in Portfolio Loans. The decrease in the
provision during 1994 reflects a subsequent decline in substandard assets that
had been acquired as a result of the 1993 Acquisitions and the KSB Acquisition
in 1994, and the corresponding increase in the unallocated portion of the
allowance for loan losses.

NONINTEREST INCOME. Noninterest income increased by 49.9% during the nine
months ended September 30, 1996, from $2.7 million during the comparable period
in 1995. The increase reflects increases in net gains on the sale of real estate
mortgage loans, as well as increases in service charges on deposit accounts and
other income.

Noninterest income totaled $3.8 million in 1995 compared to $3.1 million
and $3.9 million in 1994 and 1993, respectively. The increase in net gains on
real estate mortgage loans accounted for approximately 72% of the $665,000
increase in noninterest income during 1995. A year earlier, a decline in net
gains on the sale of such loans and net losses on the sale of securities
available for sale accounted for the $797,000 decrease in noninterest income.

The following table sets forth the principal components of noninterest
income for each of the periods indicated.

NONINTEREST INCOME

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
1996 1995 1995 1994 1993
------ ------ ------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Service charges on deposit accounts................. $1,641 $1,439 $1,919 $1,892 $1,589
Net gains (losses) on asset sales
Real estate mortgage loans........................ 1,251 405 728 249 721
Securities........................................ (130) (110) (120) (174) 637
Real estate mortgage loan servicing................. 299 273 371 335 217
PrimeVest commission................................ 82 55 73 120 139
Other............................................... 838 594 795 679 595
------ ------ ------ ------ ------
Total noninterest income....................... $3,981 $2,656 $3,766 $3,101 $3,898
====== ====== ====== ====== ======
</TABLE>

Service charges on deposit accounts, the largest component of noninterest
income, totaled $1.6 million and $1.4 million during the nine months ended
September 30, 1996 and 1995, respectively. The $202,000 increase in service
charges reflects the NBC Acquisition. During 1995, such service charges totaled
$1.9 million, essentially unchanged from 1994. The $303,000 increase to $1.9
million in 1994 from $1.6 million in 1993, principally reflects the impact of
the 1993 Acquisitions.

24
<PAGE> 27

Net gains on the sale of real estate mortgage loans totaled $1.3 million
and $405,000 during the nine months ended September 30, 1996 and 1995,
respectively. Such gains totaled $728,000 in 1995, compared to $249,000 in 1994
and $721,000 in 1993.

Although the majority of the 209% increase in net gains on the sale of real
estate loans during 1996 reflects favorable economic conditions and an increase
in loans sold, management attributes 45% of the increase to the impact of
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights" ("SFAS #122"), and the increased sale of related servicing
rights. See "Statements of Financial Accounting Standards."

In addition to an increase in loans sold, the 192% increase during 1995
reflects an increase in net gains as a percent of real estate mortgage loans
sold. The overall decline in net gains during 1994 reflects the combined effects
of a decrease in loans sold as well as a decrease in net gains as a percent of
loans sold.

The following table sets forth certain information with respect to the
origination and sale of real estate mortgage loans, including the net gains
recognized on the sale of such loans.

NET GAINS ON THE SALE OF REAL ESTATE MORTGAGE LOANS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- --------------------------------
1996 1995 1995 1994 1993
-------- -------- -------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Real estate mortgage loan
originations......................... $166,100 $118,100 $163,500 $97,800 $80,200
Real estate mortgage loan sales........ 80,000 33,400 52,000 38,100 50,100
Real estate mortgage loan servicing
rights sold.......................... 28,800 11,900 19,700 1,500 500
Net gains on the sale of real estate
mortgage loans....................... 1,251 405 728 249 721
Net gains as a percent of real estate
mortgage loan sales.................. 1.56% 1.21% 1.40% 0.65% 1.44%
</TABLE>

Consistent with management's desire to maintain profitable leverage, the
Banks continue to retain rate-sensitive real estate mortgage loans and sell the
majority of fixed-rate obligations. See "Financial Condition -- Asset/Liability
Management." Accordingly, the volume of loans sold is dependent upon the Banks'
ability to sustain or increase the origination of real estate mortgage loans as
well as consumer demand for fixed-rate loans. Net gains on the sale of such
loans are also dependent upon economic and competitive factors as well as the
Banks' ability to effectively manage exposure to changes in interest rates.

To maintain customer relationships, the Banks have historically retained
servicing rights on real estate mortgage loans sold. During the nine months
ended 1996 and the year ended 1995, however, the Banks sold the related
servicing rights on $28.8 million and $19.7 million, respectively, of real
estate mortgage loans, principally loans underwritten pursuant to government
guarantees and loans that have been originated in markets that are not served by
the Banks' branch networks.

The Company realized net losses of $130,000 and $110,000 on the sale of
securities available for sale during the nine months ended September 30, 1996
and 1995, respectively. The Company also realized net losses of $120,000 in 1995
and $174,000 in 1994 compared to net gains of $637,000 in 1993. Future gains and
losses will be dependent upon the Banks' asset/liability management needs as
well as the slope of the yield curve, the level of interest rates and other
pertinent factors. See "Financial Condition -- Asset/Liability Management."

NONINTEREST EXPENSE. Noninterest expense totaled $19.8 million and $15.9
million during the nine months ended September 30, 1996 and 1995, respectively.
Noninterest expense totaled $21.7 million in 1995 compared to $19.5 million in
1994 and $17.5 million in 1993. Salaries and benefits are the largest component
of noninterest expense and account for the majority of the increase in total
noninterest expense. A reduction in FDIC insurance assessments, however, limited
the increase in total noninterest expense.

25
<PAGE> 28

The following table sets forth the principal components of noninterest
expense for each of the periods indicated.

NONINTEREST EXPENSE

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------ -----------------------------
1996 1995 1995 1994 1993
------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Salaries....................................... $ 7,450 $ 5,887 $ 8,005 $ 7,817 $ 6,593
Performance-based compensation and benefits.... 2,280 1,703 2,351 1,052 1,182
Other benefits................................. 1,674 1,313 1,807 1,693 1,541
------- ------- ------- ------- -------
Total salaries and benefits............... 11,404 8,903 12,163 10,562 9,316
Occupancy, net................................. 1,458 1,135 1,548 1,392 1,237
Furniture and fixtures......................... 1,337 975 1,345 1,248 968
Loan and collection............................ 396 748 1,030 626 724
Deposit insurance.............................. 92 454 499 966 858
Other.......................................... 5,117 3,682 5,117 4,709 4,432
------- ------- ------- ------- -------
Total noninterest expense................. $19,804 $15,897 $21,702 $19,503 $17,535
======= ======= ======= ======= =======
</TABLE>

The Company and the Banks maintain compensation policies and practices that
are intended to provide incentives for superior performance and align the
interests of officers and employees with those of the Company's shareholders.
Such "pay for performance" compensation plans include annual cash performance
awards, the Employee Stock Ownership Plan, the Employee Stock Option Plan and
the Incentive Share Grant Plan. Including commissions relating to the
origination of real estate mortgage loans, aggregate performance-based
compensation accounts for approximately 23% of the $2.5 million increase in
salaries and benefits during the nine months ended September 30, 1996, and
approximately 81% of the $1.6 million increase during 1995.

The NBC Acquisition and the 1993 Acquisitions also had a substantive impact
on salaries and benefits as well as total noninterest expense. Management
estimates that the NBC Acquisition accounted for 33% and 45% of the increase in
salaries and benefits and total noninterest expense, respectively, during the
nine months ended September 30, 1996. During 1994, all of the increase in
salaries and benefits and 90% of the increase in total noninterest expense can
be attributed to the 1993 Acquisitions.

Costs associated with new branch facilities, a write down of other real
estate as well as the introduction of the "EZ Money" check card and related ATM
conversions have also contributed to the increases in total noninterest expense
during the nine months ended September 30, 1996. Costs associated with the new
loan production offices or otherwise relating to the origination of real estate
mortgage loans contributed to the increase in occupancy, furniture and fixtures
and other noninterest expense during 1995. Environmental remediation costs
associated with two foreclosed properties also contributed approximately
$200,000 to the increase in noninterest expense. These remediation costs were
covered under the Michigan Underground Storage Tank Financial Assurance Fund
("MUSTFA"). MUSTFA announced that it was unable to fund all claims, however, and
the Company has provided for all remaining remediation costs as estimated by
environmental engineers.

FINANCIAL CONDITION

SUMMARY. The Banks have committed significant resources to loan origination
efforts, including two new loan production offices during the second quarter of
1995. Portfolio Loans totaled $565.4 million at September 30, 1996, compared to
$418.0 million and $336.7 million at December 31, 1995 and 1994, respectively.
Excluding the impact of the NBC Acquisition, rate-sensitive real estate mortgage
loans accounted for approximately 67% and 72% of the increase in Portfolio Loans
during the first nine months of 1996 and for all of 1995, respectively.

26
<PAGE> 29

In addition to the proceeds from security sales and maturities, the Banks
have relied on other borrowings to fund the increase in Portfolio Loans. The use
of such nondeposit funds, principally advances from the FHLB, complements the
Banks' core deposits and may further assist the Banks' efforts to manage their
exposure to changes in interest rates. See "-- Asset/Liability Management." Such
advances totaled $131.0 million at September 30, 1996, compared to $103.0
million and $40.0 million at December 31, 1995 and 1994, respectively.

SECURITIES. The Banks maintain diversified securities portfolios that
include obligations of the U.S. Treasury and government-sponsored agencies as
well as securities issued by states and political subdivisions and
mortgage-backed securities. Securities available for sale are carried at fair
value and unrealized gains and losses, after consideration of applicable federal
income taxes, are recognized as a separate component of shareholders' equity.

Management has the intent and the Banks have the ability to hold other
securities to maturity. These securities are carried at amortized cost without
adjustment for unrealized gains or losses. Although there are no current plans
to sell securities, management continues to evaluate the Banks' asset/liability
management needs and attempts to maintain a portfolio structure that will
improve earnings while maintaining sufficient liquidity and cash flow to fund
loans.

The following tables set forth the book value of securities at the
specified dates and certain information with respect to the securities
portfolios, including gross unrealized gains and losses.

SECURITIES

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ------------------------------
1996 1995 1994 1993
------------- ------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
U.S. Treasury....................................... $ 22,433 $23,272 $34,724 $ 30,330
U.S. Government agencies............................ 21,205 6,623 0 0
States and political subdivisions................... 18,669 9,290 0 0
Mortgage-backed securities.......................... 56,487 37,722 11,684 0
Other securities.................................... 3,693 10,646 6,348 0
-------- ------- ------- --------
Total.......................................... $ 122,487 $87,553 $52,756 $ 30,330
======== ======= ======= ========
HELD TO MATURITY
U.S. Treasury....................................... $ 0 $ 0 $ 5,738 $ 29,385
U.S. Government agencies............................ 1,485 2,559 11,004 6,601
States and political subdivisions................... 20,137 20,142 27,240 27,241
Mortgage-backed securities.......................... 3,865 4,487 26,545 35,295
Other Securities.................................... 1,387 718 7,194 7,295
-------- ------- ------- --------
Total.......................................... $ 26,874 $27,906 $77,721 $105,817
======== ======= ======= ========
</TABLE>

<TABLE>
<CAPTION>
UNREALIZED
AMORTIZED ---------------- FAIR
COST GAINS LOSSES VALUE
--------- ------ ------ --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE
September 30, 1996...................................... $ 122,231 $ 980 $ 724 $122,487
December 31, 1995....................................... 86,471 1,538 456 87,553
December 31, 1994....................................... 55,968 0 3,212 52,756
December 31, 1993....................................... 30,330 120 0 30,450
SECURITIES HELD TO MATURITY
September 30, 1996...................................... $ 26,874 $ 891 $ 67 $ 27,698
December 31, 1995....................................... 27,906 1,157 32 29,031
December 31, 1994....................................... 77,721 976 1,247 77,450
December 31, 1993....................................... 107,261 4,386 472 111,175
</TABLE>

27
<PAGE> 30

The following table sets forth certain information with respect to the
proceeds from the sale of securities available for sale, including related
realized gains and losses.

PROCEEDS FROM THE SALE OF SECURITIES AVAILABLE FOR SALE

<TABLE>
<CAPTION>
REALIZED
---------------
PROCEEDS GAINS LOSSES
-------- ----- ------
(IN THOUSANDS)
<S> <C> <C> <C>
NINE MONTHS ENDED
September 30, 1996................................................... $ 15,907 $ 44 $174
September 30, 1995................................................... 13,152 7 117
YEAR ENDED
December 31, 1995.................................................... $ 14,054 $ 8 $128
December 31, 1994.................................................... 28,384 228 402
December 31, 1993.................................................... 34,341 658 27
</TABLE>

LOAN PORTFOLIOS. Management believes that the stable and diversified
economies of the Banks' principal markets provide attractive lending
opportunities. In addition to the communities served by the Banks' branch
networks and loan production offices, the principal lending markets include
nearby communities and metropolitan areas. Subject to established underwriting
criteria, the Banks may also participate in commercial lending transactions with
certain non-affiliated banks and purchase real estate mortgage loans from
third-party originators.

Management believes that its decentralized structure provides the Banks
with important advantages in serving the needs of its principal lending markets.
Although the management and Board of Directors of each of the Banks retain
authority and responsibility for all credit decisions, each of the Banks has
adopted uniform underwriting standards. The Company's loan committee and the
centralization of credit services promote compliance with these underwriting
standards and provide internal controls that are consistent with the needs of a
decentralized management structure. The Company's centralized credit services,
which include credit analysis and commercial loan review, also provide economies
of scale. The centralization of retail loan services further provides for
consistent service quality and facilitates compliance with applicable consumer
protection laws and regulations.

The following table sets forth the principal components of Portfolio Loans
at the dates indicated.

LOAN PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------
SEPTEMBER 30, 1996 1995 1994
------------------- ------------------- -------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- ------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Real estate
Residential first mortgages........ $263,224 46.6% $211,690 50.6% $158,432 47.1%
Residential home equity............ 31,528 5.6 19,733 4.7 17,704 5.3
Construction and land
development..................... 46,350 8.2 29,328 7.0 27,289 8.1
Other.............................. 84,428 14.9 56,675 13.6 44,982 13.4
Consumer............................. 92,137 16.3 64,821 15.5 49,075 14.6
Commercial........................... 31,534 5.6 23,403 5.6 23,388 6.9
Agricultural......................... 16,217 2.8 12,394 3.0 15,855 4.6
-------- ----- -------- ----- -------- -----
Total loans..................... $565,418 100.0% $418,044 100.0% $336,725 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

28
<PAGE> 31

The following table sets forth the principal components of nonperforming
assets at the dates indicated.

NONPERFORMING ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------------
1996 1995 1994 1993
------------- ------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Non-accrual loans....................................... $ 2,089 $1,886 $2,052 $1,707
Loans 90 days or more past due and still accruing
interest.............................................. 1,159 427 254 408
Restructured loans...................................... 203 247 528 1,098
------ ------ ------ ------
Total nonperforming loans.......................... 3,451 2,560 2,834 3,213
Other real estate....................................... 956 760 1,381 2,647
------ ------ ------ ------
Total nonperforming assets......................... $ 4,407 $3,320 $4,215 $5,860
====== ====== ====== ======
As a percent of total loans
Nonperforming loans................................... 0.61% 0.61% 0.84% 1.14%
Nonperforming assets.................................. 0.78 0.79 1.25 2.08
</TABLE>

The increases in nonperforming loans and assets during 1996 were the result
of the NBC Acquisition. In the absence of that transaction, nonperforming loans
would have declined to $2.5 million, equal to 0.52% of Portfolio Loans at
September 30, 1996, and nonperforming assets would have declined to $3.3 million
or 0.68% of Portfolio Loans.

The consistent decline in nonperforming loans and assets during 1995 and
1994 largely reflects a decrease in substandard assets originally acquired in
connection with the KSB Acquisition in 1994, as well as the 1993 Acquisitions.
Nonperforming assets associated with these acquisitions totaled $1.4 million,
$2.3 million, and $2.0 million at December 31, 1995, 1994, and 1993,
respectively.

Impaired loans totaled approximately $2.2 million at September 30, 1996. In
addition to certain nonperforming loans, such impaired loans include commercial
and agricultural loans totaling $800,000 that have been separately identified as
impaired. Certain impaired loans with a balance of approximately $1.0 million at
September 30, 1996, had specific allocations of the allowance for loan losses
totaling approximately $125,000. The Company's average investment in impaired
loans was approximately $2.5 million during the nine-month period ended
September 30, 1996, and interest income recognized on impaired loans during that
period totaled approximately $110,000.

29
<PAGE> 32

The following table sets forth an analysis of the changes in the allowance
for loan losses at each of the dates indicated.

ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------------------------------------------
1996 1995 1994 1993(1) 1992(1) 1991(1)
------------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Loans outstanding at the end of the
period
(net of unearned fees).............. $ 575,807 $434,091 $342,658 $288,643 $261,634 $275,144
======== ======== ======== ======== ======== ========
Average loans outstanding for the
period
(net of unearned fees).............. $ 485,407 $382,644 $294,968 $259,334 $267,801 $260,594
======== ======== ======== ======== ======== ========
Balance of allowance for loan losses
at beginning of period.............. $ 5,243 $ 5,054 $ 5,053 $ 4,023 $ 3,784 $ 3,541
-------- -------- -------- -------- -------- --------
Loans charged-off
Real estate......................... 6 24 14 38 69 51
Commercial and agricultural......... 58 113 311 306 566 421
Installment......................... 601 575 546 370 581 613
-------- -------- -------- -------- -------- --------
Total loans charged-off........... 665 712 871 714 1,216 1,085
-------- -------- -------- -------- -------- --------
Recoveries of loans previously
charged-off.........................
Real estate......................... 8 28 6 11 26 3
Commercial and agricultural......... 82 115 151 156 91 123
Installment......................... 180 122 242 164 113 189
-------- -------- -------- -------- -------- --------
Total recoveries.................. 270 265 399 331 230 315
-------- -------- -------- -------- -------- --------
Net loans charged-off............. 395 447 472 383 986 770
Additions to allowance charged to
operating expense................... 942 636 473 657 1,225 1,013
Allowance on loans acquired........... 930 0 0 756 0 0
-------- -------- -------- -------- -------- --------
Balance at end of period.............. $ 6,720 $ 5,243 $ 5,054 $ 5,053 $ 4,023 $ 3,784
======== ======== ======== ======== ======== ========
Net loans charged-off as a percent
of average loans outstanding for
the period(2)....................... 0.11% 0.12% 0.16% 0.15% 0.37% 0.30%
Allowance for loan losses as a percent
of loans outstanding at the end of
the period.......................... 1.17 1.21 1.48 1.75 1.54 1.38
Allowance for loan losses as a percent
of nonperforming assets............. 194.73 204.80 178.33 157.27 126.75 78.90
</TABLE>

- -------------------------
(1) Restated to reflect an acquisition accounted for as a pooling of interests.
See Note 2 to Consolidated Financial Statements.

(2) September 30, 1996 information is annualized.

The allowance for loan losses is maintained at a level that management
considers appropriate, based upon its assessment of relevant circumstances, by
charges to the associated provision for loan losses. See "-- Provision for Loan
Losses." In performing its assessment, management allocates a portion of the
allowance to specific loans and loan portfolios. Although the allowance for loan
losses has declined as a percent of Portfolio Loans, the unallocated portion of
the allowance increased to 57.3% of the total allowance at September 30, 1996,
from 41.5% at December 31, 1993.

The following table sets forth management's allocation of the allowance for
loan losses to specific loans and loan portfolios for each of the periods
indicated.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------------
1996 1995 1994 1993
------------- ------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial and agricultural............................. $ 1,761 $1,612 $1,655 $2,222
Real estate mortgage.................................... 229 162 177 270
Installment............................................. 879 597 474 464
Unallocated............................................. 3,851 2,872 2,748 2,097
------ ------ ------ ------
Total.............................................. $ 6,720 $5,243 $5,054 $5,053
====== ====== ====== ======
</TABLE>

30
<PAGE> 33

Loans charged against the allowance for loan losses, net of recoveries
("Net Losses"), were $395,000 during the nine months ended September 30, 1996,
compared to $282,000 during the comparable period of 1995. The NBC Acquisition
accounted for $90,000 of the $113,000 increase in Net Losses during 1996. Net
Losses in 1995 were $447,000 compared to $472,000 and $383,000 in 1994 and 1993,
respectively. Management estimates that Net Losses relating to loans that were
acquired as a result of the 1993 Acquisitions and the KSB Acquisition in 1994
were $50,000 in 1995, $130,000 in 1994, and $60,000 in 1993.

DEPOSITS AND BORROWINGS. Deposits totaled $541.8 million at September 30,
1996, compared to $411.6 million at December 31, 1995. The NBC Acquisition
accounted for the majority of the $130.2 million increase in deposits.
Notwithstanding the purchase of a branch facility with deposits totaling $14.4
million during 1995, total deposits at December 31, 1995 increased only slightly
from $409.5 million one year earlier.

The following table sets forth average deposit balances and the weighted
average rates paid thereon for the dates indicated.

AVERAGE DEPOSITS

YEAR ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------------------------------
1996 1995 1994 1993
---------------- ---------------- ---------------- ----------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE RATE BALANCE RATE BALANCE RATE BALANCE RATE
-------- ---- -------- ---- -------- ---- -------- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Noninterest bearing demand.......... $ 56,687 $ 46,539 $ 41,910 $ 37,426
Savings and NOW..................... 242,641 2.47% 217,721 2.53% 213,590 2.26% 185,419 2.64%
Time deposits....................... 178,671 5.32 141,292 4.92 150,036 4.18 150,536 4.74
-------- -------- -------- --------
Total........................... $477,999 3.24% $405,552 3.08% $405,536 2.74% $373,381 3.22%
======== ======== ======== ========
</TABLE>

The following table summarizes time deposits in amounts of $100,000 or more
by time remaining until maturity as of September 30, 1996.

TIME DEPOSITS OVER $100,000

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Three months or less................................. $ 12,779
Over three through six months........................ 2,718
Over six months through one year..................... 2,245
Over one year........................................ 7,751
-------
Total........................................... $ 25,493
=======
</TABLE>

The Banks' competitive position within many of the markets served by the
branch networks may limit the ability to materially increase deposits without
adversely impacting the weighted-average cost of core deposits. Accordingly, the
Banks have relied on other borrowed funds, principally advances from the FHLB,
to fund loans as part of its Alternate Loan Funding Strategy, while utilizing
pricing strategies that are intended to reduce the weighted-average cost of core
deposits. The use of non-deposit funds is structured to complement the Banks'
existing interest rate risk profile and may further reduce the Banks' exposure
to depositors' options to withdraw funds prior to maturity.

The Company utilizes federal funds purchased and other borrowings,
including FHLB advances, to fund a portion of its earning assets. During the
nine months ended September 30, 1996, such other borrowings funded approximately
21.8% of average earning assets compared to 17.4% and 6.9% during the years
ended December 31, 1995 and 1994, respectively.

FHLB advances are secured by the Banks' unencumbered qualifying real estate
mortgage loans as well as certain securities equal to 170% of outstanding
advances. To increase its aggregate borrowing capacity, management may elect to
secure FHLB advances by pledging specific collateral representing 105% to 125%
of outstanding advances. Management believes brokered certificates of deposit to
be a viable alternative to further diversify the Banks' funding sources.

31
<PAGE> 34

CAPITAL RESOURCES. The ability to profitably deploy the capital generated
by the Company's results of operations or otherwise maintain financial leverage
is critical to management's mission to create value for the Company's
shareholders. During periods when management believes there has been an absence
of suitable acquisition candidates, the Company's Alternate Loan Funding
Strategy has made important contributions to the Company's net income and return
on average equity. In view of the franchise value associated with core deposits
and other customer relationships, management believes that its approach to
acquisitions has also provided value to the Company's shareholders.

The following table sets forth the Company's capital ratios at the dates
indicated.

CAPITAL RATIOS

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------
1996 1995 1994
------------- ----- -----
<S> <C> <C> <C>
Shareholders' equity to total assets...................................... 6.40% 7.97% 7.81%
Leverage ratio............................................................ 5.23 7.58 7.40
Tier 1 capital to risk-weighted assets.................................... 8.18 11.49 11.90
Total risk-based capital to risk-weighted assets.......................... 9.44 12.75 13.03
</TABLE>

The Company's dividend policies and its share repurchase plan have been
integral components of management's efforts to maintain profitable financial
leverage. Cash dividends declared were equal to 36.5% of earnings for the first
nine months of 1996, 36.8% and 34.6% for the years ended December 31, 1995 and
1994, respectively. Although there are no current plans to repurchase shares of
its capital stock, the Company purchased 35,900 and 40,000 shares of its Common
Stock during 1995 and 1994, respectively.

Shareholders' equity totaled $50.7 million at September 30, 1996, compared
to $47.0 million and $40.3 million at December 31, 1995 and 1994, respectively.
The increase in shareholders' equity reflects the retention of earnings as well
as the value of shares of Common Stock that have been issued pursuant to the
Incentive Share Grant Plan and the Company's various stock option plans.

As a result of the NBC Acquisition, shareholders' equity declined to 6.40%
of total assets at September 30, 1996, compared to 7.97% and 7.81% at December
31, 1995, and 1994, respectively. In the absence of that transaction, however,
shareholders' equity would have been largely unchanged from December 31, 1995.

ASSET/LIABILITY MANAGEMENT. The asset/liability management efforts of the
Company and the Banks are intended to identify and evaluate opportunities to
structure the balance sheet in a manner that is consistent with management's
mission to maintain profitable financial leverage within established risk
parameters. Accordingly, management's evaluations of alternate strategies
carefully consider the likely impact on the Banks' risk profile as well as the
anticipated contributions to earnings.

Management employs simulation analyses to evaluate the potential changes in
the Banks' net interest income and market value of portfolio equity that result
from changes in interest rates. Such analyses further anticipate the potential
changes in the slope of the U.S. Treasury yield curve as well as changes in
prepayment rates on certain assets and premature withdrawals of certificates of
deposit that will likely accompany changes in interest rates.

Consistent with management's intent to maintain profitable financial
leverage, the marginal cost of non-deposit funds is a principal consideration in
the Banks' decision to sell or retain real estate mortgage loans. Marginal
funding costs are also an integral component in pricing Portfolio Loans.
Management's ongoing evaluations have determined that the retention of 15- and
30-year fixed-rate real estate mortgage loans is not consistent with its goal to
profitably deploy capital or the Banks' asset/liability management needs.
Accordingly, the majority of such loans are sold to mitigate exposure to changes
in interest rates. Adjustable-rate and balloon real estate mortgage loans may,
however, be profitably funded with FHLB advances and the retention of such loans
is a principal focus of the Alternate Loan Funding Strategy. See "Results of
Operations--Noninterest Income."

32
<PAGE> 35

The following table sets forth the anticipated maturity or repricing,
including estimated prepayments, of interest-earning assets and interest-bearing
liabilities at September 30, 1996.

INTEREST RATE SENSITIVITY

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------------------------------------------------
DAYS
------------------------------------------ YEARS
91 -- 181 -- -------------------
0 -- 30 31 -- 90 180 365 1 -- 5 5+ TOTAL
-------- -------- -------- --------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans and loans held for sale........... $102,929 $ 44,398 $ 52,012 $ 79,531 $212,672 $ 84,265 $575,807
Taxable securities...................... 12,312 7,593 5,475 6,680 46,436 42,257 120,753
Tax-exempt securities................... 799 15 294 1,714 16,570 19,414 38,806
-------- -------- -------- --------- -------- -------- --------
Interest earning assets............... 116,040 52,006 57,781 87,925 275,678 145,936 735,366
-------- -------- -------- --------- -------- --------
Noninterest earning assets.............. 57,786
--------
Total Assets........................ $793,152
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, savings and NOW................. 42,892 12,235 17,987 29,291 104,521 125,600 $332,526
Time deposits........................... 20,083 26,933 32,435 45,095 79,458 5,251 209,255
Other borrowings........................ 54,458 70,501 3,000 31,000 32,000 0 190,959
-------- -------- -------- --------- -------- -------- --------
Total deposits and other
borrowings........................ 117,433 109,669 53,422 105,386 215,979 130,851 732,740
-------- -------- -------- --------- -------- --------
Other liabilities and shareholders'
equity.............................. 60,412
--------
Total Liabilities and
Shareholders' Equity.............. $793,152
========
RATE SENSITIVITY GAP AND RATIOS
Gap for period........................ $ (1,393) $(57,663) $ 4,359 $(17,461) $ 59,699 $ 15,085
======== ======== ======== ========= ======== ========
Cumulative gap........................ $ (1,393) $(59,056) $(54,697) $(72,158) $(12,459) $ 2,626
======== ======== ======== ========= ======== ========
Ratio of rate-sensitive assets to
rate-sensitive liabilities for
period.............................. 98.8% 47.4% 108.2% 83.4% 127.6% 111.5%
Cumulative ratio of rate-sensitive
assets to rate-sensitive
liabilities......................... 98.8 74.0 80.5 81.3 97.9 100.4
</TABLE>

STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

The Company adopted SFAS #122 effective January 1, 1996. SFAS #122 requires
the Banks to recognize as separate assets the rights to service mortgage loans
for others that have been acquired through either a purchase or origination of a
loan. The fair value of capitalized originated mortgage servicing rights has
been determined based on market value quotes for similar servicing. These
mortgage servicing rights are amortized in proportion to and over the period of
estimated net loan servicing income. SFAS #122 also requires the Banks to assess
these mortgage servicing rights for impairment based on the fair value of those
rights. For purposes of measuring impairment, the risk characteristics used by
the Banks include the underlying loans' interest rates, term of loan and loan
types.

The Banks capitalized approximately $258,000 of originated servicing rights
during the nine months ended September 30, 1996, of which approximately $34,000
has been amortized.

The Company also adopted Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation," ("SFAS #123"), effective January
1, 1996. SFAS #123 encourages companies to adopt a fair value method of
accounting for stock compensation plans. Those companies not adopting a fair
value method are required to make pro-forma disclosures of net income and
earnings per share, on an annual basis, as if they had adopted the fair value
accounting method. Management has elected the pro-forma disclosure method and
will do so on an annual basis.

33
<PAGE> 36

BUSINESS

This section contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Actual results could differ
materially from those projected in such forward-looking statements as a result
of, among other things, the factors set forth in the section entitled "Risk
Factors."

GENERAL

The Company is a bank holding company with four wholly owned subsidiary
banks engaged in the business of retail and commercial banking in portions of
Michigan's lower peninsula. IBC Capital, a wholly owned subsidiary of the
Company, exists for the purpose of issuing the Preferred Securities and has no
independent operations. Headquartered in Ionia, Michigan, the Company was formed
in 1973 as the parent company of Independent Bank. Each of the Banks is a state
chartered Michigan banking corporation, the business of each of which is
described in more detail below.

Collectively, the Banks serve over 45 communities through their four main
offices and a total of 45 branches and five loan production offices. Management
attributes the Company's success to its consistent application of community
banking practices in predominantly rural and suburban markets. The Company's
decentralized management structure, which empowers and encourages local decision
making, represents the core of the Company's community banking philosophy. This
autonomy allows local bank management to better anticipate and respond to
customer demands and thereby enhances and improves customer service and
convenience, the principal means by which the Banks compete in the delivery of
financial services.

The Company's principal sources of revenue, on a consolidated basis, are
interest and fees on loans, other interest income and non-interest income. The
sources of income for the three most recent years, and each of the nine-month
periods ended September 30, 1995 and 1996 are as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER
SEPTEMBER 30, 31,
-------------- -----------------------
1996 1995 1995 1994 1993
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Interest and fees on loans............................... 76.4% 75.6% 76.1% 71.1% 68.3%
Other interest income.................................... 15.1 17.0 16.3 21.3 21.5
Non-interest income...................................... 8.5 7.4 7.6 7.6 10.2
----- ----- ----- ----- -----
100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
</TABLE>

RECENT GROWTH

Much of the Company's recent growth has resulted from acquisitions. Since
1993, the Company has acquired four Michigan banks, two branch facilities and
established five real estate mortgage loan production offices. As a result, the
Company's assets have grown to approximately $793.2 million at September 30,
1996, from $403.1 million at December 31, 1992.

In October 1993, the Company acquired American Home Bank ("American") and
Pioneer Bank ("Pioneer"), with assets of approximately $32 million and $35
million, respectively. The purchase price of $2.5 million for American
approximated its then book value, while the purchase price of $4.5 million for
Pioneer represented a premium of approximately 15% to Pioneer's book value. In
March 1994, the Company increased its assets by approximately $37.2 million by
acquiring KSB and its wholly owned subsidiary The Kingston State Bank
("Kingston"). In connection with this acquisition, the Company issued shares of
its Common Stock with a market value of approximately $4.4 million, representing
a premium of roughly 15% to KSB's book value. American, Pioneer and Kingston
have been consolidated to form IBEM. Effective May 31, 1996, the Company
acquired NBC, with assets of approximately $152.0 million, for cash in the
amount of $15.8 million. This represented a premium of approximately 66% to
NBC's book value. North Bank, NBC's wholly-owned subsidiary bank, was
consolidated with Independent Bank on August 12, 1996.

34
<PAGE> 37

THE COMPANY'S APPROACH TO COMMUNITY BANKING

The Company's operating philosophy preserves those elements of traditional
community banking which management believes create a competitive advantage in
the markets in which it operates. Among these are a high level of personal
service and customer recognition, prompt response to customer needs,
convenience, continuity of personnel and management, and commitment to and
participation in the community. Management attributes the Company's success in
preserving its community banking practices in the face of its recent growth to
three primary characteristics; (1) decentralized bank management, (2)
corporate-wide administrative and technical support, and (3) experienced Company
and Bank management.

DECENTRALIZED MANAGEMENT. The Company believes that vesting management and
the boards of the Banks with the authority to make local decisions allows the
Banks to better anticipate customer needs, respond to customer demands, and
identify profitable opportunities within their respective markets. To provide
the flexibility to effectively pursue these opportunities, the Company's
decentralized management structure vests pricing and credit decisions in the
management of the respective Banks. While management of each of the Banks is
granted the authority to make decisions for its local operations, it is also
held accountable for its performance.

CORPORATE ADMINISTRATIVE AND SUPPORT SERVICES. To complement the
decentralized management structure of the Company and establish consistent
service and quality and attain operating efficiencies, the Company's corporate
service departments provide a variety of services to each of the Banks. These
services include data processing, accounting and audit services, purchasing and
risk management, commercial loan credit analysis, servicing and review, consumer
loan servicing, real estate mortgage loan underwriting, servicing and secondary
market operations, asset/liability management and marketing services. The
Company believes that this partnership between the Banks' management and Company
personnel allows the management of each of the Banks to focus on sales and
marketing and at the same time provides the Company with the internal controls
that are consistent with the needs of a decentralized organization. Further,
this combination of decentralized management and centralized services provides
economies of scale that permit the Company to attract and retain talented
managers that possess specific expertise in areas that the Banks could not
achieve on an individual basis.

MANAGEMENT EXPERIENCE AND COMPENSATION. The Company's growth and
profitability is also attributable to management's experience in providing
community banking services. The Banks' four presidents, along with the Company's
two executive officers, have been employed by the Company, on average, for over
10 years. Set forth below is a list of the Company's executive officers and Bank
presidents, their respective ages and financial industry experience.

<TABLE>
<CAPTION>
YEARS OF FINANCIAL
NAME (AGE) POSITION WITH COMPANY INDUSTRY EXPERIENCE
- --------------------------------- ------------------------------------------ -------------------
<S> <C> <C>
Charles C. Van Loan (48)......... President, Chief Executive Officer and
Director 19
William R. Kohls (39)............ Executive Vice President and
Chief Financial Officer 17
Jeffrey A. Bratsburg (53)........ President and Chief Executive Officer --
Independent Bank West Michigan 25
Edward B. Swanson (43)........... President and Chief Executive Officer --
Independent Bank South Michigan 21
Michael M. Magee, Jr. (40)....... President and Chief Executive Officer --
Independent Bank 21
Ronald L. Long (37).............. President and Chief Executive Officer --
Independent Bank East Michigan 15
</TABLE>

The Company's growth has allowed it to recruit and retain experienced
individuals, and the recent acquisitions have added experienced community
bankers to its franchise. The Company's compensation policies and practices are
central to the maintenance of its decentralized management structure, and are
intended to promote and support local Bank autonomy while at the same time
enhancing overall Company performance. As an example, individual bonuses are
currently based on the performance of the Bank the employee works for, as well
as the overall performance of the Company. The Company believes that this

35
<PAGE> 38

combination promotes individual bank performance and at the same time helps to
ensure that results are to the ultimate benefit of the Company's shareholders.
In addition to cash incentive plans, the Company maintains a variety of
equity-based plans to provide incentives for superior performance and to align
the interests of its executive officers and managers with those of the Company's
shareholders. Such "pay for performance" compensation plans include annual cash
performance awards, the Employee Stock Ownership Plan, the Employee Stock Option
Plan and the Incentive Share Grant Plan. As a result of these policies and
practices, every full-time employee, subject to certain employment conditions,
has an equity interest in the Company. Collectively, the Company's directors and
executive officers and Bank presidents own approximately 12.7% of the Company's
Common Stock, and as such have a vested interest in the Company's future success
and growth.

BUSINESS STRATEGY

The Company intends to supplement its internal growth with selective
acquisitions, while at the same time managing its capital resources. One of the
principal challenges confronting the Company, in light of its recent growth, is
the preservation of its decentralized management structure, which represents the
core of its community banking foundation.

INTERNAL GROWTH. Management believes that the stable and diversified
economies of the suburban and rural communities served by the Banks' offices, as
well as nearby communities and metropolitan areas, provide attractive markets
for the Company's traditional commercial banking services. Although the
financial services industry continues to be highly competitive, in view of the
limited competition within many of the Banks' principal markets, the Company's
community banking philosophy emphasizes a high level of service and convenience
as the principal means of competition.

The markets served by the Banks provide attractive opportunities for
maintaining favorable net interest margins; however, the predominantly rural and
suburban nature of these markets presents certain challenges to the Company's
ability to grow. In the face of this challenge, the Banks have utilized various
strategies, based upon the particular attributes of their respective markets, to
provide asset growth and profitably deploy capital. In the absence of meaningful
deposit growth within those markets, the Banks have increasingly relied on
advances from the FHLB to fund the increase in assets. The Company intends to
encourage the Banks to continue to operate autonomously to provide the
flexibility that may be necessary to take advantage of opportunities in their
respective markets.

The Company's corporate service departments develop various expertise to
assist the Banks and Bank management. In addition, the Banks share certain
expertise and experiences with one another. This sharing of expertise and
general coordination among the Company and the Banks is accomplished through a
network of holding company committees. The Company intends to continue to
promote the development of expertise and coordination among the Banks in order
to foster the Banks' growth in their respective markets.

ACQUISITION STRATEGY. The Company will continue to consider opportunities
for expansion through selective acquisitions in markets where management
believes its community banking approach creates a competitive advantage. In
order to capitalize upon its existing banking network, the Company will continue
to focus primarily on acquisitions in contiguous markets; however, the Company
may consider expansion into noncontiguous markets in instances where management
believes that opportunities exist to enhance shareholder value and allow for
effective application of its community banking practices. Management believes
that, given its relative size, the Company can sustain meaningful growth through
acquisitions in markets that are attractive to the Company but may not be of
sufficient size to interest its larger competitors.

CAPITAL MANAGEMENT. The Company intends to continue to focus on managing
its capital to provide an attractive return on its shareholders' investment. The
Company's dividend policies and share repurchase plan have been integral
components of management's efforts to maintain profitable financial leverage
within management's established risk parameters. Cash dividends declared were
equal to 36.5% of earnings for the first nine months of 1996, and were 36.8% and
34.6% of earnings in 1995 and 1994, respectively. Since January 1, 1994, the
Company repurchased approximately 75,900 shares of its Common Stock. The Company
may rely upon these capital management practices, in the absence of profitable
growth opportunities, as part of its goal of achieving an attractive return on
its shareholders' investment.

36
<PAGE> 39

THE BANKS

The following table depicts the Company's and the Banks' loan portfolios as
of September 30, 1996:

<TABLE>
<CAPTION>
CONSOLIDATED % OF TOTAL
---------------------- ----------------------------
AMOUNT % OF TOTAL IB IBWM IBSM IBEM
-------- ---------- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Real Estate
Residential first mortgages................. $263,224 46.6% 15.7% 15.7% 9.0% 6.2%
Residential home equity mortgages........... 31,528 5.6 1.7 2.6 1.0 0.3
Construction and land development........... 46,350 8.2 2.4 3.2 2.0 0.6
Other....................................... 84,428 14.9 6.3 3.4 2.8 2.4
Consumer...................................... 92,137 16.3 9.5 3.0 1.4 2.4
Commercial.................................... 31,534 5.6 3.7 1.3 0.5 0.1
Agricultural.................................. 16,217 2.8 0.2 0.1 0.2 2.3
-------- ----- ---- ---- ---- ----
Total loans.............................. $565,418 100.0% 39.5% 29.3% 16.9% 14.3%
======== ===== ==== ==== ==== ====
</TABLE>

The Banks' activities cover traditional phases of retail and commercial
banking, including checking and savings accounts, commercial and agricultural
lending, direct and indirect consumer financing, mortgage lending and deposit
box services. The Banks do not offer trust services. Most of the Banks' offices
provide full service lobby and drive-in services in the communities which they
serve. Automated teller machines are also provided at most locations.

Principally located in rural and suburban communities, the Banks face
limited competition within certain of their primary markets. In general,
however, the financial services industry is highly competitive. Banks and bank
holding companies compete not only with each other, but with savings and loan
associations, money market mutual funds, credit unions, securities dealers,
providers of insurance and annuity fund products and investment bankers. The
market share information appearing below is derived from the June 30, 1995
deposit balances made available by the federal banking regulatory agencies.

As of September 30, 1996, the Company and the Banks had 407 full-time
employees and 169 part-time employees.

INDEPENDENT BANK

Independent Bank ("IB"), founded in 1864, operates in two geographically
distinct regions. Its south region consists of most of Ionia County and adjacent
townships in Montcalm County. Ionia County, with a population of nearly 60,000,
is located between the Grand Rapids and Lansing metropolitan areas. Within this
region, IB is the only depository institution in several communities. IB's
market share, in communities where its branches are located, exceeds 30% of
total deposits.

IB's north region is comprised of the former branches of North Bank,
acquired as a result of the NBC Acquisition. IB defines its markets in this
region of northeastern Michigan as the counties of Iosco, Alpena and Presque
Isle, along with portions of Ogemaw, Alcona and Montmorency counties. IB's
northeastern branches are located in Hale, Tawas City, Rogers City, Rose City,
Whittemore, Glennie, Hillman and Hubbard Lake, as well as the larger communities
of Alpena and Oscoda. Within seven of the ten communities served by its branches
in this region, IB's market share of deposits exceeds 50%, and it is the only
bank with an office located within four of these communities.

While the regions are geographically distinct, the rural communities served
by IB's branches are demographically similar and rely on an economic base that
includes manufacturers, service and retail businesses, agriculture, mining,
forest products and government. Notwithstanding these similarities, Ionia
County's population and IB's business benefit from the region's proximity to
Grand Rapids and Lansing as well as the six facilities of the Michigan
Department of Corrections that are located in Ionia and Carson City. IB's
northeastern region benefits from a substantial retirement population as well as
vacationers.

37
<PAGE> 40

INDEPENDENT BANK WEST MICHIGAN

The main office of Independent Bank West Michigan ("IBWM") is located in
Rockford, a northern suburb of Grand Rapids. IBWM's branches serve the
communities of Howard City, Sand Lake, Cedar Springs, White Cloud, Newaygo,
Sparta and Croton Hardy located in northern Kent County, western Montcalm County
and southern Newaygo County. IBWM is the only financial institution with an
office in two of these communities; within three other markets IBWM's market
share exceeds 55% of total deposits. Additionally, IBWM has established loan
production offices with 21 commissioned real estate mortgage loan originators
that serve Muskegon, Mecosta and Ottawa counties.

IBWM's principal markets contain two distinct demographic groups. As a
suburb of Grand Rapids, Rockford is a fast growing, affluent residential
community while most of the remaining markets are rural. Reflecting the profile
of its markets, IBWM has emphasized consumer banking and, given the rapid growth
of western Michigan, real estate mortgage lending. As a result of IBWM's success
in real estate mortgage lending, the Company has experience in secondary
marketing and servicing that promotes the success of the other Banks.

INDEPENDENT BANK SOUTH MICHIGAN

Independent Bank South Michigan ("IBSM") has its headquarters in Leslie,
located between Lansing and Jackson. IBSM's branches are located in Ingham and
Eaton counties and the northern portion of Jackson County. Within the
communities of Rives Junction, Pleasant Lake, Potterville, Vermontville and
Leslie, IBSM is the only depository institution. Within seven of the nine
communities served by IBSM's branches, its market share exceeds 60% of total
deposits. Principal employers within this market include General Motors
Corporation, the State of Michigan and Michigan State University.

Although historically characterized as an agricultural bank, IBSM has
increased its focus on consumer and real estate mortgage lending and, to a
lesser degree, the non-agricultural commercial lending opportunities within its
markets. Its Okemos-based loan production office serves the greater Lansing area
and further leverages the Company's expertise in real estate mortgage lending.

INDEPENDENT BANK EAST MICHIGAN

The main office of IBEM is located in Caro, centrally located in Tuscola
County in the heart of eastern Michigan's thumb region. In addition to the
communities of Unionville, Kingston, Snover and Reese within Tuscola County,
IBEM's branches serve Clifford, North Branch, Clio and Marlette located in
northern Lapeer, Sanilac and Genesse counties. Within four of these communities,
IBEM is the only depository institution. Notwithstanding the agricultural-based
economy of the thumb region, IBEM's markets benefit from their proximity to the
Detroit metropolitan areas.

The pending acquisition of the FOA Branches, located in the communities of
Bad Axe, Sebewaing, Caseville, Elkton, Kinde, Ubly and Gagetown will add
approximately $122 million of deposits. As a result, IBEM will become the
largest depository institution in Huron County with a market share of
approximately 25% of total deposits.

LEGAL PROCEEDINGS

The Company and the Banks are parties to various claims, complaints and
other legal actions that have arisen in the ordinary course of business from
time to time. Management believes that the outcome of all pending legal
proceedings, in the aggregate, will not have a material adverse effect on the
Company's or the Banks' business, results of operations or financial condition.

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SUPERVISION AND REGULATION

The following is a summary of certain statutes and regulations affecting
the Company and the Banks. This summary is qualified in its entirety by
reference to the particular statutes and regulations. A change in applicable
laws or regulations may have a material effect on the Company, the Banks and the
businesses of the Company and the Banks. See "Risk Factors."

GENERAL

Financial institutions and their holding companies are extensively
regulated under federal and state law. Consequently, the growth and earnings
performance of the Company and the Banks can be affected not only by management
decisions and general and local economic conditions, but also by the statutes
administered by, and the regulations and policies of, various governmental
regulatory authorities. Those authorities include, but are not limited to the
Federal Reserve, the FDIC, the Commissioner of the Michigan Financial
Institutions Bureau ("Commissioner"), the Internal Revenue Service, and state
taxing authorities. The effect of such statutes, regulations and policies and
any changes thereto can be significant and cannot be predicted.

Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments, reserves against deposits, capital levels relative to
operations, lending activities and practices, the nature and amount of
collateral for loans, the establishment of branches, mergers, consolidations and
dividends. The system of supervision and regulation applicable to the Company
and the Banks establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds, the depositors of the Banks, and the public, rather than
shareholders of the Company.

Federal law and regulations, including provisions added by the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and regulations
promulgated thereunder, establish supervisory standards applicable to the
lending activities of the Banks, including internal controls, credit
underwriting, loan documentation, and loan-to-value ratios for loans secured by
real property.

THE COMPANY

GENERAL. The Company is a bank holding company and, as such, is registered
with, and subject to regulation by, the Federal Reserve under the Bank Holding
Company Act, as amended (the "BHCA"). Under the BHCA, the Company is subject to
periodic examination by the Federal Reserve, and is required to file periodic
reports of its operations and such additional information as the Federal Reserve
may require.

In accordance with Federal Reserve policy, the Company is expected to act
as a source of financial strength to the Banks and to commit resources to
support the Banks in circumstances where the Company might not do so absent such
policy. In addition, in certain circumstances a Michigan state bank having
impaired capital may be required by the Commissioner either to restore the
bank's capital by a special assessment upon its shareholders, or to initiate the
liquidation of the bank.

Any capital loans by a bank holding company to a subsidiary bank are
subordinate in right of payment to deposits and to certain other indebtedness of
such subsidiary bank. In the event of a bank holding company's bankruptcy, any
commitment by the bank holding company to a federal bank regulatory agency to
maintain the capital of a subsidiary bank will be assumed by the bankruptcy
trustee and entitled to a priority of payment.

INVESTMENTS AND ACTIVITIES. Under the BHCA, bank holding companies are
prohibited, with certain limited exceptions, from engaging in activities other
than those of banking or of managing or controlling banks and from acquiring or
retaining direct or indirect ownership or control of voting shares or assets of
any company which is not a bank or bank holding company, other than subsidiary
companies furnishing services to or performing services for its subsidiaries,
and other subsidiaries engaged in activities which, by the Federal Reserve's
determination, are closely related to banking or managing or controlling banks.
Since September 29, 1995, the BHCA has permitted the Federal Reserve under
specified circumstances to approve the acquisition

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<PAGE> 42

by a bank holding company located in one state, of a bank or bank holding
company located in another state, without regard to any prohibition contained in
state law. See "Recent Regulatory Developments."

In general, any direct or indirect acquisition by the Company of any voting
shares of any bank which would result in the Company's direct or indirect
ownership or control of more than 5% of any class of voting shares of such bank,
and any merger or consolidation of the Company with another bank holding
company, will require the prior written approval of the Federal Reserve under
the BHCA. In acting on such applications, the Federal Reserve must consider
various statutory factors, including among others, the effect of the proposed
transaction on competition in relevant geographic and product markets, and each
party's financial condition, managerial resources, and record of performance
under the Community Reinvestment Act.

In addition and subject to certain exceptions, the Change in the Bank
Control Act ("Control Act") and regulations promulgated thereunder by the
Federal Reserve, require any person acting directly or indirectly, or through or
in concert with one or more persons, to give the Federal Reserve 60 days'
written notice before acquiring control of a bank holding company. Transactions
which are presumed to constitute the acquisition of control include the
acquisition of any voting securities of a bank holding company having securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
if, after the transaction, the acquiring person (or persons acting in concert)
owns, controls or holds with power to vote 25% or more of any class of voting
securities of the institution. The acquisition may not be consummated subsequent
to such notice if the Federal Reserve issues a notice within 60 days, or within
certain extensions of such period, disapproving the same.

The merger or consolidation of an existing bank subsidiary of the Company
with another bank, or the acquisition by such a subsidiary of the assets of
another bank, or the assumption of the deposit and other liabilities by such a
subsidiary requires the prior written approval of the responsible Federal
depository institution regulatory agency under the Bank Merger Act, based upon a
consideration of statutory factors similar to those outlined above with respect
to the BHCA. In addition, in certain such cases an application to, and the prior
approval of, the Federal Reserve under the BHCA and/or the Commissioner under
Michigan banking laws, may be required.

With certain limited exceptions, the BHCA prohibits bank holding companies
from acquiring direct or indirect ownership or control of voting shares or
assets of any company other than a bank, unless the company involved is engaged
solely in one or more activities which the Federal Reserve has determined to be
closely related to banking or managing or controlling banks. In making this
determination, the Federal Reserve considers various factors, including among
others the financial and managerial resources of the notifying bank holding
company, and the relative public benefits and adverse effects which may be
expected to result from the performance of the activity by an affiliate of such
company. The Federal Reserve may apply different standards to activities
proposed to be commenced de novo and activities commenced by acquisition, in
whole or in part, of a going concern.

The recent enactment of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 ("EGRPRA") streamlines the nonbanking activities
application process for well capitalized and well managed bank holding
companies. See "Recent Regulatory Developments." Under EGRPRA, qualified bank
holding companies may commence a regulatory approved nonbanking activity without
prior notice to the Federal Reserve; written notice is merely required within
ten days after commencing the activity. Also, under EGRPRA, the prior notice
period is reduced to 12 days in the event of any nonbanking acquisition or share
purchase, assuming the size of the acquisition does not exceed 10% of
risk-weighted assets of the acquiring bank holding company and the consideration
does not exceed 15% in Tier 1 capital. This prior notice requirement also
applies to commencing a nonbanking activity de novo which has been previously
approved by order of the Federal Reserve, but not yet implemented by
regulations.

CAPITAL REQUIREMENTS. The Federal Reserve uses capital adequacy guidelines
in its examination and regulation of bank holding companies. If capital falls
below minimum guidelines, a bank holding company may, among other things, be
denied approval to acquire or establish additional banks or non-bank businesses.

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<PAGE> 43

The Federal Reserve's capital guidelines establish the following minimum
regulatory capital requirements for bank holding companies: (i) a capital
leverage requirement expressed as a percentage of total assets, (ii) a
risk-based requirement expressed as a percentage of total risk-weighted assets,
and (iii) a Tier 1 leverage requirement expressed as a percentage of total
assets. The capital leverage requirement consists of a minimum ratio of total
capital to total assets of 6%, with an expressed expectation that banking
organizations generally should operate above such minimum level. The risk-based
requirement consists of a minimum ratio of total capital to total risk-weighted
assets of 8%, of which at least one-half must be Tier 1 capital (which consists
principally of shareholders' equity). The Tier 1 leverage requirement consists
of a minimum ratio of Tier 1 capital to total assets, less goodwill ("Tier 1
capital leverage ratio") of 3% for the most highly rated companies, with minimum
requirements of 4% to 5% for all others.

The risk-based and leverage standards presently used by the Federal Reserve
are minimum requirements, and higher capital levels will be required if
warranted by the particular circumstances or risk profiles of individual banking
organizations. Further, any banking organization experiencing or anticipating
significant growth would be expected to maintain capital ratios, including
tangible capital positions (i.e., Tier 1 capital less all intangible assets),
well above the minimum levels. The Federal Reserve has not advised the Company
of any specific minimum Tier 1 capital leverage ratio applicable to it.

FDICIA requires the federal bank regulatory agencies biennially to review
risk-based capital standards to ensure that they adequately address interest
rate risk, concentration of credit risk and risks from non-traditional
activities and, since adoption of the Riegle Community Development and
Regulatory Improvement Act of 1994 (the "Riegle Act"), to do so taking into
account the size and activities of depository institutions and the avoidance of
undue reporting burdens. See "Recent Regulatory Developments." In 1995, the
federal bank regulatory agencies adopted regulations requiring as part of the
assessment of an institution's capital adequacy the consideration of: (i)
identified concentrations of credit risks, (ii) the exposure of the institution
to a decline in the value of its capital due to changes in interest rates, and
(iii) the application of revised conversion factors and netting rules on the
institution's potential future exposure from derivative transactions.

DIVIDENDS. The Company is a corporation separate and distinct from the
Banks. Most of the Company's revenues are received by it in the form of
dividends paid by the Banks. The Banks are subject to statutory restrictions on
their ability to pay dividends to the Company. See "The Banks -- Dividends." The
Federal Reserve has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the Federal Reserve
expressed its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends exceeding its net income or which could only be
funded in ways that weakened the bank holding company's financial health, such
as by borrowing. Additionally, the Federal Reserve possesses enforcement powers
over bank holding companies and their non-bank subsidiaries to prevent or remedy
actions that represent unsafe or unsound practices or violations of applicable
statutes and regulations. Among these powers is the ability to proscribe the
payment of dividends by banks and bank holding companies. Similar enforcement
powers over the Banks are possessed by the FDIC. The "prompt corrective action"
provisions of FDICIA impose further restrictions on the payment of dividends by
insured banks which fail to meet specified capital levels and, in some cases,
impose similar restrictions on their parent bank holding companies.

In addition to the restrictions on dividends imposed by the Federal
Reserve, the Michigan Business Corporation Act provides that dividends may be
legally declared or paid only if after the distribution a corporation, such as
the Company, can pay its debts as they come due in the usual course of business
and its total assets equal or exceed the sum of its liabilities plus the amount
that would be needed to satisfy the preferential rights upon dissolution of any
holders of preferred stock whose preferential rights are superior to those
receiving the distribution.

THE BANKS

GENERAL. The Banks are Michigan banking corporations and their deposit
accounts are principally insured by the BIF of the FDIC. As BIF-insured Michigan
chartered banks, the Banks are subject to the examination, supervision,
reporting and enforcement requirements of the Commissioner, as the chartering
authority for

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<PAGE> 44

Michigan banks, and the FDIC, as administrator of the BIF. These agencies and
federal and state law extensively regulate various aspects of the banking
business including, among other things, permissible types and amounts of loans,
investments and other activities, capital adequacy, branching, interest rates on
loans and on deposits, the maintenance of noninterest-bearing reserves on
deposit accounts, and the safety and soundness of banking practices.

DEPOSIT INSURANCE. As FDIC-insured institutions, the Banks are required to
pay deposit insurance premium assessments to the FDIC. Pursuant to FDICIA, the
FDIC adopted a risk-based assessment system under which all insured depository
institutions are placed into one of nine categories and assessed insurance
premiums, based upon their level of capital and supervisory evaluation.
Institutions classified as well-capitalized (as defined by the FDIC) and
considered healthy pay the lowest premium while institutions that are less than
adequately capitalized (as defined by the FDIC) and considered of substantial
supervisory concern pay the highest premium. Risk classification of all insured
institutions is made by the FDIC for each semi-annual assessment period.

FDICIA required the FDIC to establish assessment rates at levels which
would restore the BIF to a mandated reserve ratio of 1.25% of insured deposits
over a period not to exceed 15 years. In 1995, the FDIC determined that the BIF
had reached the required ratio. Accordingly, the FDIC has established the
schedule of BIF insurance assessments for the first semi-annual assessment
period of 1996, ranging from 0% of deposits for institutions in the highest
category to .27% of deposits for institutions in the lowest category. For the
first nine months of 1996, the Banks paid $32,000 in BIF insurance assessments.

At September 30, 1996, the Banks held less than $11 million of SAIF-insured
deposits, and paid an average rate premium of .23% on such deposits during the
first nine months of 1996. The deposit liabilities to be assumed in connection
with the acquisition of the FOA Branches are all insured by SAIF. Effective
September 30, 1996, the FDIC was authorized to impose a special assessment on
certain SAIF-assessable deposits. Because IBEM held no SAIF-assessable deposits
as of March 31, 1995, IBEM will be exempt from the special assessment.

The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution or its
directors have engaged or are engaging in unsafe or unsound practices, or have
violated any applicable law, regulation, order, or any condition imposed in
writing by, or written agreement with, the FDIC, or if the institution is in an
unsafe or unsound condition to continue operations. The FDIC may also suspend
deposit insurance temporarily during the hearing process for a permanent
termination of insurance if the institution has no tangible capital.

CAPITAL REQUIREMENTS. Consistent with the Federal Reserve's guidelines for
bank holding companies, the FDIC has established the following minimum capital
standards for state-chartered, FDIC-insured non-member banks, such as the Banks:
a leverage requirement consisting of a minimum ratio of Tier 1 capital to total
assets of 3% for the most highly-rated banks with minimum requirements of 4% to
5% for all others and a risk-based capital requirement consisting of a minimum
ratio of total capital to total risk-weighted assets of 8%, at least one-half of
which must be Tier 1 capital (which consists principally of shareholders'
equity). These capital requirements are minimum requirements. Higher capital
levels will be required if warranted by the particular circumstances or risk
profiles of individual institutions.

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<PAGE> 45

FDICIA establishes five capital categories, and the federal depository
institution regulators, as directed by FDICIA, have adopted, subject to certain
exceptions, the following minimum requirements for each of such categories:

<TABLE>
<CAPTION>
TOTAL TIER 1
RISK-BASED RISK-BASED
CAPITAL RATIO CAPITAL RATIO LEVERAGE RATIO
-------------- -------------- -----------------------
<S> <C> <C> <C>
Well capitalized............................ 10% or above 6% or above 5% or above
Adequately capitalized...................... 8% or above 4% or above 4% or above
Undercapitalized............................ Less than 8% Less than 4% Less than 4%
Significantly undercapitalized.............. Less than 6% Less than 3% Less than 3%
Critically undercapitalized................. -- -- A ratio of tangible
equity to total assets
of 2% or less
</TABLE>

At September 30, 1996, each of the Banks' ratios exceeded minimum
requirements for the well-capitalized category.

Among other things, FDICIA requires the federal depository institution
regulators to take prompt corrective action in respect of depository
institutions that do not meet minimum capital requirements. The scope and degree
of regulatory intervention is linked to the capital category to which a
depository institution is assigned.

Depending upon the capital category to which an institution is assigned,
the regulators' corrective powers include: requiring the submission of a capital
restoration plan; placing limits on asset growth and restrictions on activities;
requiring the institution to issue additional capital stock (including
additional voting stock) or to be acquired; restricting transactions with
affiliates; restricting the interest rate the institution may pay on deposits;
ordering a new election of directors of the institution; requiring that senior
executive officers or directors be dismissed; prohibiting the institution from
accepting deposits from correspondent banks; requiring the institution to divest
certain subsidiaries; prohibiting the payment of principal or interest on
subordinated debt; and ultimately, appointing a receiver for the institution.

In general, a depository institution may be reclassified to a lower
category than is indicated by its capital position if the appropriate federal
depository institution regulatory agency determines the institution to be
otherwise in an unsafe or unsound condition or to be engaged in an unsafe or
unsound practice. Such a practice could include a failure by the institution,
following receipt of a less-than-satisfactory rating on its most recent
examination report, to correct the deficiency.

DIVIDENDS. Under Michigan law, the Banks are restricted as to the maximum
amount of dividends they may pay on their common stock. A Michigan state bank
may not declare or pay a dividend unless the bank will have a surplus amounting
to at least 20% of its capital after the payment of the dividend. A Michigan
state bank may, with the approval of the Commissioner, by vote of shareholders
owning 2/3 of the stock eligible to vote, increase its capital stock by a
declaration of a stock dividend, provided that after the increase the bank's
surplus equals at least 20% of its capital stock, as increased. The Banks may
not declare or pay any dividend until the cumulative dividends on preferred
stock (should any such stock be issued and outstanding) have been paid in full.
The Banks have no present plans to issue preferred stock other than the
Preferred Stock.

FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. The FDIC may also prevent an insured bank from paying
dividends if the bank is in default of payment of any assessment due to the
FDIC. In addition, payment of dividends by a bank may be prevented by the
applicable federal regulatory authority if such payment is determined, by reason
of the financial condition of such bank, to be an unsafe and unsound banking
practice. The Federal Reserve Board has issued a policy statement providing that
bank holding companies and insured banks should generally only pay dividends out
of current operating earnings.

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<PAGE> 46

INSIDER TRANSACTIONS. The Banks are subject to certain restrictions imposed
by the Federal Reserve Act on "covered transactions" with the Company or its
subsidiaries. The "covered transactions" that an insured bank and its
subsidiaries are permitted to engage in with their nonbank affiliates are
limited to the following amounts: (i) in the case of any one such affiliate, the
aggregate amount of "covered transactions" of the insured bank and its
subsidiaries cannot exceed 10% of the capital stock and surplus of the insured
bank; and (ii) in the case of all affiliates, the aggregate amount of all
"covered transactions" of the insured bank and its subsidiaries cannot exceed
20% of the capital stock and surplus of the insured bank. "Covered transactions"
are defined by statute to include a loan or extension of credit to the
affiliate, a purchase of securities issued by an affiliate, a purchase of assets
from the affiliate (unless otherwise exempted by the Federal Reserve), the
acceptance of securities issued by the affiliate as collateral for a loan, and
the issuance of a guaranty, acceptance, or letter of credit for the benefit of
an affiliate. Covered transactions must also be collateralized. The Federal
Reserve Act further requires that (i) "covered transactions" with affiliates;
(ii) asset sales to affiliates; (iii) contractual arrangements with affiliates;
(iv) transactions in which an affiliate acts as an agent or broker; and (v) any
transaction in which an affiliate has a financial interest or is a participant,
must be made: (x) on terms and under circumstances, including credit standards,
that are substantially the same as those prevailing at the time for comparable
transactions with or involving other nonaffiliated companies; or (y) in the
absence of comparable transactions, on terms and under circumstances, including
credit standards, that in good faith would be offered to, or would apply to,
nonaffiliated companies. Certain limitations and reporting requirements are also
placed on extensions of credit by the Banks to their directors and officers, to
directors and officers of the Company and its subsidiaries, to principal
shareholders of the Company, and to "related interests" of such directors,
officers and principal shareholders. In addition, such legislation and
regulations may affect the terms upon which any person becoming a director or
officer of the Company or one of its subsidiaries or a principal shareholder of
the Company may obtain credit from banks with which any of the Banks maintains a
correspondent relationship.

SAFETY AND SOUNDNESS STANDARDS. On July 10, 1995, the FDIC, the Office of
Thrift Supervision, the Federal Reserve and the Office of the Comptroller of the
Currency published final guidelines implementing the FDICIA requirement that the
federal banking agencies establish operational and managerial standards to
promote the safety and soundness of federally insured depository institutions.
The guidelines, which took effect on August 9, 1995, establish standards for
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth, and
compensation, fees and benefits. In general, the guidelines prescribe the goals
to be achieved in each area, and each institution is responsible for
establishing its own procedures to achieve those goals. If an institution fails
to comply with any of the standards set forth in the guidelines, the
institution's primary federal regulator may require the institution to submit a
plan for achieving and maintaining compliance. The preamble to the guidelines
states that the agencies expect to require a compliance plan from an institution
whose failure to meet one or more of the standards is of such severity that it
could threaten the safe and sound operation of the institution. Failure to
submit an acceptable compliance plan, or failure to adhere to a compliance plan
that has been accepted by the appropriate regulator, would constitute grounds
for further enforcement action. The federal banking agencies have also published
for comment proposed asset quality and earnings standards which, if adopted,
would be added to the safety and soundness guidelines. This proposal, like the
final guidelines, would make each depository institution responsible for
establishing its own procedures to meet such goals.

STATE BANK ACTIVITIES. Under FDICIA, as implemented by final regulations
adopted by the FDIC, FDIC-insured state banks are prohibited, subject to certain
exceptions, from making or retaining equity investments of a type, or in an
amount, that are not permissible for a national bank. FDICIA, as implemented by
FDIC regulations, also prohibits FDIC-insured state banks and their
subsidiaries, subject to certain exceptions, from engaging as a principal in any
activity that is not permitted for a national bank or its subsidiary,
respectively, unless the bank meets, and continues to meet, its minimum
regulatory capital requirements and the FDIC determines the activity would not
pose a significant risk to the deposit insurance fund of which the bank is a
member. Impermissible investments and activities must be divested or
discontinued within certain time frames set by the FDIC in accordance with
FDICIA.

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<PAGE> 47

CONSUMER BANKING. The Banks' business includes making a variety of types of
loans to individuals. In making these loans, the Banks are subject to State
usury and regulatory laws and to various Federal statutes, such as the Equal
Credit Opportunity Act, Fair Credit Reporting Act, Truth in Lending Act, Real
Estate Settlement Procedures Act, and Home Mortgage Disclosure Act, and the
regulations promulgated thereunder, which (x) prohibit discrimination based on
race, color, religion, national origin, sex, marital status, age (except in
limited circumstances), receipt of income from public assistance programs, or
good faith exercise of any rights under the Consumer Credit Protection Act, (y)
specify disclosures to be made to borrowers regarding credit and settlement
costs, and (z) regulate the mortgage loan servicing activities of the Bank,
including the maintenance and operation of escrow accounts and the transfer of
mortgage loan servicing. The Riegle Act imposed new escrow requirements on
mortgage lenders and servicers under the National Flood Insurance Program. See
"Recent Regulatory Developments." In receiving deposits, the Banks are subject
to extensive regulation under state and federal law and regulations, including
the Truth in Savings Act, the Expedited Funds Availability Act, the Bank Secrecy
Act, the Electronic Funds Transfer Act, and the Federal Deposit Insurance Act.
Violation of these laws could result in the imposition of significant damages
and fines upon the Banks and their respective directors and officers.

RECENT REGULATORY DEVELOPMENTS

In 1994, the Congress enacted two major pieces of banking legislation, the
Riegle Act and the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Riegle-Neal Act"). The Riegle Act addressed such varied issues as
the promotion of economic revitalization of defined urban and rural "qualified
distressed communities" through special purpose "Community Development Financial
Institutions," the expansion of consumer protection with respect to certain
loans secured by a consumer's home and reverse mortgages, and reductions in
compliance burdens regarding Currency Transaction Reports, reform of the
National Flood Insurance Program, the promotion of a secondary market for small
business loans and leases, and mandating specific changes to reduce regulatory
impositions on depository institutions and holding companies.

The Riegle-Neal Act substantially changed the geographic constraints
applicable to the banking industry. Effective September 29, 1995, the
Riegle-Neal Act allows bank holding companies to acquire banks located in any
state in the United States without regard to geographic restrictions or
reciprocity requirements imposed by state law, but subject to certain
conditions, including limitations on the aggregate amount of deposits that may
be held by the acquiring holding company and all of its insured depository
institution affiliates. Effective June 1, 1997 (or earlier if expressly
authorized by applicable state law), the Riegle-Neal Act allows banks to
establish interstate branch networks through acquisitions of other banks,
subject to certain conditions that include limitations on the aggregate amount
of deposits that may be held by the surviving bank and all of its insured
depository institution affiliates. The establishment of de novo interstate
branches or the acquisition of individual branches of a bank in another state
(rather than the acquisition of an out-of-state bank in its entirety) is allowed
by the Riegle-Neal Act only if specifically authorized by state law. The
legislation allows individual states to "opt-out" of certain provisions of the
Riegle-Neal Act by enacting appropriate legislation prior to June 1, 1997.

In November, 1995, Michigan exercised its right to opt-in early to the
Riegle-Neal Act, and permitted non-U.S. banks to establish branch offices in
Michigan. Effective November 29, 1995, the Michigan Banking Code was amended to
permit, in appropriate circumstances and with the approval of the Commissioner,
(i) the acquisition of Michigan-chartered banks by FDIC-insured banks, savings
banks, or savings and loan associations located in other states, (ii) the sale
by a Michigan-chartered bank of one or more of its branches (not comprising all
or substantially all of its assets) to an FDIC insured bank, savings bank or
savings and loan association located in a state in which a Michigan-chartered
bank could purchase one or more branches of the purchasing entity, (iii) the
acquisition by a Michigan-chartered bank of an FDIC-insured bank, savings bank
or savings and loan association located in another state, (iv) the acquisition
by a Michigan-chartered bank of one or more branches (not comprising all or
substantially all of the assets) of an FDIC-insured bank, savings bank or
savings and loan association located in another state, (v) the consolidation of
one or more Michigan-chartered banks and FDIC-insured banks, savings banks or
savings and loan associations located in

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<PAGE> 48

other states having laws permitting such consolidation, with the resulting
organization chartered either by Michigan or one of such other states, (vi) the
establishment by Michigan-chartered banks of branches located in other states,
the District of Columbia, or U.S. territories or protectorates with the consent
of the appropriate state or territorial regulatory authority, and (vii) the
establishment by foreign banks of branches located in Michigan. The amending
legislation also expanded the regulatory authority of the Commissioner and made
certain other changes.

The Michigan Legislature adopted, effective March 28, 1996, the Credit
Reform Act. This statute, together with amendments to other related laws,
permits regulated lenders, indirectly including Michigan-chartered banks, to
charge and collect higher rates of interest and increased fees on certain types
of loans to individuals and businesses. The laws prohibit "excessive fees and
charges," and authorize governmental authorities and borrowers to bring actions
for injunctive relief and statutory and actual damages for violations by
lenders. The statutes specifically authorize class actions, and also civil money
penalties for knowing and willful, or persistent violations.

FDIC regulations which became effective April 1, 1996, impose limitations
(and in certain cases, prohibitions) on (1) certain "golden parachute" severance
payments by troubled depository institutions and their affiliated holding
companies to institution-affiliated parties (primarily directors, officers,
employees, or principal shareholders of the institution), and (ii) certain
indemnification payments by a depository institution or its affiliated holding
company, regardless of financial condition, to institution-affiliated parties.
The FDIC regulations impose limitations on indemnification payments which could
restrict, in certain circumstances, payments by the Company or the Banks to
their respective directors or officers otherwise permitted under the Michigan
Business Corporation Act ("MBCA") or the Michigan Banking Code, respectively.

On September 30, 1996, EGRPRA was signed into law, which provides for the
recapitalization of SAIF and includes approximately 40 regulatory relief
initiatives. Among other matters, this legislation provides for expedited
application procedures for nonbanking activities by well capitalized and well
managed bank holding companies, provides reforms to the Fair Credit Reporting
Act, and provides other forms of regulatory relief to the financial services
industry.

DESCRIPTION OF PREFERRED SECURITIES

The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act. Initially, State Street Bank and Trust Company will be the
Property Trustee and will act as trustee for the purpose of complying with the
Trust Indenture Act. The terms of the Preferred Securities will include those
stated in the Trust Agreement and those made part of the Trust Agreement by the
Trust Indenture Act. This summary of certain terms and provisions of the
Preferred Securities and the Trust Agreement does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, all the
provisions of the Trust Agreement, including the definitions therein of certain
terms, and the Trust Indenture Act. Wherever particular defined terms of the
Trust Agreement (as amended or supplemented from time to time) are referred to
herein, such defined terms are incorporated herein. The form of the Trust
Agreement has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.

GENERAL

Pursuant to the terms of the Trust Agreement, the Trustees on behalf of IBC
Capital will issue the Preferred Securities and the Common Securities
(collectively, the "Trust Securities"). The Preferred Securities will represent
preferred beneficial interests in IBC Capital and the holders thereof will be
entitled to a preference in certain circumstances with respect to Distributions
and amounts payable on redemption or liquidation over the Common Securities of
IBC Capital, as well as other benefits as described in the Trust Agreement.

The Preferred Securities will rank pari passu, and payments will be made
thereon pro rata, with the Common Securities of IBC Capital except as described
under "-- Subordination of Common Securities."

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Legal title to the Subordinated Debentures will be held by the Property Trustee
in trust for the benefit of the holders of the Preferred Securities and Common
Securities. The Guarantee executed by the Company for the benefit of the holders
of the Preferred Securities will be a guarantee on a subordinated basis with
respect to the Preferred Securities but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when IBC Capital does not have funds on hand available to make such
payments. See "Description of Guarantee."

DISTRIBUTIONS

PAYMENT OF DISTRIBUTIONS. The Preferred Securities represent beneficial
interests in IBC Capital, and Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, to the holders of the Preferred Securities on the relevant record
dates (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). The record date will be, for so long as the
Preferred Securities remain in book-entry form, one Business Day prior to the
relevant Distribution Date and, in the event the Preferred Securities are not in
book-entry form, the 15th day of the month in which the relevant Distribution
Date occurs. Distributions will accumulate from the date of original issuance.
The first Distribution Date for the Preferred Securities will be March 31, 1997.
The amount of Distributions payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional Distributions,
interest or other payment in respect of any such delay), in each case with the
same force and effect as if made on the date such payment was originally
payable. As used in this Prospectus, a "Business Day" shall mean any day other
than a Saturday or a Sunday, or a day on which banking institutions in The City
of New York are authorized or required by law or executive order to remain
closed or a day on which the corporate trust office of the Property Trustee or
the Debenture Trustee is closed for business.

EXTENSION PERIOD. So long as no Event of Default under the Indenture has
occurred and is continuing, the Company has the right under the Indenture to
defer the payment of interest on the Subordinated Debentures at any time or from
time to time for a period not exceeding 20 consecutive quarters with respect to
each such period (each, an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity of the Subordinated Debentures. As
a consequence of any such election, quarterly Distributions on the Preferred
Securities will be deferred by IBC Capital during any such Extension Period.
Distributions to which holders of the Preferred Securities are entitled will
accumulate additional Distributions thereon at the rate per annum of %
thereof, compounded quarterly from the relevant Distribution Date. The term
"Distributions" as used herein shall include any such additional Distributions.
During any such Extension Period, the Company may not, and may not permit any
subsidiary of the Company to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior in interest to the
Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the
Subordinated Debentures (other than (a) dividends or distributions in Common
Stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee and (d) purchases of Common Stock under any of
the Company's benefit plans for its directors, officers or employees). Prior to
the termination of any such Extension Period, the Company may defer the payment
of interest, provided that no Extension Period may exceed 20 consecutive
quarters, or extend beyond the Stated Maturity of the Subordinated Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due, the Company may elect to begin a new Extension Period. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period.

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The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.

CUMULATIVE DISTRIBUTIONS. Distributions on the Preferred Securities will
accumulate from the date of original issuance and will be payable on the
Distribution Dates. In the event that any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any additional Distributions, interest or other
payment in respect to any such delay) with the same force and effect as if made
on the date such payment was originally payable.

The funds of IBC Capital available for distribution to holders of its
Preferred Securities will be limited to payments under the Subordinated
Debentures in which IBC Capital will invest the proceeds from the issuance and
sale of its Preferred Securities. See "Description of Subordinated Debentures."
If the Company does not make interest payments on the Subordinated Debentures,
the Property Trustee will not have funds available to pay Distributions on the
Preferred Securities. The payment of Distributions (if and to the extent IBC
Capital has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Company. See
"Description of Guarantee."

Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of IBC Capital on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to any
applicable laws and regulations and the provisions of the Trust Agreement, each
such payment will be made as described under "Book-Entry Issuance."

REDEMPTION OR EXCHANGE

The Company will have the right to redeem the Subordinated Debentures (i)
on or after , 2001, in whole at any time or in part from time to
time, or (ii) at any time, in whole (but not in part), upon the occurrence of a
Tax Event, in each case subject to receipt of prior approval by the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve.

MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Subordinated Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount (as
defined below) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date").
See "Description of Subordinated Debentures -- Redemption or Exchange." If less
than all of the Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption of the Preferred Securities and the Common
Securities pro rata or by lot.

DISTRIBUTION OF SUBORDINATED DEBENTURES. Subject to the Company having
received prior approval of the Federal Reserve if so required under applicable
capital guidelines or policies of the Federal Reserve, the Company will have the
right at any time to liquidate IBC Capital and, after satisfaction of the
liabilities of creditors of IBC Capital as provided by applicable law, cause the
Subordinated Debentures to be distributed to the holders of Preferred Securities
and Common Securities in liquidation of IBC Capital.

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TAX EVENT REDEMPTION OR INVESTMENT COMPANY EVENT REDEMPTION. If a Tax Event
or an Investment Company Event in respect of the Preferred Securities and Common
Securities shall occur and be continuing, the Company has the right to redeem
the Subordinated Debentures in whole (but not in part) and thereby cause a
mandatory redemption of such Preferred Securities and Common Securities in whole
(but not in part) at the Redemption Price within 90 days following the
occurrence of such Tax Event or Investment Company Event. In the event a Tax
Event or an Investment Company Event in respect of the Preferred Securities and
Common Securities has occurred and is continuing and the Company does not elect
to redeem the Subordinated Debentures and thereby cause a mandatory redemption
of such Preferred Securities and Common Securities or to liquidate IBC Capital
and cause the Subordinated Debentures to be distributed to holders of such
Preferred Securities and Common Securities in liquidation of IBC Capital as
described below, such Preferred Securities will remain outstanding and
Additional Sums (as defined below) may be payable on the Subordinated
Debentures.

"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by IBC Capital on the
outstanding Preferred Securities and Common Securities of IBC Capital shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which IBC Capital has become subject as a result of a Tax Event or an
Investment Company Event.

"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (ii) with respect to a
distribution of Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of IBC Capital, Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Subordinated Debentures are
distributed.

"Liquidation Amount" means the stated amount of $25 per Trust Security.

After the liquidation date fixed for any distribution of Subordinated
Debentures for Preferred Securities (i) such Preferred Securities will no longer
be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depositary") or its nominee, as the record holder of the Preferred Securities,
will receive a registered global certificate or certificates representing the
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing Preferred Securities not held by the Depositary or its
nominee will be deemed to represent the Subordinated Debentures having a
principal amount equal to the Liquidation Amount of such Preferred Securities,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on the Preferred Securities until such certificates are
presented to the Administrative Trustees or their agent for transfer or
reissuance.

There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of IBC Capital were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Debentures that the investor may receive on dissolution and
liquidation of IBC Capital, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.

REDEMPTION PROCEDURES

Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Subordinated Debentures. Redemptions of the Preferred
Securities shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that IBC Capital has funds on hand available
for the payment of such Redemption Price. See "Subordination of Common
Securities."

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If IBC Capital gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, eastern standard time, on the Redemption Date,
to the extent funds are available, the Property Trustee will deposit irrevocably
with the Depositary funds sufficient to pay the aggregate Redemption Price and
will give the Depositary irrevocable instructions and authority to pay the
Redemption Price to the holders of such Preferred Securities. See "Book-Entry
Issuance." If such Preferred Securities are no longer in book-entry form, the
Property Trustee, to the extent funds are available, will irrevocably deposit
with the paying agent for such Preferred Securities funds sufficient to pay the
aggregate Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holders of such Preferred Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of the holders of such Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any additional Distribution, interest
or other payment in respect of any such delay). In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by IBC Capital or by the
Company pursuant to the Guarantee. Distributions on such Preferred Securities
will continue to accrue at the then applicable rate, from the Redemption Date
originally established by IBC Capital for such Preferred Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the Redemption
Price. See "Description of Guarantee."

Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.

Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities shall
be made to the applicable recordholders thereof as they appear on the register
for such Preferred Securities on the relevant record date, which date shall be
one Business Day prior to the relevant Redemption Date or liquidation date, as
applicable; provided, however, that in the event that any Preferred Securities
are not in book-entry form, the relevant record date for such Preferred
Securities shall be a date at least 15 days prior to the Redemption Date or
liquidation date, as applicable.

If less than all of the Preferred Securities and Common Securities issued
by IBC Capital are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected by the Property
Trustee from the outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the trust registrar in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of the Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred Securities
shall relate to the portion of the aggregate Liquidation Amount of Preferred
Securities which has been or is to be redeemed.

Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Subordinated Debentures, on and after the

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Redemption Date interest will cease to accrue on such Subordinated Debentures or
portions thereof (and distributions will cease to accrue on the related
Preferred Securities or portions thereof) called for redemption.

SUBORDINATION OF COMMON SECURITIES

Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata based on
the Liquidation Amount of the Preferred Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or Redemption Price of, any of the Common Securities, and
no other payment on account of the redemption, liquidation or other acquisition
of such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the outstanding Preferred Securities then called for redemption,
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Preferred Securities then due and
payable.

In the case of any Event of Default resulting from a Debenture Event of
Default, the Company as holder of the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
applicable Trust Agreement until the effect of all such Events of Default with
respect to such Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the Trust Agreement with
respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
the Preferred Securities and not on behalf of the Company as holder of the
Common Securities, and only the holders of the Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.

LIQUIDATION DISTRIBUTION UPON TERMINATION

The Company will have the right at any time to terminate IBC Capital and
cause the Subordinated Debentures to be distributed to the holders of the
Preferred Securities. Such right is subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve.

In addition, pursuant to the Trust Agreement, IBC Capital shall
automatically terminate upon expiration of its term and shall earlier terminate
on the first to occur of: (i) certain events of bankruptcy, dissolution or
liquidation of the Company; (ii) the distribution of a Like Amount of the
Subordinated Debentures to the holders of its Trust Securities, if the Company,
as Depositor, has given written direction to the Property Trustee to terminate
IBC Capital (which direction is optional and wholly within the discretion of the
Company, as Depositor); (iii) redemption of all of the Preferred Securities as
described under "Description of Preferred Securities -- Redemption or
Exchange -- Mandatory Redemption;" and (iv) the entry of an order for the
dissolution of IBC Capital by a court of competent jurisdiction.

If an early termination occurs as described in clause (i), (ii) or (iv)
above, IBC Capital shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of IBC Capital as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of IBC Capital available for distribution to holders, after satisfaction
of liabilities to creditors of IBC Capital as provided by applicable law, an
amount equal to, in the case of holders of Preferred Securities, the aggregate
of the Liquidation Amount plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because IBC Capital has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by IBC Capital on the Preferred
Securities shall be paid on a pro rata basis. The holder(s) of the Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the

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holders of the Preferred Securities, except that if a Debenture Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities.

Under current United States federal income tax law and interpretations and
assuming, as expected, IBC Capital is treated as a grantor trust, a distribution
of the Subordinated Debentures should not be a taxable event to holders of the
Preferred Securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or other circumstances, however, the distribution
could be a taxable event to holders of the Preferred Securities. See "Certain
Federal Income Tax Consequences." If the Company elects neither to redeem the
Subordinated Debentures prior to maturity nor to liquidate IBC Capital and
distribute the Subordinated Debentures to holders of the Preferred Securities,
the Preferred Securities will remain outstanding until the repayment of the
Subordinated Debentures.

If the Company elects to liquidate IBC Capital and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred Securities
in liquidation of IBC Capital, the Company shall continue to have the right to
shorten or extend the maturity of such Subordinated Debentures, subject to
certain conditions. See "Description of Subordinated Debentures -- General."

LIQUIDATION VALUE

The amount payable on the Preferred Securities in the event of any
liquidation of IBC Capital is $25 per Preferred Security plus accrued and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in Subordinated Debentures, subject to certain
exceptions. See "Description of Preferred Securities -- Liquidation Distribution
Upon Termination."

EVENTS OF DEFAULT; NOTICE

Any one of the following events constitutes an "Event of Default" under the
Trust Agreement (an "Event of Default") with respect to the Preferred Securities
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Subordinated Debentures -- Debenture Events of
Default"); or

(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or

(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or

(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in the Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clauses (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Trustee or Trustees
by the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Preferred Securities, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the Trust Agreement; or

(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.

Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as Depositor, unless such Event of
Default shall

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have been cured or waived. The Company, as Depositor, and the Administrative
Trustees are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions and
covenants applicable to them under each Trust Agreement.

If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
termination of IBC Capital as described above. See "-- Liquidation Distribution
Upon Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.

REMOVAL OF IBC CAPITAL TRUSTEES

Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by the holder of the Common Securities.
If a Debenture Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the holders of a
majority in Liquidation Amount of the outstanding Preferred Securities. In no
event will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Company as the holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the applicable Trust Agreement.

CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE

MERGER OR CONSOLIDATION OF TRUSTEES

Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust Agreement,
provided such person shall be otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF IBC CAPITAL

IBC Capital may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. IBC Capital may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the holders of
the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (a) expressly assumes all of the
obligations of IBC Capital with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Company expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee in its
capacity as the holder of the Subordinated Debentures, (iii) the Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance,

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on the Nasdaq National Market or any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose identical to that of
IBC Capital, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to IBC Capital experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
IBC Capital nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act") and (vii) the Company or any permitted successor or
assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, IBC Capital shall not, except with the consent of holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause IBC Capital or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.

VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT

Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Trust Agreement, the
holders of the Preferred Securities will have no voting rights.

The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement, or (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that IBC Capital will be classified for United States
federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that IBC Capital will not be required to
register as an "investment company" under the Investment Company Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any holder of Trust Securities, and any
amendments of such Trust Agreement shall become effective when notice thereof is
given to the holders of Trust Securities. The Trust Agreement may be amended by
the Trustees and the Company with (i) the consent of holders representing not
less than a majority in the aggregate Liquidation Amount of the outstanding
Trust Securities, and (ii) receipt by the Trustees of an opinion of counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect IBC Capital's status
as a grantor trust for United States federal income tax purposes or IBC
Capital's exemption from status as an "investment company" under the Investment
Company Act, provided that without the consent of each holder of Trust
Securities, such Trust Agreement may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.

So long as any Subordinated Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind

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or annul a declaration that the principal of all the Subordinated Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Subordinated Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of a majority in aggregate Liquidation Amount of all outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Subordinated Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior consent of each holder of the Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the holders
of the Preferred Securities except by subsequent vote of the holders of the
Preferred Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Subordinated Debentures.
In addition to obtaining the foregoing approvals of the holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees shall
obtain an opinion of counsel experienced in such matters to the effect that IBC
Capital will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.

Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in the
Trust Agreement.

No vote or consent of the holders of Preferred Securities will be required
for IBC Capital to redeem and cancel its Preferred Securities in accordance with
the Trust Agreement.

Notwithstanding the fact that holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.

GLOBAL PREFERRED SECURITIES

The Preferred Securities will be represented by one or more global
certificates registered in the name of the Depositary or its nominee ("Global
Preferred Security"). Beneficial interests in the Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by participants in the Depositary. Except as described below,
Preferred Securities in certificated form will not be issued in exchange for the
global certificates. See "Book-Entry Issuance."

A global security shall be exchangeable for Preferred Securities registered
in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such depositary, (ii)
the Company in its sole discretion determines that such global security shall be
so exchangeable, or (iii) there shall have occurred and be continuing an Event
of Default under the Indenture. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as the Depositary shall direct. It is
expected that such instructions will be based upon directions received by the
Depositary with respect to ownership of beneficial interests in such global
security. In the event that Preferred Securities are issued in definitive form,
such Preferred Securities will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.

Unless and until it is exchanged in whole or in part for the individual
Preferred Securities represented thereby, a Global Preferred Security may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.

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Payments on Preferred Securities represented by a global security will be
made to the Depositary, as the depositary for the Preferred Securities. In the
event Subordinated Debentures are issued in definitive form, principal and
Distributions will be payable, the transfer of the Preferred Securities will be
registrable, and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate Liquidation Amount, at the
corporate office of the Property Trustee in Boston, Massachusetts, or at the
offices of any paying agent or transfer agent appointed by the Administrative
Trustees, provided that payment of any Distribution may be made at the option of
the Administrative Trustees by check mailed to the address of the persons
entitled thereto or by wire transfer. In addition, if the Preferred Securities
are issued in certificated form, the record dates for payment of Distributions
will be the 15th day of the month in which the relevant Distribution Date
occurs. For a description of the terms of the depositary arrangements relating
to payments, transfers, voting rights, redemptions and other notices and other
matters, see "Book-Entry Issuance."

Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Preferred Securities represented by such Global Preferred
Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Preferred Securities.
Ownership of beneficial interests in a Global Preferred Security will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Preferred Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Preferred Security.

So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the Indenture governing such Preferred Securities. Except as
provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities
represented by such Global Preferred Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Preferred
Securities in definitive form and will not be considered the owners or holders
thereof under the Indenture.

None of the Company, the Property Trustee, any Paying Agent, or the
Securities Registrar for such Preferred Securities will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Preferred Security
representing such Preferred Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

The Company expects that the Depositary for Preferred Securities or its
nominee, upon receipt of any payment of the Liquidation Amount or Distributions
in respect of a permanent Global Preferred Security immediately will credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Preferred Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.

If the Depositary for the Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, IBC Capital will issue individual
Preferred Securities in exchange for the Global Preferred Security. In addition,
IBC Capital may at any time and in its sole discretion, subject to any
limitations described herein relating to such Preferred Securities, determine
not to have any Preferred Securities represented by one or more Global Preferred

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Securities and, in such event, will issue individual Preferred Securities in
exchange for the Global Preferred Security or Securities representing the
Preferred Securities. Further, if IBC Capital so specifies with respect to the
Preferred Securities, an owner of a beneficial interest in a Global Preferred
Security representing Preferred Securities may, on terms acceptable to the
Company, the Property Trustee and the Depositary for such Global Preferred
Security, receive individual Preferred Securities in exchange for such
beneficial interests, subject to any limitations described herein. In any such
instance, an owner of a beneficial interest in a Global Preferred Security will
be entitled to physical delivery of individual Preferred Securities represented
by such Global Preferred Security equal in Liquidation Amount to such beneficial
interest and to have such Preferred Securities registered in its name.
Individual Preferred Securities so issued will be issued in denominations,
unless otherwise specified by IBC Capital, of $25 and integral multiples
thereof.

PAYMENT AND PAYING AGENCY

Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Preferred Securities are not held by
the Depositary, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the Register. The
paying agent ("Paying Agent") shall initially be the Property Trustee and any
copaying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee and
the Company. In the event that the Property Trustee shall no longer be the
Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and the
Company) to act as Paying Agent.

REGISTRAR AND TRANSFER AGENT

The Property Trustee will act as registrar and transfer agent for the
Preferred Securities. Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of IBC Capital, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. IBC Capital will not be required to register or cause to
be registered the transfer of Preferred Securities after such Preferred
Securities have been called for redemption.

INFORMATION CONCERNING THE PROPERTY TRUSTEE

The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Company and if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.

MISCELLANEOUS

The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate IBC Capital in such a way that IBC Capital will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Subordinated
Debentures will be treated as indebtedness of the Company for United States
federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the

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certificate of trust of IBC Capital or the Trust Agreement, that the Company and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related Preferred
Securities.

Holders of the Preferred Securities have no preemptive or similar rights.

DESCRIPTION OF SUBORDINATED DEBENTURES

The Subordinated Debentures will be issued under the Indenture, dated as of
, 1996 ("Indenture"), between the Company and State Street Bank and
Trust Company, as trustee ("Debenture Trustee"). The following summary of the
terms and provisions of the Subordinated Debentures and the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Indenture, which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and to the Trust
Indenture Act. The Indenture is qualified under the Trust Indenture Act.
Whenever particular defined terms of the Indenture are referred to herein, such
defined terms are incorporated herein or therein by reference.

Concurrently with the issuance of the Preferred Securities, IBC Capital
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Subordinated Debentures issued by the
Company. The Subordinated Debentures will be issued as unsecured debt under the
Indenture.

GENERAL

The Subordinated Debentures will bear interest at the annual rate of %
of the principal amount thereof, payable quarterly in arrears on March 31, June
30, September 30, and December 31 of each year (each, an "Interest Payment
Date") beginning March 31, 1997, to the person in whose name each Subordinated
Debenture is registered, subject to certain exceptions, at the close of business
on the Business Day next preceding such Interest Payment Date. It is anticipated
that, until the liquidation, if any, of IBC Capital, the Subordinated Debentures
will be held in the name of the Property Trustee in trust for the benefit of the
holders of the Preferred Securities. The amount of interest payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) with the same force
and effect as if made on the date such payment was originally payable. Accrued
interest that is not paid on the applicable Interest Payment Date will bear
additional interest on the amount thereof (to the extent permitted by law) at
the rate per annum of % thereof, compounded quarterly. The term "interest"
as used herein shall include quarterly interest payments, interest on quarterly
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.

The Subordinated Debentures will mature on , 2026 (such date,
as it may be shortened or extended as hereinafter described, the "Stated
Maturity"). Such date may be shortened at any time by the Company to any date
not earlier than , 2001, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended at
any time at the election of the Company but in no event to a date later than
, 2045, provided that at the time such election is made and at the
time of extension (i) the Company is not in bankruptcy, otherwise insolvent or
in liquidation, (ii) the Company is not in default in the payment of any
interest or principal on the Subordinated Debentures, and (iii) IBC Capital is
not in arrears on payments of Distributions on the Preferred Securities and no
deferred Distributions are accumulated. In the event that the Company elects to
shorten or extend the Stated Maturity of the Subordinated Debentures, it shall
give notice to the Debenture Trustee, and the Debenture Trustee shall give
notice of such shortening or extension to the holders of the Subordinated
Debentures no more than 180 days and no less than 90 days prior to the
effectiveness thereof.

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The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt and Subordinated Debt of the
Company and, in certain circumstances relating to the dissolution, winding-up,
liquidation or reorganization of the Company, to all Additional Senior
obligations of the Company. See "Description of Subordinated Debentures --
Subordination." Because the Company is a holding company, the right of the
Company to participate in any distribution of assets of any of the Banks, upon
any such Bank's liquidation or reorganization or otherwise (and thus the ability
of holders of the Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claim of creditors of that Bank, except
to the extent that the Company may itself be recognized as a creditor of such
Bank. Accordingly, the Subordinated Debentures will be effectively subordinated
to all existing and future liabilities of the Banks, and holders of Subordinated
Debentures should look only to the assets of the Company for payments on the
Subordinated Debentures. The Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of the Company, including Senior Debt,
Subordinated Debt, Additional Senior Obligations, whether under the Indenture or
any existing indenture or other indenture that the Company may enter into in the
future or otherwise. See "Description of Subordinated Debentures --
Subordination."

OPTION TO EXTEND INTEREST PAYMENT PERIOD

So long as no Event of Default under the Indenture has occurred or is
continuing, the Company has the right under the Indenture at any time during the
term of the Subordinated Debentures to defer the payment of interest at any time
or from time to time for a period not exceeding 20 consecutive quarters (each
such period an "Extension Period"), provided that no Extension Period may extend
beyond the Stated Maturity of the Preferred Securities. At the end of such
Extension Period, the Company must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of %, compounded
quarterly, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Subordinated Debentures
(or holders of Preferred Securities while such series is outstanding) will be
required to accrue interest income for United States federal income tax
purposes. See "Certain Federal Income Tax Consequences -- Potential Extension of
Interest Payment Period and Original Issue Discount."

During any such Extension Period, the Company may not, and may not permit
any Bank or other subsidiary of the Company to, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including other Subordinated Debentures) that
rank pari passu with or junior in interest to the Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks pari
passu or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in Common Stock, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, and (d) purchases of Common Stock related to rights under any of the
Company's benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any such Extension Period and the payment of
all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of such Extension Period at least one
Business Day prior to the earlier of (i) the date the Distributions on the
Preferred Securities would have been payable except for the election to begin
such Extension Period or (ii) the date the Administrative Trustees are required
to give notice to the Nasdaq National Market or other applicable self-regulatory
organization, or to holders of such Preferred Securities on the record date for
the date such Distributions are payable, but in any event not less than one
Business Day prior to such record date. The Debenture Trustee shall give notice
of the Company's election to begin a new Extension Period to the holders of the
Preferred Securities. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.

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ADDITIONAL SUMS

If IBC Capital is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Subordinated Debentures such amounts ("Additional
Sums") as shall be required so that the Distributions payable by IBC Capital
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges.

REDEMPTION OR EXCHANGE

Subject to the Company having received prior approval of the Federal
Reserve, if then required under applicable capital guidelines or policies of the
Federal Reserve, the Subordinated Debentures are redeemable prior to maturity at
the option of the Company (i) on or after , 2001, in whole at any
time or in part from time to time or (ii) at any time in whole (but not in
part), upon the occurrence and during the continuance of a Debenture Tax Event
or an Investment Company Event in each case at a redemption price equal to the
accrued and unpaid interest on the Subordinated Debentures so redeemed to the
date fixed for redemption, plus 100% of the principal amount thereof.

"Debenture Tax Event" means the receipt by the Company of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Subordinated Debentures under the Indenture, there is more than an
insubstantial risk that (i) interest payable by the Company on the Subordinated
Debentures is not, or within 90 days of the date of such opinion will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes, (ii) IBC Capital is, or will be within 90 days after the date of
such opinion of counsel, subject to United States federal income tax with
respect to income received or accrued on the Subordinated Debentures, or (iii)
IBC Capital is, or will be within 90 days after the date of such opinion of
counsel, subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges.

Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Company defaults in payment of
the redemption price, on and after the redemption date interest ceases to accrue
on such Subordinated Debentures or portions thereof called for redemption.

The Subordinated Debentures will not be subject to any sinking fund.

DISTRIBUTION UPON LIQUIDATION

As described under "Description of Preferred Securities--Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of IBC Capital, the Subordinated Debentures may be distributed to
the holders of the Preferred Securities in liquidation of IBC Capital after
satisfaction of liabilities to creditors of IBC Capital as provided by
applicable law. If distributed to holders of Preferred Securities in
liquidation, the Subordinated Debentures will initially be issued in the form of
one or more global securities and the Depositary, or any successor depositary
for the Preferred Securities, will act as depositary for the Subordinated
Debentures. It is anticipated that the depositary arrangements for the
Subordinated Debentures would be substantially identical to those in effect for
the Preferred Securities. If the Subordinated Debentures are distributed to the
holders of Preferred Securities upon the liquidation of IBC Capital, the Company
will use its best efforts to list the Subordinated Debentures on the Nasdaq
National Market or such stock exchanges, if any, on which the Preferred
Securities are then listed. There can be no assurance as to the market price of
any Subordinated Debentures that may be distributed to the holders of Preferred
Securities.

RESTRICTIONS ON CERTAIN PAYMENTS

The Company will covenant, as to the Subordinated Debentures, that if at
such time (i) there shall have occurred any event of which the Company has
actual knowledge that (a) with the giving of notice or the lapse

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of time, or both, would constitute an "Event of Default" under the Indenture
with respect to the Subordinated Debentures of IBC Capital, or (b) in respect of
which the Company shall not have taken reasonable steps to cure, or (ii) the
Company shall have given notice of its election of an Extension Period as
provided in the Indenture with respect to the Subordinated Debentures and shall
not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing. It will not, and will not permit any subsidiary of
the Company to, (1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock or (2) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest to the Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu or junior in interest to the Subordinated Debentures
(other than (a) dividends or distributions in Common Stock, (b) any declaration
of a dividend in connection with the implementation of a shareholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
the Guarantee and (d) purchases of Common Stock related to rights under any of
the Company's benefit plans for its directors, officers or employees.

SUBORDINATION

In the Indenture, the Company has covenanted and agreed that any
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Debt, Subordinated Debt and Additional Senior
Obligations to the extent provided in the Indenture. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution, winding
up, reorganization, assignment for the benefit of creditors, marshaling of
assets or any bankruptcy, insolvency, debt restructuring or similar proceedings
in connection with any insolvency or bankruptcy proceeding of the Company, the
holders of Senior Debt, Subordinated Debt and Additional Senior Obligations will
first be entitled to receive payment in full of principal of (and premium, if
any) and interest, if any, on such Senior Debt, Subordinated Debt and Additional
Senior Obligations before the holders of Subordinated Debentures will be
entitled to receive or retain any payment in respect of the principal of or
interest, if any, on the Subordinated Debentures.

In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Debt, Subordinated Debt and Additional
Senior Obligations outstanding at the time of such acceleration will first be
entitled to receive payment in full of all amounts due thereon (including any
amounts due upon acceleration) before the holders of Subordinated Debentures
will be entitled to receive or retain any payment in respect of the principal of
or interest, if any, on the Subordinated Debentures; provided, however, that
holders of Subordinated Debt shall not be entitled to receive payment of any
such amounts to the extent that such Subordinated Debt is by its terms
subordinated to trade creditors.

No payments on account of principal or interest, if any, in respect of the
Subordinated Debentures may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt, Subordinated
Debt or Additional Senior Obligations or an event of default with respect to any
Senior Debt, Subordinated Debt or Additional Senior Obligations resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.

"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent, (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; and (vi) and every
obligation of the type referred to in clauses (i) through (v) of another person
and all dividends of another person the payment of which, in either case, such
person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.

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"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debentures or to other Debt
which is pari passu with, or subordinated to, the Subordinated Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any Debt
of the Company which when incurred and without respect to any election under
section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) Debt to any employee of the Company, (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Subordinated Debentures as a result
of the subordination provisions of the Indenture would be greater than they
otherwise would have been as a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; (v) Debt which
constitutes Subordinated Debt, and (vi) any other debt securities issued
pursuant to the Indenture.

"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Company (other than the Subordinated Debentures).

"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of the Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations do not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Subordinated Debentures or to rank pari passu in right of payment with the
Subordinated Debentures. For purposes of this definition, "claim" shall have the
meaning assigned thereto in Section 101(4) of the United States Bankruptcy Code
of 1978, as amended.

The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness constituting Senior Debt, Subordinated Debt and
Additional Senior Obligations.

DENOMINATIONS, REGISTRATION AND TRANSFER

The Subordinated Debentures will be represented by global certificates
registered in the name of the Depositary or its nominee. Beneficial interests in
the Subordinated Debentures will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary. Except as described
below, Subordinated Debentures in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Issuance."

Unless and until a Global Subordinated Debenture is exchanged in whole or
in part for the individual Subordinated Debentures represented thereby, it may
not be transferred except as a whole by the Depositary for such Global
Subordinated Debenture to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.

A global security shall be exchangeable for Subordinated Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such global security and no successor depositary
shall have been appointed, or if at any time the Depositary ceases to be a
clearing agency registered under the Securities

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Exchange Act of 1934, as amended, at a time when the Depositary is required to
be so registered to act as such depositary, (ii) the Company in its sole
discretion determines that such global security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default under the
Indenture with respect to such global security. Any global security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
definitive certificates registered in such names as the Depositary shall direct.
It is expected that such instructions will be based upon directions received by
the Depositary from its Participants with respect to ownership of beneficial
interests in such global security. In the event that Subordinated Debentures are
issued in definitive form, such Subordinated Debentures will be in denominations
of $25 and integral multiples thereof and may be transferred or exchanged at the
offices described below.

Payments on Subordinated Debentures represented by a global security will
be made to the Depositary, as the depositary for the Subordinated Debentures. In
the event Subordinated Debentures are issued in definitive form, principal and
interest will be payable, the transfer of the Subordinated Debentures will be
registrable, and Subordinated Debentures will be exchangeable for Subordinated
Debentures of other denominations of a like aggregate principal amount, at the
corporate office of the Debenture Trustee in Boston, Massachusetts, or at the
offices of any paying agent or transfer agent appointed by the Company (the
"Place of Payment"), provided that payment of interest may be made at the option
of the Company by check mailed to the address of the persons entitled thereto or
by wire transfer. In addition, if the Subordinated Debentures are issued in
certificated form, the record dates for payment of interest will be the 15th day
of the last month of each calendar quarter. For a description of the Depositary
and the terms of the depositary arrangements relating to payments, transfers,
voting rights, redemptions and other notices and other matters, see "Book-Entry
Issuance."

The Company will appoint the Debenture Trustee as securities registrar
under the Indenture (the "Securities Registrar"). Subordinated Debentures may be
presented for exchange as provided above, and may be presented for registration
of transfer (with the form of transfer endorsed thereon, or a satisfactory
written instrument of transfer, duly executed), at the office of the Securities
Registrar. The Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, provided that the Company maintains a transfer agent in the
Place of Payment. The Company may at any time designate additional transfer
agents with respect to the Subordinated Debentures.

In the event of any redemption, neither the Company nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Subordinated Debentures during a period beginning at the opening of business 15
days before the day of selection for redemption of Subordinated Debentures and
ending at the close of business on the day of mailing of the relevant notice of
redemption or (ii) transfer or exchange any Subordinated Debentures so selected
for redemption, except, in the case of any Subordinated Debentures being
redeemed in part, any portion thereof not to be redeemed.

GLOBAL SUBORDINATED DEBENTURES

Upon the issuance of the Global Subordinated Debenture, and the deposit of
such Global Subordinated Debenture with or on behalf of the Depositary, the
Depositary for such Global Subordinated Debenture or its nominee will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the individual Subordinated Debentures represented by such Global
Subordinated Debenture to the accounts of persons that have accounts with such
Depositary ("Participants"). Ownership of beneficial interests in a Global
Subordinated Debenture will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such Global
Subordinated Debenture will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Subordinated Debenture.

So long as the Depositary for a Global Subordinated Debenture, or its
nominee, is the registered owner of such Global Subordinated Debenture, such
Depositary or such nominee, as the case may be, will be

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considered the sole owner or holder of the Subordinated Debentures represented
by such Global Subordinated Debenture for all purposes under the Indenture
governing such Subordinated Debentures. Except as provided below, owners of
beneficial interests in a Global Subordinated Debenture will not be entitled to
have any of the individual Subordinated Debentures represented by such Global
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Subordinated Debentures in
definitive form and will not be considered the owners or holders thereof under
the Indenture.

Payments of principal of and interest on individual Subordinated Debentures
represented by a Global Subordinated Debenture registered in the name of the
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Subordinated Debenture
representing such Subordinated Debentures. None of the Company, the Debenture
Trustee, any Paying Agent, or the Securities Registrar for such Subordinated
Debentures will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Subordinated Debenture representing such Subordinated
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal, premium or interest in respect of a permanent Global
Subordinated Debenture representing the Subordinated Debentures, immediately
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interest in the principal amount of the Global
Subordinated Debenture as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.

If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Subordinated
Debentures in exchange for the Global Subordinated Debenture. In addition, the
Company may at any time and in its sole discretion, determine not to have the
Subordinated Debentures represented by one or more Global Subordinated
Debentures and, in such event, will issue individual Subordinated Debentures in
exchange for the Global Subordinated Debenture. Further, if the Company so
specifies with respect to the Subordinated Debentures, an owner of a beneficial
interest in a Global Subordinated Debenture representing Subordinated Debentures
may, on terms acceptable to the Company, the Debenture Trustee and the
Depositary for such Global Subordinated Debenture, receive individual
Subordinated Debentures in exchange for such beneficial interests. In any such
instance, an owner of a beneficial interest in a Global Subordinated Debenture
will be entitled to physical delivery of individual Subordinated Debentures
equal in principal amount to such beneficial interest and to have such
Subordinated Debentures registered in its name. Individual Subordinated
Debentures so issued will be issued in denominations, unless otherwise specified
by the Company, of $25 and integral multiples thereof.

PAYMENT AND PAYING AGENTS

Payment of principal of and any interest on the Subordinated Debentures
will be made at the office of the Debenture Trustee in the City of Boston,
Massachusetts, except that at the option of the Company payment of any interest
may be made (i) except in the case of Global Subordinated Debentures, by check
mailed to the address of the person entitled thereto as such address shall
appear in the securities register or (ii) by transfer to an account maintained
by the person entitled thereto as specified in the securities register, provided
that proper transfer instructions have been received by the regular record date.
Payment of any interest on Subordinated Debentures will be made to the person in
whose name such Subordinated Debenture is registered at the close of business on
the regular record date for such interest, except in the case of Defaulted
Interest. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however the Company will at all
times be required to maintain a Paying Agent in each Place of Payment for the
Subordinated Debentures.

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Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of the principal of or
interest on the Subordinated Debentures and remaining unclaimed for two years
after such principal or interest has become due and payable shall, at the
request of the Company, be repaid to the Company and the holder of such
Subordinated Debenture shall thereafter look, as a general unsecured creditor,
only to the Company for payment thereof.

MODIFICATION OF INDENTURE

From time to time the Company and the Debenture Trustee may, without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interests of the holders of the
Subordinated Debentures or the Preferred Securities so long as they remain
outstanding) and qualifying, or maintaining the qualification of, the Indenture
under the Trust Indenture Act. The Indenture contains provisions permitting the
Company and the Debenture Trustee, with the consent of the holders of not less
than a majority in principal amount of the outstanding Subordinated Debentures,
to modify the Indenture in a manner affecting the rights of the holders of the
Subordinated Debentures; provided, that no such modification may, without the
consent of the holder of each outstanding Subordinated Debenture, (i) change the
Stated Maturity of the Subordinated Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon or
(ii) reduce the percentage of principal amount of Subordinated Debentures, the
holders of which are required to consent to any such modification of the
Indenture, provided that so long as any of the Preferred Securities remain
outstanding, no such modification may be made that adversely affects the holders
of such Preferred Securities in any material respect, and no termination of the
Indenture may occur, and no waiver of any Debenture Event of Default or
compliance with any covenant under the Indenture may be effective, without the
prior consent of the holders of at least a majority of the aggregate Liquidation
Amount of the Preferred Securities unless and until the principal of the
Subordinated Debentures and all accrued and unpaid interest thereon have been
paid in full and certain other conditions are satisfied.

DEBENTURE EVENTS OF DEFAULT

The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes a "Debenture Event of Default" with respect to the
Subordinated Debentures:

(i) failure for 30 days to pay any interest on the Subordinated
Debentures, when due (subject to the deferral of any due date in the case
of an Extension Period); or

(ii) failure to pay any principal on the Subordinated Debentures when
due whether at maturity, upon redemption by declaration or otherwise; or

(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or

(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.

The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee. The
Debenture Trustee or the holders of not less than 25% in aggregate outstanding
principal amount of the Subordinated Debentures may declare the principal due
and payable immediately upon a Debenture Event of Default. The holders of a
majority in aggregate outstanding principal amount of the Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of the Subordinated Debentures
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the

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Subordinated Debentures fail to annul such declaration and waive such default,
the holders of a majority in aggregate Liquidation Amount of the Preferred
Securities shall have such right.

The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.

In case a Debenture Event of Default shall occur and be continuing as to
the Subordinated Debentures, the Property Trustee will have the right to declare
the principal of and the interest on such Subordinated Debentures, and any other
amounts payable under the Indenture, to be forthwith due and payable and to
enforce its other rights as a creditor with respect to such Subordinated
Debentures.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES

If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Subordinated Debentures on the date such interest or principal is
otherwise payable, a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such holder ("Direct Action"). The Company may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Preferred Securities. If the
right to bring a Direct Action is removed, IBC Capital may become subject to the
reporting obligations under the Securities Exchange Act of 1934, as amended. The
Company shall have the right under the Indenture to set-off any payment made to
such holder of Preferred Securities by the Company in connection with a Direct
Action.

The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Subordinated Debentures unless there shall have
been an Event of Default under the Trust Agreement. See "Description of
Preferred Securities -- Events of Default; Notice."

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS

The Indenture provides that the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless (i) in case the Company
consolidates with or merges into another Person or conveys or transfers its
properties and assets substantially as an entirety to any Person, the successor
Person is organized under the laws of the United States or any state or the
District of Columbia, and such successor Person expressly assumes the Company's
obligations on the Subordinated Debentures issued under the Indenture; (ii)
immediately after giving effect thereto, no Debenture Event of Default, and no
event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; and (iii) certain other
conditions as prescribed in the Indenture are met.

The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Subordinated Debentures.

SATISFACTION AND DISCHARGE

The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at their
Stated Maturity within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee trust funds, in trust, for the purpose and
in an amount in the currency or currencies in which the Subordinated Debentures
are payable sufficient to pay and discharge the entire indebtedness on the
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and interest to the date of the deposit or to
the Stated Maturity, as the case may

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be, then the Indenture will cease to be of further effect (except as to the
Company's obligations to pay all other sums due pursuant to the Indenture and to
provide the officers' certificates and opinions of counsel described therein),
and the Company will be deemed to have satisfied and discharged the Indenture.

GOVERNING LAW

The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Michigan.

INFORMATION CONCERNING THE DEBENTURE TRUSTEE

The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Debenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Debenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.

The Company will covenant in the Indenture, as to the Subordinated
Debentures, that if and so long as (i) IBC Capital is the holder of all such
Subordinated Debentures, (ii) a Tax Event in respect of IBC Capital has occurred
and is continuing and (iii) the Company has elected, and has not revoked such
election, to pay Additional Sums (as defined under "Description of Preferred
Securities -- Redemption or Exchange") in respect of the Preferred Securities,
the Company will pay to IBC Capital such Additional Sums. The Company will also
covenant, as to the Subordinated Debentures, (i) to maintain directly or
indirectly 100% ownership of the Common Securities of IBC Capital to which
Subordinated Debentures have been issued, provided that certain successors which
are permitted pursuant to the Indenture may succeed to the Company's ownership
of the Common Securities, (ii) not to voluntarily terminate, wind up or
liquidate IBC Capital, except upon prior approval of the Federal Reserve if then
so required under applicable capital guidelines or policies of the Federal
Reserve, and (a) in connection with a distribution of Subordinated Debentures to
the holders of the Preferred Securities in liquidation of IBC Capital, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of the related Trust Agreement, to cause IBC
Capital to remain classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax purposes.

BOOK-ENTRY ISSUANCE

The Depositary will act as securities depositary for all of the Preferred
Securities and the Subordinated Debentures. The Preferred Securities and the
Subordinated Debentures will be issued only as fully-registered securities
registered in the name of Cede & Co. (the Depositary's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
and the Subordinated Debentures and will be deposited with the Depositary.

The Depositary is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its Participants deposit with the
Depositary. The Depositary also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
"Direct Participants" include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The Depositary
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the the Depositary system is also

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available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to the Depositary and its Participants are on file with the
Commission.

Purchases of Preferred Securities or Subordinated Debentures within the
Depositary system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Subordinated Debentures on the
Depositary's records. The ownership interest of each actual purchaser of each
Preferred Security and each Subordinated Debenture ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from the Depositary of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participants through which the Beneficial
Owners purchased Preferred Securities or Subordinated Debentures. Transfers of
ownership interests in the Preferred Securities or Subordinated Debentures are
to be accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Preferred Securities or Subordinated
Debentures, except in the event that use of the book-entry system for the
Preferred Securities of IBC Capital or Subordinated Debentures is discontinued.

The Depositary has no knowledge of the actual Beneficial Owners of the
Preferred Securities or Subordinated Debentures; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
Preferred Securities or Subordinated Debentures are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.

Redemption notices will be sent to Cede & Co. as the registered holder of
the Preferred Securities or Subordinated Debentures. If less than all of the
Preferred Securities or the Subordinated Debentures are being redeemed, the
Depositary will determine by lot or pro rata the amount of the Preferred
Securities of each Direct Participant to be redeemed.

Although voting with respect to the Preferred Securities or the
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Subordinated Debentures, in those instances in which a vote is
required, neither the Depositary nor Cede & Co. will itself consent or vote with
respect to Preferred Securities or Subordinated Debentures. Under its usual
procedures, the Depositary would mail an omnibus proxy (the "Omnibus Proxy") to
the relevant Trustee as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts such Preferred Securities or Subordinated
Debentures are credited on the record date (identified in a listing attached to
the Omnibus Proxy).

Distribution payments on the Preferred Securities or the Subordinated
Debentures will be made by the relevant Trustee to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of the
Depositary, the relevant Trustee, IBC Capital or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to the Depositary is the responsibility of the relevant
Trustee, disbursement of such payments to Direct Participants is the
responsibility of the Depositary, and disbursements of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.

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The Depositary may discontinue providing its services as securities
depositary with respect to any of the Preferred Securities or the Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Company. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Subordinated Debenture certificates
representing such Preferred Securities or Subordinated Debentures are required
to be printed and delivered. The Company, at its option, may decide to
discontinue use of the system of book-entry transfers through the Depositary (or
a successor depositary). After a Debenture Event of Default, the holders of a
majority in liquidation preference of Preferred Securities or aggregate
principal amount of Subordinated Debentures may determine to discontinue the
system of book-entry transfers through the Depositary. In any such event,
definitive certificates for such Preferred Securities or Subordinated Debentures
will be printed and delivered.

The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that IBC Capital
and the Company believe to be accurate, but IBC Capital and the Company assume
no responsibility for the accuracy thereof. Neither IBC Capital nor the Company
has any responsibility for the performance by the Depositary or its Participants
of their respective obligations as described herein or under the rules and
procedures governing their respective operations.

DESCRIPTION OF GUARANTEE

The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred Securities.
State Street Bank and Trust Company will act as indenture trustee ("Guarantee
Trustee") under the Guarantee for the purposes of compliance with the Trust
Indenture Act, and the Guarantee will be qualified as an Indenture under the
Trust Indenture Act. The following summary of certain provisions of the
Guarantee does not purport to be complete and is subject to, and qualified in
its entirety by reference to, all of the provisions of the Guarantee Agreement,
including the definitions therein of certain terms, and the Trust Indenture Act.
The form of the Guarantee has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Guarantee Trustee will hold
the Guarantee for the benefit of the holders of the Preferred Securities.

GENERAL

The Guarantee will be an irrevocable guarantee on a subordinated basis of
IBC Capital's obligations under the Preferred Securities, but will apply only to
the extent that IBC Capital has funds sufficient to make such payments, and is
not a guarantee of collection.

The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that IBC Capital may have or assert other than
the defense of payment. The following payments with respect to the Preferred
Securities, to the extent not paid by or on behalf of IBC Capital (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on the Preferred Securities, to the
extent that IBC Capital has funds on hand available therefor at such time, (ii)
the Redemption Price with respect to any Preferred Securities called for
redemption to the extent that IBC Capital has funds on hand available therefor
at such time, and (iii) upon a voluntary or involuntary dissolution, winding up
or liquidation of IBC Capital (unless the Subordinated Debentures are
distributed to holders of the Preferred Securities), the lesser of (a) the
Liquidation Distribution and (b) the amount of assets of IBC Capital remaining
available for distribution to holders of Preferred Securities. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of the Preferred Securities or by
causing IBC Capital to pay such amounts to such holders.

If the Company does not make interest payments on the Subordinated
Debentures held by IBC Capital, IBC Capital will not be able to pay
Distributions on the Preferred Securities and will not have funds legally
available therefor. The Guarantee will rank subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt, and, under certain circumstances,
Additional Senior Obligations of the Company. See "-- Status of the Guarantee."
Because the Company is a holding company, the right of the Company to

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participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. Except as
otherwise described herein, the Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Company, including Senior
Debt, whether under the Indenture, any other indenture that the Company may
enter into in the future, or otherwise.

The Company has, through the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of IBC Capital's
obligations under the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of IBC
Capital's obligations under the Preferred Securities. See "Relationship Among
the Preferred Securities, the Subordinated Debentures and the Guarantee."

STATUS OF THE GUARANTEE

The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations of the Company in the same manner as the Subordinated Debentures.

The Guarantee will constitute a guarantee of payment and not of collection.
For example, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity. The Guarantee
will be held for the benefit of the holders of the related Preferred Securities.
The Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by IBC Capital or upon distribution of the
Subordinated Debentures to the holders of the Preferred Securities. The
Guarantee does not place a limitation on the amount of additional Senior Debt,
Subordinated Debt or Additional Senior Obligations that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior Debt, Subordinated Debt and Additional Senior Obligations.

AMENDMENTS AND ASSIGNMENT

Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of not less than a majority of the aggregate Liquidation Amount
of such outstanding Preferred Securities. See "Description of Preferred
Securities -- Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Preferred Securities then outstanding.

EVENTS OF DEFAULT

An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.

Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against IBC Capital, the Guarantee Trustee
or any other person or entity.

The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.

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INFORMATION CONCERNING THE GUARANTEE TRUSTEE

The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to any Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.

TERMINATION OF THE GUARANTEE

The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of IBC Capital or upon
distribution of the Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Preferred Securities must
restore payment of any sums paid under such Preferred Securities or the
Guarantee.

GOVERNING LAW

The Guarantee will be governed by and construed in accordance with the laws
of the State of Michigan.

THE EXPENSE AGREEMENT

Pursuant to the Expense Agreement entered into by the Company under the
Trust Agreement (the "Expense Agreement"), the Company will irrevocably and
unconditionally guarantee to each person or entity to whom IBC Capital becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
IBC Capital, other than obligations of IBC Capital to pay to the holders of the
Preferred Securities or other similar interests in IBC Capital of the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.

RELATIONSHIP AMONG THE PREFERRED SECURITIES,

THE SUBORDINATED DEBENTURES

AND THE GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the Preferred Securities
(to the extent IBC Capital has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." Taken together, the Company's
obligations under the Subordinated Debentures, the Indenture, the Trust
Agreement, the Expense Agreement, and the Guarantee provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payment of distributions and
other amounts due on the Preferred Securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of IBC Capital's obligations under the Preferred Securities. If and to the
extent that the Company does not make payments on the Subordinated Debentures,
IBC Capital will not pay Distributions or other amounts due on the Preferred
Securities. The Guarantee does not cover payment of Distributions when IBC
Capital does not have sufficient funds to pay such Distributions. In such event,
the remedy of a holder of Preferred Securities is to institute a legal
proceeding directly against the Company for enforcement of payment of such
Distributions to such holder. The obligations of the Company under the Guarantee
are subordinate and junior in right of payment to all Senior Debt, Subordinated
Debt and, under certain circumstances, Additional Senior Obligations of the
Company.

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SUFFICIENCY OF PAYMENTS

As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover Distributions
and other payments due on the Preferred Securities, primarily because (i) the
aggregate principal amount of the Subordinated Debentures will be equal to the
sum of the aggregate stated Liquidation Amount of the Preferred Securities and
Common Securities; (ii) the interest rate and interest and other payment dates
on the Subordinated Debentures will match the Distribution rate and Distribution
and other payment dates for the Preferred Securities; (iii) the Company shall
pay for all and any costs, expenses and liabilities of IBC Capital except IBC
Capital's obligations to holders of the Preferred Securities; and (iv) the Trust
Agreement further provides that IBC Capital will not engage in any activity that
is not consistent with the limited purposes of IBC Capital.

Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.

ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES

A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, IBC Capital
or any other person or entity.

A default or event of default under any Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company would not constitute a default or
Event of Default. However, in the event of payment defaults under, or
acceleration of, Senior Debt, Subordinated Debt or Additional Senior Obligations
of the Company, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Subordinated Debentures until such Senior
Debt, Subordinated Debt or Additional Senior Obligations has been paid in full
or any payment default thereunder has been cured or waived. Failure to make
required payments on the Subordinated Debentures would constitute an Event of
Default.

LIMITED PURPOSE OF IBC CAPITAL

The Preferred Securities evidence a beneficial interest in IBC Capital, and
IBC Capital exists for the sole purpose of issuing its Preferred Securities and
Common Securities and investing the proceeds thereof in Subordinated Debentures.
A principal difference between the rights of a holder of a Preferred Security
and a holder of a Subordinated Debenture is that a holder of a Subordinated
Debenture is entitled to receive from the Company the principal amount of and
interest accrued on Subordinated Debentures held, while a holder of Preferred
Securities is entitled to receive Distributions from IBC Capital (or from the
Company under the Guarantee) if and to the extent IBC Capital has funds
available for the payment of such Distributions.

RIGHTS UPON TERMINATION

Upon any voluntary or involuntary termination, winding-up or liquidation of
IBC Capital involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by IBC Capital, the Liquidation Distribution in cash. See "Description of
Preferred Securities -- Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Subordinated Debentures, would be a subordinated
creditor of the Company, subordinated in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations as set forth in the
Indenture, but entitled to receive payment in full of principal and interest
before any stockholders of the Company receive payments or distributions. Since
the Company is the guarantor under the Guarantee and has agreed to pay for all
costs, expenses and liabilities of IBC Capital (other than IBC Capital's
obligations to the holders of its Preferred Securities), the positions of a
holder of the Preferred Securities and a holder of the Subordinated Debentures
relative to other creditors and to stockholders of the Company in the event of
liquidation or bankruptcy of the Company are expected to be substantially the
same.

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DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 200,000 shares of
preferred stock, none of which are outstanding, and 14,000,000 shares of Common
Stock, 2,861,399 of which were outstanding as of September 30, 1996. The
following is a description of the Company's capital stock.

COMMON STOCK

Subject to the rights, if any, of holders of any of the Company's preferred
stock then outstanding, all voting rights are vested in holders of shares of
Common Stock. Each share of Common Stock entitles the holder thereof to one
vote. Holders of shares of Common Stock are not entitled to cumulative voting
rights and have no preemptive right to subscribe for additional securities
issuable by the Company.

Subject to any prior rights of holders of preferred stock then outstanding,
holders of the Company's Common Stock are entitled to receive dividends as the
Board of Directors may from time to time declare out of funds legally available
for that purpose. In the event of the liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share pro rata in the
assets available for distribution to holders of Common Stock. The outstanding
shares of Common Stock are fully paid and non-assessable. The Company's transfer
agent is State Street Bank & Trust Company.

PREFERRED STOCK

The Board of Directors of the Company is authorized to issue shares of
preferred stock in series and affix the particular designations and terms of
those shares, including dividend rates, conversion prices, voting rights,
redemption prices and other matters, without further approval of the Company's
shareholders. No series of preferred stock is currently designated by the Board.

GENERAL

The Company's Articles of Incorporation and the Michigan Business
Corporation Act contain provisions which could be utilized by the Company to
impede any efforts to acquire control of the Company, namely:

Classified Board of Directors. The Company's Articles of Incorporation
provide for the division of the Board of Directors into three classes with
staggered three-year terms of office. Accordingly, because a person considering
the acquisition of voting control of the Company could not necessarily obtain
majority control of the Board of Directors until the second annual meeting of
the Company's shareholders following the acquisition of voting control, such a
person might be dissuaded from seeking to obtain voting control of the Company.

Michigan Fair Price Provisions. Chapter 7A of the Michigan Business
Corporation Act impacts certain business combinations involving Michigan
corporations such as the Company. Except in cases in which certain minimum
price, form of consideration, and procedural requirements are satisfied or for
certain transactions that may be approved in advance by the Company's Board of
Directors, higher than normal voting requirements are imposed with respect to
various transactions involving persons who own ten percent or more of the
Company's voting stock (referred to as "Interested Shareholders"). Transactions
to which the higher voting requirements apply require an advisory statement from
the Board of Directors and must be approved by not less than 90% of the votes of
each class of stock entitled to vote and by not less than two-thirds of the
votes, other than the votes of Interested Shareholders who are (or whose
affiliates are) a party to the proposed transaction or an affiliate of the
Interested Shareholders, of each class entitled to vote.

Michigan Shareholder Equity Provisions. Chapter 7B of the Michigan Business
Corporation Act affects the voting rights of persons who acquire more than 20%,
33 1/3%, or 50 percent of a Michigan corporation's voting stock (referred to as
"Control Shares"). Chapter 7B denies shareholder voting rights to those persons
or entities who make purchase offers or investors who increase their holdings
above any of the Control Share levels, unless they are granted voting rights by
a majority vote of all disinterested shareholders (shareholders excluding the
bidders or owners of Control Shares and the corporation's management). If the
shareholders do not elect to grant voting rights to Control Shares, under
certain circumstances, the Control Shares may become subject to redemption.

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES

GENERAL

This section is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
and represents the opinion of Varnum, Riddering, Schmidt & Howlett LLP, counsel
to the Company and IBC Capital, insofar as it relates to matters of law and
legal conclusions. The conclusions expressed herein are based upon current
provisions of the Internal Revenue Code of 1986, as amended ("Code"),
regulations thereunder and current administrative rulings and court decisions,
all of which are subject to change at any time, with possible retroactive
effects. Subsequent changes may cause tax consequences to vary substantially
from the consequences described below. Furthermore, the authorities on which
this summary is based are subject to various interpretations, and it is
therefore possible that the federal income tax treatment of the purchase,
ownership, and disposition of Preferred Securities may differ from the treatment
described below.

No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and who
acquire Preferred Securities on their original issue at their offering price and
hold Preferred Securities as capital assets. The discussion has only limited
application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address all the tax consequences that may be
relevant to holders who may be subject to special tax treatment, such as, for
example, banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons that will hold the Preferred Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. dollar or the tax
consequences to shareholders, partners or beneficiaries of a holder of Preferred
Securities. Further, it does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the Preferred Securities.
Accordingly, each prospective investor should consult, and should rely
exclusively on, the investor's own tax advisors in analyzing the federal, state,
local and foreign tax consequences of the purchase, ownership or disposition of
Preferred Securities.

CLASSIFICATION OF THE SUBORDINATED DEBENTURES

The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as indebtedness
of the Company under current law, and, by acceptance of a Preferred Security,
each holder covenants to treat the Subordinated Debentures as indebtedness and
the Preferred Securities as evidence of an indirect beneficial ownership
interest in the Subordinated Debentures. No assurance can be given, however,
that such position of the Company will not be challenged by the Internal Revenue
Service or, if challenged, that such a challenge will not be successful. The
remainder of this discussion assumes that the Subordinated Debentures will be
classified for United States federal income tax purposes as indebtedness of the
Company.

CLASSIFICATION OF IBC CAPITAL

With respect to the Preferred Securities, Varnum, Riddering, Schmidt &
Howlett LLP, counsel to the Company and IBC Capital, has rendered its opinion
generally to the effect that, under then current law and assuming full
compliance with the terms of the Trust Agreement and Indenture, IBC Capital will
be classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation. Accordingly, for United
States federal income tax purposes, each holder of Preferred Securities
generally will be treated as owning an undivided beneficial interest in the
Subordinated Debentures, and each holder will be required to include in its
gross income any original issue discount ("OID") accrued with respect to its
allocable share of the Subordinated Debentures whether or not cash is actually
distributed to such holder.

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POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT

Because the Company has the option, under the terms of the Subordinated
Debentures, to defer payments of interest by extending interest payment periods
for up to 20 consecutive quarters, all of the stated interest payments on the
Subordinated Debentures will be treated as OID. Holders of debt instruments
issued with OID must include that discount in income on an economic accrual
basis before the receipt of cash attributable to the interest, regardless of
their method of tax accounting. Generally, all of a holder's taxable interest
income with respect to the Subordinated Debentures will be accounted for as OID.
Actual payments and distributions of stated interest will not, however, be
separately reported as taxable income. The amount of OID that accrues in any
quarter will approximately equal the amount of the interest that accrues on the
Subordinated Debentures in that quarter at the stated interest rate. In the
event that the interest payment period is extended, holders will continue to
accrue OID approximately equal to the amount of the interest payment due at the
end of the extended interest payment period on an economic accrual basis over
the length of the extended interest payment period.

Because income on the Preferred Securities will constitute OID, corporate
holders of Preferred Securities will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Preferred
Securities.

MARKET DISCOUNT AND ACQUISITION PREMIUM

Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interests in the Subordinated Debentures with "market discount"
or "acquisition premium" as such phrases are defined for United States federal
income tax purposes. Such holders are advised to consult their tax advisors as
to the income tax consequences of the acquisition, ownership and disposition of
the Preferred Securities.

RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF IBC CAPITAL

Under certain circumstances, as described under "Description of the
Preferred Securities -- Redemption or Exchange," the Subordinated Debentures may
be distributed to holders of Preferred Securities upon a liquidation of IBC
Capital. Under current United States federal income tax law, such a distribution
would be treated as a nontaxable exchange to each such holder and would result
in such holder having an aggregate tax basis in the Subordinated Debentures
received in the liquidation equal to such holder's aggregate tax basis in the
Preferred Securities immediately before the distribution. A holder's holding
period in the Subordinated Debentures so received in liquidation of IBC Capital
would include the period for which such holder held the Preferred Securities.

If, however, a Tax Event occurs which results in IBC Capital being treated
as an association taxable as a corporation, the distribution would likely
constitute a taxable event to holders of the Preferred Securities. Under certain
circumstances described herein, the Subordinated Debentures may be redeemed for
cash and the proceeds of such redemption distributed to holders in redemption of
their Preferred Securities. Under current law, such a redemption would, for
United States federal income tax purposes, constitute a taxable disposition of
the redeemed Preferred Securities, and a holder would recognize gain or loss as
if the holder sold such Preferred Securities for cash. See "Description of
Preferred Securities -- Redemption or Exchange."

DISPOSITION OF PREFERRED SECURITIES

A holder that sells Preferred Securities will recognize gain or loss equal
to the difference between the amount realized on the sale of the Preferred
Securities and the holder's adjusted tax basis in such Preferred Securities. A
holder's adjusted tax basis in the Preferred Securities generally will be its
initial purchase price increased by OID previously includible in such holder's
gross income to the date of disposition and decreased by payments received on
the Preferred Securities to the date of disposition. Such gain or loss will be a
capital gain or loss and will be a long-term capital gain or loss if the
Preferred Securities have been held for more than one year at the time of sale.

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The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder that disposes of its Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debentures through the
date of disposition in income as ordinary income, and to add such amount to its
adjusted tax basis in its pro rata share of the underlying Subordinated
Debentures deemed disposed of. To the extent the selling price is less than the
holder's adjusted tax basis (which basis will include, in the form of OID, all
accrued but unpaid interest), a holder will recognize a capital loss. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.

EFFECT OF PROPOSED CHANGES IN TAX LAWS

The Clinton Administration has proposed statutory changes in the Federal
income tax rules relating to financial instruments. Under one such proposal,
debt with a maximum maturity of more than 20 years that is not shown as debt on
the applicable balance sheet of the issuer would be characterized as equity of
the issuer, with the result that interest would be nondeductible to the issuer.
If this proposal were enacted and applied to the Preferred Securities, a Tax
Event would occur.

The Company has been advised by counsel that, under certain transition
rules contained in the proposed legislation, the Preferred Securities would not
be subject to such legislation. Moreover, the Chairman of the House Ways and
Means Committee and the Senate Finance Committee, as well as the ranking
minority members of the House Ways and Means Committee, have publicly indicated
that the proposals, if enacted, would not apply prior to the date of
"appropriate Congressional action." Thus, the Company believes such proposed
legislation, if ultimately enacted, will not apply to the Preferred Securities.
Nevertheless, no assurance can be given in this regard.

BACKUP WITHHOLDING AND INFORMATION REPORTING

The amount of OID accrued on the Preferred Securities held of record by
individual citizens or residents of the United States, or certain trusts,
estates, and partnerships, will be reported to the Internal Revenue Service on
Forms 1099, which forms should be mailed to such holders of Preferred Securities
by January 31 following each calendar year. Payments made on, and proceeds from
the sale of, the Preferred Securities may be subject to a "backup" withholding
tax (currently at 31%) unless the holder complies with certain identification
and other requirements. Any amounts withheld under the backup withholding rules
will be allowed as a credit against the holder's United States federal income
tax liability, provided the required information is provided to the Internal
Revenue Service.

THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF PREFERRED
SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER
TAX LAWS.

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ERISA CONSIDERATIONS

Generally, employee benefit plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code ("Plans"), may purchase Preferred Securities, subject to the investing
fiduciary's determination that the investment in Preferred Securities satisfies
ERISA's fiduciary standards and other requirements applicable to investments by
the Plan.

In any case, the Company and/or any of its affiliates may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified person"
(within the meaning of Section 4975 of the Code) with respect to certain plans
(generally, Plans maintained or sponsored by, or contributed to by, any such
persons). The acquisition and ownership of Preferred Securities by a Plan (or by
an individual retirement arrangement or other Plans described in Section
4975(e)(1) of the Code) with respect to which the Company or any of its
affiliates is considered a party in interest or a disqualified person, may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Preferred Securities are acquired pursuant to and in
accordance with an applicable exemption.

As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Preferred Securities unless such Preferred Securities are acquired pursuant to
and in accordance with an applicable exemption. Any other Plans or other
entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Preferred Securities should consult with their own
counsel.

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UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting
Agreement, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part, the Company and IBC Capital have
agreed that IBC Capital will sell to Stifel, Nicolaus & Company, Incorporated
("Underwriter") and the Underwriter has agreed to purchase from IBC Capital
600,000 Preferred Securities. The Underwriter proposes initially to offer the
Preferred Securities to the public at the initial offering price set forth on
the cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $ per Preferred Security. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of $ per
Preferred Security to certain other dealers. After the initial offering, the
offering price and other selling terms may be changed by the Underwriter.

IBC Capital has granted an option to the Underwriter, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to 90,000
additional Preferred Securities to cover over-allotments, if any, at the same
price per Preferred Security as the initial 600,000 Preferred Securities to be
purchased by the Underwriter. The Underwriter may purchase such Preferred
Securities only to cover over-allotments made in connection with the offering.

In view of the fact that the proceeds from the sale of Preferred Securities
will be used to purchase the Subordinated Debentures issued by the Company, the
Underwriting Agreement provides that the Company will pay as Underwriter's
Compensation for the Underwriter's services an amount of $ per Preferred
Security.

The Company and IBC Capital have agreed that, during the period beginning
from the date of the Underwriting Agreement and continuing to and including the
earlier of (i) the termination of trading restrictions on the Preferred
Securities, as determined by the Underwriter, or (ii) days after the closing
date, they will not, directly or indirectly, offer, sell, agree to sell or
otherwise dispose of any Preferred Securities, any other beneficial interests in
the assets of IBC Capital, or any other securities of IBC Capital or the Company
which are substantially similar to the Preferred Securities, including any
guarantee of such beneficial interests or substantially similar securities, or
any securities convertible into or exchangeable for or representing the right to
receive securities, preferred securities or any such substantially similar
securities of either IBC Capital or the Company, without the prior written
consent of the Underwriter, except for the Preferred Securities offered in
connection with the offering.

The Underwriting Agreement provides that the Company and IBC Capital will
indemnify the Underwriter against certain liabilities, including civil
liabilities under the Securities Act of 1933, as amended, or will contribute to
payments the Underwriter may be required to make in respect thereof.

VALIDITY OF SECURITIES

Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of IBC
Capital will be passed upon by Richards, Layton & Finger, special Delaware
counsel to the Company and IBC Capital. Certain legal matters for the Company
and IBC Capital, including the validity of the Guarantee and the Subordinated
Debentures will be passed upon for the Company and IBC Capital by Varnum,
Riddering, Schmidt & Howlett LLP, Grand Rapids, Michigan, counsel to the Company
and IBC Capital. Certain legal matters will be passed upon for the Underwriter
by Bryan Cave LLP, St. Louis, Missouri. Varnum Riddering, Schmidt & Howlett LLP
and Bryan Cave LLP, will rely on the opinion of Richards, Layton & Finger as to
matters of Delaware law. Certain matters relating to United States federal
income tax considerations will be passed upon for the Company by Varnum,
Riddering, Schmidt & Howlett LLP.

78
<PAGE> 81

EXPERTS

The consolidated financial statements of the Company as of December 31,
1995 and 1994, and for each of the years in the three year period ended December
31, 1995 included herein and incorporated by reference in this Prospectus and
elsewhere in the Registration Statement have been audited by KPMG Peat Marwick
LLP, independent accountants, to the extent and for the periods set forth in
their report appearing elsewhere herein and incorporated herein by reference.
The consolidated financial statements of the Company are included and
incorporated herein in reliance upon such report given upon the authority of
such firm as an expert in auditing and accounting.

The consolidated financial statements of North Bank Corporation as of
December 31, 1995 and 1994, and for each of the years in the three year period
ended December 31, 1995 included herein and incorporated by reference in this
Prospectus and elsewhere in this Registration Statement have been audited by
Crowe, Chizek and Company LLP, independent accountants, to the extent and for
the periods set forth in their report appearing elsewhere herein, and
incorporated herein by reference. The consolidated financial statements of North
Bank Corporation are included and incorporated herein in reliance upon such
report given upon the authority of such firm as an expert in auditing and
accounting.

AVAILABLE INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and, in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The reports, proxy statements and other
information can be inspected and copied at the Public Reference Section of the
Commission Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at 7 World Trade Center, Suite 1300, New
York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois
60601. Copies of such materials can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site (which can be
found at http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.

No separate financial statements of IBC Capital have been included herein.
The Company and IBC Capital do not consider that such financial statements would
be material to holders of Preferred Securities because IBC Capital is a newly
formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than holding as trust assets the Subordinated Debentures of the Company
and issuing the Trust Securities. See "Description of Preferred Securities,"
"Description of Subordinated Debentures" and "Description of Guarantee." In
addition, the Company and IBC Capital do not expect that IBC Capital will be
filing reports under the Exchange Act with the Commission.

The Company has filed with the Commission a Registration Statement on Form
S-2 (herein, together with all amendments and exhibits thereto and documents
incorporated by reference, referred to as the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement. The statements contained in this Prospectus concerning
the contents of any contract or other document referred to are not necessarily
complete. Where such contract or other document is an exhibit to the
Registration Statement, each statement is qualified in all respects by the
provisions of such exhibit, to which reference is hereby made for a full
statement of the provisions thereof.

79
<PAGE> 82

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's annual report on Form 10-K for the year ended December 31,
1995, its quarterly reports on Form 10-Q for the quarters ended March 31, 1996,
June 30, 1996 and September 30, 1996, and its current report on Form 8-K, dated
June 6, 1996 (as amended August 9, 1996), and which have been filed by the
Company with the Commission (File No. 0-7818), are incorporated herein by
reference.

Any statement contained in a document incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

Upon request, the Company will provide, without charge, copies of any
documents incorporated by reference herein (other than certain exhibits) to any
person to whom a Prospectus is delivered. Requests for such copies should be
directed to William R. Kohls, Secretary, Independent Bank Corporation, 230 West
Main Street, Ionia, Michigan 48846, telephone (616) 527-9450.

80
<PAGE> 83

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
INDEPENDENT BANK CORPORATION AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets as of December 31, 1995 and 1994......................... F- 2
Consolidated Statements of Operations for each of the years ended December 31, 1995,
1994 and 1993...................................................................... F- 3
Consolidated Statements of Cash Flows for each of the years ended December 31, 1995,
1994 and 1993...................................................................... F- 4
Consolidated Statements of Shareholders' Equity for each of the years ended December
31, 1995, 1994 and 1993............................................................ F- 5
Notes to Consolidated Financial Statements........................................... F- 6
Independent Auditor's Report......................................................... F-21
INDEPENDENT BANK CORPORATION UNAUDITED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
Interim Consolidated Balance Sheet as of September 30, 1996 (unaudited).............. F-22
Interim Consolidated Statements of Operations for the nine months ended September 30,
1996
and 1995 (unaudited)............................................................... F-23
Interim Consolidated Statements of Cash Flows for the nine months ended September 30,
1996
and 1995 (unaudited)............................................................... F-24
Interim Consolidated Statements of Shareholders' Equity for the nine months ended
September 30, 1996 and 1995 (unaudited)............................................ F-25
Notes to Interim Consolidated Financial Statements (unaudited)....................... F-26
NORTH BANK CORPORATION CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants.................................................... F-27
Consolidated Balance Sheets as of December 31, 1995 and 1994......................... F-28
Consolidated Statements of Income for the years ended December 31, 1995,
1994 and 1993...................................................................... F-29
Consolidated Statements of Changes in Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993................................................... F-30
Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993...................................................................... F-31
Notes to Consolidated Financial Statements........................................... F-32
</TABLE>

F-1
<PAGE> 84

INDEPENDENT BANK CORPORATION

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents
Cash and due from banks................................................. $ 17,208,000 $ 22,869,000
Federal funds sold...................................................... 850,000
------------ ------------
Total Cash and Cash Equivalents................................ 17,208,000 23,719,000
------------ ------------
Securities available for sale............................................. 87,553,000 52,756,000
Securities held to maturity (fair value of $29,031,000 at December 31,
1995; $77,450,000 at December 31, 1994)................................. 27,906,000 77,721,000
Federal Home Loan Bank stock, at cost..................................... 7,710,000 3,433,000
Loans held for sale....................................................... 16,047,000 5,933,000
Loans
Commercial and agricultural............................................. 108,879,000 103,984,000
Real estate mortgage.................................................... 225,900,000 166,794,000
Installment............................................................. 83,265,000 65,947,000
------------ ------------
Total Loans.................................................... 418,044,000 336,725,000
Allowance for loan losses............................................... (5,243,000) (5,054,000)
------------ ------------
Net Loans...................................................... 412,801,000 331,671,000
Property and equipment, net............................................... 9,931,000 9,493,000
Accrued income and other assets........................................... 10,991,000 11,485,000
------------ ------------
Total Assets................................................... $590,147,000 $516,211,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing.................................................... $ 46,168,000 $ 48,641,000
Savings and NOW......................................................... 215,336,000 227,137,000
Time.................................................................... 150,120,000 133,693,000
------------ ------------
Total Deposits................................................. 411,624,000 409,471,000
Federal funds purchased................................................. 13,400,000 13,900,000
Other borrowings........................................................ 110,894,000 47,741,000
Accrued expenses and other liabilities.................................. 7,204,000 4,788,000
------------ ------------
Total Liabilities.............................................. 543,122,000 475,900,000
Commitments and contingent liabilities
Shareholders' Equity
Preferred stock, no par value -- 200,000 shares authorized; none
outstanding
Common stock, $1.00 par value -- 14,000,000 shares authorized; issued
and outstanding:
2,704,038 shares at December 31, 1995 and 2,589,163 shares at
December 31, 1994.................................................. 2,704,000 2,589,000
Capital surplus..................................................... 19,924,000 16,932,000
Retained earnings................................................... 23,683,000 22,910,000
Net unrealized gain (loss) on securities available for sale, net of
related tax effect................................................. 714,000 (2,120,000)
------------ ------------
Total Shareholders' Equity..................................... 47,025,000 40,311,000
------------ ------------
Total Liabilities and Shareholders' Equity................. $590,147,000 $516,211,000
============ ============
</TABLE>

See notes to consolidated financial statements.

F-2
<PAGE> 85

INDEPENDENT BANK CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............................ $37,861,000 $29,107,000 $26,128,000
Securities available for sale......................... 2,692,000 2,853,000 1,232,000
Securities held to maturity
Taxable............................................ 3,227,000 3,684,000 4,744,000
Tax-exempt......................................... 1,781,000 1,716,000 1,731,000
Other investments..................................... 421,000 460,000 535,000
----------- ----------- -----------
Total Interest Income............................ 45,982,000 37,820,000 34,370,000
----------- ----------- -----------
INTEREST EXPENSE
Deposits.............................................. 12,470,000 11,092,000 12,027,000
Other borrowings...................................... 5,430,000 1,493,000 278,000
----------- ----------- -----------
Total Interest Expense........................... 17,900,000 12,585,000 12,305,000
----------- ----------- -----------
Net Interest Income.............................. 28,082,000 25,235,000 22,065,000
Provision for loan losses............................... 636,000 473,000 657,000
----------- ----------- -----------
Net Interest Income After Provision for Loan
Losses........................................ 27,446,000 24,762,000 21,408,000
----------- ----------- -----------
NON-INTEREST INCOME
Service charges on deposit accounts................... 1,919,000 1,892,000 1,589,000
Net gains (losses) on asset sales
Real estate mortgage loans......................... 728,000 249,000 721,000
Securities......................................... (120,000) (174,000) 637,000
Other income.......................................... 1,239,000 1,134,000 951,000
----------- ----------- -----------
Total Non-interest Income........................ 3,766,000 3,101,000 3,898,000
----------- ----------- -----------
NON-INTEREST EXPENSE
Salaries and employee benefits........................ 12,163,000 10,562,000 9,316,000
Occupancy, net........................................ 1,548,000 1,392,000 1,237,000
Furniture and fixtures................................ 1,345,000 1,248,000 968,000
Other expenses........................................ 6,646,000 6,301,000 6,014,000
----------- ----------- -----------
Total Non-interest Expense....................... 21,702,000 19,503,000 17,535,000
----------- ----------- -----------
Income Before Federal Income Tax................. 9,510,000 8,360,000 7,771,000
Federal income tax expense.............................. 2,700,000 2,329,000 2,165,000
----------- ----------- -----------
Net Income....................................... $ 6,810,000 $ 6,031,000 $ 5,606,000
=========== =========== ===========
Income per common share................................. $2.38 $2.09 $1.95
Cash dividends declared per common share................ $0.89 $0.72 $0.50
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 86

INDEPENDENT BANK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Net Income............................................ $ 6,810,000 $ 6,031,000 $ 5,606,000
------------ ------------ ------------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM
OPERATING ACTIVITIES
Proceeds from sales of loans held for sale.......... 51,976,000 38,103,000 50,142,000
Disbursements for loans held for sale............... (54,262,000) (37,411,000) (49,397,000)
Provision for loan losses........................... 636,000 473,000 657,000
Deferred federal income tax expense (credit)........ (1,208,000) 474,000 (13,000)
Deferred loan fees.................................. 109,000 (179,000) (2,000)
Depreciation, amortization of intangible assets and
premiums and accretion of discounts on securities
and loans........................................ 2,247,000 2,494,000 1,875,000
Net gains on sales of real estate mortgage loans.... (728,000) (249,000) (721,000)
Net (gains) losses on sales of securities........... 120,000 174,000 (637,000)
Decrease in accrued income and other assets......... 286,000 1,891,000 499,000
Increase (decrease) in accrued expenses and
other liabilities................................ 2,587,000 373,000 (213,000)
------------ ------------ ------------
Total Adjustments................................... 1,763,000 6,143,000 2,190,000
------------ ------------ ------------
Net Cash from Operating Activities............. 8,573,000 12,174,000 7,796,000
------------ ------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sales of securities available for
sale............................................. 14,054,000 28,384,000 34,341,000
Proceeds from maturities of securities held to
maturity......................................... 13,920,000 25,094,000 9,589,000
Principal payments received on securities available
for sale......................................... 1,347,000 285,000
Principal payments received on securities held to
maturity......................................... 5,116,000 8,866,000 12,868,000
Purchases of securities available for sale.......... (732,000) (34,658,000) (45,589,000)
Purchases of securities held to maturity............ (19,423,000) (28,299,000) (30,389,000)
Portfolio loans made to customers, net of principal
payments received................................ (88,906,000) (54,751,000) 8,134,000
Acquisitions of banks, less cash received........... 3,533,000
Acquisition of branch office, less cash received.... 13,949,000
Capital expenditures................................ (1,642,000) (1,283,000) (2,105,000)
------------ ------------ ------------
Net Cash from Investing Activities............. (62,317,000) (56,362,000) (9,618,000)
------------ ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Net increase (decrease) in total deposits........... (12,273,000) (14,149,000) 4,634,000
Net increase (decrease) in short-term borrowings.... (347,000) 16,252,000 (297,000)
Proceeds from Federal Home Loan Bank advances....... 104,000,000 44,000,000 6,000,000
Payments of Federal Home Loan Bank advances......... (41,000,000) (10,000,000)
Proceeds from issuance of long-term borrowings...... 3,000,000
Retirement of debt.................................. (2,750,000) (250,000)
Dividends paid...................................... (2,392,000) (1,926,000) (1,380,000)
Proceeds from issuance of common stock.............. 138,000 16,000
Repurchase of common stock.......................... (893,000) (924,000)
------------ ------------ ------------
Net Cash from Financing Activities............. 47,233,000 30,519,000 11,707,000
------------ ------------ ------------
Net Increase (Decrease) in Cash and Cash
Equivalents................................. (6,511,000) (13,669,000) 9,885,000
Cash and Cash Equivalents at Beginning of Period...... 23,719,000 37,388,000 27,503,000
------------ ------------ ------------
Cash and Cash Equivalents at End of Period..... $ 17,208,000 $ 23,719,000 $ 37,388,000
============ ============ ============
Cash paid during the period for
Interest............................................ $ 17,604,000 $ 12,696,000 $ 12,572,000
Income taxes........................................ 3,110,000 2,366,000 2,466,000
Transfer of loans to other real estate................ 555,000 254,000 556,000
Transfer of portfolio loans to held for sale.......... 7,100,000
Transfer of securities held to maturity to available
for sale............................................ 52,601,000 19,283,000
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 87

INDEPENDENT BANK CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
NET REALIZED
GAIN (LOSS) ON
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE SHAREHOLDERS'
STOCK SURPLUS EARNINGS FOR SALE EQUITY
---------- ----------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1993... $2,590,000 $17,084,000 $14,793,000 $ 0 $ 34,467,000
Net income for 1993........... 5,606,000 5,606,000
Cash dividends declared, $.50
per share................... (1,432,000) (1,432,000)
Issuance of 21,477 shares of
common stock................ 21,000 387,000 408,000
---------- ----------- ----------- ----------- -----------
Balances at December 31,
1993........................ 2,611,000 17,471,000 18,967,000 0 39,049,000
Impact of change in accounting
for securities, net of
$46,000 of related tax
effect...................... 90,000 90,000
Net income for 1994........... 6,031,000 6,031,000
Cash dividends declared, $.72
per share................... (2,088,000) (2,088,000)
Issuance of 18,356 shares of
common stock................ 18,000 345,000 363,000
Repurchase of 40,000 shares of
common stock................ (40,000) (884,000) (924,000)
Net change in unrealized gain
(loss) on securities
available for sale, net of
$1,138,000 of related tax
effect...................... (2,210,000) (2,210,000)
---------- ----------- ----------- ----------- -----------
Balances at December 31,
1994........................ 2,589,000 16,932,000 22,910,000 (2,120,000) 40,311,000
Net income for 1995........... 6,810,000 6,810,000
Cash dividends declared, $.89
per share................... (2,506,000) (2,506,000)
5% stock dividend............. 129,000 3,386,000 (3,531,000) (16,000)
Issuance of 22,430 shares of
common stock................ 22,000 463,000 485,000
Repurchase of 35,900 shares of
common stock................ (36,000) (857,000) (893,000)
Transfer of securities held to
maturity to available for
sale, net of $443,000 of
related tax effect.......... 859,000 859,000
Net change in unrealized gain
(loss) on securities
available for sale, net of
$1,017,000 of related tax
effect...................... 1,975,000 1,975,000
---------- ----------- ----------- ----------- -----------
Balances at December 31,
1995........................ $2,704,000 $19,924,000 $23,683,000 $ 714,000 $ 47,025,000
========== =========== =========== =========== ===========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 88

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies and practices of Independent Bank
Corporation and subsidiaries conform with generally accepted accounting
principles and prevailing practices within the banking industry. The following
summaries describe the significant accounting and reporting policies that are
employed in the preparation of the consolidated financial statements.

The Banks transact business in the single industry segment of commercial
banking. The Banks' activities cover traditional phases of commercial banking,
including checking and savings accounts, commercial and agricultural lending,
direct and indirect consumer financing, mortgage lending and deposit box
services. The principal markets are the rural and suburban communities across
lower Michigan that are served by the Banks' branch networks. Subject to
established underwriting criteria, the Banks may also participate in commercial
lending transactions with certain non-affiliated banks and purchase real estate
mortgage loans from third-party originators. The local economies of the
communities served by the Banks are relatively stable and reasonably
diversified.

Management is required to make estimates and assumptions in the preparation
of the financial statements which affect the amounts reported. Material
estimates that are particularly susceptible to changes in the near-term relate
to the determination of the allowance for loan losses. While Management uses
relevant information to recognize losses on loans, future provisions for related
losses may be necessary based on changes in economic conditions and customer
circumstances.

Principles of Consolidation -- The consolidated financial statements
include the accounts of Independent Bank Corporation and its subsidiaries. The
income, expenses, assets and liabilities of the subsidiaries are included in the
respective accounts of the consolidated financial statements, after elimination
of all material intercompany accounts and transactions.

Statements of Cash Flows -- For purposes of reporting cash flows, cash and
cash equivalents include cash on hand, amounts due from banks, and federal funds
sold. Generally, federal funds are sold for one-day periods. The Company reports
net cash flows for customer loan and deposit transactions.

Loans Held for Sale -- Loans designated as held for sale are carried at the
lower of aggregate amortized cost or market value. Lower of cost or market value
adjustments, as well as realized gains and losses, are recorded in current
earnings. The Company will adopt Statement of Financial Accounting Standards No.
122, "Accounting for Mortgage Servicing Rights," ("SFAS #122") on January 1,
1996. SFAS #122 will require the Banks to prospectively recognize rights to
service mortgage loans as separate assets. This statement will also require the
Banks to assess these mortgage servicing rights for impairment based on the fair
value of those rights. The adoption of SFAS #122 on a prospective basis in the
first quarter of 1996 is not expected to have a significant effect on the
consolidated financial statements.

Securities -- The Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," ("SFAS #115") effective January 1, 1994. Under SFAS #115, the
Company is required to classify its securities as trading, held to maturity or
available for sale.

Trading securities are bought and held principally for the purpose of
selling them in the near-term and are reported at fair value with realized and
unrealized gains and losses included in earnings. The Company does not have any
trading securities. Securities classified as held to maturity represent those
securities for which the Banks have the positive intent and ability to hold
until maturity and are reported at cost, adjusted for amortization of premiums
and accretion of discounts computed on the level yield method. Securities
available for sale represent those securities not classified as trading or held
to maturity and are reported at fair value with unrealized gains and losses, net
of applicable income taxes reported as a separate component of shareholders'
equity. Gains and losses realized on the sale of securities available for sale
are determined using

F-6
<PAGE> 89

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
the specific identification method and are recognized on a trade-date basis.
Premiums and discounts are recognized in interest income computed on the level
yield method.

The Company adopted Statement of Financial Accounting Standards No. 119,
"Disclosure About Derivative Financial Instruments and Fair Value of Financial
Instruments," ("SFAS #119") effective December 31, 1994. SFAS #119 requires
disclosure about off-balance sheet financial instruments.

Loan Revenue Recognition -- Interest on loans is accrued based on the
principal amounts outstanding. The accrual of interest income is discontinued
when a loan becomes 90 days past due and the borrower's capacity to repay the
loan and collateral values appear insufficient. A non-accrual loan may be
restored to accrual status when interest and principal payments are current and
the loan appears otherwise collectible.

Certain loan fees, net of direct loan origination costs, are deferred and
recognized as an adjustment of yield over the life of the related loan. Fees
received in connection with loan commitments are deferred until the loan is
advanced and are then recognized over the life of the loan as an adjustment of
yield. Fees on commitments that expire unused are recognized at expiration. Fees
received for a letter of credit are recognized as fee revenue over its life.

Allowance for Loan Losses -- Some loans may not be repaid in full.
Therefore, an allowance for loan losses is maintained at a level which
management has determined to be adequate to absorb inherent losses. Management's
assessment of the allowance is based on prior years' loss experience, general
economic conditions and trends, as well as the review of specific loans.
Increases in the allowance are recorded by a provision for loan losses charged
to expense and, although management periodically allocates portions of the
allowance to specific loans and loan portfolios, the entire allowance is
available for any charge-offs which occur. Collection efforts may continue and
future recoveries may occur after a loan is charged-off.

The Company has adopted Statement of Financial Accounting Standards No.
114, "Accounting by Creditors for Impairment of a Loan," ("SFAS #114"). SFAS
#114, which has been subsequently amended by SFAS #118, requires the Company to
measure its investment in certain impaired loans based on one of three methods:
the loan's observable market price, the fair value of the collateral or the
present value of expected future cash flows discounted at the loan's effective
interest rate. The adoption of this Statement in 1995 did not have a significant
effect on the allowance for loan losses.

Property and Equipment -- Property and equipment is stated at cost less
accumulated depreciation and amortization. Depreciation and amortization is
computed using both straight-line and accelerated methods over the estimated
useful lives of the related assets.

Other Real Estate -- Other real estate represents properties acquired
through foreclosure or by acceptance of a deed in lieu of foreclosure. Prior to
1995, loan collateral which had been in-substance foreclosed was included in
other real estate. A portion of these properties has been sold on land contract
or financed at below market terms. The carrying values of these properties are
periodically evaluated and are adjusted to the lower of cost or fair value minus
estimated costs to sell. Other real estate and repossessed assets totaling
$760,000 and $1,381,000 at December 31, 1995 and 1994, respectively, are
included in other assets.

Intangible Assets -- Goodwill, which represents the excess of the purchase
price over the fair value of net tangible assets acquired, is amortized on a
straight-line basis over the period of expected benefit, generally 12 to 20
years. Goodwill totaled $1,099,000 and $1,188,000 as of December 31, 1995 and
1994, respectively. Other intangible assets are amortized using both
straight-line and accelerated methods over 12 to 15 years. Other intangibles
amounted to $1,407,000 and $1,096,000 as of December 31, 1995 and 1994,
respectively.

F-7
<PAGE> 90

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
Income Taxes -- Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," ("SFAS
#109") with no material impact on the financial statements. SFAS #109 required
that the Company employ the asset and liability method of accounting for income
taxes. The objective of this method is to establish deferred tax assets and
liabilities for the temporary differences between the financial reporting basis
and the tax basis of the Company's assets and liabilities at enacted tax rates
expected to be in effect when such amounts are realized or settled. Under the
asset and liability method, the effect of a change in tax rates is recognized in
income in the period that includes the enactment date. The deferred tax asset is
subject to a valuation allowance for that portion of the asset for which it is
more likely than not that it will not be realized.

The Company and its subsidiaries file a consolidated federal income tax
return. Intercompany tax liabilities are settled as if each subsidiary filed a
separate return.

Common Stock -- At December 31, 1995, 46,387 shares of common stock were
reserved for issuance under the Incentive Share Grant Plan, 26,089 shares of
common stock were reserved for issuance under the dividend reinvestment plan and
128,275 shares of common stock were reserved for issuance under stock option
plans.

Earnings Per Share -- Earnings per share is based on 2,861,898 average
shares and equivalents outstanding in 1995, 2,890,368 in 1994 and 2,878,386 in
1993. Per share data has been adjusted to give retroactive effect to 5% stock
dividends in 1996 and 1995.

Retirement Plans -- The Company maintains an employee stock ownership plan
as well as a 401(k) plan for substantially all full-time employees.

Reclassification -- Certain amounts in the 1994 and 1993 financial
statements have been reclassified to conform with the 1995 presentation.

NOTE 2 -- ACQUISITIONS

On March 7, 1994, KSB Financial, Inc., ("KSB") merged with the Company. As
a result, The Kingston State Bank became a subsidiary of the Company. The
Company issued 225,649 shares of common stock in exchange for all of the
outstanding common stock of KSB. The merger was accounted for as a pooling of
interests and, accordingly, the accompanying financial statements were restated
to include the accounts and operations of KSB for all periods prior to the
merger.

Separate results of operations of the combining entities as of December 31,
follows:

<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Net Interest Income After Provision For Loan Losses
Independent Bank Corporation..................................... $24,427,000 $19,606,000
KSB Financial, Inc. ............................................. 335,000 1,802,000
----------- -----------
Total......................................................... $24,762,000 $21,408,000
=========== ===========
Net Income
Independent Bank Corporation..................................... $ 6,021,000 $ 5,376,000
KSB Financial, Inc. ............................................. 10,000 230,000
----------- -----------
Total......................................................... $ 6,031,000 $ 5,606,000
=========== ===========
</TABLE>

In October 1993, the Company acquired American Home Bank ("American") and
Pioneer Bank ("Pioneer"). Cash consideration totaled $2,518,000 and $4,589,000
respectively. The transactions were accounted for as purchases and, accordingly,
the assets acquired and the liabilities assumed were recorded at

F-8
<PAGE> 91

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 2 -- ACQUISITIONS -- CONTINUED
fair value. The Company's results of operations include revenues and expenses
relating to American and Pioneer since September 30, 1993.

The pro-forma information presented in the following table is based on
historical results of the Company, American and Pioneer. The information has
been combined to present the results of operations as if the acquisitions had
occurred at the beginning of the period presented. The following pro-forma
results for the year ended December 31 are not necessarily indicative of the
results which would have actually been attained if the acquisitions had been
consummated in the past or what may be attained in the future.

<TABLE>
<CAPTION>
1993
-----------
(UNAUDITED)
<S> <C>
Total revenue.................................................................. $42,700,000
Net income..................................................................... 5,700,000
Earnings per share............................................................. 1.98
</TABLE>

NOTE 3 -- PENDING ACQUISITION

On February 2, 1996, the Company entered into a definitive agreement to
merge with North Bank Corporation ("NBC"). As a result, North Bank will become a
subsidiary of the Company. Cash consideration is anticipated to approximate
$16,300,000. At December 31, 1995, NBC had total assets and loans of
$153,600,000 and $91,200,000 (unaudited), respectively. The transaction is
subject to approval by NBC shareholders and the Federal Reserve and will be
accounted for as a purchase. Accordingly, the assets acquired and the
liabilities assumed will be recorded at fair value. Goodwill is anticipated to
approximate $6,000,000.

NOTE 4 -- RESTRICTIONS ON CASH AND DUE FROM BANKS

The Banks' legal reserve requirements were satisfied by maintaining
non-interest earning vault cash balances of $2,661,000 in 1995 and $2,547,000 in
1994. The Banks do not maintain compensating balances with correspondent banks.

NOTE 5 -- SECURITIES

Securities available for sale consist of the following at December 31:

<TABLE>
<CAPTION>
UNREALIZED
AMORTIZED ------------------------ FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
1995
U.S. Treasury............................. $23,189,000 $ 188,000 $ 105,000 $23,272,000
U.S. Government agencies.................. 6,557,000 79,000 13,000 6,623,000
Mortgage-backed securities................ 37,238,000 661,000 177,000 37,722,000
Obligations of states and political
subdivisions........................... 8,682,000 608,000 9,290,000
Other securities.......................... 10,805,000 2,000 161,000 10,646,000
----------- ---------- ---------- -----------
Total.................................. $86,471,000 $1,538,000 $ 456,000 $87,553,000
=========== ========== ========== ===========
1994
U.S. Treasury............................. $36,099,000 $1,375,000 $34,724,000
Mortgage-backed securities................ 12,718,000 1,034,000 11,684,000
Other securities.......................... 7,151,000 803,000 6,348,000
----------- ---------- ---------- -----------
Total.................................. $55,968,000 $ 0 $3,212,000 $52,756,000
=========== ========== ========== ===========
</TABLE>

F-9
<PAGE> 92

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 5 -- SECURITIES -- CONTINUED
Securities held to maturity consist of the following at December 31:

<TABLE>
<CAPTION>
UNREALIZED
AMORTIZED ------------------------ FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
1995
U.S. Government agencies.................. $ 2,559,000 $ 70,000 $ 2,629,000
Mortgage-backed securities................ 4,487,000 13,000 $ 18,000 4,482,000
Obligations of states and political
subdivisions........................... 20,142,000 1,074,000 12,000 21,204,000
Other securities.......................... 718,000 2,000 716,000
----------- ---------- ---------- -----------
Total.................................. $27,906,000 $1,157,000 $ 32,000 $29,031,000
=========== ========== ========== ===========
1994
U.S. Treasury............................. $ 5,738,000 $ 5,000 $ 223,000 $ 5,520,000
U.S. Government agencies.................. 11,004,000 371,000 10,633,000
Mortgage-backed securities................ 26,545,000 136,000 376,000 26,305,000
Obligations of states and political
subdivisions........................... 27,240,000 835,000 163,000 27,912,000
Other securities.......................... 7,194,000 114,000 7,080,000
----------- ---------- ---------- -----------
Total.................................. $77,721,000 $ 976,000 $1,247,000 $77,450,000
=========== ========== ========== ===========
</TABLE>

The amortized cost and approximate fair value of securities at December 31,
1995, by contractual maturity, follow. Actual maturities will differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
AVAILABLE FOR SALE HELD TO MATURITY
-------------------------- --------------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Maturing within one year.................. $13,004,000 $12,939,000 $ 1,187,000 $ 1,189,000
Maturing after one year but within five
years................................... 19,399,000 19,695,000 9,028,000 9,399,000
Maturing after five years but within ten
years................................... 9,922,000 10,446,000 10,607,000 11,229,000
Maturing after ten years.................. 2,591,000 2,726,000
----------- ----------- ----------- -----------
42,325,000 43,080,000 23,413,000 24,543,000
Mortgage-backed securities................ 37,238,000 37,722,000 4,487,000 4,482,000
Other securities.......................... 6,908,000 6,751,000 6,000 6,000
----------- ----------- ----------- -----------
Total................................ $86,471,000 $87,553,000 $27,906,000 $29,031,000
=========== =========== =========== ===========
</TABLE>

A summary of proceeds from the sale of securities available for sale and
realized gains and losses follows:

<TABLE>
<CAPTION>
REALIZED REALIZED
PROCEEDS GAINS LOSSES
----------- -------- --------
<S> <C> <C> <C>
1995....................................................... $14,054,000 $ 8,000 $128,000
1994....................................................... 28,384,000 228,000 402,000
1993....................................................... 34,341,000 658,000 21,000
</TABLE>

Securities with a book value of $20,816,000 and $10,948,000 at December 31,
1995 and 1994, respectively, were pledged to secure public deposits and for
other purposes as required by law.

There were no investment obligations of state and political subdivisions
that were payable from or secured by the same source of revenue or taxing
authority that exceeded 10% of consolidated shareholders' equity at December 31,
1995 or 1994.

F-10
<PAGE> 93

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 5 -- SECURITIES -- CONTINUED
During November 1995, the Financial Accounting Standards Board issued a
"Guide to Implementation of Statement #115 on Accounting for Certain Investment
in Debt and Equity Securities." This guide allowed for a one-time change in the
classification of securities pursuant to SFAS #115 as of the date of the
implementation guide, but no later than December 31, 1995. As a result, the
Banks made a transfer of $52,601,000 to securities available for sale.

NOTE 6 -- LOANS

An analysis of the allowance for loan losses for the years ended December 31
follows:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Balance at beginning of period........................... $5,054,000 $5,053,000 $4,023,000
Allowance on loans acquired............................ 756,000
Provision charged to operating expense................. 636,000 473,000 657,000
Recoveries credited to allowance....................... 265,000 399,000 331,000
Loans charged against allowance........................ (712,000) (871,000) (714,000)
---------- ---------- ----------
Balance at end of period................................. $5,243,000 $5,054,000 $5,053,000
========== ========== ==========
</TABLE>

Loans are presented net of deferred income of $1,434,000 at December 31,
1995, and $1,325,000 at December 31, 1994.

Loans on non-accrual status, 90 days or more past due and still accruing
interest, or restructured amounted to $2,560,000, $2,834,000 and $3,213,000 at
December 31, 1995, 1994 and 1993, respectively. If these loans had continued to
accrue interest in accordance with their original terms, approximately $263,000,
$259,000, and $261,000 of interest income would have been realized in 1995, 1994
and 1993, respectively. Interest income accrued on these loans was approximately
$64,000, $102,000 and $143,000 in 1995, 1994 and 1993, respectively.

Impaired loans totaled approximately $3,200,000 at December 31, 1995. In
addition to certain non-performing loans, other than homogeneous residential
mortgage and installment loans, impaired loans include commercial and
agricultural loans totaling $1,800,000 that have been separately identified as
impaired. The Banks' average investment in impaired loans approximated
$2,300,000 in 1995. Cash receipts on impaired loans on non-accrual status are
generally applied to the principal balance. Interest income recognized on
impaired loans in 1995 was approximately $70,000. Certain impaired loans with a
balance of approximately $700,000 had specific allocations of the allowance for
loan losses calculated in accordance with SFAS #114 totaling approximately
$250,000 at December 31, 1995. As a result of the implementation of SFAS #114,
certain loans that had previously been identified as in-substance foreclosed and
classified as other real estate have been transferred to loans at December 31,
1995.

At December 31, 1995, 1994 and 1993, the Banks serviced loans totaling
approximately $124,000,000, $103,500,000 and $78,000,000, respectively, for the
benefit of third parties.

F-11
<PAGE> 94

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 7 -- PROPERTY AND EQUIPMENT

A summary of property and equipment at December 31 follows:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Land............................................................... $ 1,662,000 $ 1,409,000
Buildings.......................................................... 9,554,000 8,956,000
Equipment.......................................................... 7,988,000 7,177,000
----------- -----------
19,204,000 17,542,000
Accumulated depreciation and amortization.......................... (9,273,000) (8,049,000)
----------- -----------
Property and equipment, net................................... $ 9,931,000 $ 9,493,000
=========== ===========
</TABLE>

NOTE 8 -- DEPOSITS

A summary of interest expense on deposits for the years ended December 31
follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Savings and NOW....................................... $ 5,515,000 $ 4,819,000 $ 4,887,000
Time deposits under $100,000.......................... 6,072,000 5,705,000 6,508,000
Time deposits of $100,000 or more..................... 883,000 568,000 632,000
----------- ----------- -----------
Total............................................ $12,470,000 $11,092,000 $12,027,000
=========== =========== ===========
</TABLE>

Aggregate time certificates of deposit and other time deposits in
denominations of $100,000 or more amounted to $19,497,000, $11,231,000, and
$14,124,000 at December 31, 1995, 1994 and 1993, respectively.

NOTE 9 -- OTHER BORROWINGS

A summary of other borrowings at December 31 follows:

<TABLE>
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Advances from Federal Home Loan Bank.............................. $103,000,000 $40,000,000
U.S. Treasury demand notes........................................ 1,223,000 1,985,000
Repurchase agreements............................................. 6,666,000 5,752,000
Other............................................................. 5,000 4,000
------------ -----------
Total........................................................ $110,894,000 $47,741,000
============ ===========
</TABLE>

Advances from the Federal Home Loan Bank ("FHLB") at December 31, 1995 and
1994, are secured by the Banks' unencumbered qualifying mortgage loans as well
as U.S. Treasury and government agency

F-12
<PAGE> 95

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 9 -- OTHER BORROWINGS -- CONTINUED
securities equal to at least 170% of outstanding advances. Maturities and
weighted average interest rates are as follows:

<TABLE>
<CAPTION>
1995 1994
-------------------- -------------------
AMOUNT RATE AMOUNT RATE
------------ ---- ----------- ----
<S> <C> <C> <C> <C>
Fixed rate advances
1995............................................. $ 3,000,000 6.90%
1996............................................. $ 27,000,000 5.61%
1997............................................. 34,000,000 6.01
1998............................................. 16,000,000 5.94
------------ ---- ----------- ----
Total fixed rate advances..................... 77,000,000 5.86 3,000,000 6.90
------------ ---- ----------- ----
Variable rate advances
1995............................................. 37,000,000 6.15
1996............................................. 15,000,000 5.76
1997............................................. 4,000,000 5.86
2000............................................. 7,000,000 6.66
------------ ---- ----------- ----
Total variable rate advances.................. 26,000,000 6.02 37,000,000 6.15
------------ ---- ----------- ----
Total advances................................ $103,000,000 5.90% $40,000,000 6.21%
============ ==== =========== ====
</TABLE>

Interest expense on advances amounted to $3,836,000, $761,000 and $55,000
for the years ending December 31, 1995, 1994 and 1993, respectively.

As members of the FHLB system, the Banks must own FHLB stock equal to the
greater of 1.0% of the unpaid principal balances of residential mortgage loans,
0.3% of its total assets, or 5.0% of its outstanding advances. At December 31,
1995, the Banks are in compliance with the FHLB stock ownership requirements.

The Company also has a $3,000,000 revolving credit agreement secured by the
capital stock of one of the Banks. At December 31, 1995, no amounts were
outstanding on this revolving credit agreement.

NOTE 10 -- FEDERAL INCOME TAX

The composition of federal income tax expense for the years ended December
31 follows:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ---------- ----------
<S> <C> <C> <C>
Current................................................. $ 3,908,000 $1,855,000 $2,178,000
Deferred................................................ (1,208,000) 474,000 (13,000)
----------- ---------- ----------
Federal income tax expense......................... $ 2,700,000 $2,329,000 $2,165,000
=========== ========== ==========
</TABLE>

A reconciliation of federal income tax expense to the amount computed by
applying the statutory federal income tax rate of 34% to income before federal
income tax for the years ended December 31 follows:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Statutory rate applied to income before federal income
tax.................................................... $3,233,000 $2,842,000 $2,642,000
Tax-exempt interest income............................... (587,000) (586,000) (584,000)
Amortization of goodwill................................. 54,000 58,000 49,000
Other, net............................................... 15,000 58,000
---------- ---------- ----------
Federal income tax expense.......................... $2,700,000 $2,329,000 $2,165,000
========== ========== ==========
</TABLE>

F-13
<PAGE> 96

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 10 -- FEDERAL INCOME TAX -- CONTINUED
The deferred federal income tax benefit of $1,208,000 in 1995, expense of
$474,000 in 1994, and benefit of $13,000 in 1993, resulted from the tax effects
of temporary differences. There was no impact for changes in tax laws and rates
or changes in the valuation allowance for deferred tax assets.

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31
follow:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Deferred tax assets
Allowance for loan losses.......................................... $ 961,000 $ 821,000
Deferred compensation.............................................. 598,000 481,000
Deferred loan fees................................................. 486,000 458,000
Deferred credit life premiums...................................... 145,000 136,000
Mortgage servicing fees............................................ 112,000 128,000
Unrealized loss on securities available for sale................... 1,092,000
Other.............................................................. 443,000 205,000
---------- ----------
Gross deferred tax assets....................................... 2,745,000 3,321,000
---------- ----------
Deferred tax liabilities
Unrealized gain on securities available for sale................... 368,000
Purchase premiums.................................................. 134,000 177,000
Securities and loans marked-to-market for tax purposes............. 622,000
Other.............................................................. 27,000
---------- ----------
Gross deferred tax liabilities.................................. 502,000 826,000
---------- ----------
Net deferred tax assets......................................... $2,243,000 $2,495,000
========== ==========
</TABLE>

The Company's aggregate income subject to federal income tax for the three
years ended December 31, 1995, totaled approximately $25,600,000. Consequently,
Management believes that at December 31, 1995, it is more likely than not that
the benefit of the gross deferred tax assets of $2,745,000 will be realized and
no valuation allowance is deemed necessary as of December 31, 1995.

NOTE 11 -- EMPLOYEE BENEFIT PLANS

During 1992, the Company's shareholders approved the adoption of stock
option plans for certain employees of the Company and the Banks and for
non-employee directors of the Company. An aggregate of 137,800 shares of common
stock has been authorized for issuance under the plans. Options granted under
these plans are exercisable not earlier than one year after the date of grant,
at a price equal to the fair market value of the common stock on the date of
grant, and expire five years after the date of grant.

F-14
<PAGE> 97

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 11 -- EMPLOYEE BENEFIT PLANS -- CONTINUED
The following table summarizes outstanding grants and stock option
transactions:

<TABLE>
<CAPTION>
NUMBER AVERAGE
OF EXERCISE
SHARES PRICE
------ --------
<S> <C> <C>
Outstanding at December 31, 1992......................................... 22,050 $13.95
Granted................................................................ 22,050 18.31
Forfeited.............................................................. (1,103) 14.29
------ ------
Outstanding at December 31, 1993......................................... 42,997 16.18
Granted................................................................ 23,153 18.14
Exercised.............................................................. (1,103) 14.29
------ ------
Outstanding at December 31, 1994......................................... 65,047 16.91
Granted................................................................ 26,460 22.57
Exercised.............................................................. (8,435) 16.23
Forfeited.............................................................. (1,103) 22.22
------ ------
Outstanding at December 31, 1995......................................... 81,969 $18.73
====== ======
</TABLE>

The Company has a 401(k) and an employee stock ownership plan covering
substantially all full-time employees of the Company and the Banks. The Company
matches employee contributions to the 401(k) up to a maximum of 3% of
participating employees' eligible wages. Contributions to the employee stock
ownership plan are determined annually and require approval of the Company's
Board of Directors. For the years ended December 31, 1995, 1994 and 1993,
$704,000, $365,000 and $452,000 respectively, was expensed for these retirement
plans.

Officers of the Company and the Banks participate in various
performance-based compensation plans. The 1988 Incentive Share Grant Plan
provides that the Board of Directors, at its sole discretion, may award
restricted shares of common stock to the participants in the Management
Incentive Compensation Plan in lieu of cash bonuses. The market value of such
incentive shares at the date of grant must equal twice the amount of the cash
incentive otherwise payable. Shares of common stock issued pursuant to the
Incentive Share Grant Plan vest over four years. For the years ended December
31, 1995, 1994 and 1993, amounts expensed for all incentive plans totaled
$876,000, $633,000, and $784,000, respectively.

The Company also provides certain health care and life insurance programs
to substantially all full-time employees. These insurance programs are available
to retired employees at their expense.

Effective January 1, 1996, the Company will adopt Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation", ("SFAS
#123"). SFAS #123 encourages companies to adopt a fair value method of
accounting for stock compensation plans. Those companies not adopting a fair
value method will be required to make pro-forma disclosures of net income and
earnings per share as if they had adopted the fair value accounting method.
Management anticipates the Company will elect the pro-forma disclosure method.

NOTE 12 -- FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

In the normal course of business, the Banks enter into financial
instruments with off-balance sheet risk to meet the financing needs of customers
or to reduce exposure to fluctuations in interest rates. These financial
instruments may include commitments to extend credit, standby letters of credit
and interest rate swaps. There were no interest rate swaps in 1995, 1994 and
1993. Financial instruments involve varying degrees of credit and interest rate
risk in excess of amounts reflected in the consolidated balance sheets. Exposure
to

F-15
<PAGE> 98

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 12 -- FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK -- CONTINUED
credit risk in the event of non-performance by the counterparties to the
financial instruments for loan commitments to extend credit and letters of
credit is represented by the contractual amounts of those instruments.
Management does not, however, anticipate material losses as a result of these
financial instruments.

A summary of financial instruments with off-balance sheet risk at December
31 follows:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Financial instruments whose risk is represented by contract amounts
Commitments to extend credit..................................... $50,821,000 $34,266,000
Standby letters of credit........................................ 2,427,000 2,858,000
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and generally require payment of a fee. Since many of the commitments are
expected to expire without being drawn upon, the commitment amounts do not
represent future cash requirements. Commitments are issued subject to similar
underwriting standards, including collateral requirements, as are generally
involved in the extension of credit facilities.

Standby letters of credit are written conditional commitments issued by the
Banks to guarantee the performance of a customer to a third party, primarily
public and private borrowing arrangements. Standby letters of credit generally
extend for periods of less than one year. The credit risk involved in such
transactions is essentially the same as that involved in extending loan
facilities and, accordingly, standby letters of credit are issued subject to
similar underwriting standards, including collateral requirements, as are
generally involved in the extension of credit facilities.

NOTE 13 -- RELATED PARTY TRANSACTIONS

Certain directors and executive officers of the Company and the Banks,
including companies in which they are officers or have significant ownership,
were loan customers of the Banks during 1995 and 1994.

A summary of loans to directors and executive officers whose borrowing
relationship exceeds $60,000, and to entities in which they own a 10% or more
voting interest for the years ended December 31 follows:

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Balance at beginning of period..................................... $ 5,322,000 $ 4,765,000
New loans and advances........................................... 3,265,000 7,145,000
Repayments....................................................... (3,900,000) (6,588,000)
----------- -----------
Balance at end of period........................................... $ 4,687,000 $ 5,322,000
=========== ===========
</TABLE>

F-16
<PAGE> 99

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 14 -- OTHER OPERATING EXPENSES

Other operating expenses for the years ended December 31, follow:

<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Loan and collection...................................... $1,030,000 $ 626,000 $ 724,000
Computer processing...................................... 818,000 786,000 674,000
Communications........................................... 791,000 728,000 614,000
Supplies................................................. 561,000 498,000 423,000
State taxes.............................................. 537,000 496,000 435,000
Deposit insurance........................................ 499,000 966,000 858,000
Legal and professional................................... 307,000 406,000 394,000
Other.................................................... 2,103,000 1,795,000 1,892,000
---------- ---------- ----------
Total............................................... $6,646,000 $6,301,000 $6,014,000
========== ========== ==========
</TABLE>

NOTE 15 -- UNDISTRIBUTED INCOME AND DIVIDEND LIMITATIONS OF SUBSIDIARIES

Capital guidelines adopted by Federal and State regulatory agencies and
restrictions imposed by law limit the amount of cash dividends the Banks can pay
to the Company. At December 31, 1995, using the most restrictive of these
conditions for each Bank, the aggregate cash dividends that the Banks can pay
the Company without prior approval is approximately $18,930,000. It is not the
intent of Management to have dividends paid in amounts which would reduce the
capital of the Banks to levels below those which are considered prudent by
management and in accordance with guidelines of regulatory authorities.

NOTE 16 -- FAIR VALUES OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments" requires that the Company disclose
estimated fair values for its financial instruments. Many of the Company's
financial instruments lack an available trading market. Further, it is the
Company's general practice and intent to hold the majority of its financial
instruments to maturity. Significant estimates and assumptions were used to
determine the fair value of financial instruments. These estimates are
subjective in nature, involving uncertainties and matters of judgment, and
therefore, fair values cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.

Estimated fair values have been determined using available data and an
estimation methodology that is considered suitable for each category of
financial instrument. For assets and liabilities with floating interest rates
which reprice frequently and without significant credit risk, it is presumed
that estimated fair values approximate the recorded book balances.

Financial instrument assets actively traded in a secondary market, such as
securities, have been valued using quoted market prices while recorded book
balances have been used for cash and due from banks and federal funds sold.

The fair value of loans is calculated by discounting estimated future cash
flows using estimated market discount rates that reflect credit and interest
rate risk inherent in the loan.

Financial instruments with stated maturities, such as certificates of
deposit, have been valued based on the discounted value of contractual cash
flows using a discount rate approximating current market rates for liabilities
with similar remaining maturities.

Financial instrument liabilities with no stated maturities, such as demand
deposits, savings, NOW and money market accounts, have a fair value equal to the
amount payable on demand.

F-17
<PAGE> 100

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 16 -- FAIR VALUES OF FINANCIAL INSTRUMENTS -- CONTINUED
The estimated fair values and recorded book balances at December 31 follow:

<TABLE>
<CAPTION>
1995 1994
--------------------- ---------------------
ESTIMATED RECORDED ESTIMATED RECORDED
FAIR BOOK FAIR BOOK
VALUE BALANCE VALUE BALANCE
--------- -------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks........................... $ 17,200 $ 17,200 $ 22,900 $ 22,900
Federal funds sold................................ 900 900
Securities available for sale..................... 87,600 87,600 52,800 52,800
Securities held to maturity....................... 29,000 27,900 77,500 77,700
Net loans and loans held for sale................. 432,000 428,800 330,700 337,600
LIABILITIES
Deposits with no stated maturities................ $ 261,500 $261,500 $ 275,800 $275,800
Deposits with stated maturities................... 150,300 150,100 132,500 133,700
Other borrowings.................................. 124,400 124,300 61,600 61,600
</TABLE>

The fair values for commitments to extend credit and standby letters of
credit are estimated to approximate their aggregate book balance.

Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result from
offering for sale the entire holdings of a particular financial instrument.

Fair value estimates are based on existing on and off-balance sheet
financial instruments without attempting to estimate the value of anticipated
future business, the value of future earnings attributable to off-balance sheet
activities and the value of assets and liabilities that are not considered
financial instruments.

Fair value estimates for deposit accounts do not include the value of the
substantial core deposit intangible asset resulting from the low-cost funding
provided by the deposit liabilities compared to the cost of borrowing funds in
the market.

F-18
<PAGE> 101

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 17 -- INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL
INFORMATION

Presented below are condensed financial statements for the parent company.

CONDENSED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks.......................................... $ 2,761,000 $ 1,865,000
Investment in subsidiaries....................................... 44,212,000 38,058,000
Other assets..................................................... 1,713,000 1,667,000
----------- -----------
Total Assets.................................................. $48,686,000 $41,590,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities................................................ $ 1,661,000 $ 1,279,000
Shareholders' equity............................................. 47,025,000 40,311,000
----------- -----------
Total Liabilities and Shareholders' Equity.................... $48,686,000 $41,590,000
=========== ===========
</TABLE>

CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
OPERATING INCOME
Dividends from subsidiaries............................ $4,500,000 $5,560,000 $5,426,000
Management fees from subsidiaries and other income..... 4,248,000 4,028,000 3,362,000
---------- ---------- ----------
Total Operating Income.............................. 8,748,000 9,588,000 8,788,000
---------- ---------- ----------
OPERATING EXPENSES
Interest expense....................................... 120,000 34,000
Administrative and other expenses...................... 5,226,000 4,849,000 4,387,000
---------- ---------- ----------
Total Operating Expenses............................ 5,226,000 4,969,000 4,421,000
---------- ---------- ----------
Income Before Federal Income Tax and Undistributed
Net Income of Subsidiaries........................ 3,522,000 4,619,000 4,367,000
Federal income tax credit................................ 320,000 310,000 313,000
---------- ---------- ----------
Income Before Equity in Undistributed Net Income of
Subsidiaries...................................... 3,842,000 4,929,000 4,680,000
Equity in undistributed net income of subsidiaries....... 2,968,000 1,102,000 926,000
---------- ---------- ----------
Net Income.......................................... $6,810,000 $6,031,000 $5,606,000
========== ========== ==========
</TABLE>

F-19
<PAGE> 102

INDEPENDENT BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 17 -- INDEPENDENT BANK CORPORATION (PARENT COMPANY ONLY) FINANCIAL
INFORMATION -- CONTINUED
CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Net Income.............................................. $ 6,810,000 $ 6,031,000 $ 5,606,000
----------- ----------- -----------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM
OPERATING ACTIVITIES
Depreciation, amortization of intangible assets and
premiums, and accretion of discounts on securities
and loans.......................................... 297,000 286,000 215,000
(Increase) decrease in other assets................... (604,000) 547,000 (332,000)
Increase in other liabilities......................... 599,000 298,000 560,000
Equity in undistributed net income of subsidiaries.... (2,968,000) (1,102,000) (926,000)
----------- ----------- -----------
Total Adjustments................................ (2,676,000) 29,000 (483,000)
----------- ----------- -----------
Net Cash from Operating Activities............... 4,134,000 6,060,000 5,123,000
----------- ----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of securities available for sale............. (241,000) (233,000)
Capital expenditures.................................. (127,000) (142,000) (594,000)
Investment in subsidiaries............................ (7,214,000)
Proceeds from sale of property and equipment.......... 36,000 13,000
----------- ----------- -----------
Net Cash from Investing Activities............... (91,000) (383,000) (8,028,000)
----------- ----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term borrowings........ 3,000,000
Repayment of debt..................................... (2,750,000) (250,000)
Dividends paid........................................ (2,392,000) (1,926,000) (1,380,000)
Proceeds from issuance of common stock................ 138,000 16,000
Repurchase of common stock............................ (893,000) (924,000)
----------- ----------- -----------
Net Cash from Financing Activities............... (3,147,000) (5,584,000) 1,370,000
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash
Equivalents................................... 896,000 93,000 (1,535,000)
Cash and Cash Equivalents at Beginning of Period........ 1,865,000 1,772,000 3,307,000
----------- ----------- -----------
Cash and Cash Equivalents at End of Period....... $ 2,761,000 $ 1,865,000 $ 1,772,000
=========== =========== ===========
</TABLE>

F-20
<PAGE> 103

INDEPENDENT BANK CORPORATION

INDEPENDENT AUDITOR'S REPORT

BOARD OF DIRECTORS AND SHAREHOLDERS
INDEPENDENT BANK CORPORATION
IONIA, MICHIGAN

We have audited the accompanying consolidated statements of financial
condition of Independent Bank Corporation and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of operations,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express our
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Independent
Bank Corporation and subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1995, in conformity with generally accepted
accounting principles.

As discussed in note 1 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in 1993 to adopt the
provisions of Financial Accounting Standards Board's Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." As discussed
in note 1, the Company changed its method of accounting for investments to adopt
the provisions of Financial Accounting Standards Board's SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" at January 1,
1994. As discussed in note 1, the Company changed its method of accounting for
impaired loans in 1995 to adopt the provisions of Financial Accounting Standards
Board's SFAS No. 114, "Accounting by Creditors for Impairment of a Loan", as
amended by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan --
Income Recognition and Disclosures."

KPMG Peat Marwick LLP
Lansing, Michigan
February 1, 1996

F-21
<PAGE> 104

INDEPENDENT BANK CORPORATION

INTERIM CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
-------------
(UNAUDITED)
<S> <C>
ASSETS
Cash and due from banks....................................................... $ 26,601,000
Securities available for sale................................................. 122,487,000
Securities held to maturity (fair value of $27,698,000 at September 30,
1996)....................................................................... 26,874,000
Federal Home Loan Bank stock, at cost......................................... 10,198,000
Loans held for sale........................................................... 10,389,000
Loans
Commercial and agricultural................................................. 141,747,000
Real estate mortgage........................................................ 310,079,000
Installment................................................................. 113,592,000
------------
Total Loans....................................................... 565,418,000
Allowance for loan losses................................................... (6,720,000)
------------
Net Loans......................................................... 558,698,000
Property and equipment, net................................................... 16,624,000
Accrued income and other assets............................................... 21,281,000
------------
Total Assets...................................................... $ 793,152,000
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing........................................................ $ 68,685,000
Savings and NOW............................................................. 263,841,000
Time........................................................................ 209,255,000
------------
Total Deposits.................................................... 541,781,000
Federal funds purchased....................................................... 37,100,000
Other borrowings.............................................................. 153,859,000
Accrued expenses and other liabilities........................................ 9,679,000
------------
Total Liabilities................................................. 742,419,000
------------
Shareholders' Equity
Preferred stock, no par value -- 200,000 shares authorized; none outstanding
Common stock, $1.00 par value -- 14,000,000 shares authorized; issued and
outstanding: 2,861,399 shares at September 30, 1996...................... 2,861,000
Capital surplus............................................................. 24,256,000
Retained earnings........................................................... 23,447,000
Net unrealized gain on securities available for sale, net of related tax
effect................................................................... 169,000
------------
Total Shareholders' Equity........................................ 50,733,000
------------
Total Liabilities and Shareholders' Equity..................... $ 793,152,000
============
</TABLE>

See notes to interim consolidated financial statements.

F-22
<PAGE> 105

INDEPENDENT BANK CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
--------------------------
1996 1995
----------- -----------
(UNAUDITED)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans....................................... $35,587,000 $27,370,000
Securities
Taxable....................................................... 4,873,000 4,572,000
Tax-exempt.................................................... 1,502,000 1,328,000
Other investments................................................ 636,000 264,000
----------- -----------
Total Interest Income....................................... 42,598,000 33,534,000
----------- -----------
INTEREST EXPENSE
Deposits......................................................... 11,598,000 9,193,000
Other borrowings................................................. 5,950,000 3,688,000
----------- -----------
Total Interest Expense...................................... 17,548,000 12,881,000
----------- -----------
Net Interest Income......................................... 25,050,000 20,653,000
Provision for loan losses.......................................... 942,000 477,000
----------- -----------
Net Interest Income After
Provision for Loan Losses................................ 24,108,000 20,176,000
----------- -----------
NON-INTEREST INCOME
Service charges on deposit accounts.............................. 1,641,000 1,439,000
Net gains (losses) on asset sales
Real estate mortgage loans.................................... 1,251,000 405,000
Securities.................................................... (130,000) (110,000)
Other income..................................................... 1,219,000 922,000
----------- -----------
Total Non-interest Income................................... 3,981,000 2,656,000
----------- -----------
NON-INTEREST EXPENSE
Salaries and employee benefits................................... 11,404,000 8,903,000
Occupancy, net................................................... 1,458,000 1,135,000
Furniture and fixtures........................................... 1,337,000 975,000
Other expenses................................................... 5,605,000 4,884,000
----------- -----------
Total Non-interest Expense.................................. 19,804,000 15,897,000
----------- -----------
Income Before Federal Income Tax............................ 8,285,000 6,935,000
Federal income tax expense......................................... 2,466,000 1,948,000
----------- -----------
Net Income.................................................. $ 5,819,000 $ 4,987,000
=========== ===========
Net income per common share........................................ $2.02 $1.74
=========== ===========
Cash dividends declared per common share........................... $0.74 $0.66
=========== ===========
</TABLE>

See notes to interim consolidated financial statements.

F-23
<PAGE> 106

INDEPENDENT BANK CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------------
1996 1995
------------ ------------
(UNAUDITED)
<S> <C> <C>
Net Income....................................................... $ 5,819,000 $ 4,987,000
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH FROM OPERATING
ACTIVITIES
Proceeds from sales of loans held for sale..................... 78,515,000 33,439,000
Disbursements for loans held for sale.......................... (69,135,000) (31,883,000)
Provision for loan losses...................................... 942,000 477,000
Deferred loan fees............................................. 158,000 23,000
Depreciation, amortization of intangible assets and premiums
and accretion of discounts on investment securities and
loans....................................................... 1,899,000 1,679,000
Net losses on sales of securities.............................. 130,000 110,000
Net gains on sales of real estate mortgage loans............... (1,251,000) (405,000)
Increase in accrued income and other assets.................... (7,784,000) (751,000)
Increase in accrued expenses and other liabilities............. 1,114,000 1,993,000
------------ ------------
Total Adjustments........................................... 4,588,000 4,682,000
------------ ------------
Net Cash from Operating Activities........................ 10,407,000 9,669,000
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sales of securities available for sale........... 15,907,000 13,152,000
Proceeds from maturities of securities held to maturity........ 8,898,000 10,925,000
Principal payments received on securities available for sale... 6,785,000 863,000
Principal payments received on securities held to maturity..... 601,000 3,867,000
Purchases of securities available for sale..................... (30,839,000)
Purchases of securities held to maturity....................... (295,000) (15,715,000)
Portfolio loans made to customers net of principal payments
received.................................................... (63,355,000) (75,788,000)
Acquisition of branch office, less cash received............... 13,949,000
Acquisition of bank, less cash received........................ 9,478,000
Capital expenditures........................................... (2,607,000) (1,133,000)
------------ ------------
Net Cash from Investing Activities........................ (55,427,000) (49,880,000)
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Net decrease in total deposits................................. (1,378,000) (15,371,000)
Net increase in short-term borrowings.......................... 20,165,000 6,663,000
Proceeds from Federal Home Loan Bank advances.................. 45,000,000 76,000,000
Payments of Federal Home Loan Bank advances.................... (17,000,000) (30,000,000)
Proceeds from issuance of long-term borrowings................. 10,000,000
Retirement of debt............................................. (500,000)
Dividends paid................................................. (1,933,000) (1,758,000)
Proceeds from issuance of common stock......................... 59,000 81,000
Repurchase of common stock..................................... (755,000)
------------ ------------
Net Cash from Financing Activities........................ 54,413,000 34,860,000
------------ ------------
Net Increase (Decrease) in Cash and Cash Equivalents...... 9,393,000 (5,351,000)
Cash and Cash Equivalents at Beginning of Period................. 17,208,000 23,719,000
------------ ------------
Cash and Cash Equivalents at End of Period................ $ 26,601,000 $ 18,368,000
============ ============
Cash paid during the period for:
Interest....................................................... $ 16,935,000 $ 12,530,000
Income taxes................................................... 2,990,000 2,150,000
Transfer of loans to other real estate........................... 808,000 367,000
</TABLE>

See notes to interim consolidated financial statements.

F-24
<PAGE> 107

INDEPENDENT BANK CORPORATION

INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1996 1995
----------- -----------
(UNAUDITED)
<S> <C> <C>
Balance at beginning of period..................................... $47,025,000 $40,311,000
Net income....................................................... 5,819,000 4,987,000
Cash dividends declared.......................................... (2,125,000) (1,861,000)
Issuance of common stock......................................... 559,000 430,000
Repurchase of common stock....................................... (755,000)
Net change in unrealized gain on securities available for sale,
net of related tax effect..................................... (545,000) 1,794,000
----------- -----------
Balance at end of period........................................... $50,733,000 $44,906,000
=========== ===========
</TABLE>

See notes to interim consolidated financial statements.

F-25
<PAGE> 108

INDEPENDENT BANK CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all the adjustments (consisting only
of normal recurring accruals) necessary to present fairly the consolidated
financial condition of the Company as of September 30, 1996 and the results of
operations for the nine-month periods ended September 30, 1996 and 1995.

2. Management's assessment of the allowance for loan losses is based on an
evaluation of the loan portfolio, recent loss experience, current economic
conditions and other pertinent factors. Loans on non-accrual status, past due
more than 90 days, or restructured amounted to $3,451,000 at September 30, 1996.
(See Management's Discussion and Analysis of Financial Condition and Results of
Operations).

3. The provision for income taxes represents federal income tax expense
calculated using annualized rates on taxable income generated during the
respective periods.

4. The unaudited pro forma combined results for the Company and NBC set
forth below are presented as if the NBC Acquisition had occurred at the
beginning of the periods presented.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues, net....................................... $51,700,000 $45,800,000
Net income.......................................... 5,600,000 4,600,000
Net income per common share......................... $1.93 $1.60
</TABLE>

5. The results of operations for the nine-month period ended September 30,
1996, are not necessarily indicative of the results to be expected for the full
year.

6. The Company adopted Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights," effective January 1, 1996. (See
Management's Discussion and Analysis of Financial Condition and Results of
Operations).

F-26
<PAGE> 109

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
NORTH BANK CORPORATION
HALE, MICHIGAN

We have audited the accompanying consolidated balance sheets of North Bank
Corporation as of December 31, 1995 and 1994, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of North Bank
Corporation as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.

As discussed in Note 2 to the consolidated financial statements, the
Corporation changed its methods of accounting for impaired loans in 1995 and
investment securities and income taxes in 1993 to conform to new accounting
standards. The change in accounting for income taxes was made retroactively to
January 1, 1991.

Crowe, Chizek and Company LLP

Grand Rapids, Michigan
March 8, 1996

F-27
<PAGE> 110

NORTH BANK CORPORATION

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Cash and due from banks (Note 3)........................................ $ 6,421 $ 8,121
Federal funds sold...................................................... 200
-------- --------
Total cash and cash equivalents.................................... 6,621 8,121
Securities available for sale (Note 4).................................. 48,665 26,503
Securities held to maturity (estimated fair value of $28,755) (Note
4).................................................................... 30,584
-------- --------
Total securities................................................... 48,665 57,087
Total loans (Note 5).................................................... 90,331 81,833
Less allowance for loan losses (Note 6)................................. (988) (949)
-------- --------
Net Loans.......................................................... 89,343 80,884
Premises and equipment -- net (Note 7).................................. 5,580 6,047
Accrued interest receivable............................................. 1,102 1,010
Other real estate....................................................... 118 628
Other assets............................................................ 1,287 2,496
-------- --------
Total assets....................................................... $152,716 $156,273
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing demand......................................... $ 17,872 $ 17,189
Interest-bearing transaction accounts.............................. 19,858 19,292
Savings............................................................ 38,444 40,157
Time (Note 8)...................................................... 55,591 47,127
-------- --------
Total deposits................................................ 131,765 123,765
Long-term borrowings (Note 10)........................................ 9,000 19,728
Federal funds purchased............................................... 1,100
Accrued interest payable.............................................. 516 496
Other liabilities (Note 11)........................................... 789 1,661
-------- --------
Total liabilities.................................................. 142,070 146,750
Shareholders' Equity
Common stock, no par value, 1,500,000 shares authorized; 482,040 and
481,478 issued and outstanding in 1995 and 1994, respectively...... 1,207 1,204
Surplus............................................................... 5,635 5,629
Retained earnings..................................................... 3,841 4,159
Net unrealized appreciation (depreciation) on available for sale
securities, net of tax of $19 in 1995 and $585 in 1994 (Note 4).... (37) (1,136)
Minimum pension liability adjustment, net of tax of $171 in 1994 (Note
11)................................................................ (333)
-------- --------
Total shareholders' equity......................................... 10,646 9,523
-------- --------
Total liabilities and shareholders' equity.................... $152,716 $156,273
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-28
<PAGE> 111

NORTH BANK CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
INTEREST INCOME
Loans, including fees............................................ $ 7,765 $6,539 $6,406
Securities
Taxable....................................................... 3,002 2,372 2,715
Tax-exempt.................................................... 342 584 814
Federal funds sold............................................... 124 70 62
------- ------ ------
Total interest income.................................... 11,233 9,565 9,997
INTEREST EXPENSE
Deposits......................................................... 4,401 3,127 3,917
Borrowings....................................................... 983 803 226
------- ------ ------
Total interest expense................................... 5,384 3,930 4,143
------- ------ ------
Net interest income...................................... 5,849 5,635 5,854
Provision for loan losses (Note 6)................................. (307) (180) (150)
------- ------ ------
Net interest income after provision for loan losses................ 5,542 5,455 5,704
Other operating income
Service charges on deposit accounts.............................. 404 422 394
Net gain (loss) on sales of securities........................... (111) (374) 1,201
Gain on sales of loans........................................... 424 116 441
Gain on sale of mortgage servicing rights........................ 124
Other operating income........................................... 361 353 420
------- ------ ------
Total other operating income............................. 1,202 517 2,456
Other operating expenses
Salaries and employee benefits (Note 11)......................... 2,738 2,745 3,076
Pension settlement (Note 11)..................................... 774
Net occupancy.................................................... 468 407 373
Equipment........................................................ 740 651 581
Legal fees....................................................... 132 109 131
FDIC premium..................................................... 144 274 304
Other operating expense.......................................... 1,898 1,535 2,004
------- ------ ------
Total other operating expense............................ 6,894 5,721 6,469
------- ------ ------
Income (loss) before federal income taxes.......................... (150) 251 1,691
Federal income tax expense (benefit) (Note 9)...................... (121) (82) 260
------- ------ ------
Net income (loss)........................................ $ (29) $333 $1,431
======= ====== ======
Net income (loss) per common share (Note 2)........................ $(.06) $ .70 $ 2.97
======= ====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 112

NORTH BANK CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION
(DEPRECIATION) MINIMUM
ON SECURITIES PENSION
COMMON RETAINED AVAILABLE FOR LIABILITY
STOCK SURPLUS EARNINGS SALE ADJUSTMENT TOTAL
------ ------- -------- -------------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
BALANCE -- JANUARY 1, 1993.......... $1,223 $ 5,757 $2,949 $ 9,929
Net income, 1993.................... 1,431 1,431
Cash dividends ($.55 per share)..... (266) (266)
Retirement of shares................ (19 ) (128) (147)
Net unrealized appreciation on
securities available for sale..... $ 53 53
------ ------ ------ ------- -------
BALANCE -- DECEMBER 31, 1993........ 1,204 5,629 4,114 53 11,000
Net income, 1994.................... 333 333
Cash dividends ($.60 per share)..... (288) (288)
Net change in unrealized
appreciation (depreciation) on
securities available for sale..... (1,189) (1,189)
Minimum pension liability adjustment
(Note 11)......................... $ (333) (333)
------ ------ ------ ------- ----- -------
BALANCE -- DECEMBER 31, 1994........ 1,204 5,629 4,159 (1,136) (333) 9,523
Net loss, 1995...................... (29) (29)
Cash dividends ($.60 per share)..... (289) (289)
Exercise of options (Note 11)....... 3 6 9
Net change in unrealized
appreciation (depreciation) on
securities available for sale..... 1,099 1,099
Minimum pension liability adjustment
(Note 11)......................... 333 333
------ ------ ------ ------- ----- -------
BALANCE -- DECEMBER 31, 1995........ $1,207 $ 5,635 $3,841 $ (37) $ 0 $10,646
====== ====== ====== ======= ===== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 113

NORTH BANK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss).................................................... $ (29) $ 333 $ 1,431
Adjustments to reconcile net income (loss) to net cash from operating
activities:
Depreciation....................................................... 534 613 546
Net amortization................................................... 86 87 76
Provision for loan losses.......................................... 307 180 150
(Gain) loss on sales of other real estate.......................... (76) 5
Gain on sales of loans............................................. (424) (116) (441)
Origination of loans for sale...................................... (24,592) (6,120) (18,765)
Proceeds from sales of loans originated for sale................... 23,926 6,297 19,623
Gain on sale of mortgage servicing rights.......................... (124)
Net (gain) loss on sales of securities............................. 111 374 (1,201)
Change in assets and liabilities
Securities available for sale.................................... (2,169)
Deferred taxes................................................... (178) (109) 28
Accrued interest receivable...................................... (92) (92) 354
Accrued interest payable......................................... 20 59 (13)
Other assets..................................................... 639 (728) 292
Other liabilities................................................ (539) 224 (327)
-------- -------- --------
Net cash from operating activities............................ (431) 1,007 (416)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available for sale................. 62,290 20,612
Proceeds from maturities, calls, and paydowns of securities available
for sale........................................................... 3,572
Purchase of securities available for sale............................ (55,974) (8,550)
Proceeds from sales of securities held to maturity................... 9,251
Proceeds from maturities of securities held to maturity.............. 2 3,594 600
Purchase of securities held to maturity.............................. (6,558) (17,980)
Loan originations net of principal payments on loans................. (7,905) (16,595) 7,177
Proceeds from sales of other real estate............................. 815 233
Proceeds from sale of mortgage servicing rights...................... 306
Premises and equipment expenditures.................................. (67) (137) (1,126)
-------- -------- --------
Net cash from investing activities................................. 3,039 (7,401) (2,078)
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of deposits.............................................. 6,767
Net change in deposits............................................... 1,233 (360) (16,076)
Dividends............................................................ (289) (288) (266)
Proceeds from FHLB advances.......................................... 3,000 4,728 15,000
Repayment of FHLB advances........................................... (13,728)
Change in Federal funds purchased.................................... (1,100) 1,100
Exercise of stock options............................................ 9
Stock retired........................................................ (147)
-------- -------- --------
Net cash from financing activities............................ (4,108) 5,180 (1,489)
Net change in cash and cash equivalents................................ (1,500) (1,214) (3,983)
Cash and cash equivalents at beginning of year......................... 8,121 9,335 13,318
-------- -------- --------
Cash and cash equivalents at end of year............................... $ 6,621 $ 8,121 $ 9,335
======== ======== ========
Supplemental disclosures of cash flow information
Cash paid during the year for
Interest........................................................... $ 5,364 $ 3,871 $ 4,156
Income taxes....................................................... 35 645
Supplemental disclosures on noncash investing activities
Transfer from loans to other real estate............................. 289 25 542
Transfer of securities to available for sale upon adoption of SFAS
115................................................................ 40,753
Transfer of securities from held to maturity to available for sale
(Note 4)........................................................... 29,499
</TABLE>

See accompanying notes to consolidated financial statements.

F-31
<PAGE> 114

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994

NOTE 1 -- NATURE OF OPERATIONS

The consolidated financial statements include the accounts of North Bank
Corporation and its wholly-owned subsidiary, North Bank (the Bank), and the
Bank's wholly-owned subsidiary, First Central Mortgage Corporation, after
elimination of significant inter-company transactions and accounts.

On October 3, 1994, North Bank acquired First Central Mortgage Corporation,
a residential mortgage originating company headquartered in Saginaw, Michigan.
The acquisition was recorded under the purchase method. Intangible assets
acquired are being amortized over their estimated economic lives.

In October 1995, North Bank acquired a branch of First of America in
Hubbard Lake, Michigan. Deposits acquired were approximately $6.8 million.
Intangible assets associated with this acquisition are being amortized over
their estimated economic lives.

The Bank grants commercial, installment and residential loans to customers
primarily in Northeastern Michigan. Although the loan portfolio is diversified,
a substantial portion of its debtors' ability to honor their contracts is
dependent upon the tourism industry. Primarily all installment and residential
loans are secured by personal property and real estate. Approximately 96% of the
commercial loans are secured by business assets and the remaining 4% are largely
unsecured.

The Bank's revenues primarily arise from interest income from residential
mortgage lending activities, investments and revenue derived from mortgage
banking through origination of, and sales of mortgage loans to the secondary
market with servicing retained, and related servicing income. The Bank maintains
eleven branches within Iosco, Ogemaw, Alpena, Presque Isle, Alcona and
Montmorency counties of Michigan.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following summarize the significant accounting and reporting policies
used in the preparation of the consolidated financial statements:

Use of Estimates in Preparing Financial Statements: The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates. The primary estimates incorporated into the Corporation's financial
statements which are susceptible to change in the near term include the
allowance for loan losses, the determination and carrying value of impaired
loans, the determination and carrying value of intangibles, the determination
and carrying value of certain financial instruments and the realization of
deferred tax assets.

Securities: At December 31, 1993, the Corporation adopted Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS No. 115). As required by SFAS No. 115,
securities classified as available for sale are reported at their fair value and
the related unrealized holding gain or loss is reported, net of related income
tax effects, as a separate component of shareholders' equity, until realized.
Securities available for sale consist of those securities not classified as held
to maturity. Such securities might be sold prior to maturity due to changes in
interest rates, prepayment risks, yield and availability of alternative
investments, liquidity needs or other factors. Securities for which management
has the positive intent and the Corporation has the ability to hold to maturity
are reported at amortized cost.

Premiums and discounts on securities are recognized in interest income
using the interest method over the period to maturity. Gains and losses on the
sale of securities available for sale are determined using the specific
identification method.

F-32
<PAGE> 115

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED

Loans and Interest and Fees on Loans: Loans are stated at their principal
amount outstanding. Interest on loans is accrued over the term of the loan based
upon the amount of the principal outstanding. The accrual of interest is
discontinued on a loan when management believes serious doubt exists as to the
collectibility of the loan principal or interest. Loan fees and certain direct
loan origination costs are deferred and amortized into interest income over the
term of the loans using the level yield method.

Allowance for Loan Losses: Because some loans may not be repaid in full, an
allowance for loan losses is recorded. Increases to the allowance are recorded
by a provision for possible loan losses charged to expense. Estimating the risk
of loss and the amount of loss on any loan is necessarily subjective.
Accordingly, the allowance is maintained by management at a level considered
adequate to cover possible losses that are currently anticipated based on past
loss experience, general economic conditions, information about specific
borrower situations including their financial position and collateral values,
and other factors and estimates which are subject to change over time. While
management may periodically allocate portions of the allowance for specific
problem loan situations, the whole allowance is available for any loan
charge-offs that occur. A loan is charged off by management as a loss when
deemed uncollectible, although collection efforts continue and further
recoveries may occur.

Statement of Financial Accounting Standards No. 114, Accounting by
Creditors for Impairment of a Loan (SFAS No. 114), as amended by SFAS No. 118,
was adopted by the Corporation on January 1, 1995. Under this Standard, loans
considered to be impaired are reduced to the present value of expected future
cash flows or to the fair value of collateral, by allocating a portion of the
allowance for loan losses to such loans. If these allocations cause the
allowance for loan losses to require an increase, such an increase is reported
as bad debt expense. The adoption of this Standard was immaterial to the 1995
consolidated financial statements.

The carrying values of impaired loans are periodically adjusted to reflect
cash payments, revised estimates of future cash flows, and increases in the
present value of expected cash flows due to the passage of time. Cash payments
representing interest income are reported as such. Other cash payments are
reported as reductions in the carrying value of the loan. Increases or decreases
due to changes in estimates of future payments and due to the passage of time
are reported within the provision for loan losses.

The Corporation has defined "impaired loans" as those loans for which it is
probable that all principal and interest due will not be repaid in accordance
with the original loan agreement. The Corporation has set minimum balance and
condition requirements before a loan may be considered to be impaired.

Loans Held for Sale: Mortgage loans originated and intended for sale in the
secondary market are carried at the lower of cost or market value in the
aggregate. Net unrealized losses are recognized in a valuation allowance by
adjustments to income.

Premises and Equipment: Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
provided primarily on the straight-line basis over the estimated useful lives of
the assets. Maintenance and repairs are expensed and major improvements are
capitalized. At the time of sales or disposition of an asset, the applicable
cost and accumulated depreciation amounts are removed from the books.

Other Real Estate: Other real estate includes properties acquired through,
or in lieu of, loan foreclosure and are initially recorded at fair value at the
date of foreclosure establishing a new cost basis. After foreclosure, valuations
are periodically performed by management and the real estate is carried at the
lower of carrying amount or fair value less costs to sell. Revenue and expenses
from operations and changes in the valuation allowance are included in loss on
other real estate.

F-33
<PAGE> 116

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
Intangible Assets and Goodwill: The value of core deposits acquired in a
1995 branch acquisition are amortized on an accelerated method over their
expected lives. The excess of purchase price over the fair value of assets and
liabilities acquired (goodwill) is amortized on a straight-line basis over 12
years.

Income Taxes: In 1995, the Corporation retroactively adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS No.
109), by restating 1991 and subsequent years. The Corporation records income tax
expense based on the amount of taxes due on its tax return plus deferred taxes
computed based on the expected future tax consequences of temporary differences
between the carrying amounts and tax bases of assets and liabilities, using
enacted tax rates. As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income taxes.

Net Income (Loss) Per Common Share: Net income (loss) per common share is
based on the weighted average common shares outstanding during the years
presented, retroactively adjusted for a two-for-one stock split effected
December 31, 1993. The stock split was recorded at par value. Beginning in 1994,
Employee Stock Ownership Plan shares are considered outstanding for net
income(loss) per share calculations as they are committed to be released;
unallocated shares are not considered outstanding. The weighted average number
of common shares used in the per share computations were 481,759 in 1995,
472,876 in 1994 and 482,532 in 1993.

Statement of Cash Flows: For purposes of this statement, cash and cash
equivalents include cash on hand, demand deposits in other institutions, federal
funds sold and short-term investments. The Corporation reports net cash flows
for customer loan and deposit transactions.

Impact of New Accounting Standards: The following new accounting standards
have been issued by the Financial Accounting Standards Board that will apply in
1996. Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets, requires a review of long-term assets for
impairment of recorded value and resulting write-downs if value is impaired.
Statement of Financial Accounting Standards No. 122, Accounting for Mortgage
Servicing Rights, requires recognition of an asset when servicing rights are
retained on in-house originated loans that are sold. Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, requires
proforma disclosure of the effect on net income of valuing future option grants
at their estimated fair value. These Statements are not expected to have a
material effect on the Corporation's financial position or results of
operations.

Reclassification: Certain reclassifications have been made to prior period
consolidated financial statements to place them on a basis comparable with the
current year's consolidated financial statements.

NOTE 3 -- CASH AND DUE FROM BANKS

Included in cash and due from banks are amounts required to be deposited
with the Federal Reserve Bank. These reserve balances vary, depending on the
level of customer deposits in the Corporation's subsidiary bank. At December 31,
1995 and 1994, the Federal Reserve balances were $717,000 and $694,000,
respectively.

F-34
<PAGE> 117

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 4 -- SECURITIES

The amortized cost and fair value of securities are as follows at December
31, in thousands:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE
1995
U.S. Government agencies............................ $20,660 $120 $ (9) $20,771
Obligations of states and political subdivisions.... 2,282 6 (16) 2,272
Mortgage-backed securities.......................... 24,786 54 (210) 24,630
Equity securities................................... 992 992
------- ---- ------- -------
$48,720 $180 $ (235) $48,665
======= ==== ======= =======
1994
U.S. Government agencies............................ $ 462 $ (3) $ 459
Mortgage-backed securities.......................... 26,769 (1,718) 25,051
Equity securities................................... 993 993
------- ------- -------
$28,224 $ (1,721) $26,503
======= ======= =======
HELD TO MATURITY
1994
U.S. Government agencies............................ $ 952 $ (7) $ 945
Obligations of states and political subdivisions.... 12,965 $ 65 (580) 12,450
Mortgage-backed securities.......................... 16,667 (1,307) 15,360
------- ---- ------- -------
$30,584 $ 65 $ (1,894) $28,755
======= ==== ======= =======
</TABLE>

Transfer of Securities from HTM to AFS: Effective in May 1995, the entire
portfolio of securities held to maturity were reclassified as securities
available for sale. The amount of securities transferred had a book value of
$30,249,000, a fair value of $29,499,000, and a net unrealized loss of $750,000
at the time of transfer. Management believes that classification of all
securities as available for sale will provide the Bank with greater flexibility
in managing the Bank's assets and liabilities.

The amortized cost and fair value of securities at December 31, 1995, by
contractual maturity, are shown below in thousands. Maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
AVAILABLE FOR SALE
--------------------
AMORTIZED FAIR
COST VALUE
--------- -------
<S> <C> <C>
Due in one year or less................................................... $ 1,243 $ 1,239
Due after 1 year through 5 years.......................................... 6,507 6,522
Due after 5 years through 10 years........................................ 15,192 15,282
Mortgage-backed securities................................................ 24,786 24,630
Equity securities......................................................... 992 992
------- -------
$48,720 $48,665
======= =======
</TABLE>

Because of their variable payments, mortgage-backed securities are not
reported by a specific maturity grouping.

F-35
<PAGE> 118

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 4 -- SECURITIES -- CONTINUED
Sales activities for the years ended December 31 were as follows, in
thousands:

<TABLE>
<CAPTION>
AVAILABLE FOR SALE HELD TO MATURITY
----------------------------- ----------------------------
1995 1994 1993 1995 1994 1993
------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Sales proceeds......................... $62,290 $20,612 $78,981 $9,251
Gross gains............................ 334 104 980 411
Gross losses........................... 445 478 167 23
</TABLE>

At December 31, 1995, mortgage-backed securities with a carrying value of
approximately $11,995,000 were pledged to secure public deposits and advances
from the Federal Home Loan Bank (Note 10).

NOTE 5 -- LOANS

Total loans consist of the following at December 31, in thousands:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Commercial................................................................ $20,923 $17,349
Consumer.................................................................. 30,335 25,907
Real Estate............................................................... 39,073 38,577
------- -------
$90,331 $81,833
======= =======
</TABLE>

Loans held for sale totaled $1,115,000 and $25,000 at December 31, 1995 and
1994, respectively. Loans sold with servicing retained totaled $1,671,000 and
$32,088,000 at December 31, 1995 and 1994, respectively.

NOTE 6 -- ALLOWANCE FOR LOAN LOSSES

An analysis of activity in the allowance for loan losses for the years
ended December 31, follows in thousands:

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Balance -- January 1................................................. $ 949 $ 902 $ 993
Provision charged to expense....................................... 307 180 150
Loans charged off.................................................. (386) (207) (348)
Recoveries......................................................... 118 74 107
----- ----- -----
Balance -- December 31............................................... $ 988 $ 949 $ 902
===== ===== =====
</TABLE>

Information regarding impaired loans is as follows for 1995:

<TABLE>
<S> <C>
Average investment in impaired loans................................. $ 319
Interest income recognized on impaired loans on cash basis........... 44
</TABLE>

Information regarding impaired loans at December 31, 1995 is as follows:

<TABLE>
<S> <C>
Total impaired loans................................................. $ 389
Less loans for which no allowance for loan losses is allocated....... (389)
-----
Impaired loans for which an allowance for loan losses is allocated... $ 0
=====
Portion of allowance allocated to these loans........................ $ 0
=====
</TABLE>

F-36
<PAGE> 119

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 6 -- ALLOWANCE FOR LOAN LOSSES -- CONTINUED
Nonperforming loans, including loans on nonaccrual and loans past due
greater than 90 days, totaled $1,014,000 at December 31, 1994.

NOTE 7 -- PREMISES AND EQUIPMENT

Premises and equipment by classification are as follows at December 31, in
thousands:

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Land...................................................................... $ 640 $ 497
Buildings and improvements................................................ 4,507 4,712
Furniture and fixtures.................................................... 3,974 3,915
------- -------
9,121 9,124
Accumulated depreciation.................................................. (3,541) (3,077)
------- -------
$ 5,580 $ 6,047
======= =======
</TABLE>

NOTE 8 -- DEPOSITS

The aggregate amount of time certificates of deposit in denominations of
$100,000 or more approximated $2,980,000 and $3,567,000 as of December 31, 1995
and 1994, respectively.

At December 31, 1995, the maturity of certificates of deposits for each
year is as follows:

<TABLE>
<S> <C>
1996............................................................................... $39,023
1997............................................................................... 4,432
1998............................................................................... 3,992
1999............................................................................... 4,185
2000............................................................................... 3,783
Afterwards......................................................................... 176
-------
$55,591
=======
</TABLE>

NOTE 9 -- INCOME TAXES

The following are the components of the federal income tax expense
(benefit) for the years ended December 31, in thousands:

<TABLE>
<CAPTION>
1995 1994 1993
----- ---- ----
<S> <C> <C> <C>
Current expense........................................................ $ 57 $ 27 $232
Deferred expense (benefit)............................................. (112) (13) 28
Net operating loss benefit............................................. (66) (96)
----- ---- ----
$(121) $(82) $260
===== ==== ====
</TABLE>

F-37
<PAGE> 120

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 9 -- INCOME TAXES -- CONTINUED
The net deferred tax asset (liability) at December 31, 1995 and 1994 is
comprised of the following:

<TABLE>
<CAPTION>
1995 1994
----- ------
<S> <C> <C>
Deferred tax assets
Net unrealized depreciation on securities available for sale.............. $ 19 $ 585
Allowance for loan losses................................................. 154 140
Nonaccrual interest....................................................... 3 14
Pension................................................................... 100
AMT credit carry forward.................................................. 108 107
Net operating loss........................................................ 162 96
Other..................................................................... 32 36
----- ------
478 1,078
Deferred tax liabilities
Fixed assets.............................................................. (348) (223)
Purchase accounting adjustments........................................... (310) (477)
Pension................................................................... (17)
Other..................................................................... (45) (61)
----- ------
(720) (761)
----- ------
Net deferred tax asset (liability).......................................... $(242) $ 317
===== ======
</TABLE>

No valuation allowance has been provided on deferred tax assets.

The difference between the financial statement tax expense and amounts
computed by applying the federal statutory tax rate of 34% to pretax income is
reconciled as follows:

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Statutory rate applied to income (loss) before federal income
taxes.............................................................. $ (51) $ 85 $ 575
Add (Deduct)
Effect of tax exempt interest...................................... (125) (210) (299)
Effect of disallowed interest expense.............................. 19 27 31
Other.............................................................. 36 16 (47)
----- ----- -----
$(121) $ (82) $ 260
===== ===== =====
</TABLE>

A tax operating loss carryforward in the amount of $96,000 expires in 2009.
The remaining $66,000 in carryforward expires in 2010.

F-38
<PAGE> 121

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 10 -- LONG TERM BORROWINGS

Included in long-term borrowings on the consolidated balance sheets are
advances from the Federal Home Loan Bank (FHLB) which consist of the following
at December 31, in thousands:

<TABLE>
<CAPTION>
RATE AT
DECEMBER 31,1995 MATURITY 1995 1994
----------------- ------------------ ------ -------
<S> <C> <C> <C> <C>
Adjustable Rate Advances:
November 10, 1999 $ 5,000
5.908% July 15, 1998 $9,000 10,000
Fixed Rate Advances:
August 15, 2003 2,364
December 15, 2003 2,364
------ -------
$9,000 $19,728
====== =======
</TABLE>

The adjustable rate advances are priced at the three-month LIBOR rate less
three basis points. The advances are secured by approximately $11,495,000 in
securities as of December 31, 1995. Interest is payable in monthly installments
through the date of maturity. Prepayments on the adjustable rate advances up to
10% of the principal balance will be accepted by the FHLB given the
Corporation's notification to the FHLB of their intent to prepay.

NOTE 11 -- EMPLOYEE BENEFIT PLANS

The Corporation maintains an Employee Stock Ownership Plan (ESOP), which
invests primarily in stock of North Bank Corporation. The ESOP is a stock bonus
and defined contribution plan covering substantially all full-time employees
ages 21 or older, having completed one full year of service. In accordance with
the terms of the ESOP, employees may make voluntary contributions to the Plan of
up to 10 percent of eligible compensation, subject to certain limitations. The
Corporation will match employee contributions equal to the greater of 50% of the
first 6% of compensation deferred by the participant or a discretionary amount
determined by the employer. The Corporation may also make a supplemental
matching contribution to the Plan in an amount determined by the employer. The
Corporation's contributions for 1995 and 1994 were $62,000 and $49,000,
respectively. At December 31, 1995, 48,114 shares were allocated to individual
participants under the plan.

The ESOP had a loan from a commercial bank which was paid off during 1995.
Accordingly, the Corporation had guaranteed the ESOP's debt. As loan payments
were made, unallocated shares were released and allocated to plan participants.
The ESOP's repayments of the debt were made from the contributions and dividends
on stock it received from the Corporation.

The Corporation has a stock option plan, adopted by shareholders in 1993,
which provides for the grant of a maximum of 20,000 shares of the Corporation's
common stock to certain officers and employees at a price which is not less than
the fair market value of the stock at the time the options are granted. The
options

F-39
<PAGE> 122

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 11 -- EMPLOYEE BENEFIT PLANS -- CONTINUED
granted are exercisable immediately and expire five years after the date of the
grant. No options were granted in 1993. Activity in the plan was as follows:

<TABLE>
<CAPTION>
SHARES
OPTION SUBJECT TO
PRICE OPTION
------ ----------
<S> <C> <C>
Options granted in 1994................................................... $16.25 3,039
Options expired......................................................... 16.25 (218)
-----
Outstanding December 31, 1994............................................. 2,821
Options granted......................................................... 16.45 3,412
Options expired......................................................... 16.25 (262)
Options expired......................................................... 16.45 (255)
Options exercised....................................................... 16.25 (283)
Options exercised....................................................... 16.45 (279)
-----
Outstanding December 31, 1995............................................. 5,154
Exercisable at December 31, 1995.......................................... 16.25 2,276
-----
16.45 2,878
-----
5,154
=====
</TABLE>

Nonqualified stock options were granted to an officer of the Corporation
during 1993. The options cover 4,000 shares of common stock at the price of
$15.13 and expire in 1998. At December 31, 1995, the options had not been
exercised.

The Corporation sponsored a non-contributory, defined benefit pension plan
covering substantially all employees. On December 31, 1994, the Corporation
curtailed the defined benefit pension plan, which resulted in the freezing of
benefits as of that date. The net loss due to the plan curtailment was $72,230
for 1994. During December 1995, the Corporation terminated the plan and settled
$1,103,000 of the accumulated benefit obligation by making cash payments to plan
participants and purchasing nonparticipating annuity contracts. The remaining
accumulated benefit obligation is expected to be settled by April 1996. Defined
benefits were not provided under any successor plan. The net loss due to the
plan settlement was $773,910 for 1995.

The following sets forth the plan's funded status and amounts recognized in
the consolidated balance sheets at December 31, in thousands:

<TABLE>
<CAPTION>
1995 1994
---- -------
<S> <C> <C>
Actuarial present value of vested accumulated benefit obligation............ $(88) $(1,098)
Plan assets at fair value................................................... 178 802
---- -------
Excess (deficiency) of plan assets over (under) accumulated benefit
obligation............................................................. 90 (296)
Unrecognized net loss....................................................... 536
Unrecognized transition asset............................................... (33)
Adjustment required to recognize minimum liability.......................... (503)
---- -------
Net pension assets (liabilities).......................................... $ 90 $ (296)
==== =======
</TABLE>

F-40
<PAGE> 123

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 11 -- EMPLOYEE BENEFIT PLANS -- CONTINUED
Net pension cost included in operations, including the effects of
curtailment and settlement, consisted of the following components:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- -------
<S> <C> <C> <C>
Service cost-benefits earned.......................................... $ 88 $ 80
Interest cost on projected benefit obligation......................... $ 75 80 79
Expected return on plan assets........................................ (92) (76) (71)
Net amortization and deferral......................................... (1) 34 34
Net loss due to curtailment........................................... 72
Net loss due to settlement............................................ 774
---- ---- -------
Net periodic pension cost........................................... $756 $198 $ 122
==== ==== =======
</TABLE>

In accordance with the provisions of Statement of Financial Accounting
Standards No. 87, the Corporation recorded an additional minimum pension
liability adjustment in 1994 representing the excess of the accumulated benefit
obligation over the fair value of plan assets plus the amount recognized as
prepaid pension costs. The additional minimum pension liability was included in
"Other liabilities". This transaction, which had no impact on earnings, resulted
in a reduction of shareholders' equity in 1994 of $332,640, net of tax.

A weighted average discount rate of 7% was used in determining the
actuarial present value of the accumulated benefit obligation in 1995 and 1994.
The expected long-term rate of return on plan assets was 9% in both years.

NOTE 12 -- RELATED PARTY TRANSACTIONS

The Corporation enters into transactions with certain executive officers,
directors, and their related interests. Included in these transactions are loans
which amounted to approximately $130,000 and $309,000 at December 31, 1995 and
1994, respectively. Deposit accounts with the same individuals amounted to
$549,324 and $492,863 at December 31, 1995 and 1994, respectively.

NOTE 13 -- COMMITMENTS AND CONTINGENCIES

From time to time, the Corporation is involved in legal matters in the
ordinary course of business. Management believes that the ultimate resolution of
such matters will not have a material effect on the consolidated financial
statements.

The Bank is a party to financial instruments with off-balance sheet risk in
the normal course of business to meet financing needs of its customers. These
financial instruments include commitments to make loans and unused lines of
credit. The Bank follows the same credit policy to make such commitments as is
followed for loans and investments recorded in the consolidated financial
statements.

As of December 31, 1995, the Bank has outstanding commitments to make loans
of which 67% are at fixed rates. These interest rates range from 8.25% to 9.75%.
The Bank also funds unused lines of credit of which 26% are at fixed rates. The
fixed interest rates on the line of credits range from 6.20% to 11.75%.

Outstanding commitments at December 31 were as follows:

<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
To make loans........................................................ $ 341,000 $ 201,000
To fund lines of credit.............................................. 7,152,000 3,091,000
To extend letters of credit.......................................... 75,000 68,000
</TABLE>

F-41
<PAGE> 124

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 14 -- NORTH BANK CORPORATION (PARENT COMPANY ONLY) CONDENSED FINANCIAL
INFORMATION (IN THOUSANDS)

Presented below are condensed financial statements for the parent company:

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
1995 1994
------- ------
<S> <C> <C>
Assets
Cash.................................................................. $ 34 $ 37
Investment in subsidiary.............................................. 10,545 9,415
Other assets.......................................................... 67 71
-------- ------
$10,646 $9,523
======== ======
Shareholders' equity.................................................... $10,646 $9,523
======== ======
</TABLE>

CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ------
<S> <C> <C> <C>
Dividends from subsidiary......................................... $289 $317 $ 578
Operating expenses................................................ 20 73 64
---- ---- ------
Income before federal income tax and equity in undistributed
or excess distributed earnings or loss of subsidiary........ 269 244 514
Federal income tax benefit........................................ 4 25 20
---- ---- ------
Income before equity in undistributed or excess distributed
earnings or loss of subsidiary.............................. 273 269 534
Equity in undistributed or excess distributed earnings or loss of
subsidiary...................................................... (302) 64 897
---- ---- ------
Net income................................................... $(29) $333 $1,431
==== ==== ======
</TABLE>

F-42
<PAGE> 125

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 14 -- NORTH BANK CORPORATION (PARENT COMPANY ONLY) CONDENSED FINANCIAL
INFORMATION (IN THOUSANDS) -- CONTINUED
CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss).......................................... $ (29) $ 333 $ 1,431
Adjustments to reconcile net income to net cash from
operating activities
Equity in subsidiary's net (income)loss................. 13 (381) (1,475)
Increase (decrease) in other assets..................... 4 (13) (8)
----- ----- -------
Net cash from operating activities................. (12) (61) (52)
CASH FLOW FROM INVESTING ACTIVITIES
Increase (decrease) in advances to subsidiary.............. (45)
Dividends from subsidiary.................................. 289 317 578
----- ----- -------
Net cash from investing activities................. 289 317 533
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders............................. (289) (288) (265)
Issuance of common stock................................... 9
Repurchases of common stock................................ (147)
----- ----- -------
Net cash from financing activities................. (280) (288) (412)
Net increase in cash and cash equivalents.................... (3) (32) 69
Cash at beginning of period................................ 37 69
----- ----- -------
Cash at end of year................................ $ 34 $ 37 $ 69
===== ===== =======
</TABLE>

NOTE 15 -- DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (IN
THOUSANDS)

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash and Short-Term Investments: For these short-term instruments, the
carrying amount is a reasonable estimate of fair value.

Securities: For securities, fair value is based upon market price quotes
from brokers utilizing pricing formulas.

Loans: The fair value of loans is estimated by discounting future cash
flows using the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities.

Deposit Liabilities: The fair value of demand deposits, savings accounts,
and certain money market deposits is the amount payable on demand at the
reporting date. The fair value of fixed-maturity certificates of deposit is
estimated by discounting future cash flows using the rates currently offered for
deposits of similar remaining maturities.

Long-Term Borrowings: The fair value of FHLB advances is estimated by
discounting future cash flows using rates currently offered for similar terms.

Accrued Interest Receivable/Payable: For these items, the carrying amount
is a reasonable estimate of fair value.

F-43
<PAGE> 126

NORTH BANK CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE 15 -- DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (IN
THOUSANDS) -- CONTINUED
Commitments to Extend Credit and Standby Letters of Credit: The fair value
of commitments is estimated using the fees currently charged to enter similar
agreements, taking into account the remaining terms of the agreements and the
present creditworthiness of the counterparties. For fixed-rate loan commitments,
fair value also considers the difference between current levels of interest
rates and the committed rates. The fair value of letters of credit is based on
fees currently charged for similar agreements or on the estimated costs to
terminate them or otherwise settle the obligations with the counterparties at
the reporting date. The fair values associated with these financial instruments
are immaterial at December 31, 1995 and 1994.

The estimated fair values of the Corporation's financial instruments are as
follows:

<TABLE>
<CAPTION>
1995 1995
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Financial assets
Cash and short-term investments................... $ 6,621 $ 6,621 $ 8,121 $ 8,121
Securities........................................ 48,665 48,665 57,087 55,257
Loans............................................. 90,331 90,159 81,833 80,308
Less: allowance for loan loss..................... (988) (988) (949) (949)
Accrued interest receivable....................... 1,102 1,102 1,010 1,010
Financial liabilities
Deposits.......................................... 131,765 132,267 123,765 124,121
Borrowings........................................ 9,000 9,000 20,828 20,328
Accrued interest payable.......................... 516 516 496 496
</TABLE>

NOTE 16 -- RESTRICTIONS ON SUBSIDIARY DIVIDENDS

Banking laws and regulations restrict the amount the Bank can transfer to
the Corporation in the form of cash dividends. At December 31, 1995, $3.6
million of retained earnings of the Bank was available for distribution to the
Corporation as dividends without prior regulatory approval. It is not the intent
of management to pay dividends in amounts which would reduce the capital of the
Bank to a level below that which is considered prudent by management and in
accordance with the guidelines of regulatory authorities.

NOTE 17 -- PENDING MERGER

In February 1996, the Corporation entered into a definitive agreement to be
acquired by Independent Bank Corporation of Ionia, Michigan (a publicly-traded
corporation). The purchase price is estimated to be $33 per share of North Bank
Corporation common stock. The acquisition is subject to both regulatory and
shareholder approval and is expected to be completed during the second quarter
of 1996.

F-44
<PAGE> 127

- --------------------------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary...................... 4
Risk Factors............................ 9
Recent Developments..................... 15
Use of Proceeds......................... 16
Market for the Preferred Securities..... 16
Accounting Treatment.................... 16
Capitalization.......................... 17
Selected Consolidated Financial Data.... 18
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................ 19
Business................................ 34
Supervision and Regulation.............. 39
Description of Preferred Securities..... 46
Description of Subordinated
Debentures............................ 58
Book-Entry Issuance..................... 67
Description of the Guarantee............ 69
Relationship Among the Preferred
Securities, the Subordinated
Debentures and the Guarantee.......... 71
Description of Capital Stock............ 73
Certain Federal Income Tax
Consequences.......................... 74
ERISA Considerations.................... 77
Underwriting............................ 78
Validity of Securities.................. 78
Experts................................. 79
Available Information................... 79
Incorporation of Certain Documents by
Reference............................. 80
Index to Consolidated Financial
Statements............................ F-1
</TABLE>

------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY IBC
CAPITAL, THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL.

- --------------------------------------------------------------------------------

600,000 PREFERRED SECURITIES

IBC CAPITAL FINANCE

% CUMULATIVE TRUST PREFERRED SECURITIES

(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)

FULLY AND UNCONDITIONALLY GUARANTEED, AS

DESCRIBED HEREIN, BY

[INDEPENDENT BANK LOGO]
------------------------

Prospectus
, 1996
------------------------

STIFEL, NICOLAUS & COMPANY
INCORPORATED

- --------------------------------------------------------------------------------
<PAGE> 128

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Expenses in connection with the issuance and distribution of the securities
being registered are estimated as follows, all of which are to be borne by the
Company:

<TABLE>
<S> <C>
SEC Registration Fee............................................... $5,227.27
NASD Filing Fee....................................................
Nasdaq Listing Fee................................................. *
Printing and Engraving Expenses.................................... *
Accounting Fees.................................................... *
Transfer and Registrar's Fees...................................... *
Legal Fees and Expenses............................................ *
Blue Sky Qualification Fees and Expenses........................... *
Miscellaneous...................................................... *
---------
Total.........................................................
=========
</TABLE>

- -------------------------
* To be completed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Articles of Incorporation of the Company provide that its directors and
officers are to be indemnified as of right to the fullest extent permitted under
the Michigan Business Corporation Act ("MBCA"). Under the MBCA, directors,
officers, employees or agents are entitled to indemnification against expenses
(including attorneys' fees) whenever they successfully defend legal proceedings
brought against them by reason of the fact that they hold such a position with
the corporation. In addition, with respect to actions not brought by or in the
right of the corporation, indemnification is permitted under the MBCA for
expenses (including attorneys' fees), judgments, fines, penalties and reasonable
settlement if it is determined that the person seeking indemnification acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation or its shareholders and, with respect
to criminal proceedings, he or she had no reasonable cause to believe that his
or her conduct was unlawful. With respect to actions brought by or in the right
of the corporation, indemnification is permitted under the MBCA for expenses
(including attorneys' fees) and reasonable settlements, if it is determined that
the person seeking indemnification acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders; provided, indemnification is not permitted if
the person is found liable to the corporation, unless the court in which the
action or suit was brought has determined that indemnification is fair and
reasonable in view of all the circumstances of the case.

The MBCA specifically provides that it is not the exclusive source of
indemnity. As a result, the Company adopted individual indemnification
agreements with its directors. Approved by the Company's shareholders, the
indemnification agreements provide a contractually enforceable right for prompt
indemnification, except that indemnification is not required where: (i)
indemnification is provided under an insurance policy, except for amounts in
excess of insurance coverage; (ii) indemnification is provided by the Company
outside of the agreement; (iii) the claim involved a violation of Section 16(b)
of the Securities Exchange Act of 1934 or similar provision of state law; or
(iv) indemnification by the Company is otherwise prohibited by law. In the case
of a derivative or other action by or in the right of the Company where a
director is found liable, indemnity is predicated on the determination that
indemnification is nevertheless appropriate, by majority vote of a committee of
disinterested directors, independent legal counsel, or a court where the claim
is litigated, whichever the indemnitee chooses. The protection provided by the
indemnification agreements is broader than that under the MBCA, where
indemnification in such circumstances is available only where specifically
authorized by the court where the claim is litigated.

II-1
<PAGE> 129

In addition to the available indemnification, the Company's Articles of
Incorporation, as amended, limit the personal liability of the members of its
Board of Directors for monetary damages with respect to claims by the Company or
its shareholders resulting from certain negligent acts or omissions.

Under an insurance policy maintained by the Company, the directors and
officers of the Company are insured within the limits and subject to the
limitations of the policy, against certain expenses in connection with the
defense of certain claims, actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such claims, action, suits or
proceedings, which may be brought against them by reason of being or having been
such directors and officers.

Under the Trust Agreement, the Company will agree to indemnify each of the
Trustees of IBC Capital or any predecessor Trustee for IBC Capital, and to hold
each Trustee harmless against, any loss, damage, claims, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the Trust Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties under the Trust Agreement.

The Company and IBC Capital have agreed to indemnify the Underwriter, and
the Underwriter has agreed to indemnify IBC Capital and the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended. Reference is made to the Underwriting Agreement filed as
Exhibit 1 herewith.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Reference is made to the Exhibit Index which appears at page II-4 of the
Registration Statement.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant of the foregoing provisions, or
otherwise, the Company has been advised that, in the opinion of the Securities
and Exchange Commission such indemnification is against the public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

The undersigned Company hereby undertakes that: (1) For purposes of
determining any liability under the Act, the information omitted from the form
of prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective; and (2)
For the purpose of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

II-2
<PAGE> 130

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Ionia, State of Michigan on November 8, 1996.

INDEPENDENT BANK CORPORATION

/s/ CHARLES C. VAN LOAN
--------------------------------------
Charles C. Van Loan, Principal
Executive Officer

Pursuant to the requirements of Securities Act of 1933, IBC Capital Finance
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ionia, and the State of Michigan on the 8th day of
November, 1996.

IBC CAPITAL FINANCE

By: /s/ WILLIAM R. KOHLS

--------------------------------------

William R. Kohls, Trustee

By: /s/ CHARLES C. VAN LOAN

--------------------------------------

Charles C. Van Loan, Trustee

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE POSITION DATE
- ------------------------------------- -------------------------------- -----------------
<C> <S> <C>
/s/ CHARLES C. VAN LOAN Principal Executive Officer and November 8, 1996
- ------------------------------------- Director
Charles C. Van Loan

/s/ WILLIAM R. KOHLS Principal Financial Officer November 8, 1996
- -------------------------------------
William R. Kohls

/s/ JAMES J. TWAROZYNSKI Principal Accounting Officer November 8, 1996
- -------------------------------------
James J. Twarozynski

/s/ WILLIAM F. EHINGER* Director November 8, 1996
- -------------------------------------
William F. Ehinger

/s/ KEITH E. BAZAIRE* Director November 8, 1996
- -------------------------------------
Keith E. Bazaire

/s/ TERRY L. HASKE* Director November 8, 1996
- -------------------------------------
Terry L. Haske

/s/ THOMAS F. KOHN* Director November 8, 1996
- -------------------------------------
Thomas F. Kohn

/s/ ROBERT J. LEPPINK* Director November 8, 1996
- -------------------------------------
Robert J. Leppink

/s/ REX P. O'CONNOR* Director November 8, 1996
- -------------------------------------
Rex P. O'Connor

/s/ ARCH V. WRIGHT, JR.* Director November 8, 1996
- -------------------------------------
Arch V. Wright, Jr.

/s/ CHARLES A. PALMER* Director November 8, 1996
- -------------------------------------
Charles A. Palmer

*By /s/ WILLIAM R. KOHLS
- -------------------------------------
William R. Kohls, Attorney-in-Fact
</TABLE>

II-3
<PAGE> 131

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER AND DESCRIPTION
-------------------------------------------------------------------------------
<S> <C>
1* Form of Underwriting Agreement
4.1* Form of Indenture, to be dated as of November , 1996.
4.2* Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1)
4.3* Certificate of Trust of IBC Capital Finance.
4.4* Trust Agreement of IBC Capital Finance dated as of November 7, 1996.
4.5* Form of Amended and Restated Trust Agreement of IBC Capital Finance to be dated
as of November , 1996.
4.6* Form of Preferred Security Certificate of IBC Capital Finance (included as an
exhibit to Exhibit 4.5.)
4.7* Form of Preferred Securities Guarantee Agreement for IBC Capital Finance.
4.8* Form of Agreement as to Expenses and Liabilities (included as an exhibit to
Exhibit 4.5).
5.1* Form of Opinion of Varnum, Riddering, Schmidt & Howlett LLP as to the validity
of the issuance of the Subordinated Debentures.
5.2* Form of Opinion of Richards, Layton & Finger, special Delaware counsel, as to
the legality of the Preferred Securities to be issued by IBC Capital Finance.
10(A) Deferred Benefit Plan for Directors (incorporated hereby by reference to
Exhibit 10(C) to the Company's report on Form 10-K for the year ended December
31, 1984)
10(B) The form of Indemnity Agreement approved by the Company's shareholders at its
April 19, 1988 Annual Meeting, as executed with all of the Directors of the
Company (incorporated herein by reference to Exhibit 10(F) to the Company's
report on Form 10-K for the year ended December 31, 1988)
10(C) Incentive Share Grant Plan, as amended, approved by the Company's shareholders
at its April 21, 1992 Annual Meeting (incorporated herein by reference to
Exhibit 10 to the Company's report on Form 10-K for the year ended December 31,
1992)
10(D) Nonemployee Director Stock Option Plan, approved by the Company's shareholders
at its April 21, 1992 Annual Meeting (incorporated herein by reference to
Exhibit 28 to the Company's Form S-8 Registration Statement, dated April 23,
1993, filed under Registration No. 33-62086)
10(E) Employee Stock Option Plan, approved by the Company's shareholders at its April
21, 1992 Annual Meeting (incorporated herein by reference to Exhibit 28 to the
Company's Form S-8 Registration Statement, dated April 30, 1993, filed under
Registration No. 33-62090)
10(F) Agreement and Plan of Reorganization among the Company, IBC Interim Co., and
North Bank Corporation, dated February 2, 1996 (incorporated by reference to
Exhibit 2.1 to the Company's Current Report on 8-K filed June 16, 1996)
10(G) Agreement to Purchase Assets and Assume Liabilities By and Between the Company
and First of America Bank-Michigan, National Association, dated September 18,
1996
23.1* Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.2* Consent of Crowe, Chizek and Company LLP, Independent Auditors.
23.3* Consent of Varnum, Riddering, Schmidt & Howlett LLP (to be included in their
opinion filed herewith as Exhibit 5.1)
23.4* Consent of Richards, Layton & Finger (to be included in their opinion filed
herewith as Exhibit 5.2)
24 Power of Attorney (included on the signature page)
</TABLE>

II-4
<PAGE> 132

<TABLE>
<CAPTION>
EXHIBIT NUMBER AND DESCRIPTION
-------------------------------------------------------------------------------
<S> <C>
25.1** Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under the Indenture.
25.2** Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under Amended and Restated Trust Agreement.
25.3** Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under the Preferred Securities Guarantee Agreement.
</TABLE>

- -------------------------

* Filed herewith.

** To be filed.

II-5

<PAGE> 1

EXHIBIT 1

600,000 Preferred Securities

IBC Capital Finance

___% Cumulative Trust Preferred Securities
(Liquidation Preference of $25 per Preferred Security)

UNDERWRITING AGREEMENT

November __, 1996

STIFEL, NICOLAUS & COMPANY, INCORPORATED
500 North Broadway
St. Louis, Missouri 63102

Dear Sirs:

Independent Bank Corporation, a Michigan corporation (the "Company") and its
financing subsidiary, IBC Capital Finance ("IBC Capital"), a Delaware business
trust (the "Trust", and hereinafter together with the Company, the "Offerors"),
propose that the Trust issue and sell severally to Stifel, Nicolaus & Company,
Incorporated (the "Underwriter"), pursuant to the terms of this Agreement, the
Trust's ____% Cumulative Trust Preferred Securities, with a liquidation
preference of $25.00 per preferred security (the "Preferred Securities"), to be
issued under a Certificate of Designations (the "Certificate of Designations"),
the terms of which are more fully described in the Prospectus (as hereinafter
defined). The aforementioned 600,000 Preferred Securities to be sold to the
Underwriter are herein called the "Firm Shares". Solely for the purpose of
covering over-allotments in the sale of the Firm Shares, the Offerors further
propose that the Trust issue and severally sell to the Underwriter, at its
option, up to an additional 90,000 Preferred Securities (the "Option Shares")
upon exercise of the over-allotment option granted in Section 1 hereof. The
Firm Shares and any Option Shares are herein collectively referred to as the
"Shares".

The Offerors hereby confirm as follows their agreement with the Underwriter
in connection with the proposed purchase of the Shares.

<PAGE> 2

1. SALE, PURCHASE AND DELIVERY OF SHARES; DESCRIPTION OF SHARES.

(a) On the basis of the representations, warranties and agreements herein
contained, and subject to the terms and conditions herein set forth, the
Offerors hereby agree that the Trust shall issue and severally sell to the
Underwriter and the Underwriter agrees to purchase from the Trust, at a
purchase price per share of $25.00 (the "Purchase Price") the Firm Shares, and
the Company shall pay to the Underwriter a commission in the amount set forth
in Schedule 1 hereto.

In addition, on the basis of the representations, warranties and agreements
herein contained and subject to the terms and conditions herein set forth, the
Offerors hereby grant to the Underwriter, an option to purchase all or any
portion of the 90,000 Option Shares, and upon the exercise of such option in
accordance with this Section 1, the Offerors hereby agree that the Trust shall
sell to the Underwriter, and the Underwriter agrees to purchase from the Trust,
all or any portion of the Option Shares at the same Purchase Price per share
paid for the Firm Shares. The option hereby granted (the "Option") shall
expire 30 days after the date upon which the Registration Statement (as
hereinafter defined) becomes effective and may be exercised only for the
purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Firm Shares. The Option may be exercised in
whole or in part at any time (but not more than once) by you giving notice
(confirmed in writing) to the Company setting forth the number of Option Shares
as to which the Underwriter is exercising the Option and the time, date and
place for payment and delivery of certificates for such Option Shares. Such
time and date of payment and delivery for the Option Shares (the "Option
Closing Date") shall be determined by you, but shall not be earlier than two
nor later than five full business days after the exercise of such Option, nor
in any event prior to the Closing Date (as hereinafter defined). The Option
Closing Date may be the same as the Closing Date.

Payment of the Purchase Price and delivery of certificates for the Firm
Shares shall be made at the offices of the Underwriter, 500 North Broadway, St.
Louis, Missouri 63102, or such other place as shall be agreed to by you and the
Company, at 10:00 a.m., St. Louis time, on _____ __, 1996, or at such other
time not more than five full business days thereafter as the Company and you
shall determine (the "Closing Date"). If the Underwriter exercises the option
to purchase any or all of the Option Shares, payment of the Purchase Price and
delivery of certificates for such Option Shares shall be made on the Option
Closing Date at the offices of the Underwriter, or at such other place as the
Company and you shall determine. Such payments shall be made to the Company or
its order by wire transfer or certified or bank cashier's check, in clearing
house or similar immediately available funds, in the amount of the Purchase
Price therefor, against

2
<PAGE> 3

delivery by or on behalf of the Company to you for the Underwriter of
certificates for the Shares to be purchased by the Underwriter.

The Agreement contained herein with respect to the timing of the Closing
Date and Option Closing Date is intended to, and does, constitute an express
agreement, as described in Rule 15c6-1(c) and (d) promulgated under the 1934
Act (as defined herein), for a settlement date other than four business days
after the date of the contract.

Certificates for Shares to be purchased by the Underwriter shall be
delivered in fully registered form in such authorized denominations and
registered in such names as you shall request not later than 12:00 noon, St.
Louis time, two business days prior to the Closing Date and, if applicable, the
Option Closing Date. Certificates for Shares to be purchased by the
Underwriter shall be made available to you for inspection, checking and
packaging at such office as you may designate not later than 1:00 p.m., St.
Louis time, on the last business day prior to the Closing Date and, if
applicable, on the last business day prior to the Option Closing Date.

Time shall be of the essence, and delivery of the certificates for the
Shares at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Underwriter hereunder.

(b) The Offerors propose that the Trust issue the Shares pursuant to an
Amended and Restated Trust Agreement among State Street Bank and Trust Company,
as Property Trustee, Wilmington Trust Company, as Delaware Trustee, the
Administrative Trustees named therein, and the Company in substantially the
form heretofore delivered to you, said Agreement being hereinafter referred to
as the "Trust Agreement". In connection with the issuance of the Shares, the
Company proposes (i) to issue its Junior Subordinated Deferrable Interest
Debentures ( the "Debentures") pursuant to an Indenture, dated as of
_____________, 1996, between the Company and ________________________ as
Trustee (the "Indenture") and (ii) to guarantee the Shares pursuant to a
Guarantee Agreement between the Company and State Street Bank and Trust
Company, as guarantee trustee (the "Guarantee"), to the extent described
therein.

2. REPRESENTATIONS AND WARRANTIES.

(a) The Offerors jointly and severally represent and warrant to, and agree
with, the Underwriter that:

(i) The reports filed with the Securities and
Exchange Commission (the "Commission") by the Company under the
Securities

3
<PAGE> 4

Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations thereunder (the "1934 Act Regulations") at the time they
were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations and did not contain an 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 in which they were made, not misleading.

(ii) The Offerors have prepared and filed with the
Commission a registration statement on Form S-2 (File No. 33-_______)
for the registration of the Shares, the Guarantee and $_______ million
aggregate principal amount of Debentures under the Securities Act of
1933, as amended (the "1933 Act"), including the related prospectus
subject to completion, and one or more amendments to such registration
statement may have been so filed, in each case in conformity in all
material respects with the requirements of the 1933 Act, the rules and
regulations promulgated thereunder (the "1933 Act Regulations") and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and the rules and regulations thereunder. Copies of such
registration statement, including any amendments thereto, each
Preliminary Prospectus (as defined herein) contained therein and the
exhibits, financial statements and schedules to such registration
statement, as finally amended and revised, have heretofore been
delivered by the Company to the Underwriter. After the execution of
this Agreement, the Offerors will file with the Commission (A) if such
registration statement, as it may have been amended, has been declared
by the Commission to be effective under the 1933 Act, a prospectus in
the form most recently included in an amendment to such registration
statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are
required by Rule 430A of the 1933 Act Regulations ("Rule 430A") or
permitted by Rule 424(b) of the 1933 Act Regulations ("Rule 424(b)")
and as have been provided to and not objected to by the Underwriter
prior to (or as are agreed to by the Underwriter subsequent to) the
execution of this Agreement, or (B) if such registration statement, as
it may have been amended, has not been declared by the Commission to
be effective under the 1933 Act, an amendment to such registration
statement, including a form of final prospectus, necessary to permit
such registration statement to become effective, a copy of which
amendment has been furnished to and not objected to by the Underwriter
prior to (or is agreed to by the Underwriter subsequent to) the
execution of this Agreement. The Offerors will not file any amendment
to the registration statement or any amended Preliminary Prospectus or
any amendment thereto, of which you have not been previously furnished
a copy or to which you or your counsel shall reasonably object. As
used in this Agreement, the

4
<PAGE> 5

term "Registration Statement" means such registration statement, as
amended at the time when it was or is declared effective under the
1933 Act, including (1) all financial schedules and exhibits thereto
(2) all documents (or portions thereof) incorporated by reference
therein filed under the 1934 Act, and (3) any information omitted
therefrom pursuant to Rule 430A and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each
prospectus subject to completion filed with such registration
statement or any amendment thereto including all documents (or
portions thereof) incorporated by reference therein under the 1934 Act
(including the prospectus subject to completion, if any, included in
the Registration Statement and each prospectus filed pursuant to Rule
424(a) under the 1933 Act); and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b)(1)
or (4) or, if no prospectus is required to be filed pursuant to Rule
424(b)(1) or (4), the prospectus included in the Registration
Statement, in each case including the financial schedules and all
documents (or portions thereof) incorporated by reference therein
under the 1934 Act. The date on which the Registration Statement
becomes effective is hereinafter referred to as the "Effective Date."

(iii) The documents incorporated by reference in
the Preliminary Prospectus or Prospectus or from which information is
so incorporated by reference, when they become effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at the
Closing Date and any Option Closing Date, did not or will not, as the
case may be, contain an 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 in which
they were made, not misleading.

(iv) No order preventing or suspending the use of
any Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) has been issued by the Commission, nor
has the Commission, to the knowledge of the Offerors, threatened to
issue such an order or instituted proceedings for that purpose. Each
Preliminary Prospectus, at the time of filing thereof, (A) complied in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and (B) did not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were

5
<PAGE> 6

made, not misleading; provided, however, that this representation and
warranty does not apply to statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Offerors by you expressly for inclusion in the Prospectus beneath the
heading "Underwriting" (such information referred to herein as the
"Underwriter's Information").

(v) At the Effective Date and at all times
subsequent thereto, up to and including the Closing Date and, if
applicable, the Option Closing Date, the Registration Statement and
any post-effective amendment thereto (A) complied and will comply in
all material respects with the requirements of the 1933 Act, the 1933
Act Regulations and the Trust Indenture Act (and the rules and
regulations thereunder) and (B) did not and will not contain an 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, not
misleading. At the Effective Date and at all times when the
Prospectus is required to be delivered in connection with offers and
sales of Shares, including, without limitation, the Closing Date and,
if applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the Trust Indenture Act (and the rules and regulations thereunder) and
(B) did not contain and will not contain an untrue statement of a
material fact or omit to state any 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; provided,
however, that this representation and warranty does not apply to
Underwriter's Information.

(vi) The Company is duly organized, validly
existing and in good standing under the laws of the State of Michigan,
with full corporate and other power and authority to own, lease and
operate its properties and conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted and is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as
amended (the "BHC Act").

The Trust has been duly created and is
validly existing as a statutory business trust in good standing under
the Delaware Business Trust Act with the power and authority (trust
and other) to own its property and conduct its business as described
in the Registration Statement and Prospectus, to issue and sell the
Shares and to enter into and perform its

6
<PAGE> 7

obligations under this Agreement and to consummate the transactions
herein contemplated; the Trust has no subsidiaries and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of
its property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Trust; the Trust has conducted and will
conduct no business other than the transactions contemplated by this
Agreement and described in the Prospectus; the Trust is not a party to
or bound by any agreement or instrument other than this Agreement, the
Trust Agreement and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; the Trust is not a part to or subject
to any action, suit or proceeding of any nature; the Trust is not, and
at the Closing Date or any Option Closing Date will not be, classified
as an association taxable as a corporation for United States federal
income tax purposes; and the Trust is, and as of the Closing Date or
any Option Closing Date will be, treated as a consolidated subsidiary
of the Company pursuant to generally accepted accounting principles.

(vii) The Company has five subsidiaries. They are
Independent Bank, Independent Bank West Michigan, Independent Bank
South Michigan, Independent Bank East Michigan (the "Banks") and the
Trust. The Company does not own or control, directly or indirectly,
more than 5% of any class of equity security of any corporation,
association or other entity other than the Banks, Independent Title
Services, Inc., IBC Financial Services, Inc. and the Trust. Each of
the Banks is a Michigan State Bank duly incorporated, validly existing
and in good standing under the laws of Michigan. Each Bank has full
corporate and other power and authority to own, lease and operate its
properties and to conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted. Each Bank is a member
of the Federal Reserve System, and no proceedings for the termination
or revocation of such membership are pending or, to the knowledge of
the Company, threatened. The deposit accounts of each Bank are
insured by the Bank Insurance Fund administered by the Federal Deposit
Insurance Corporation (the "FDIC") up to the maximum amount provided
by law, except to the extent the Prospectus discloses such deposit
accounts are insured by the Savings Association Insurance Fund
administered by the FDIC ("SAIF") and to such extent the deposit
accounts are so insured up to the maximum amount provided by law; and
no proceedings for the modification,

7
<PAGE> 8

termination or revocation of any such insurance are pending or, to the
knowledge of the Company, threatened.

(viii) Each of the Company and the Banks is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases
property or conducts its business so as to require such qualification
and in which the failure to so qualify would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, prospects or results of operations
of the Company and the Banks on a consolidated basis. All of the
issued and outstanding shares of capital stock of the Banks (A) have
been duly authorized and are validly issued, (B) are fully paid and
nonassessable except to the extent such shares may be deemed
assessable under 12 U.S.C. Section 55 or 12 U.S.C. Section 1831o, and
(C) except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), are
directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, restriction upon voting or
transfer, preemptive rights, claim or equity. Except as disclosed in
the Prospectus, there are no outstanding rights, warrants or options
to acquire or instruments convertible into or exchangeable for any
capital stock of the Company and the Banks.

(ix) The capital stock of the Offerors conforms to
the description thereof contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus). The outstanding shares of capital stock of the Offerors
have been duly authorized and validly issued and are fully paid and
nonassessable, and no such shares were issued in violation of the
preemptive or similar rights of any security holder of the Company; no
person has any preemptive or similar right to purchase any shares of
capital stock of the Offerors. Except as disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no outstanding rights, options or
warrants to acquire any securities of the Offerors other than options
issued under the Company's Incentive Share Grant Plan and Employee
Stock Option Plan, and there are no outstanding securities convertible
into or exchangeable for any such securities, and no restrictions upon
the voting or transfer of any capital stock of the Company pursuant to
the Company's corporate charter or by-laws or any agreement or other
instrument to which the Company is a party or by which it is bound.

(x) The Trust has all requisite power and
authority to issue, sell and deliver the Shares in accordance with and
upon the terms and conditions set forth in this Agreement, the
Certificate of Designations, the

8
<PAGE> 9

Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). All
corporate action required to be taken by the Offerors for the
authorization, issuance, sale and delivery of the Shares in accordance
with such terms and conditions has been validly and sufficiently
taken. The Shares, when delivered in accordance with this Agreement,
will be duly and validly issued and outstanding, will be fully paid
and nonassessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Trust Agreement, will
not be issued in violation of or subject to any preemptive or similar
rights, and will conform to the description thereof in the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and the
Certificate of Designations. Holders of the Shares will be entitled
to the same limitation of personal liability extended to stockholders
of private for profit corporations organized under the General
Corporation Law of the State of Delaware. None of the Shares,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon voting
or transfer, preemptive rights, claim, equity or other defect.

The Debentures have been duly and validly
authorized, and, when duly and validly executed, authenticated and
issued as provided in the Indenture and delivered pursuant to this
Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture and will conform
to the description thereof contained in the Prospectus.

(xi) The Offerors and the Banks have complied in
all material respects with all federal, state and local statutes,
regulations, ordinances and rules applicable to the ownership and
operation of their properties or the conduct of their businesses as
described in and contemplated by the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and as currently being conducted.

(xii) The Offerors and the Banks have all material
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and as
currently being conducted in all material respects. All such Permits
are in full force and effect and each of the Company and the Banks are
in all

9
<PAGE> 10

material respects complying therewith, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material impairment of
the rights of the holder of any such Permit, subject in each case to
such qualification as may be adequately disclosed in the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). Such Permits contain no restrictions that
would materially impair the ability of the Company or the Banks to
conduct their businesses in the manner consistent with their past
practices. Neither the Offerors nor the Banks have received notice or
otherwise has knowledge of any proceeding or action relating to the
revocation or modification of any such Permit.

(xiii) Neither the Offerors nor any of the Banks is
in breach or violation of their corporate charter (including without
limitation, the Certificate of Designations), by-laws or other
governing documents. Neither the Offerors nor the Banks are, and to
the knowledge of the Offerors no other party is, in violation, breach
or default (with or without notice or lapse of time or both) in the
performance or observance of any term, covenant, agreement,
obligation, representation, warranty or condition contained in (A) any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound, which such breach, violation or
default could have material adverse consequences to the Offerors and
the Banks on a consolidated basis, and to its knowledge, no other
party has asserted that the Offerors or any of the Banks is in such
violation, breach or default (provided that the foregoing shall not
apply to defaults by borrowers from the Banks), or (B) except as
disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), any order, decree,
judgment, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, having
jurisdiction over the Offerors or the Banks or any of their respective
properties the breach, violation or default of which could have a
material adverse effect on the condition, financial or otherwise,
earnings, affairs, business, prospects, or results of operations of
the Offerors and the Banks on a consolidated basis.

(xiv) The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
by this Agreement, the Certificate of Designations, the Registration
Statement and the Prospectus (or, if the Prospectus in not in
existence, the most recent Preliminary Prospectus) do not and will not
conflict with, result in the creation or imposition of any material
lien, claim, charge, encumbrance or

10
<PAGE> 11

restriction upon any property or assets of the Offerors or the Banks
or the Shares pursuant to, constitute a breach or violation of, or
constitute a default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the charter
(including without limitation, the Certificate of Designations) or
by-laws of the Company or the Banks, the Trust Agreement, any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which the Offerors or the Banks is a party
or by which either of them or any of their respective properties may
be bound or any order, decree, judgment, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Bank or any of their respective properties which
conflict, creation, imposition, breach, violation or default would
have either singly or in the aggregate a material adverse effect on
the condition, financial or otherwise, earnings, affairs, business,
prospects or results of operations of the Offerors and the Banks on a
consolidated basis. No authorization, approval, consent or order of,
or filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Certificate of Designations, the Registration Statement
and the Prospectus (or such Preliminary Prospectus), except such as
may be required under the 1933 Act, and such as may be required under
state securities laws in connection with the purchase and distribution
of the Shares by the Underwriter. No authorization, approval, consent
or order of or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions
contemplated by this Agreement, the Certificate of Designations, the
Registration Statement and the Prospectus, except such as have been
obtained under the 1933 Act, and such as may be required under state
securities laws or Interpretations or Rules of the National
Association of Securities Dealers, Inc. ("NASD") in connection with
the purchase and distribution of the Shares by the Underwriter.

(xv) The Offerors have all requisite corporate
power and authority to enter into this Agreement and this Agreement
has been duly and validly authorized, executed and delivered by the
Offerors and constitutes the legal, valid and binding agreement of the
Offerors, enforceable against Offerors in accordance with its terms,
except as the enforcement thereof may be limited by general principles
of equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement, the

11
<PAGE> 12

Guarantee and the Agreement as to Expenses and Liabilities (the
"Expense Agreement") has been duly authorized by the Offerors, and,
when executed and delivered by the Company on the Closing Date, each
of said agreements will constitute a valid and legally binding
obligation of the Offerors and will be enforceable against the
Offerors in accordance with its terms, except as the enforcement
thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights
generally and except as any indemnification or contribution provisions
thereof may be limited under applicable securities laws. Each of the
Indenture, the Trust Agreement and the Guarantee has been duly
qualified under the Trust Indenture Act and will conform to the
description thereof contained in the Prospectus.

(xvi) The Company and the Banks have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business, in
each case free and clear of all security interests, liens, mortgages,
pledges, encumbrances, restrictions, claims, equities and other
defects except such as are referred to in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus) or such as do not materially affect the value of such
property in the aggregate and do not materially interfere with the use
made or proposed to be made of such property; and all of the leases
under which the Company or the Banks hold real or personal property
are valid, existing and enforceable leases and in full force and
effect with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real or
personal property, and neither the Company nor the Banks is in default
in any material respect of any of the terms or provisions of any
leases.

(xvii) KPMG Peat Marwick LLP, who have certified
certain of the consolidated financial statements of the Company and
the Banks including the notes thereto, included in the Registration
Statement and Prospectus, are independent public accountants with
respect to the Company and the Banks, as required by the 1933 Act and
the 1933 Act Regulations.

(xviii) The consolidated financial statements
including the notes thereto, included in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) with respect to the Company and
the Banks comply in all material respects with the 1933 Act and the
1933 Act Regulations and present fairly the consolidated financial
position of the Company and the Banks as of the dates indicated and
the consolidated results of operations, cash flows and

12
<PAGE> 13

stockholders' equity of the Company and the Banks for the periods
specified and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis. The selected and
summary consolidated financial data concerning the Company and the
Banks included in the Registration Statement and the Prospectus (or
such Preliminary Prospectus) comply in all material respects with the
1933 Act and the 1933 Act Regulations, present fairly the information
set forth therein, and have been compiled on a basis consistent with
that of the consolidated financial statements of the Company and the
Banks in the Registration Statement and the Prospectus (or such
Preliminary Prospectus). The other financial, statistical and
numerical information included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus) comply in all material
respects with the 1933 Act and the 1933 Act Regulations, present
fairly the information shown therein, and to the extent applicable
have been compiled on a basis consistent with the consolidated
financial statements of the Company and the Banks included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus).

(xix) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), except as otherwise stated therein:

(A) neither the Offerors nor any of the Banks
have sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree which is material to the
condition (financial or otherwise), earnings, business,
prospects or results of operations of the Offerors and the
Banks on a consolidated basis;

(B) there has not been any material adverse
change in, or any development which is reasonably likely to
have a material adverse effect on, the condition (financial or
otherwise), earnings, business, prospects or results of
operations of the Offerors and the Banks on a consolidated
basis, whether or not arising in the ordinary course of
business;

(C) neither the Offerors nor any of the Banks
have incurred any liabilities or obligations, direct or
contingent, or entered into any material transactions, other
than in the ordinary course of business which is material to
the condition (financial or otherwise), earnings,

13
<PAGE> 14

business, prospects or results of operations of the Offerors
and the Banks on a consolidated basis;

(D) the Offerors have not declared or paid any
dividend, and neither the Offerors nor any of the Banks have
become delinquent in the payment of principal or interest on
any outstanding borrowings; and

(E) there has not been any change in the capital
stock (except for the exercise of employee stock options
issued under the Company's Incentive Share Grant Plan and
Employee Stock Option Plan, and disclosed as outstanding),
long-term debt, obligations under capital leases or, other
than in the ordinary course of business, short-term borrowings
of the Offerors or the Banks.

(xx) Except as set forth in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), no charge,
investigation, action, suit or proceeding is pending or, to the
knowledge of the Company, threatened, against or affecting the
Offerors or the Banks or any of their respective properties before or
by any court or any regulatory, administrative or governmental
official, commission, board, agency or other authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could
have a material adverse effect on the consummation of this Agreement
or the transactions contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Offerors and the Banks on a consolidated basis or
which is required to be disclosed in the Registration Statement or the
Prospectus (or such Preliminary Prospectus) and is not so disclosed.

(xxi) There are no contracts or other documents
required to be filed as exhibits to the Registration Statement by the
1933 Act or the 1933 Act Regulations or the Trust Indenture Act (or
any rules or regulations thereunder) which have not been filed as
exhibits to the Registration Statement, or that are required to be
summarized in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) that are not so
summarized.

(xxii) The Offerors have not taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the

14
<PAGE> 15

Shares, and the Offerors are not aware of any such action taken or to
be taken by any affiliate of the Offerors.

(xxiii) The Offerors and the Banks own, or possess
adequate rights to use, all patents, copyrights, trademarks, service
marks, trade names and other rights necessary to conduct the
businesses now conducted by them in all material respects or as
described in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and neither the
Offerors nor the Banks have received any notice of infringement or
conflict with asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names or other rights
which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
Banks on a consolidated basis, and the Company does not know of any
basis for any such infringement or conflict.

(xxiv) Except as adequately disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no labor dispute involving the Company or the
Banks exists or, to the knowledge of the Company, is imminent which
might be expected to have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Offerors and the Banks on a consolidated
basis or which is required to be disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus). Neither the Company nor the Banks have received notice
of any existing or threatened labor dispute by the employees of any of
its principal suppliers, customers or contractors which might be
expected to have a material adverse effect on the condition (financial
or otherwise), earnings, affairs, business, prospects or results of
operations of the Company and the Banks on a consolidated basis.

15
<PAGE> 16

(xxv) The Offerors and the Banks have timely and
properly prepared and filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
Banks on a consolidated basis. The Company has no knowledge of any
tax deficiency which has been or might be assessed against the
Offerors or the Banks which, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Banks on a
consolidated basis.

(xxvi) Each of the material contracts, agreements
and instruments described or referred to in the Registration Statement
or the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and each contract, agreement and
instrument filed as an exhibit to the Registration Statement is in
full force and effect and is the legal, valid and binding agreement of
the Offerors or the Banks, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by general principles
of equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally. Except as disclosed in the Prospectus
(or such Preliminary Prospectus), to the knowledge of the Company, no
other party to any such agreement is (with or without notice or lapse
of time or both) in breach or default in any material respect
thereunder.

(xxvii) No relationship, direct or indirect, exists
between or among the Offerors or the Banks, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Offerors or the Banks, on the other hand, which is required to be
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus) which is not adequately described therein.

(xxviii) No person has the right to request or require
the Offerors or the Banks to register any securities for offering and
sale under the 1933 Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the Shares
except as adequately disclosed in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).

16
<PAGE> 17

(xxix) The Shares have been approved for quotation
on the Nasdaq National Market subject to official notice of issuance.

(xxx) Except as described in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no contractual encumbrances or restrictions or
material legal restrictions, on the ability of the Banks or the Trust
(A) to pay dividends or make any other distributions on its capital
stock or to pay any indebtedness owed to the Company, (B) to make any
loans or advances to, or investments in, the Company or (C) to
transfer any of its property or assets to the Company.

(xxxi) Neither of the Offerors is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.

(xxxii) The Company has not distributed and will not
distribute prior to the Closing Date any prospectus in connection with
the Offering, other than a Preliminary Prospectus, the Prospectus, the
Registration Statement and the other materials permitted by the 1933
Act and the 1933 Act Regulations and reviewed by the Underwriter.

3. OFFERING BY THE UNDERWRITER. After the Registration
Statement becomes effective or, if the Registration Statement is already
effective, after this Agreement becomes effective, the Underwriter proposes to
offer the Firm Shares for sale to the public upon the terms and conditions set
forth in the Prospectus. The Underwriter may from time to time thereafter
reduce the public offering price and change the other selling terms, provided
the proceeds to the Trust shall not be reduced as a result of such reduction or
change.

The Underwriter may reserve and sell such of the Shares
purchased by the Underwriter as the Underwriter may elect to dealers chosen by
it (the "Selected Dealers") at the public offering price set forth in the
Prospectus less the applicable Selected Dealers' concessions set forth therein,
for re-offering by Selected Dealers to the public at the public offering price.
The Underwriter may allow, and Selected Dealers may re-allow, a concession set
forth in the Prospectus to certain other brokers and dealers.

17
<PAGE> 18

4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors
jointly and severally covenant with the Underwriter as follows:

(a) The Offerors shall use their best efforts to cause
the Registration Statement and any amendments thereto, if not effective at the
time of execution of this Agreement, to become effective as promptly as
possible. If the Registration Statement has become or becomes effective
pursuant to Rule 430A and information has been omitted therefrom in reliance on
Rule 430A, then, the Offerors will prepare and file in accordance with Rule
430A and Rule 424(b) copies of the Prospectus or, if required by Rule 430A, a
post-effective amendment to the Registration Statement (including the
Prospectus) containing all information so omitted and will provide evidence
satisfactory to the Underwriter of such timely filing.

(b) The Offerors shall notify you immediately, and confirm
such notice in writing:

(i) when the Registration Statement, or any
post-effective amendment to the Registration Statement, has become
effective, or when the Prospectus or any supplement to the Prospectus
or any amended Prospectus has been filed;

(ii) of the receipt of any comments or requests
from the Commission;

(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or for additional information; and

(iv) of the issuance by the Commission or any
state or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, preventing
or suspending the use of any Preliminary Prospectus or the Prospectus,
or suspending the qualification of any of the Shares for offering or
sale in any jurisdiction or the institution or threat of institution
of any proceedings for any of such purposes. The Offerors shall use
their best efforts to prevent the issuance of any such stop order or
of any other such order and if any such order is issued, to cause such
order to be withdrawn or lifted as soon as possible.

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<PAGE> 19

(c) The Company shall furnish to you, from time to time
without charge, as soon as available, as many copies as you may reasonably
request of (i) the registration statement as originally filed and of all
amendments thereto, in executed form, including exhibits, whether filed before
or after the Registration Statement becomes effective, (ii) all exhibits and
documents incorporated therein or filed therewith, (iii) all consents and
certificates of experts in executed form, (iv) each Preliminary Prospectus and
all amendments and supplements thereto, and (v) the Prospectus, and all
amendments and supplements thereto.

(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Offerors shall comply to the best of their
ability with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Shares as contemplated herein and in the Prospectus. The Offerors shall not
file any amendment to the registration statement as originally filed or to the
Registration Statement and shall not file any amendment thereto or make any
amendment or supplement to any Preliminary Prospectus or to the Prospectus of
which you shall not previously have been advised in writing and provided a copy
a reasonable time prior to the proposed filings thereof or to which you shall
reasonably object. If it is necessary, in your reasonable opinion or in the
reasonable opinion of your counsel to amend or supplement the Registration
Statement or the Prospectus in connection with the distribution of the Shares,
the Offerors shall forthwith amend or supplement the Registration Statement or
the Prospectus, as the case may be, by preparing and filing with the
Commission, and furnishing to you, such number of copies as you may reasonably
request of an amendment or amendments of, or a supplement or supplements to,
the Registration Statement or the Prospectus, as the case may be (in form and
substance reasonably satisfactory to you and your counsel. If any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus to correct an untrue statement of a material fact or to include a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for any reason
it is necessary at any time to amend or supplement the Prospectus to comply
with the 1933 Act and the 1933 Act Regulations, the Offerors shall, subject to
the second sentence of this subsection (d), forthwith amend or supplement the
Prospectus by preparing and filing with the Commission, and furnishing to you,
such number of copies as you may reasonably request of an amendment or
amendments of, or a supplement or supplements to, the Prospectus (in form and
substance satisfactory to you and your counsel so that, as so amended or
supplemented, the Prospectus shall not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

19
<PAGE> 20

(e) The Offerors shall cooperate with you and your
counsel in order to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as you may reasonably request
and shall continue such qualifications in effect so long as may be advisable
for distribution of the Shares; provided, however, that the Offerors shall not
be required to qualify to do business as a foreign corporation or file a
general consent to service of process in any jurisdiction in connection with
the foregoing. The Offerors shall file such statements and reports as may be
required by the laws of each jurisdiction in which the Shares have been
qualified as above. The Offerors will notify you immediately of, and confirm
in writing, the suspension of qualification of the Shares or threat thereof in
any jurisdiction.

(f) The Company shall make generally available to its
security holders in the manner contemplated by Rule 158 of the 1933 Act
Regulations and furnish to you as soon as practicable, but in any event not
later than 16 months after the Effective Date, a consolidated earnings
statement of the Company conforming with the requirements of Section 11(a) of
the 1933 Act and Rule 158.

(g) The Offerors shall use the net proceeds from the sale
of the Shares to be sold by the Trust hereunder in the manner specified in the
Prospectus under the caption "Use of Proceeds."

(h) For five years from the Effective Date, the Company
shall furnish to the Underwriter copies of all reports and communications
(financial or otherwise) furnished by the Company to the holders of the Shares
as a class, copies of all reports and financial statements filed with or
furnished to the Commission (other than portions for which confidential
treatment has been obtained from the Commission) or with any national
securities exchange or the Nasdaq National Market and such other documents,
reports and information concerning the business and financial condition of the
Company as the Underwriter may reasonably request, other than such documents,
reports and information for which the Company has the legal obligation not to
reveal to the Underwriter.

(i) For a period of 180 days from the date hereof, the
Company shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any shares of the common stock securities
convertible into, exercisable or exchangeable for, or that are the economic or
voting equivalent of, any such shares of common stock, or announce the offering
of, or register with the Commission, any shares of common stock or such other
securities, without your prior written consent.

20
<PAGE> 21

(j) For a period of 180 days from the date hereof, the
Offerors shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any shares of Shares, any other beneficial
interests in the assets of the Trust or any securities of the Trust or the
Company that are substantially similar to the Shares, including any guarantee
of any such beneficial interests or substantially similar securities, or
securities convertible into or exchangeable for or that represent the right to
receive any such beneficial interest or substantially similar securities,
without your prior written consent.

(k) The Offerors shall use their best efforts to cause
the Shares to become quoted on the Nasdaq National Market, or in lieu thereof a
national securities exchange, and to remain so quoted for at least five years
from the Effective Date or for such shorter period as may be specified in a
written consent of the Underwriter, provided this shall not prevent the Company
from redeeming the Shares pursuant to the terms of the Certificate of
Designations. If the Shares are exchanged for Debentures, the Company will use
its best efforts to have the Debentures listed on the exchange or other
organization on which the Preferred securities are then listed, and to have the
Debentures registered under the Exchange Act.

(l) Subsequent to the date of this Agreement and through
the date which is the later of (i) the day following the date on which the
Underwriter's option to purchase the Option Shares shall expire or (ii) the day
following the Option Closing Date with respect to any Option Shares that the
Underwriter shall elect to purchase, except as described in or contemplated by
the Prospectus, neither the Offerors nor the Banks shall take any action (or
refrain from taking any action) which will result in the Offerors or the Banks
incurring any material liability or obligation, direct or contingent, or enter
into any material transaction, except in the ordinary course of business, and
there will not be any material change in the financial position, capital stock,
or any material increase in long-term debt, obligations under capital leases or
short-term borrowings of the Offerors and the Banks on a consolidated basis.

(m) The Company shall not, for a period of 180 days after
the date hereof, without the prior written consent of the Underwriter,
purchase, redeem or call for redemption, or prepay or give notice of prepayment
(or announce any redemption or call for redemption, or any repayment or notice
of prepayment) of any of the Company's securities, provided that the foregoing
shall not prevent an employee from delivering the Company's securities in
payment of the exercise price of options issued under the Company's Incentive
Share Grant Plan and Employee Stock Option Plan.

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<PAGE> 22

(n) The Offerors shall not take, directly or indirectly,
any action designed to result in or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of
the Shares and the Company is not aware of any such action taken or to be taken
by any affiliate of the Company.

(o) Prior to the Closing Date (and, if applicable, the
Option Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Company, the Banks or the offering of the Shares (the "Offering")
without your prior written consent which will not be unreasonably withheld.

5. PAYMENT OF EXPENSES. Whether or not this Agreement
is terminated or the sale of the Shares to the Underwriter is consummated, the
Company covenants and agrees that it will pay or cause to be paid (directly or
by reimbursement) all costs and expenses incident to the performance of the
obligations of the Offerors under this Agreement, including:

(a) the preparation, printing, filing, delivery and
shipping of the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any amendments
or supplements thereto, and the printing, delivery and shipping of this
Agreement and any other underwriting documents (including, without limitation,
selected dealers agreements), the certificates for the Shares and the
Preliminary and Final Blue Sky Memoranda and any legal investment surveys and
any supplements thereto;

(b) all fees, expenses and disbursements of the Offeror's
counsel and accountants;

(c) all fees and expenses incurred in connection with the
qualification of the Shares under the securities or blue sky laws of such
jurisdictions as you may request, including all filing fees and fees and
disbursements of counsel for the Underwriter in connection therewith,
including, without limitation, in connection with the preparation of the
Preliminary and Final Blue Sky Memoranda and any legal investment surveys and
any supplements thereto;

(d) all fees and expenses incurred in connection with
filings made with the NASD;

22
<PAGE> 23

(e) any applicable fees and other expenses incurred in
connection with the listing of the Shares and, if applicable, the Debentures on
the Nasdaq National Market;

(f) the cost of furnishing to you copies of the initial
registration statements, any Preliminary Prospectus, the Registration Statement
and the Prospectus and all amendments or supplements thereto;

(g) the costs and charges of any transfer agent or
registrar and the fees and disbursements of counsel for any transfer agent or
registrar;

(h) all costs and expenses (including stock transfer
taxes) incurred in connection with the printing, issuance and delivery of the
Shares to the Underwriter;

(i) all expenses incident to the preparation, execution
and delivery of the trust agreements with respect to the Trust, the Indenture
and the Guarantee; and

(j) all other costs and expenses incident to the
performance of the obligations of the Company hereunder and under the
Certificate of Designations that are not otherwise specifically provided for in
this Section 5.

If the sale of Shares contemplated by this Agreement is not
completed for any reason whatsoever, including without limitation if this
Agreement is terminated by the Offerors or by you for any reason whatsoever,
whether or not such termination is allowable hereunder, the Company will pay
you your accountable out-of-pocket expenses in connection herewith or in
contemplation of the performance of your obligations hereunder, including
without limitation travel expenses, reasonable fees, expenses and disbursements
of counsel or other out-of- pocket expenses incurred by you in connection with
any discussion of the Offering or the contents of the Registration Statement,
any investigation of the Offerors and the Banks, or any preparation for the
marketing, purchase, sale or delivery of the Shares, in each case following
presentation of reasonably detailed invoices therefor.

If the sale of Shares contemplated by this Agreement is
completed, the Company shall not be responsible for payment of fees or
disbursements of counsel for the Underwriter other than in accordance with
paragraph (c) above, or for the reimbursement of any expenses of the
Underwriter.

6. CONDITIONS OF THE UNDERWRITER' OBLIGATIONS. The
obligations of the Underwriter to purchase and pay for the Firm Shares and,
following exercise of

23
<PAGE> 24

the option granted by the Offerors in Section 1 of this Agreement, the Option
Shares, are subject, in your sole discretion, to the accuracy of and compliance
with the representations and warranties and agreements of the Offerors herein
as of the date hereof and as of the Closing Date (or in the case of the Option
Shares, if any, as of the Option Closing Date), to the accuracy of the written
statements of the Offerors made pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and obligations hereunder and to
the following additional conditions:

(a) If the Registration Statement or any amendment
thereto filed prior to the Closing Date has not been declared effective prior
to the time of execution hereof, the Registration Statement shall become
effective not later than 10:00 a.m., St. Louis time, on the first business day
following the time of execution of this Agreement, or at such later time and
date as you may agree to in writing. If required, the Prospectus and any
amendment or supplement thereto shall have been timely filed in accordance with
Rule 424(b) and Rule 430A under the 1933 Act and Section 4(a) hereof. No stop
order suspending the effectiveness of the Registration Statement or any
amendment or supplement thereto shall have been issued under the 1933 Act or
any applicable state securities laws and no proceedings for that purpose shall
have been instituted or shall be pending, or, to the knowledge of the Offenders
the Underwriter, shall be contemplated by the Commission or any state
authority. Any request on the part of the Commission or any state authority
for additional information (to be included in the Registration Statement or
Prospectus or otherwise) shall have been disclosed to you and complied with to
your satisfaction and to the satisfaction of your counsel.

(b) The Underwriter shall not have advised the Company at
or before the Closing Date (and, if applicable, the Option Closing Date) that
the Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of a fact which, in your opinion, is material or omits to state a fact which,
in your opinion, is material and is required to be stated therein or is
necessary to make statements therein (in the case of the Prospectus or any
amendment or supplement thereto, in light of the circumstances under which they
were made) not misleading.

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<PAGE> 25

(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Certificate of Designations, the Trust Agreement, the Shares and the Shares,
and the authorization and form of the Registration Statement and Prospectus,
other than financial statements and other financial data, and all other legal
matters relating to this Agreement and the transactions contemplated hereby or
by the Certificate of Designations shall be satisfactory in all respects to
your counsel, and the Offerors and the Banks shall have furnished to such
counsel all documents and information relating thereto that they may reasonably
request to enable them to pass upon such matters.

(d) Varnum, Riddering Schmidt & Howlett LLP, counsel for
the Company, shall have furnished to you their signed opinion, dated the
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to your counsel, to the effect that:

(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Michigan, and is duly registered as a bank holding company under the
BHC Act. Each of the Banks is a state banking corporation duly
incorporated, validly existing and in good standing under the laws of
Michigan. Each of the Banks is a member of the Federal Reserve
System, and to the knowledge of such counsel no proceedings for the
termination or revocation of such membership are pending or
threatened. The deposit accounts of the Banks are insured by the FDIC
up to the maximum amount provided by law, except to the extent the
Prospectus discloses such deposit accounts are insured by SAIF and to
such extent the deposit accounts are so insured up to the maximum
amount provided by law; and to the knowledge of such counsel no
proceedings for the termination or revocation of any such insurance or
such membership are pending or threatened. Each of the Company and
the Banks has full corporate power and authority to own or lease its
properties and to conduct its business as such business is described
in the Prospectus and is currently conducted in all material respects.
All outstanding shares of capital stock of the Banks have been duly
authorized and validly issued and are fully paid and nonassessable
except to the extent such shares may be deemed assessable under 12
U.S.C. Section 55 or 12 U.S.C. Section 1831o and, to the best of such
counsel's knowledge, except as disclosed in the Prospectus, there are
no outstanding rights, options or warrants to purchase any such shares
or securities convertible into or exchangeable for any such shares.

(ii) The capital stock of the Company conforms to
the description thereof contained in the Prospectus in all material
respects. The capital stock of the Company authorized to be issued as
of September 30, 1996 is as set forth under the caption
"Capitalization" in the Prospectus, has

25
<PAGE> 26

been duly authorized and validly issued, is fully paid and
nonassessable. The form of certificates to evidence the Shares has
been approved by the Board of Directors and is in due and proper form
and complies with all applicable requirements. To the best of such
counsel's knowledge there are no outstanding rights, options or
warrants to purchase, no other outstanding securities convertible into
or exchangeable for, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company, except as described
in the Prospectus.

(iii) All corporate action required to be taken by
the Company for the authorization, issuance, sale and delivery of the
Shares in accordance with such terms and conditions has been validly
and sufficiently taken. All of the Shares have been duly and validly
authorized and, when delivered in accordance with this Agreement will
be duly and validly issued, fully paid and nonassessable, and will
conform to the description thereof in the Registration Statement, the
Prospectus and the Certificate of Designations. The Shares have been
approved for quotation on the Nasdaq National Market subject to
official notice of issuance. There are no preemptive or other rights
to subscribe for or to purchase, and other than as disclosed in the
Prospectus no restrictions upon the voting or transfer of, any shares
of capital stock of the Company or the Banks pursuant to the corporate
charter (including without limitation, the Certificate of
Designations), by-laws or other governing documents of the Company or
the Banks, or, to the best of such counsel's knowledge any agreement
or other instrument to which the Company or the Banks is a party or by
which the Company or the Banks may be bound.

(iv) The Company has all requisite corporate power
to enter into and perform its obligations under this Agreement and the
Certificate of Designations, and this Agreement and the Certificate of
Designations have been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with their terms,
except as the enforcement hereof or thereof may be limited by general
principles of equity and by bankruptcy or other laws relating to or
affecting creditors' rights generally, and except as the
indemnification and contribution provisions hereof may be limited
under applicable laws and certain remedies may not be available in the
case of a non-material breach.

(v) Each of the Indenture, the Trust Agreement and
the Guarantee has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company, and
is a valid and legally binding obligation of the Company enforceable
in accordance with its

26
<PAGE> 27

terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles
of equity;

(vi) The Debentures have been duly authorized,
executed and delivered by the Company, are entitled to the benefits of
the Indenture and are legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles
of equity;

(vii) The Expense Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company enforceable in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles
of equity;

(viii) To the best knowledge of such counsel's
knowledge neither the Company nor any of the Banks is in breach or
violation of, or default under, with or without notice or lapse of
time or both, its corporate charter (including without limitation, the
Certificate of Designations) or by-laws. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement, and the Certificate of Designations do
not and will not conflict with, result in the creation or imposition
of any material lien, claim, charge, encumbrance or restriction upon
any property or assets of the Company or the Banks or the Shares
pursuant to, or constitute a material breach or violation of, or
constitute a material default under, with or without notice or lapse
of time or both, any of the terms, provisions or conditions of the
charter (including without limitation, the Certificate of
Designations) or by-laws of the Company or the Banks, or to the best
of such counsel's knowledge, any material contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license or any other agreement or instrument to which the
Company the Banks is a party or by which either of them or any of
their respective properties may be bound or any order, decree,
judgment, franchise, license, Permit, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality,
domestic or foreign, known to such counsel having jurisdiction over
the Company or the Banks or any of their respective properties which,
in each case, is material to the Company and its subsidiaries on a
consolidated basis. No authorization, approval, consent or order of,
or filing, registration or

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<PAGE> 28

qualification with, any person (including, without limitation, any
court, governmental body or authority) is required under Michigan law
in connection with the transactions contemplated by this Agreement
except as may be required under Oklahoma securities laws in connection
with the purchase and distribution of the Shares by the Underwriters.

(ix) To the best of such counsel's knowledge
holders of securities of the Company either do not have any right
that, if exercised, would require the Company to cause such securities
to be included in the Registration Statement or have waived such
right. To the best of such counsel's knowledge neither the Company
nor any of the Banks is a party to any agreement or other instrument
which grants rights for or relating to the registration of any
securities of the Company.

(x) Except as set forth in the Registration
Statement and the Prospectus, to the best of such counsel's knowledge
no action, suit or proceeding at law or in equity is pending or
threatened in writing to which the Company or the Banks is or may be a
party, and no action, suit or proceeding is pending or threatened in
writing against or affecting the Company or the Banks or any of their
properties before or by any court or governmental official,
commission, board or other administrative agency, authority or body,
or any arbitrator, wherein an unfavorable decision, ruling or finding
could have a material adverse effect on the consummation of this
Agreement or the issuance and sale of the Shares as contemplated
herein or the condition (financial or otherwise), earnings, affairs,
business, or results of operations of the Company and the Banks on a
consolidated basis or which is required to be disclosed in the
Registration Statement or the Prospectus and is not so disclosed.

(xi) No authorization, approval, consent or order
of or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions
contemplated by this Agreement, the Certificate of Designations, the
Registration Statement and the Prospectus, except such as have been
obtained under the 1933 Act, and such as may be required under state
securities laws or Interpretations or Rules of the NASD in connection
with the purchase and distribution of the Shares by the Underwriter.

(xii) The Registration Statement and the Prospectus
and any amendments or supplements thereto (other than the financial
statements or other financial data included therein or omitted
therefrom and Underwriter's Information, as to which such counsel need
express no opinion) comply as

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<PAGE> 29

to form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations as of their respective dates of
effectiveness.

(xiii) To the best of such counsel's knowledge,
there are no contracts, agreements, leases or other documents of a
character required to be disclosed in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
that are not so disclosed or filed.

(xiv) The statements under the captions
"Description of Capital Stock", "Supervision and Regulation",
"Description of the Preferred Securities", "Description of the
Subordinated Debentures" and Description of the Guarantee" in the
Prospectus, insofar as such statements constitute a summary of legal
and regulatory matters, documents or proceedings referred to therein
are accurate in all material respects and fairly present the
information called for with respect to such legal matters, documents
and proceedings.

(xv) Such counsel has been advised by the staff of
the Commission that the Registration Statement has become effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made within the time period required by Rule
424(b); to the best of such counsel's knowledge no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for a stop order are pending or threatened
by the Commission.

(xvi) Except as set forth in the Prospectus, to the
best of such counsel's knowledge there are no contractual encumbrances
or restrictions, or material legal restrictions on the ability of the
Banks (A) to pay dividends or make any other distributions on its
capital stock or to pay indebtedness owed to the Company, (B) to make
any loans or advances to, or investments in, the Company or (C) to
transfer any of its property or assets to the Company.

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<PAGE> 30

(xvii) To the best of such counsel's knowledge (A)
the business and operations of the Company and the Banks comply in all
material respects with all statutes, ordinances, laws, rules and
regulations applicable thereto and which are material to the Company
and the Banks on a consolidated basis, except in those instances where
non-compliance would not materially impair the ability of the Company
and the Banks to conduct their business; and (B) the Company and the
Banks possess and are operating in all material respects in compliance
with the terms, provisions and conditions of all permits, consents,
licenses, franchises and governmental and regulatory authorizations
("Permits") and required to conduct their businesses as described in
the Prospectus and which are material to the Company and the Banks on
a consolidated basis, except in those instances where the loss thereof
or non-compliance therewith would not have a material adverse effect
on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Company and the
Banks on a consolidated basis; to the best of such counsel's knowledge
all such Permits are valid and in full force and effect, and to the
best of such counsel's knowledge no action, suit or proceeding is
pending or threatened which may lead to the revocation, termination,
suspension or non-renewal of any such Permit, except in those
instances where the loss thereof or non-compliance therewith would not
materially impair the ability of the Company or the Banks to conduct
their businesses.

In giving the above opinion, such counsel may state that,
insofar as such opinion involves factual matters, they have relied upon
certificates of officers of the Company including, without limitation,
certificates as to the identity of any and all material contracts, indentures,
mortgages, deeds of trust, loans or credit agreements, notes, leases,
franchises, licenses or other agreements or instruments, and all material
permits, easements, consents, licenses, franchises and government regulatory
authorizations, for purposes of paragraphs (vii), (xii) and (xvi) hereof and
certificates of public officials.

Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Company
and with its independent public accountants and with you and your counsel, at
which conferences such counsel made inquiries of such officers, representatives
and accountants and discussed in detail the contents of the Registration
Statement and Prospectus and such counsel has no reason to believe (A) that the
Registration Statement or any amendment thereto (except for the financial
statements included therein or omitted therefrom Underwriter's Information, as
to which such counsel need express no opinion), at the time the Registration
Statement or any such amendment became effective, contained any untrue
statement of a material fact or

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<PAGE> 31

omitted to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading or (B) that the Prospectus or any amendment or
supplement thereto (except for the financial statements included therein or
omitted therefrom Underwriter's Information, as to which such counsel need
express no opinion), at the time the Registration Statement became effective
(or, if the term "Prospectus" refers to the prospectus first filed pursuant to
Rule 424(b) of the 1933 Act Regulations, at the time the Prospectus was
issued), at the time any such amended or supplemented Prospectus was issued, at
the Closing Date and, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, not misleading or (C) that there is any amendment to the
Registration Statement required to be filed that has not already been filed.

(f) On the Date of Delivery, you shall have received the
opinion of Richards, Layton and Finger, special Delaware counsel to the
Offerors, dated as of such date, to the effect that:

(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act and, under the Trust Agreement and
the Delaware Business Trust Act, has the trust power and
authority to conduct its business as described in the
Prospectus.

(ii) The Trust Agreement is a legal, valid and binding
agreement of the Company and the Trustees, and is enforceable
against the Company and the Trustees, in accordance with its
terms.

(iii) Under the Trust Agreement and the Delaware Business
Trust Act, the execution and delivery of the Underwriting
Agreement by the Trust, and the performance by the Trust of
its obligations thereunder, have been authorized by all
requisite trust action on the part of the Trust.

(iv) The Shares have been duly authorized by the Trust
Agreement, and when issued and sold in accordance with the
Trust Agreement, the Shares will be, subject to the
qualifications set forth in paragraph (v) below, fully paid
and nonassessable beneficial interest in the assets of the
Trust and entitled to the benefits of the Trust Agreement.

(v) The Preferred Security holders, as beneficial owners
of the Trust, will be entitled to the same limitation of
personal liability

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<PAGE> 32

extended to stockholders of private for profit corporations
organized under the General Corporation Law of the State of
Delaware. Such opinion may not that the Preferred Security
Holders may be obligated to make payments as set forth in the
Trust Agreement.

(vi) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Shares is not subject to
preemptive rights.

(vii) The issuance and sale by the Trust of the Shares, the
execution, delivery and performance by the Trust of this
Agreement, and the consummation of the transactions
contemplated by this Agreement, do not violate (a) the Trust
Agreement, or (b) any applicable Delaware law, rule or
regulation.

Such opinion may state that it is limited to the laws of the State of
Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.

(g) Bryan Cave LLP, counsel for the Underwriter, shall
have furnished you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement, the Prospectus
and such other related matters as you may reasonably request and there shall
have been furnished to such counsel such documents and other information as
they may request to enable them to pass on such matters. In giving such
opinion, Bryan Cave LLP may rely as to matters of fact upon statements and
certifications of officers of the Company and of other appropriate persons and
may rely as to matters of law, other than law of the United States and the
State of Missouri, and upon the opinion of Varnum, Riddering Schmidt & Howlett
LLP described herein.

(h) On the date of this Agreement and on the Closing Date
(and, if applicable, any Option Closing Date), the Underwriter shall have
received from KPMG Peat Marwick LLP a letter, dated the date of this Agreement
and the Closing Date (and, if applicable, the Option Closing Date),
respectively, in form and substance satisfactory to the Underwriter, confirming
that they are independent

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<PAGE> 33

public accountants with respect to the Company and the Banks, within the
meaning of the 1933 Act and the 1933 Act Regulations, and stating in effect
that:

(i) In their opinion, the consolidated financial
statements of the Company and the Banks audited by them and included
in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations.

(ii) On the basis of the procedures specified by
the American Institute of Certified Public Accountants as described in
SAS No. 71, "Interim Financial Information", inquiries of officials of
the Company and the Banks responsible for financial and accounting
matters, and such other inquiries and procedures as may be specified
in such letter, which procedures do not constitute an audit in
accordance with U.S. generally accepted auditing standards, nothing
came to their attention that caused them to believe that, if
applicable, the unaudited interim consolidated financial statements of
the Company and the Banks included in the Registration Statement do
not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and 1933 Act Regulations or
are not in conformity with U.S. generally accepted accounting
principles applied on a basis substantially consistent with the basis
for the audited consolidated financial statements of the Company and
the Banks included in the Registration Statement.

(iii) On the basis of limited procedures, not
constituting an audit in accordance with U.S. generally accepted
auditing standards, consisting of a reading of the unaudited interim
financial statements and other information referred to below, a
reading of the latest available unaudited condensed consolidated
financial statements of the Company and the Banks, inspection of the
minute books of the Company and the Banks since the date of the latest
audited financial statements of the Company and the Banks included in
the Registration Statement, inquiries of officials of the Company and
the Banks responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:

(A) as of a specified date not more than five
days prior to the date of such letter, there have been any
changes in the consolidated capital stock, allowance for loan
losses, or net loans receivable of the Company and the Banks,
any increase in the consolidated long-term debt, short-term
borrowings, obligations under capital leases or real estate
owned by the Company and the Banks, any decreases in
consolidated total assets or shareholders equity of the
Company and

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<PAGE> 34

the Banks, or any changes, decreases or increases in other
items specified by the Underwriter, in each case as compared
with amounts shown in the latest unaudited interim
consolidated statement of financial condition of the Company
and the Banks included in the Registration Statement except
in each case for changes, increases or decreases which the
Registration Statement specifically discloses, have occurred
or may occur or which are described in such letter; and

(B) for the period from the date of the latest
unaudited interim consolidated financial statements included
in the Registration Statement to the specified date referred
to in Clause (iii)(A), there were any decreases in the
consolidated interest income, net interest income, other
operating income or net income of the Company and the Banks or
in the per share amount of net income of the Company and the
Banks any increase in consolidated other operating expense of
the Company and the Banks, or any changes, decreases or
increases in any other items specified by the Underwriter, in
each case as compared with the comparable period of the
preceding year and with any other period of corresponding
length specified by the Underwriter, except in each case for
increases or decreases which the Registration Statement
discloses have occurred or may occur, or which are described
in such letter.

(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with U.S. generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by
the Underwriter which are derived from the general accounting records
and consolidated financial statements of the Company and the Banks
which appear in the Registration Statement specified by the
Underwriter in the Registration Statement, and have compared such
amounts, percentages and financial information with the accounting
records and the material derived from such records and consolidated
financial statements of the Company and the Banks have found them to
be in agreement.

In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases as specified in
Clauses (iii)(A) or (iii)(B) above, or any exceptions from such agreement
specified in Clause (iv) above, it shall be a further condition to the
obligations of the Underwriter that the Underwriter shall have determined,
after discussions with officers of the Company

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<PAGE> 35

responsible for financial and accounting matters, that such changes, decreases,
increases or exceptions as are set forth in such letters do not (x) reflect a
material adverse change in the items specified in Clause (iii)(A) above as
compared with the amounts shown in the latest unaudited consolidated statement
of financial condition of the Company and the Banks included in the
Registration Statement, (y) reflect a material adverse change in the items
specified in Clause (iii)(B) above as compared with the corresponding periods
of the prior year or other period specified by the Underwriter, or (z) reflect
a material change in items specified in Clause (iv) above from the amounts
shown in the Preliminary Prospectus distributed by the Underwriter in
connection with the offering contemplated hereby or from the amounts shown in
the Prospectus.

(i) At the Closing Date and, if applicable, the Option
Closing Date, you shall have received certificates of the chief executive
officer and the chief financial and accounting officer of the Company, which
certificates shall be deemed to be made on behalf of the Company dated as of
the Closing Date and, if applicable, the Option Closing Date, evidencing
satisfaction of the conditions of Section 6(a) and stating that (i) the
representations and warranties of the Company set forth in Section 2(a) hereof
are accurate as of the Closing Date and, if applicable, the Option Closing
Date, and that the Offerors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied at or prior to such
Closing Date; (ii) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
material adverse change in the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors and the
Banks on a consolidated basis; (iii) since such dates there has not been any
material transaction entered into by the Offerors or the Banks other than
transactions in the ordinary course of business; and (iv) they have carefully
examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue
dates, contained, and the Prospectus as amended or supplemented at such Closing
Date (and, if applicable, the Option Closing Date), contains any untrue
statement of a material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and (v)
covering such other matters as you may reasonably request. The officer's
certificate of the Company shall further state that no stop order affecting the
Registration Statement is in effect or, to their knowledge, threatened.

(j) You shall have received a certificate, dated the
Closing Date, of an authorized representative of the Trust to the effect that
to the best of his or her knowledge based upon a reasonable investigation, the
representations and

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<PAGE> 36

warranties of the Trust in this Agreement are true and correct as though made
on and as of the Closing Date; the Trust has complied with all the agreements
and satisfied all the conditions required by this Agreement to be performed or
satisfied by the Trust on or prior to the Closing Date and since the most
recent date as of which information is given in the Prospectus, except as
contemplated by the Prospectus, the Trust has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business and there has not been any
material adverse change in the condition (financial or otherwise) of the Trust.

(k) On the Closing Date, you shall have received duly
executed counterparts of the Trust Agreement, the Guarantee, the Indenture and
the Expense Agreement.

(l) The NASD, upon review of the terms of the public
offering of the Shares, shall not have objected to the Underwriter's
participation in such offering. The Federal Reserve, upon review of the terms
of the public offering of the shares, shall not have objected to the
Underwriter's participation in such offering.

(m) Prior to the Closing Date and, if applicable, the
Option Closing Date, the Company shall have furnished to you and your counsel
all such other documents, certificates and opinions as they have reasonably
requested.

All opinions, certificates, letters and other documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you. The Offerors shall furnish you with
conformed copies of such opinions, certificates, letters and other documents as
you shall reasonably request.

If any of the conditions referred to in this Section 6 shall
not have been fulfilled when and as required by this Agreement, this Agreement
and all of your obligations hereunder may be terminated by you on notice to the
Company at, or at any time before, the Closing Date or the Option Closing Date,
as applicable. Any such termination shall be without liability of the
Underwriter to the Company.

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<PAGE> 37

7. INDEMNIFICATION AND CONTRIBUTION.

(a) The Offerors agree to jointly and severally indemnify
and hold harmless the Underwriter, each of its directors, officers and agents,
and each person, if any, who controls the Underwriter within the meaning of the
1933 Act, against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and reasonable attorney fees and
expenses), joint or several, arising out of or based (i) upon any untrue
statement or alleged untrue statement of a material fact made by the Company or
the Trust contained in Section 2(a) of this Agreement (or any certificate
delivered by the Company or the Trust pursuant hereto Section 6(l) hereto) or
the registration statement as originally filed or the Registration Statement,
any Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, (ii) upon any blue sky application or other document executed by the
Company or the Trust specifically for that purpose or based upon written
information furnished by the Company or the Trust filed in any state or other
jurisdiction in order to qualify any of the Shares under the securities laws
thereof (any such application, document or information being hereinafter
referred to as a "Blue Sky Application"), (iii) any omission or alleged
omission to state a material fact in the registration statement as originally
filed or the Registration Statement, any Preliminary Prospectus or the
Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application) required to be stated therein or necessary to make the statements
therein not misleading, and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
attorney fees), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus, or in any amendment of supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or (iv) the enforcement of this indemnification
provision or the contribution provisions of Section 7(e); and shall reimburse
each such indemnified party for any reasonable legal or other expenses as
incurred, but in no event less frequently than 30 days after each invoice is
submitted, incurred by them in connection with investigating or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case
such payments shall be promptly refunded; provided, however, that the Offerors
shall not be liable in any such case to the extent, but only to the extent,
that any such losses, claims, damages, liabilities and expenses arise out of or
are based upon any untrue statement or omission or allegation thereof that has
been made therein or omitted therefrom in reliance upon and in conformity with
information furnished in writing to the Offerors through you by expressly for
use therein beneath the heading "Underwriting;" provided, that the

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<PAGE> 38

indemnification contained in this paragraph with respect to any Preliminary
Prospectus shall not inure to the benefit of the Underwriter (or of any person
controlling the Underwriter) to the extent any such losses, claims, damages,
liabilities or expenses directly results from the fact that such Underwriter
sold Shares to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been furnished
to the Underwriter in sufficient time to distribute same with or prior to the
written confirmation of the sale involved), if required by law, and if such
loss, claim, damage, liability or expense would not have arisen but for the
failure to give or send such person such document. The foregoing indemnity
agreement is in addition to any liability the Company or the Trust may
otherwise have to any such indemnified party.

(b) The Underwriter, agrees to indemnify and hold
harmless each Offeror, each of its directors, each of its officers who signed
the Registration Statement and each person, if any, who controls an Offeror
within the meaning of the 1933 Act, to the same extent as required by the
foregoing indemnity from the Company to the Underwriter, but only with respect
to information relating to such Underwriter furnished in writing to an Offeror
through you by or on behalf of it expressly for use in connection with the
registration statement as originally filed, the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
beneath the heading "Underwriting" or in a Blue Sky Application. The foregoing
indemnity agreement is in addition to any liability which the Underwriter may
otherwise have to any such indemnified party.

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<PAGE> 39

(c) If any action or claim shall be brought or asserted
against any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the indemnifying
party in writing, and the indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all expenses; provided, however, that the failure so
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under such paragraph, and
further, shall only relieve it from liability under such paragraph to the
extent prejudiced thereby. Any indemnified party or any such controlling
person shall have the right to employ separate counsel in any such action and
to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or such controlling
person unless (i) the employment thereof has been specifically authorized by
the indemnifying party in writing, (ii) the indemnifying party has failed to
assume the defense or to employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both such indemnified party or such controlling
person and the indemnifying party and such indemnified party or such
controlling person shall have been advised by such counsel that there may be
one or more legal defenses available to it that are different from or in
addition to those available to the indemnifying party (in which case, if such
indemnified party or controlling person notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party or such
controlling person) it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time and for all
such indemnified party and controlling persons, which firm shall be designated
in writing by the indemnified party. Each indemnified party and each
controlling person, as a condition of such indemnity, shall use reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. The indemnifying party shall not be liable for any settlement
of any such action effected without its written consent, but if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.

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<PAGE> 40

An indemnifying party shall not, without the prior written
consent of each indemnified party, settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the 1933 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes a release of each such
indemnified party reasonably satisfactory to each such indemnified party and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding or unless the indemnifying party shall confirm in a
written agreement with each indemnified party, that notwithstanding any
federal, state or common law, such settlement, compromise or consent shall not
alter the right of any indemnified party or controlling person to
indemnification or contribution as provided in this Agreement.

40
<PAGE> 41

(d) If the indemnification provided for in this Section 7
is unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriter on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Offerors on
the one hand and the Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Offerors on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) received by the
Offerors bear to the total underwriting discounts and commissions received by
the Underwriter, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Offerors on the one hand and of the
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Each Offeror and the Underwriter
agrees that it would not be just and equitable if contribution pursuant to this
paragraph (d) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
the first sentence of this paragraph (d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
paragraph (d), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

41
<PAGE> 42

For purposes of this paragraph (d), each person who controls
the Underwriter within the meaning of the 1933 Act shall have the same rights
to contribution as such Underwriter, and each person who controls an Offeror
within the meaning of the 1933 Act, each officer of an Offeror who shall have
signed the Registration Statement and each director of an Offeror shall have
the same rights to contribution as the Offerors subject in each case to the
preceding sentence. The obligations of the Offerors under this paragraph (d)
shall be in addition to any liability which the Offerors may otherwise have and
the obligations of the Underwriter under this paragraph (d) shall be in
addition to any liability that the Underwriter may otherwise have.

(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Offerors set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Underwriter or
any person controlling the Underwriter or by or on behalf of the Company, or
such directors or officers (or any person controlling and Offeror, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor of the Underwriter or of and
Offeror, such directors or officers (or of any person controlling the
Underwriter or an Offeror) shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.

(f) The Company agrees to indemnify the Trust against any
and all losses, claims, damages or liabilities that may become due from the
Trust under this Section 7.

8. TERMINATION. You shall have the right to terminate
this Agreement at any time at or prior to the Closing Date or, with respect to
your obligation to purchase the Option Shares, at any time at or prior to the
Option Closing Date, without liability on the part of the Underwriter to the
Offerors, if:

(a) Either Offeror shall have failed, refused, or been unable
to perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;

(b) The Offerors or the Banks shall have sustained any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree which in the judgment of the
Underwriter materially impairs the investment quality of the Shares;

42
<PAGE> 43

(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely to
have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Company
and the Banks on a consolidated basis, whether or not arising in the ordinary
course of business;

(d) There has occurred any outbreak of hostilities or
other calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable to market the Shares or enforce contracts
for the sale of the Shares;

(e) Trading generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, by any of
said exchanges or market system or by the Commission or any other governmental
authority;

(f) A banking moratorium shall have been declared by
either federal or Michigan authorities; or

(g) Any action shall have been taken by any government in
respect of its monetary affairs which, in your reasonable judgment, has a
material adverse effect on the United States securities markets.

If this Agreement shall be terminated pursuant to this Section
8, the Offerors shall not then be under any liability to the Underwriter except
as provided in Sections 5 and 7 hereof.

10. EFFECTIVE DATE OF AGREEMENT. If the Registration
Statement is not effective at the time of execution of this Agreement, this
Agreement shall become effective on the Effective Date at the time the
Commission declares the Registration Statement effective. The Company shall
immediately notify the Underwriter when the Registration Statement becomes
effective.

If the Registration Statement is effective at the time of
execution of this Agreement, this Agreement shall become effective at the
earlier of 11:00 a.m. St. Louis time, on the first full business day following
the day on which this Agreement is executed, or at such earlier time as the
Underwriter shall release the Shares for initial public offering. The
Underwriter shall notify the Company

43
<PAGE> 44

immediately after it has taken any action which causes this Agreement to become
effective.

Until such time as this Agreement shall have become effective,
it may be terminated by the Offerors, by notifying you, or by you by notifying
either Offerors, except that the provisions of Sections 5 and 7 shall at all
times be effective.

11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The representations, warranties, indemnities, agreements and other
statements of the Offerors and their officers set forth in or made pursuant to
this Agreement and the agreements of the Underwriter contained in Section 7
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Officers or controlling persons of
either Offeror, or by or on behalf of the Underwriter or controlling persons of
the Underwriter or any termination or cancellation of this Agreement and shall
survive delivery of and payment for the Shares.

12. NOTICES. Except as otherwise provided in this
Agreement, all notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered by hand, mailed by
registered or certified mail, return receipt requested, or transmitted by any
standard form of telecommunication and confirmed. Notices to either Offeror
shall be sent to 230 West Main Street, P.O. Box 491, Ionia, Michigan 48846,
Attention: William R. Kohls (with a copy to Varnum, Riddering, Schmidt &
Howlett LLP, 330 Bridge Street, N.W., P.O. Box 352, Grand Rapids, Michigan
49501-0352, Attention: Michael G. Wooldridge, Esq.); and notices to the
Underwriter shall be sent to Stifel, Nicolaus & Company, Incorporated, 500
North Broadway, Suite 1500, St. Louis, Missouri 63102, Attention: Rick E.
Maples (with a copy to Bryan Cave LLP, 211 North Broadway, Suite 3600, St.
Louis, Missouri 63102, Attention: James L. Nouss, Jr., Esq.).

13. PARTIES. The Agreement herein set forth is made
solely for the benefit of the Underwriter and the Offerors and, to the extent
expressed, directors and officers of the Offerors, any person controlling the
Offerors or the Underwriter, and their respective successors and assigns. No
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser,
in his status as such purchaser, from the Underwriter of the Shares.

14. GOVERNING LAW. This Agreement shall be governed by
the laws of the State of Missouri, without giving effect to the choice of law
or conflicts of law principles thereof.

44
<PAGE> 45

15. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and when a counterpart has been executed by each party
hereto all such counterparts taken together shall constitute one and the same
Agreement.

If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this shall become a binding agreement between the Company, the Trust and you in
accordance with its terms.

Very truly yours,

INDEPENDENT BANK CORPORATION

By: ___________________________
Name:
Title:

IBC CAPITAL FINANCE

By: __________________________
Name:
Title:

CONFIRMED AND ACCEPTED,
as of November __, 1996.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

By: _______________________________
Name:
Title:

45
<PAGE> 46

Schedule 1

Securities

Designation: % Cumulative Trust Preferred Securities
Date of maturity:
Liquidation preference amount per unit: $25
Number of units:
Distribution rate per unit:
Purchase price per unit:
Public offering price per unit:
Underwriting Commission:

<PAGE> 1
EXHIBIT 4.1

[FORM OF INDENTURE]

INDEPENDENT BANK CORPORATION

AND

STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE

INDENTURE

___________% SUBORDINATED DEBENTURES

DATED AS OF __________, 1996.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II Terms and Conditions of the Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Section 2.1. Designation and Principal Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.3. Form and Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.4. Global Debenture. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.5. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE III Redemption of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Section 3.1. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.2. Special Event Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.3. Optional Redemption by Company. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.4. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.5. Payment Upon Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.6. No Sinking Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE IV Extension of Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Section 4.1. Extension of Interest Payment Period. . . . . . . . . . . . . . . . . . . . . 15
Section 4.2. Notice of Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.3. Limitation of Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE V Particular Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Section 5.1. Payment of Principal, Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.2. Maintenance of Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.3. Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 5.4. Appointment to Fill Vacancy in Office of Trustee. . . . . . . . . . . . . . . . . . . . 19
Section 5.5. Compliance with Consolidation Provisions. . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.6. Limitation on Dividends; Transactions with Affiliates. . . . . . . . . . . . . . . . . 19
Section 5.7. Covenants as to IBC Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C> <C>
ARTICLE VI Securityholders' Lists and Reports by the Company and the Trustee . . . . . . . . . . . . . . . 20

Section 6.1. Company to Furnish Trustee Names and Addresses of Securityholders. . . . . . . . . . . 20
Section 6.2. Preservation Of Information Communications With
Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.3. Reports by the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.4. Reports by the Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE VII Remedies of the Trustee and Securityholders on Event of Default . . . . . . . . . . . . . . . . . . . . 21

Section 7.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.2. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . 24
Section 7.3. Application of Moneys Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 7.4. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.5. Rights and Remedies Cumulative; Delay or Omission
Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.6. Control by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.7. Undertaking to Pay Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE VIII Form of Debenture and Original Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Section 8.1 Form of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 8.2 Original Issue of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE IX. Concerning the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Section 9.1. Certain Duties and Responsibilities Trustee. . . . . . . . . . . . . . . . . . . . . . 28
Section 9.2. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.3. Trustee Not Responsible for Recitals or Issuance or Securities. 31
Section 9.4. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.5. Moneys Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.6. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.7. Reliance on Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.8. Disqualification: Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.9. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.10. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.11. Acceptance of Appointment By Successor. . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.12. Merger, Conversion, Consolidation or Succession to Business 35
Section 9.13. Preferential Collection of Claims Against the
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>

ii
<PAGE> 4

<TABLE>
<S> <C> <C>
ARTICLE X Concerning the Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Section 10.1. Evidence of Action by Securityholders. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.2. Proof of Execution by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.3. Who May be Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 10.4. Certain Securities Owned by Company Disregarded. . . . . . . . . . . . . . . . . . . . 37
Section 10.5. Actions Binding on Future Securityholders. . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE XI. Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Section 11.1. Supplemental Indentures Without the Consent of Securityholders. . . . . . . . . . . . . 38
Section 11.2. Supplemental Indentures With Consent of Securityholders. . . . . . . . . . . . . . . . 39
Section 11.3. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 11.4. Securities Affected by Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . 40
Section 11.5. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . 40

ARTICLE XII Successor Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Section 12.1. Company May Consolidate, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 12.2. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 12.3. Evidence of Consolidation, Etc. to Trustee. . . . . . . . . . . . . . . . . . . . . . . 42

ARTICLE XIII Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Section 13.1. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 13.2. Discharge of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 13.3. Deposited Moneys to be Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 13.4. Payment of Monies Held by Paying Agents. . . . . . . . . . . . . . . . . . . . . . . . 43
Section 13.5. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE XIV Immunity of Incorporators, Stockholders, Officers and Directors . . . . . . . . . . . . . . . . . . . . 43

Section 14.1. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE XV Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Section 15.1. Effect on Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.2. Actions by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.3. Surrender of Company Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.5. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 15.6. Treatment of Debentures as Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 15.7. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 15.8. Payments on Business Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
</TABLE>

iii
<PAGE> 5

<TABLE>
<S> <C> <C>
Section 15.9. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 15.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 15.11 Separability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 15.12 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 15.13 Acknowledgment of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

ARTICLE XVI. Subordination of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Section 16.1. Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 16.2. Default on Senior Debt, Subordinated Debt or Additional Senior
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 16.3. Liquidation; Dissolution; Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 16.4. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 16.5. Trustee to Effectuate Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 16.6. Notice by the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 16.7. Rights of the Trustee; Holders of Senior Indebtedness. . . . . . . . . . . . . . . . . 51
Section 16.8. Subordination May Not Be Impaired. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
</TABLE>

iv
<PAGE> 6

INDENTURE, dated as of ____________________________, 1996, among
Independent Bank Corporation, a Michigan corporation (the "Company") and State
Street Bank and Trust Company, a Massachusetts corporation, as trustee (the
"Trustee");

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of a new series of its securities to be known as its ___________ %
Junior Subordinated Debentures due 2026 (hereinafter referred to as the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in this
Indenture;

WHEREAS, IBC Capital Finance, a Delaware statutory business trust (
the "Trust"), has offered to the public $___ million aggregate liquidation
amount of its ___% Trust Preferred Securities (the "Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering, together with the proceeds
of the issuance and sale by the Trust to the Company of $___ million aggregate
liquidation amount of its ___% Trust Common Securities, in $____ million
aggregate principal amount of the Debentures; and

WHEREAS, the Company has requested that the Trustee execute and
deliver this Indenture and all requirements necessary to make this Indenture a
valid instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture has been duly authorized in all respects:

WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:

ARTICLE I.
DEFINITIONS

SECTION 1.1. DEFINITIONS OF TERMS.

The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural
as well as the singular. All other terms used in this Indenture that are
defined in the TrustIndenture Act of 1939, as amended, or that are by reference
in such Act defined in the Securities Act

<PAGE> 7

of 1933, as amended (except as herein otherwise expressly provided or unless
the context otherwise requires), shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of the execution of this instrument.

"Accelerated Maturity Date" means if the Company elects to accelerate
the Maturity Date in accordance with Section 2.2(c), the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after
_______________________________________, 2001.

"Additional Interest" shall have the meaning set forth in Section 2.5.

"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations do not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Subordinated Debentures or to rank pari passu in right of payment with the
Subordinated Securities Debentures. For purposes of this definition, "claim"
shall have the meaning assigned thereto in Section 101(4) of the United States
Bankruptcy Code of 1978, as amended.

"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.

"Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Securities appointed with respect to all or any
series of the Securities by the Trustee pursuant to Section 2.10.

"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.

"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee of such Board.

"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.

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<PAGE> 8

"Business Day" means, with respect to any series of Securities, any
day other than a day on which Federal or State banking institutions in the
Borough of Manhattan, The City of New York, are authorized or obligated by law,
executive order or regulation to close.

"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company. The Certificate need not comply with the provisions of Section
15.7.

"Common Securities" means undivided beneficial interests in the assets
of IBC Capital which rank pari passu with Preferred Securities issued by IBC
Capital; provided, however, that upon the occurrence of an Event of Default,
the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.

"Common Securities Guarantee" means any guarantee that the Company may
enter into with State Street Bank and Trust Company or other Persons that
operate directly or indirectly for the benefit of holders of Common Securities
of IBC Capital.

"Company" means Independent Bank Corporation, a corporation duly
organized and existing under the laws of the State of Michigan, and, subject to
the provisions of Article Ten, shall also include its successors and assigns.

"Compounded Interest" shall have the meaning set forth in Section 4.1.

"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two International
Place, Fourth Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Department.

"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.

"Debentures" means the Subordinated Debentures authenticated and
delivered under this Indenture.

"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) and
every obligation of the type referred to in clauses (i) through (v) of another
Person and all dividends of another Person the

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<PAGE> 9

payment of which, in either case, such Person has guaranteed or is responsible
or liable, directly or indirectly, as obligor or otherwise.

"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.

"Deferred Interest" shall have the meaning set forth in Section 4.1.

"Depositary" means, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.1 or 2.11.

"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Debentures held by the Property Trustee are to
be distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Trust Agreement.

"Event of Default" means, with respect to Securities of a particular
series, any event specified in Section 7.1, continued for the period of time,
if any, therein designated.

"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.

"Extended Maturity Date" means if the Company elects to extend the
Maturity Date in accordance with Section 2.2(b), the date selected by the
Company which is after the Scheduled Maturity Date but before October _____,
2044.

"Federal Reserve" means the Board of Governors of the Federal Reserve
System.

"Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with the
Indenture, which shall be registered in the name of the Depositary or its
nominee.

"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on
any such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided,

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<PAGE> 10

however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the
Governmental Obligation or the specific payment of principal of or interest on
the Governmental Obligation evidenced by such depositary receipt.

"Herein," "hereof," and "hereunder," and other words of similar
import, refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.

"IBC Capital" means IBC Capital Finance, a Delaware business trust
created for the purpose of issuing preferred securities in connection with the
issuance of Securities under this Indenture.

"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.

"Interest Payment Date," when used with respect to any installment of
interest on the Debentures, means the date specified in the Debenture or in a
Board Resolution or in an indenture supplemental hereto with respect to such
series as the fixed date on which an installment of interest with respect to
the Debentures is due and payable.

"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment Company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.

"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any.

"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4.

"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company that is delivered to the Trustee in accordance with
the terms hereof. Each such certificate shall include the statements provided
for in Section 15.7, if and to the extent required by the provisions thereof.

"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include
the statements provided for in Section 15.7, if and to the extent required by
the provisions thereof.

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"Optional Redemption Price" shall have the meaning set forth in
Section 3.3.

"Outstanding," when used with reference to Debentures of any series,
means, subject to the provisions of Section 10.4, as of any particular time,
all Debentures of that series theretofore authenticated and delivered by the
Trustee under this Indenture, except (a) Debentures theretofore cancelled by
the Trustee or any paying agent, or delivered to the Trustee or any paying
agent for cancellation or that have previously been cancelled; (b) Debentures
or portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided, however, that if such
Debentures or portions of such Debentures are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
Three provided, or provision satisfactory to the Trustee shall have been made
for giving such notice; and (c) Debentures in lieu of or in substitution for
which other Debentures shall have been authenticated and delivered pursuant to
the terms of Section [2.7].

"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization or government
or any agency or political subdivision thereof.

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section ________ in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security

"Preferred Securities" means undivided beneficial interests in the
assets of a IBC Capital which rank pari passu with Common Securities issued by
IBC Capital; provided, however, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.

"Preferred Securities Guarantee" means any guarantee that the Company
may enter into with State Street Bank and Trust Company or other Persons that
operate directly or indirectly for the benefit of holders of Preferred
Securities of IBC Capital.

"Property Trustee" has the meaning set forth in the Trust Agreement of
IBC Capital Finance.

"Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Treasurer, any trust officer, any corporate trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

"Scheduled Maturity Date" means November _____, 2026.

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<PAGE> 12

"Securities" means any Debentures.

"Securityholder," "holder of Securities," "registered holder," or
other similar term, means the Person or Persons in whose name or names a
particular Security shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.

"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debentures or to other Debt
which is pari passu with, or subordinated to, the Subordinated Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any Debt
of the Company which when incurred and without respect to any election under
section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) Debt to any employee of the Company, (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Subordinated Debentures as a result
of the subordination provisions of the Indenture would be greater than they
otherwise would have been as a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject; (v) Debt which
constitutes Subordinated Debt, and (vi) any other debt securities issued
pursuant to the Indenture.

"Special Event" means a Tax Event or an Investment Company Event.

"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.

"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any

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<PAGE> 13

amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance
of the Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States federal income tax purposes or (iii) the
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.

"Trust Agreement" means the Amended and Restated Trust Agreement,
dated __________________, of IBC Capital Finance.

"Trustee" means State Street Bank and Trust Company and, subject to
the provisions of Article Seven, shall also include its successors and assigns,
and, if at any time there is more than one Person acting in such capacity
hereunder, "Trustee" shall mean each such Person. The term "Trustee" as used
with respect to a particular series of the Securities shall mean the trustee
with respect to that series.

"Trust Indenture Act," means the Trust Indenture, subject to the
provisions of Sections 11.1, 11.2, and 12.1, as in effect at the date of
execution of this instrument.

"Trust Securities" means Common Securities and Preferred Securities of
a IBC Capital.

"Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.

ARTICLE II
ISSUE, DESCRIPTION,TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF THE DEBENTURES

SECTION 2.1.DESIGNATION AND PRINCIPAL AMOUNT.

There is hereby authorized a series of Securities designated the "___%
Subordinated Debentures due 2026", limited in aggregate principal amount to
$___ million, which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Debentures pursuant to Section
___ of this Indenture.

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SECTION 2.2. MATURITY.

(a) The Maturity Date will be either:

(i) the Scheduled Maturity Date; or

(ii) if the Company elects to extend the Maturity
Date beyond the Scheduled Maturity Date in accordance with
Section 2.2(b), the Extended Maturity Date; or

(iii) If the Company elects to accelerate the
Maturity Date to be prior a date to the Scheduled Maturity
Date in accordance with Section 2.2(c), the Accelerated
Maturity Date.

(b) the Company may at any time before the day which is
90 days before the Scheduled Maturity Date, elect to extend the
Maturity Date only once to the Extended Maturity Date provided that
the Company has received the prior approval of the Federal Reserve if
then required under applicable capital guidelines or policies of the
Federal Reserve and further provided that the following conditions in
this Section 2.2(b) are satisfied both at the date the Company gives
notice in accordance with Section 2.2(d) of its election to extend the
Maturity Date and at the Scheduled Maturity Date:

(i) the Company is not in bankruptcy, otherwise
insolvent or in liquidation;

(ii) the Company is not in default on any
Securities issued to IBC Capital or any trustee of IBC Capital
in connection with the issuance of Trust Securities by IBC
Capital;

(iii) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued by it and no
deferred Distributions are accumulated; and

(c) the Company may at any time before the day which is
90 days before the Scheduled Maturity Date and after ______________
________________ , 2001, elect to shorten the Maturity Date only once
to the Accelerated Maturity Date provided that the Company has
received the prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal
Reserve.

(d) if the Company elects to extend the Maturity Date in
accordance with Section 2.2(b), the Company shall give notice to
registered holders of the Debentures, the Property Trustee and the
Trust of the extension of the Maturity Date and the Extended Maturity
Date at least 90 days before the Scheduled Maturity Date.

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<PAGE> 15

(e) if the Company elects to accelerate the Maturity Date
in accordance with Section 2.2(c), the Company shall give notice to
registered holders of the Debentures, the Property Trustee and the
Trust of the acceleration of the Maturity Date and the Accelerated
Maturity Date at least 90 days before the Accelerated Maturity Date.

SECTION 2.3. FORM AND PAYMENT.

Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions at the
office or agency of the Trustee; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the Holder at such
address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of any Debentures is the Property Trustee, the
payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such Debentures held by the Property Trustee
will be made at such place and to such account as may be designated by the
Property Trustee.

SECTION 2.4. GLOBAL DEBENTURE.

(a) In connection with a Dissolution Event,

(i) the Debentures in certificated form may be
presented to the Trustee by the Property Trustee in exchange
for a global Debenture in an aggregate principal amount equal
to the aggregate principal amount of all outstanding
Debentures (a "Global Debenture"), to be registered in the
name of the Depositary, or its nominee, and delivered by the
Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the
Administrative Trustees. The Company upon any such
presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with this
Indenture. Payments on the Debentures issued as a Global
Debenture will be made to the Depositary; and

(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated
form may be presented to the Trustee by the Property Trustee
and any Preferred Security Certificate which represents
Preferred Securities other than Preferred Securities held by
the Clearing Agency or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests
in Debentures presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to
the Security Registrar for transfer or reissuance at which
time such Preferred Security Certificates will be canceled and
a Debenture, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder
of such Preferred Security Certificate, as the case may be,
with an aggregate

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<PAGE> 16

principal amount equal to the aggregate liquidation amount of
the Preferred Security Certificate canceled, will be executed
by the Company and delivered to the Trustee for authentication
and delivery in accordance with this Indenture. On issue of
such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been canceled.

(b) A Global Debenture may be transferred, in whole but
not in part, only to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a
nominee of such successor Depositary.

(c) If at any time the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary or if at any
time the Depositary for such series shall no longer be registered or
in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, and a successor
Depositary for such series is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such
condition, as the case may be, the Company will execute, and the
Trustee, upon written notice from the Company, will authenticate and
deliver the Debentures in definitive registered form without coupons,
in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Debenture in exchange for
such Global Debenture. In addition, the Company may at any time
determine that the Debentures shall no longer be represented by a
Global Debenture. In such event the Company will execute, and the
Trustee, upon receipt of an Officers Certificate evidencing such
determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture in exchange for such
Global Debenture. Upon the exchange of the Global Debenture for such
Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be canceled by
the Trustee. Such Debentures in definitive registered form issued in
exchange for the Global Debenture shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose
names such Securities are so registered.

SECTION 2.5. INTEREST.

(a) Each Debenture will bear interest at the rate of ___%
per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject to
the provisions of Article Four) quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each, an "Interest
Payment Date," commencing on __________, 1997), to the Person in whose
name such Debenture or any predecessor Debenture is registered, at the
close of business on the

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regular record date for such interest installment, which, in
respect of (i) Debentures of which the Property Trustee is the Holder
and the Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business Day
next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if (i) the Debentures are held by the Institutional
Trustee and the Preferred Securities are no longer in book-entry only
form or (ii) the Debentures are not represented by a Global Debenture,
the Company may select a regular record date for such interest
installment which shall be any date at least one Business Day before an
Interest Payment Date.

(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which
interest is computed, will be computed on the basis of the actual
number of days elapsed in such a 30-day period. In the event that any
date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.

(c) If, at any time while the Property Trustee is the
Holder of any Debentures, the Trust or the Property Trustee is
required to pay any taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed by the
United States, or any other taxing authority, then, in any case, the
Company will pay as additional interest ("Additional Interest") on the
Debentures held by the Property Trustee, such additional amounts as
shall be required so that the net amounts received and retained by the
Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts
the Trust and the Property Trustee would have received had no such
taxes, duties, assessments or other government charges been imposed.

ARTICLE III.
REDEMPTION OF DEBENTURES

SECTION 3.1. REDEMPTION.

Subject to the Company having received prior approval of the Federal
Reserve, if then required under the applicable capital guidelines or policies
of the Federal Reserve, the Company may redeem the Debentures of any series
issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.1 hereof.

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SECTION 3.2. SPECIAL EVENT REDEMPTION.

Subject to the Company having received the prior approval of the
Federal Reserve, if then required under the applicable capital guidelines or
policies of the Federal Reserve, if a Special Event has occurred and is
continuing, then, notwithstanding Section 3.3(a) but subject to Section
3.3(b), the Company shall have the right upon not less than 30 days nor more
than 60 days notice to the Holders of the Debentures to redeem the Debentures,
in whole but not in part, for cash within 90 days following the occurrence of
such Special Event (the "90-Day Period") at a redemption price equal to 100% of
the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Redemption Price"), provided that
if at the time there is available to the Company the opportunity to eliminate,
within the 90-Day Period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities issued by the
Trust, the Company shall pursue such Ministerial Action in lieu of redemption,
and, provided, further, that the Company shall have no right to redeem the
Debentures while the Trust is pursuing any Ministerial Action pursuant to its
obligations under the Declaration. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or such earlier time
as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New
York time, on the date such Redemption Price is to be paid.

SECTION 3.3. OPTIONAL REDEMPTION BY COMPANY.

(a) Subject to the provisions of Section 3.3(b), except
as otherwise may be specified in this Indenture, the Company shall
have the right to redeem the Debentures, in whole or in part, from
time to time, on or after _________, 2001, at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be
made upon not less than 30 days nor more than 60 days notice to the
Holder of the Debentures, at the Optional Redemption Price. If the
Debentures are only partially redeemed pursuant to this Section 3.3,
the Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee; provided, that if at the time of
redemption the Debentures are registered as a Global Debenture, the
Depositary shall determine, in accordance with its procedures, the
principal amount of such Debentures held by each Holder of Debenture
to be redeemed. The Optional Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such
earlier time as the Company determines provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional
Redemption Price by 10:00 a.m., New York time, on the date such
Optional Redemption Price is to be paid.

(b) If a partial redemption of the Debentures would
result in the delisting of the Preferred Securities issued by the
Trust from The Nasdaq National Market or any national securities
exchange or other organization on which the Preferred Securities are
then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.

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SECTION 3.4. NOTICE OF REDEMPTION.

(a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the
Debentures of any series in accordance with the right reserved so to
do, the Company shall, or shall cause the Trustee to, give notice of
such redemption to holders of the Debentures of such series to be
redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the
date fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register unless a
shorter period is specified in the Debentures to be redeemed. Any
notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the
registered holder receives the notice In any case, failure duly to
give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the
notice, shall not affect the validity of the proceedings for the
redemption of any other Debentures of such series or any other series.
In the case of any redemption of Debentures prior to the expiration of
any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with
any such restriction.

Each such notice of redemption shall specify the date fixed
for redemption and the redemption price at which Debentures of that
series are to be redeemed, and shall state that payment of the
redemption price of such Debentures to be redeemed will be made at the
office or agency of the Company in the Borough of Manhattan, the City
and State of New York, upon presentation and surrender of such
Debentures, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, that from and after said
date interest will cease to accrue and that the redemption is for a
sinking fund, if such is the case. If less than all the Debentures of
a series are to be redeemed, the notice to the holders of Debentures
of that series to be redeemed in whole or in part shall specify the
particular Debentures to be so redeemed. In case any Security is to
be redeemed in part only, the notice that relates to such Security
shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon
surrender of such Security, a new Security or Debentures of such
series in principal amount equal to the unredeemed portion thereof.

(b) If less than all the Debentures of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice
in advance of the date fixed for redemption as to the aggregate
principal amount of Debentures of the series to be redeemed, and
thereupon the Trustee shall select, by lot or in such other manner as
it shall deem appropriate and fair in its discretion and that may
provide for the selection of a portion or portions (equal to
twenty-five U.S. dollars ($25) or any integral multiple thereof) of
the principal amount of such Debentures of a denomination larger than
$25, the Debentures to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part.

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<PAGE> 20

The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or any
Vice President, instruct the Trustee or any paying agent to call all
or any part of the Debentures of a particular series for redemption
and to give notice of redemption in the manner set forth in this
Section, such notice to be in the name of the Company or its own name
as the Trustee or such paying agent may deem advisable. In any case
in which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be delivered
to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records,
or suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may be
required under the provisions of this Section.

SECTION 3.5. PAYMENT UPON REDEMPTION.

(a) If the giving of notice of redemption shall have been
completed as above provided, the Debentures or portions of Debentures
of the series to be redeemed specified in such notice shall become due
and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the
date fixed for redemption and interest on such Debentures or portions
of Debentures shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such
Security or portion thereof. On presentation and surrender of such
Debentures on or after the date fixed for redemption at the place of
payment specified in the notice, said Debentures shall be paid and
redeemed at the applicable redemption price for such series, together
with interest accrued thereon to the date fixed for redemption (but if
the date fixed for redemption is an interest payment date, the
interest installment payable on such date shall be payable to the
registered holder at the close of business on the applicable record
date pursuant to Section 3.3).

(b) Upon presentation of any Security of such series that
is to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the Security
is presented shall deliver to the holder thereof, at the expense of
the Company, a new Security or Debentures of the same series of
authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.

SECTION 3.6. NO SINKING FUND.

The Debentures are not entitled to the benefit of any sinking fund.

ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.

The Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such

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<PAGE> 21

Debentures for a period not exceeding 20 consecutive quarters (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable; provided that no Extended Interest Payment
Period may extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will
bear interest thereon at the Coupon Rate compounded quarterly for each quarter
of the Extended Interest Payment Period ("Compounded Interest"). At the end of
the Extended Interest Payment Period, the Company shall pay all interest
accrued and unpaid on the Debentures, including any Additional Interest and
Compounded Interest (together, "Deferred Interest") that shall be payable to
the Holders of the Debentures in whose names the Debentures are registered in
the Security Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest
Payment Period, the Company may further extend such period, provided that such
period together with all such further extensions thereof shall not exceed 20
consecutive quarters, or extend beyond the maturity date of the Debentures.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.

SECTION 4.2. NOTICE OF EXTENSION.

(a) If the Property Trustee is the only registered Holder
of the Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the
Administrative Trustees, the Property Trustee and the Trustee of its
selection of such Extended Interest Payment Period one Business Day
before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are payable,
or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to the Nasdaq
National Market or other applicable self-regulatory organization or to
holders of the Preferred Securities issued by the Trust, but in any
event at least one Business Day before such record date.

(b) If the Property Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Debentures
and the Trustee written notice of its selection of such Extended
Interest Payment Period at least one Business Day before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the
Company is required to give notice of the record or payment date of
such interest payment to the Nasdaq National Market or other
applicable self-regulatory organization or to Holders of the
Debentures.

(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of
the 20 quarters permitted in the maximum Extended Interest Payment
Period permitted under Section 4.1.

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SECTION 4.3. LIMITATION OF TRANSACTIONS.

If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, or (ii) there shall have occurred any
Event of Default, as defined in the Indenture, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of its
common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company
to purchase shares of its common stock, (ii) the purchase of fractional
interests in shares of its capital stock pursuant to the conversion or exchange
provisions of such capital stock or security being converted or exchanged, or
(iii) payments under the Guaranty) and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank pari passu with or
junior to the Debentures; provided, however, the Company may declare and pay a
stock dividend where the dividend stock is the same stock as that on which the
dividend is being paid.

ARTICLE V.
PARTICULAR COVENANTS OF THE COMPANY

SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debentures of that
series at the time and place and in the manner provided herein and established
with respect to such Debentures.

SECTION 5.2. MAINTENANCE OF AGENCY.

So long as any series of the Securities remain Outstanding, the
Company agrees to maintain an office or agency in the Borough of Manhattan, the
City and State of New York, with respect to each such series and at such other
location or locations as may be designated as provided in this Section 5.2,
where (i) Securities of that series may be presented for payment, (ii)
Securities of that series may be presented as hereinabove authorized for
registration of transfer and exchange, and (iii) notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be given or served, such designation to continue with respect to such office or
agency until the Company shall, by written notice signed by its President or a
Vice President and delivered to the trustee, designate some other office or
agency for such purposes or any of them. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, notices and demands may
be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
notices and demands.

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<PAGE> 23

SECTION 5.3. PAYING AGENTS.

(a) If the Company shall appoint one or more paying
agents for all or any series of the Securities, other than the
Trustee, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this Section:

(i) that it will hold all sums held by it as such
agent for the payment of the principal of (and premium, if
any) or interest on the Securities of that series (whether
such sums have been paid to it by the Company or by any other
obligor of such Securities) in trust for the benefit of the
Persons entitled thereto;

(ii) that it will give the Trustee notice of any
failure by the Company (or by any other obligor of such
Securities) to make any payment of the principal of (and
premium, if any) or interest on the Securities of that series
when the same shall be due and payable;

(iii) that it will, at any time during the
continuance of any failure referred to in the preceding
paragraph (a)(2) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and

(iv) that it will perform all other duties of
paying agent as set forth in this Indenture.

(b) If the Company shall act as its own paying agent with
respect to any series of the Securities, it will on or before each due
date of the principal of (and premium, if any) or interest on
Securities of that series, set aside, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay
such principal (and premium, if any) or interest so becoming due on
Securities of that series until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure (by it or any other
obligor on such Securities) to take such action. Whenever the Company
shall have one or more paying agents for any series of Securities, it
will, prior to each due date of the principal of (and premium, if any)
or interest on any Securities of that series, deposit with the paying
agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly
notify the Trustee of this action or failure so to act.

(c) Notwithstanding anything in this Section to the
contrary, (i) the agreement to hold sums in trust as provided in this
Section is subject to the provisions of Section [11.5], and (ii) the
Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or
direct any paying agent to pay, to the Trustee all sums held in trust
by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such
sums were

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<PAGE> 24

held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.

SECTION 5.4. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.

The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 9.10, a
Trustee, so that there shall at all times be a Trustee hereunder.

SECTION 5.5. COMPLIANCE WITH CONSOLIDATION PROVISIONS.

The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article Ten hereof are complied with.

SECTION 5.6. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.

If Securities are issued to a IBC Capital or a trustee of such trust
in connection with the issuance of Trust Securities by IBC Capital and (i)
there shall have occurred any event that would constitute an Event of Default,
(ii) IBC Capital shall be in default with respect to its payment of any
obligations under the Preferred Securities Guarantee relating to IBC Capital or
(iii) the Company shall have given notice of its election to defer payments of
interest on such Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, and (b) the Company shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior in interest to the Debentures; provided, however, that the
restriction in clause (a) above does not apply to any stock dividends paid by
the Company where the dividend stock is the same as that on which the dividend
is being paid.

SECTION 5.7. COVENANTS AS TO IBC CAPITAL.

For so long as such Trust Securities of IBC Capital remain
outstanding, the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of IBC Capital; provided, however, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Securities, (ii) use its reasonable efforts to cause
IBC Capital (a) to remain a business trust, except in connection with a
distribution of Securities, the redemption of all of the Trust Securities of
IBC Capital or certain mergers, consolidations or amalgamations, each as
permitted by the Trust Agreement of IBC Capital, and (b) to otherwise continue
not to be treated as an association taxable as a corporation or partnership for
United States federal income tax purposes and (iii) to use its reasonable
efforts to cause each holder of Trust Securities to be treated as owning an
individual beneficial interest in the Securities.

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<PAGE> 25

If the Debentures are to be issued as a Global Debenture in connection
with the distribution of the Debentures to the holders of the Preferred
Securities issued by the Trust upon a Dissolution Event, the Company will use
its best efforts to list such Debentures on the Nasdaq National Market or on
such other exchange as the Preferred Securities are then listed.

ARTICLE VI.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE

SECTION 6.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS.

The Company will furnish or cause to be furnished to the Trustee (a)
on a monthly basis on each regular record date (as defined in Section 2.3) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of each series of Securities as of such regular record
date, provided that the Company shall not be obligated to furnish or cause to
furnish such list at any time that the list shall not differ in any respect
from the most recent list furnished to the Trustee by the Company and (b) at
such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, that, in either case, no such list need be furnished for any
series for which the Trustee shall be the Security Registrar.

SECTION 6.2. PRESERVATION OF INFORMATION COMMUNICATIONS WITH
SECURITYHOLDERS.

(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and
addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 6.1 and as to the names
and addresses of holders of Securities received by the Trustee in its
capacity as Security Registrar (if acting in such capacity).

(b) The Trustee may destroy any list furnished to it as
provided in Section 6.1 upon receipt of a new list so furnished.

(c) Securityholders may communicate as provided in
Section 312(b) of the Trust Indenture Act with other Securityholders
with respect to their rights under this Indenture or under the
Securities.

SECTION 6.3. REPORTS BY THE COMPANY.

(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file

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<PAGE> 26
information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act;
or, if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.

(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed
from to time by the Commission, such additional information, documents
and reports with respect to compliance by the Company with the conditions
and covenants provided for in this Indenture as may be required from time
to time by such rules and regulations.

(c) The Company covenants and agrees to transmit by mail, first
class postage prepaid, or reputable over-night delivery service that
provides for evidence of receipt, to the Securityholders, as their names
and addresses appear upon the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.

SECTION 6.4. REPORTS BY THE TRUSTEE.

(a) On or before July 15 in each year in which any of the Securities
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon
the Security Register, a brief report dated as of the preceding May 15,
if and to the extent required under Section 313(a) of the Trust Indenture
Act.

(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.

(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Securities are listed
(if so listed) and also with the Commission. The Company agrees to
notify the Trustee when any Securities become listed on any stock
exchange.

ARTICLE VII.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT

SECTION 7.1. EVENTS OF DEFAULT.

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<PAGE> 27

(a) Whenever used herein with respect to Securities of a particular
series, "Event of Default" means any one or more of the following events
that has occurred and is continuing:

(i) the Company defaults in the payment of any installment of
interest upon any of the Securities of that series, as and when the
same shall become due and payable, and continuance of such default
for a period of days; provided, however, that a valid
extension of an interest payment period by the Company in
accordance with the terms of any indenture supplemental hereto,
shall not constitute a default in the payment of interest for this
purpose;

(ii) the Company defaults in the payment of the principal of
(or premium, if any, on) any of the Securities of that series as
and when the same shall become due and payable whether at maturity,
upon redemption, by declaration or otherwise, or in any payment
required by any sinking or analogous fund established with respect
to that series; provided, however, that a valid extension of the
maturity of such Securities in accordance with the terms of any
indenture supplemental hereto shall not constitute a default in the
payment of principal or premium, if any;

(iii) the Company fails to observe or perform any other of its
covenants or agreements with respect to the Debentures or otherwise
established with respect to the Debentures pursuant to Section 2.1
hereof (other than a covenant or agreement that has been expressly
included in this Indenture solely for the benefit of one or more
series of Securities other than such series) for a period of 90
days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a
"Notice of Default" hereunder, shall have been given to the Company
by the Trustee, by registered or certified mail, or to the Company
and the Trustee by the holders of at least 25% in principal amount
of the Securities of that series at the time Outstanding;

(iv) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case, (ii) consents to the
entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property or (iv) makes a general
assignment for the benefit of its creditors;

(v) a court of competent jurisdiction enters an order under
any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company for all
or substantially all of their respective property, or (iii) orders
the liquidation of the Company or the Guarantor, and the order or
decree remains unstayed and in effect for 90 days; or

(vi) in the event Securities are issued to a IBC Capital or a
trustee of such trust in connection with the issuance of Trust
Securities by IBC Capital, IBC Capital shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise

<PAGE> 28

terminated its existence except in connection with (i) the
distribution of Securities to holders of Trust Securities in
liquidation of their interests in IBC Capital, (ii) the redemption
of all of the outstanding Trust Securities of IBC Capital or (iii)
certain mergers, consolidations or amalgamation, each as permitted
by the Declaration of IBC Capital.

(b) In each and every such case, unless the principal of all the
Securities of that series shall have already become due and payable,
either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if
given by such Securityholders) may declare the principal of all the
Securities of that series to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due
and payable, notwithstanding anything contained in this Indenture or in
the Securities of that series or established with respect to that series
pursuant to Section 2.1 to the contrary.

(c) At any time after the principal of the Securities of that series
shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the holders of a majority in aggregate
principal amount of the Securities of that series then Outstanding
hereunder, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Securities of that
series that shall have become due otherwise than by acceleration (with
interest upon such principal and premium, if any, and, to the extent that
such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the
Securities of that series to the date of such payment or deposit) and the
amount payable to the Trustee under Section 7.6, and (ii) any and all
Events of Default under the Indenture with respect to such series, other
than the nonpayment of principal on Securities of that series that shall
not have become due by their terms, shall have been remedied or waived as
provided in Section 6.6.

No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.

(d) In case the Trustee shall have proceeded to enforce any right
with respect to Securities of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of
the Company and the Trustee shall continue as though no such proceedings
had been taken.

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SECTION 7.2. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Securities of a
series, or any payment required by any sinking or analogous fund
established with respect to that series as and when the same shall have
become due and payable, and such default shall have continued for a
period of 90 Business Days, or (2) in case it shall default in the
payment of the principal of (or premium, if any, on) any of the
Securities of a series when the same shall have become due and payable,
whether upon maturity of the Securities of a series or upon redemption or
upon declaration or otherwise, then, upon demand of the Trustee the
Guarantor will pay to the Trustee, for the benefit of the holders of the
Securities of that series, the whole amount that then shall have been
become due and payable on all such Securities for principal (and premium,
if any) or interest, or both, as the case may be, with interest upon the
overdue principal (and premium, if any) and (to the extent that payment
of such interest is enforceable under applicable law and, if the
Securities are held by a IBC Capital or a trustee of such trust, without
duplication of any other amounts paid by IBC Capital or trustee in
respect thereof) upon overdue installments of interest at the rate per
annum expressed in the Securities of that series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, and the amount payable to the Trustee under
Section 7.6.

(b) If the Company shall fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or
final decree, and may enforce any such judgment or final decree against
the Company or other obligor upon the Securities of that series and
collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or other obligor upon
the Securities of that series, wherever situated.

(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or
judicial proceedings affected the Company or the creditors or property of
either, the Trustee shall have power to intervene in such proceedings and
take any action therein that may be permitted by the court and shall
(except as may be otherwise provided by law) be entitled to file such
proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders
of Securities of such series allowed for the entire amount due and
payable by the Company under the Indenture at the date of institution of
such proceedings and for any additional amount that may become due and
payable by the Company after such date, and to collect and receive any
moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the
Trustee under Section 9.6; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders
of Securities of such series to make such payments to the Trustee, and,
in the event that the Trustee shall consent to the

<PAGE> 30
making of such payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section [9.6].

(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Securities of that series, may be enforced by the Trustee without the
possession of any of such Securities, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section
9.6, be for the ratable benefit of the holders of the Securities of such
series.

In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at
law or in equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in the Indenture or in
aid of the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law.

Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of that series or the rights of any
holder thereof or to authorize the Trustee to vote in respect of the
claim of any Securityholder in any such proceeding.

SECTION 7.3. APPLICATION OF MONEYS COLLECTED

Any moneys collected by the Trustee pursuant to this Article with respect
to a particular series of Securities shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal (or premium, if any) or interest, upon
presentation of the Securities of that series, and notation thereon the
payment, if only partially paid, and upon surrender thereof if
fully paid:

FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.6;

SECOND: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article Fourteen; and

THIRD: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
(and premium, if any) and interest, respectively.

<PAGE> 31

SECTION 7.4. LIMITATION ON SUITS.

No holder of any Security of any series shall have any right by virtue or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities of such series specifying such Event of Default, as
hereinbefore provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as trustee hereunder; (iii) such holder or holders
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby;
and (iv) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding and (v) during such 60 day period, the holders of a majority in
principal amount of the Securities of that series do not give the Trustee a
direction inconsistent with the request.

Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Security to
receive payment of the principal of (and premium, if any) and interest on such
Security, as therein provided, on or after the respective due dates expressed
in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without
the consent of such holder and by accepting a Security hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right
in any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any
other of such Securities, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities of series. For the protection and
enforcement of the provisions of this Section, each and every Securityholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

SECTION 7.5. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.

(a) Except as otherwise provided in Section 2.7, all powers and
remedies given by this Article to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any other powers and remedies available to the Trustee or
the holders of the Securities, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements
contained in this Indenture or otherwise established with respect to such
Securities.

(b) No delay or omission of the Trustee or of any holder of any of
the Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing

<PAGE> 32

as aforesaid shall impair any such right or power, or shall be construed
to be a waiver of any such default or on acquiescence therein; and,
subject to the provisions of Section 7.4, every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient,
by the Trustee or by the Securityholders.

SECTION 7.6. CONTROL BY SECURITYHOLDERS.

The holders of a majority in aggregate principal amount of the Securities
of any series at the time Outstanding, determined in accordance with Section
10.4, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee with respect to such series; provided,
however, that such direction shall not be in conflict with any rule of law or
with this Indenture or be unduly prejudicial to the rights of holders of
Securities of any other series at the time Outstanding determined in accordance
with Section ______ hereof. Subject to the provisions of Section 9.1, the
Trustee shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would involve the Trustee in
personal liability. The holders of a majority in aggregate principal amount of
the Securities of any series at the time Outstanding affected thereby,
determined in accordance with Section ____, may on behalf of the holders of
all of the Securities of such series waive any past default in the performance
of any of the covenants contained herein or established pursuant to Section 2.1
with respect to such series and its consequences, except (i) a default in the
payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of
such Securities otherwise than by acceleration (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Trustee (in accordance
with Section 6.1(c)), (ii) a default in the covenants contained in Section 4.6
or (iii) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected; provided, however, that if the
Debentures of such series are held by a IBC Capital or a trustee of such trust,
such waiver or modification to such waiver shall not be effective until the
holders of a majority in liquidation preference of Trust Securities of the
applicable IBC Capital shall have consented to such waiver or modification to
such waiver; provided further, that if the consent of the Holder of each
Outstanding Debt Security is required, such waiver shall not be effective until
each holder of the Trust Securities of the applicable IBC Capital shall have
consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Securities of such series shall be restored
to their former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.

SECTION 7.7. UNDERTAKING TO PAY COSTS.

All parties to this Indenture agree, and each holder of any Securities by
such holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the

<PAGE> 33

Trustee for any action taken or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding more than 10% in aggregate
principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security of such series,
on or after the respective due dates expressed in such Security or established
pursuant to this Indenture.

ARTICLE VIII
FORM OF DEBENTURE AND ORIGINAL ISSUE

SECTION 8.1. FORM OF DEBENTURE

The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A to
this Indenture, attached hereto and incorporated herein by reference.

SECTION 8.2. ORIGINAL ISSUE OF DEBENTURES

Debentures in the aggregate principal amount of $ ____________________
may, upon execution of this Indenture, be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any
Vice President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.

ARTICLE IX.
CONCERNING THE TRUSTEE

SECTION 9.1. CERTAIN DUTIES AND RESPONSIBILITIES TRUSTEE.

(a) The Trustee prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing of all Events
of Default with respect to the Securities of that series that may have
occurred, shall undertake to perform with respect to the Securities of
such series such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect
to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that
series such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.

<PAGE> 34

(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

(1) prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing or
waiving of all such Events of Default with respect to that series
that may have occurred:

(i) the duties and obligations of the Trustee shall with
respect to the Securities of such series be determined solely
by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Securities of such
series except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and

(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to the Securities of
such series conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirement of this Indenture;

(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee, was
negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time
Outstanding relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Securities of that series; and

(4) None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of
this Indenture or adequate indemnity against such risk is not
reasonably assured to it.

<PAGE> 35

SECTION 9.2. CERTAIN RIGHTS OF TRUSTEE.

Except as otherwise provided in Section 9.1:

(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;

(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer thereof (unless other evidence in respect
thereof is specifically prescribed herein);

(c) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted hereunder in good faith and in reliance thereon;

(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived) to exercise with respect
to Securities of that series such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;

(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;

(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security, or other papers or documents, unless requested in writing
so to do by the holders of not less than a majority in principal amount
of the Outstanding Securities of the particular series affected thereby
(determined as provided in Section 10.4); provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding. The

<PAGE> 36

reasonable expense of every such examination shall be paid by the Company
or, if paid by the Trustee, shall be repaid by the Company upon demand;
and

(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder.

SECTION 9.3. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR SECURITIES.

(a) The recitals contained herein and in the Securities shall be
taken as the statements of the Company and the Trustee assumes no
responsibility for the correctness of the same.

(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.

(c) The Trustee shall not be accountable for the use or application
by the Company of any of the Securities or of the proceeds of such
Securities, or for the use or application of any moneys paid over by the
Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.1, or for the use or application of any moneys
received by any paying agent other than the Trustee.

SECTION 9.4. MAY HOLD SECURITIES.

The Trustee or any paying agent or Security Registrar, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not Trustee, paying agent or Security
Registrar.

SECTION 9.5. MONEYS HELD IN TRUST.

Subject to the provisions of Section [13.5], all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any moneys received by it hereunder except such as
it may agree with the Company to pay thereon.

SECTION 9.6. COMPENSATION AND REIMBURSEMENT.

(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), as the Company and the Trustee may from
time to time agree in writing, for all services rendered by it in the
execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee,
and, except as otherwise expressly

<PAGE> 37

provided herein, the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its
employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any
claim of liability in the premises.

(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by
a lien prior to that of the Securities upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the
benefit of the holders of particular Securities.

SECTION 9.7. RELIANCE ON OFFICERS' CERTIFICATE.

Except as otherwise provided in Section _______ whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an Officers' Certificate delivered to
the Trustee and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.

SECTION 9.8. DISQUALIFICATION: CONFLICTING INTERESTS.

If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.

SECTION 9.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State, Territorial, or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the

<PAGE> 38
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. The Company may not, nor
may any Person directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.

SECTION 9.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) The Trustee or any successor hereafter appointed, may at any
time resign with respect to the Securities of one or more series by
giving written notice thereof to the Company and by transmitting notice
of resignation by mail, first class postage prepaid, to the
Securityholders of such series, as their names and addresses appear upon
the Security Register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed
by order of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee.
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Securities of such series, or any Securityholder of that series who has
been a bona fide holder of a Security or Securities for at least six
months may, subject to the provisions of Section [6.8], on behalf of
himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.

(b) In case at any time any one of the following shall occur:

(i) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 9.8 after written request therefor by the
Company or the Guarantor or by any Securityholder who has been a
bona fide holder of a Security or Securities for at least six
months; or

(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 9.9 and shall fail to resign after
written request therefor by the Company or by any such
Securityholder; or

(iii) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or commence a voluntary
bankruptcy proceeding, or a receiver of the Trustee or of its
property shall be appointed or consented to, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the
Trustee with respect to all Securities and appoint a successor
trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so

<PAGE> 39

removed and one copy to the successor trustee, or, subject to
the provisions of Section 7.8, unless the Trustee's duty to resign
is stayed as provided herein, any Securityholder who has been a
bona fide holder of a Security or Securities for at least six
months may, on behalf of that holder and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee.
Such court may thereupon after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor
trustee.

(c) The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding may at any time remove
the Trustee with respect to such series by so notifying the Trustee and
the Company and may appoint a successor Trustee for such series with the
consent of the Company.

(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities of a series pursuant to
any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
9.11.

(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Securities of one or more series or all of
such series, and at any time there shall be only one Trustee with respect
to the Securities of any particular series.

SECTION 9.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

(a) In case of the appointment hereunder of a successor trustee with
respect to all Securities, every such successor trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor trustee
all the rights, powers, and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder.

(b) In case of the appointment hereunder of a successor trustee with
respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to
the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor trustee relates, (2) shall
contain such provisions as

<PAGE> 40

shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3)
shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust
or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any act or failure to act on the part of
any other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein, such retiring
Trustee shall with respect to the Securities of that or those series to
which the appointment of such successor trustee relates have no further
responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under
this Indenture, and each such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor
trustee relates; but, on request of the Company or any successor trustee,
such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental
indenture, the property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the
appointment of such successor trustee relates.

(c) upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in
and confirming to such successor trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case
may be.

(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and
eligible under this Article.

(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the
succession of such trustee hereunder by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon
the Security Register. If the Company fails to transmit such notice
within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be transmitted at the
expense of the Company and the Guarantor.

SECTION 9.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided that such corporation shall be

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<PAGE> 41
qualified under the provisions of Section 7.8 and eligible under the provisions
of Section 7.9, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

SECTION 9.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.

The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.

ARTICLE X
CONCERNING THE SECURITYHOLDERS

SECTION 10.1. EVIDENCE OF ACTION BY SECURITYHOLDERS.

Whenever in this Indenture it is provided that the holders of a majority
or specified percentage in aggregate principal amount of the Securities of a
particular series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the holders of
such majority or specified percentage of that series have joined therein may be
evidenced by any instrument or any number of instruments of similar tenor
executed by such holders of Securities of that series in Person or by agent or
proxy appointed in writing.

If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Securities of that series
shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.

<PAGE> 42

SECTION 10.2. PROOF OF EXECUTION BY SECURITYHOLDERS.

Subject to the provisions of Section 7.1, proof of the execution of any
instrument by a Securityholder (such proof will not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Securities shall be sufficient if made in the following manner:

(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.

(b) The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.

SECTION 10.3. WHO MAY BE DEEMED OWNERS.

Prior to the due presentment for registration of transfer of any Security,
the Company, the Trustee, any paying agent and any Security Registrar may deem
and treat the Person in whose name such Security shall be registered upon the
books of the Company as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notice of ownership or
writing thereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and (subject to Section 2.3) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.

SECTION 10.4. CERTAIN SECURITIES OWNED BY COMPANY DISREGARDED.

In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction,
consent of waiver under this Indenture, the Securities of that series that are
owned by the Company or any other obligor on the Securities of that series or
by any Person directly or indirectly controlling or controlled by or under
common control with the Company or any other obligor on the Securities of that
series shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in
good faith may be regarded as Outstanding for the purposes of this Section, if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not a
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of
a dispute as to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.

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<PAGE> 43

SECTION 10.5. ACTIONS BINDING ON FUTURE SECURITYHOLDERS.

At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Securities of a
particular series specified in this Indenture in connection with such action,
any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.2, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the holder of any Security shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether
or not any notation in regard thereto is made upon such Security. Any action
taken by the holders of the majority or percentage in aggregate principal
amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Securities of that series.

ARTICLE XI.
SUPPLEMENTAL INDENTURES

SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF SECURITYHOLDERS.

In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:

(a) to cure any ambiguity, defect, or inconsistency herein, in the
Securities of any series;

(b) to comply with Article Ten;

(d) to add to the covenants of the Company for the benefit of the
holders of all or any Series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon the
Company;

(e) to add to, delete from, or revise the conditions, limitations,
and restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;

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<PAGE> 44

(f) to make any change that does not adversely affect the rights of
any Securityholder in any material respect; or

(g) to provide for the issuance of and establish the form and terms
and conditions of the Securities of any series, to establish the form of
any certifications required to be furnished pursuant to the terms of this
Indenture or any series of Securities, or to add to the rights of the
holders of any series of Securities.

The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture that
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time Outstanding, notwithstanding any
of the provisions of Section 9.2.

SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.

With the consent (evidenced as provided in Section 8.1) of the holders of
not less than a majority in aggregate principal amount of the Securities of
each series affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by Board Resolutions, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture
or of any supplemental indenture or of modifying in any manner not covered by
Section 11.1 the rights of the holders of the Securities of such series under
this Indenture; provided, however, that no such supplemental indenture shall
without the consent of the holders of each Debenture then Outstanding and
affected thereby, (i) extend the fixed maturity of any Securities of any
series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Security so
affected or (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture provided,
further, that if the Debentures of such series are held by a IBC Capital or a
trustee of such trust, such supplemental indenture shall not be effective until
the holders of a majority in liquidation preference of Trust Securities of the
applicable Trust shall have consented to such supplemental indenture; provided
further, that if the consent of the Holder of each Outstanding Debt Security is
required, such supplemental indenture shall not be effective until each holder
of the Trust Securities of the applicable IBC Capital shall have consented to
such supplemental indenture.

It shall not be necessary for the consent of the Securityholders of any
series affected thereby under this Section to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.

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<PAGE> 45

SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURES.

Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.1, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Securities of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

SECTION 11.4. SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.

Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article or of Section [10.1], may bear a
notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such series may be listed, as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new
Securities of that series so modified as to conform, in the opinion of the
Board of Directors of the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Securities of
that series then Outstanding.

SECTION 11.5. EXECUTION OF SUPPLEMENTAL INDENTURES.

Upon the request of the Company, accompanied by their Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture. The Trustee, subject to
the provisions of Section 7.1, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in
the execution thereof.

Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

<PAGE> 46
ARTICLE XII.
SUCCESSOR CORPORATION

SECTION 12.1. COMPANY MAY CONSOLIDATE, ETC.

Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company, as the
case may be), or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Company, as the case may be, or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether
or not affiliated with the Company, as the case may be, or its successor or
successors) authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agree that, upon any such consolidation, merger,
sale, conveyance, transfer or other disposition, the due and punctual payment,
in the case of the Company, of the principal of (premium, if any) and interest
on all of the Debentures of all series in accordance with the terms of each
series, according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture with respect
to each series or established with respect to such series pursuant to Section
2.1 to be kept or performed by the Company as the case may be, shall be
expressly assumed, by supplemental indenture (which shall conform to the
provisions of the Trust Indenture Act, as then in effect) satisfactory in form
to the Trustee executed and delivered to the Trustee by the entity formed by
such consolidation, or into which the Company, as the case may be, shall have
been merged, or by the entity which shall have acquired such property.

SECTION 12.2. SUCCESSOR CORPORATION SUBSTITUTED.

(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by
the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of,
in the case of the Company, the due and punctual payment of the
principal of, premium, if any, and interest on all of the Debentures
of all series Outstanding and the due and punctual performance of all
of the covenants and conditions of this Indenture or established with
respect to each series of the Securities pursuant to Section 2.1 to be
performed by the Company, as the case may be, with respect to each
series, such successor corporation shall succeed to and be substituted
for the Company, as the case may be, with the same effect as if it had
been named as the Company, as the case may be, herein, and thereupon
the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.

(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in phraseology
and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.

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<PAGE> 47

(c) Nothing contained in this Indenture or in any of the
Securities shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property of
any other Person (whether or not affiliated with the Company).

SECTION 12.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

The Trustee, subject to the provisions of Section 7.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption,
comply with the provisions of this Article.

ARTICLE XIII.
SATISFACTION AND DISCHARGE

SECTION 13.1. SATISFACTION AND DISCHARGE OF INDENTURE.

If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Securities of a series theretofore authenticated (other
than any Securities that shall have ben destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.7) and Securities for
whose payment money or Governmental Obligations have theretofore been deposited
in trust or segregated and held in trust by the Company (and thereupon repaid
to the Company or discharged from such trust, as provided in Section 13.5); or
all such Securities of a particular series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to
be deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations sufficient or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
at maturity or upon redemption all Securities of that series not theretofore
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity or date fixed
for redemption, as the case may be, and if the Company shall also pay or cause
to be paid all other sums payable hereunder with respect to such series by the
Company; then this Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections 2.3, 2.5, 2.7,
4.1, 4.2, 4.3 and 9.10, that shall survive until the date of maturity or
redemption date, as the case may be, and Sections 9.6 and 13.5, that shall
survive to such date and thereafter, and the Trustee, on demand of the Company
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to
such series.

SECTION 13.2. DISCHARGE OF OBLIGATIONS.

If at any time all such Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become
due and payable as described in Section 11.1 shall have been paid by the
Company by depositing irrevocably with the Trustee as trust funds moneys or an
amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all such Securities of that series not theretofore delivered to the
Trustee for cancellation, including principal

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<PAGE> 48

(and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company with respect to such series, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with the Trustee
the obligations of the Company under this Indenture with respect to such series
shall cease to be of further effect except for the provisions of Sections 2.3,
2.5, 2.7, 4.1, 4.2, 4.3, 9.6, 9.10 and 13.5 hereof that shall survive until
such Securities shall mature and be paid. Thereafter, Sections 9.6 and 13.5
shall survive.

SECTION 13.3. DEPOSITED MONEYS TO BE HELD IN TRUST.

All monies or Governmental Obligations deposited with the Trustee
pursuant to Sections 13.1 or 13.2 shall be held in trust and shall be available
for payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the particular
series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.

SECTION 13.4. PAYMENT OF MONIES HELD BY PAYING AGENTS.

In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.

SECTION 13.5. REPAYMENT TO COMPANY.

Any monies or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company in trust for payment of principal
of or premium or interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company, as the case may be, on May 31 of each year or
(if then held by the Company) shall be discharged from such trust; and
thereupon the paying agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental Obligations, and the
holder of any of the Securities entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company or the
Guarantor for the payment thereof.

ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS

SECTION 14.1. NO RECOURSE.

No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer
or director, past, present or future as such, of the Company or of

43
<PAGE> 49

any predecessor or successor corporation, either directly or through the
Company or the Guarantor or any such predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every
name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Securities.

ARTICLE XV.
MISCELLANEOUS PROVISIONS

SECTION 15.1. EFFECT ON SUCCESSORS AND ASSIGNS.

All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind their respective
successors and assigns, whether so expressed or not.

SECTION 15.2. ACTIONS BY SUCCESSOR.

Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company, as the case may be.

SECTION 15.3. SURRENDER OF COMPANY POWERS.

The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power
so surrendered shall terminate both as to the Company, as the case may be, and
as to any successor corporation.

SECTION 15.4. NOTICES.

Except as otherwise expressly provided herein any notice or demand
that by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Securities to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company

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<PAGE> 50

with the Trustee), as follows: c/o Independent Bank Corporation, 230 West Main
Street, Ionia, Michigan 48846, Attention Chief Financial Officer. Any notice,
election, request or demand by the Company or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.

SECTION 15.5. GOVERNING LAW.

This Indenture and each Security shall be deemed to be a contract made
under the internal laws of the State of Michigan and for all purposes shall be
construed in accordance with the laws of said State.

SECTION 15.6. TREATMENT OF DEBENTURES AS DEBT.

It is intended that the Debentures will be treated as indebtedness and
not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.

SECTION 15.7. COMPLIANCE CERTIFICATES AND OPINIONS.

(a) Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and
an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent have been complied with, except that in the
case of any such application or demand as to which the furnishing of
such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.

(b) Indenture and delivered to the Trustee with respect
to compliance with a condition or covenant in this Indenture shall
include (1) a statement that the Person making such certificate or
opinion has read such covenant or condition; (2) a brief statement as
to the nature and scope of the examination or investigation upon which
the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or
not, in the opinion of such Person, such condition or covenant has
been complied with.

SECTION 15.8. PAYMENTS ON BUSINESS DAYS.

Except as provided pursuant to Section 2.1 pursuant to a Board
Resolution, and as set forth in an Officers' Certificate, or established in one
or more indentures supplemental to this Indenture, in any case where the date
of maturity of interest or principal of any Security or the date of redemption
of any Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeeding Business Day
with the same force and effect

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<PAGE> 51

as if made on the nominal date of maturity or redemption, and no interest shall
accrue for the period after such nominal date.

SECTION 15.9. CONFLICT WITH TRUST INDENTURE ACT.

If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

SECTION 15.10. COUNTERPARTS.

This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

SECTION 15.11. SEPARABILITY.

In case any one or more of the provisions contained in this Indenture
or in the Securities of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Securities, but this Indenture and such Securities shall be construed as
if such invalid or illegal or unenforceable provision had never been contained
herein or therein.

SECTION 15.12. ASSIGNMENT.

The Company will have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly-owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company, as the case may be, will remain liable for all such
obligations. Subject to the foregoing, the Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties
thereto.

SECTION 15.13. ACKNOWLEDGMENT OF RIGHTS.

The Company acknowledges that, with respect to any Debentures held by
IBC Capital or a trustee of such trust, if the Property Trustee of such Trust
fails to enforce its rights under this Indenture as the holder of the series of
Debentures held as the assets of IBC Capital any holder of Preferred Securities
may institute legal proceedings directly against the Company to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the applicable Series of Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on
the redemption date), the Company acknowledges that a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the applicable Series of
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred

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<PAGE> 52

Securities of such holder on or after the respective due date specified in the
Applicable Series of Securities.

ARTICLE XVI.
SUBORDINATION OF SECURITIES

SECTION 16.1. AGREEMENT TO SUBORDINATE.

The Company covenants and agrees, and each Holder of Debentures issued
hereunder by such Holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each Holder of a Debt Security, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

The payment by the Company of the principal of, premium, if any, and
interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior Debt, Subordinated Debt and Additional
Senior Obligations, whether outstanding at the date of this Indenture or
thereafter incurred.

No provision of this Article XVI shall prevent the occurrence of any
default or Event of Default hereunder.

SECTION 16.2. DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR ADDITIONAL SENIOR
OBLIGATIONS.

In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Debt, Subordinated Debt or Additional Senior Obligations of the Company,
as the case may be, or in the event that the maturity of any Senior Debt,
Subordinated Debt or Additional Senior Obligations of the Company, as the case
may be, has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption and sinking fund payments) of, or premium, if any, or interest on
the Debentures.

In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.

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<PAGE> 53

SECTION 16.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.

Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company
on account of the principal (and premium, if any) or interest on the
Debentures; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Debentures or the Trustee would be entitled to receive
from the Company, except for the provisions of this Article XVI, shall be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Debentures or by the Trustee under the Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Company (pro rata to such
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders of
Debentures or to the Trustee.

In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.

For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XVI with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such

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<PAGE> 54

reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article X of the Indenture shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 16.3 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article X of the Indenture. Nothing in Section 16.2 or in this
Section 16.3 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 9.6 of the Indenture.

SECTION 16.4. SUBROGATION.

Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the Holders of the Debentures shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any) and interest on the Debentures shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Holders of the Debentures or the Trustee would be entitled except for the
provisions of this Article XVI, and no payment over pursuant to the provisions
of this Article XVI to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Debentures or the Trustee, shall, as between the
Company, its creditors other than Holders of Senior Indebtedness of the
Company, and the holders of the Debentures, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article XVI are and are intended solely for the purposes
of defining the relative rights of the Holders of the Debentures, on the one
hand, and the holders of such Senior Indebtedness on the other hand.

Nothing contained in this Article XIV or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness of the Company, and
the Holders of the Debentures, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Debentures the principal of
(and premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Debentures and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, as the case may be, nor shall anything herein or
therein prevent the Trustee or the Holder of any Debt Security from exercising
all remedies otherwise permitted by applicable law upon default under the
Indenture, subject to the rights, if any, under this Article XVI of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.

Upon any payment or distribution of assets of the Company referred to
in this Article XVI, the Trustee, subject to the provisions of Section 9.1 of
the Indenture, and the Holders of the Debentures shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee,

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<PAGE> 55

agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XVI.

SECTION 16.5. TRUSTEE TO EFFECTUATE SUBORDINATION.

Each Holder of Debentures by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article XVI and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.

SECTION 16.6. NOTICE BY THE COMPANY.

The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article XVI. Notwithstanding the provisions
of this Article XVI or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.1 of the Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 8.6 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.

The Trustee, subject to the provisions of Section 9.1 of the
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company, as the case may be (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XVI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article XVI, and, if such evidence is not
furnished, the Trustee may defer

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<PAGE> 56

any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.

SECTION 16.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIV in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.

With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XIV, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 9.1 of the
Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of Debentures, the
Company or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article XVI or otherwise.

SECTION 16.8. SUBORDINATION MAY NOT BE IMPAIRED.

No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company, as the case may be, or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the Company, as the case
may be, with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof that any such holder may have or otherwise be charged
with.

Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Debentures, without incurring responsibility to the Holders of the
Debentures and without impairing or releasing the subordination provided in
this Article XVI or the obligations hereunder of the Holders of the Debentures
to the holders of such Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend
or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company, as the case may be, and any other Person.

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<PAGE> 57

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

INDEPENDENT BANK CORPORATION

By:_____________________________________

Attest:

________________________________

STATE STREET BANK AND TRUST COMPANY, AS
TRUSTEE

By:_____________________________________

STATE OF )
) ss:
COUNTY OF )

On the _______ day of _______________________________, 1996, before me
personally came ______________________________to me known, who, being by me
duly sworn, did depose and say that he is the of INDEPENDENT BANK CORPORATION,
one of the corporations described in and which executed the above instrument;
that he knows the corporate seal of said corporation; that the seal affixed to
the said instrument is such corporation seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.

________________________________________

Notary Public, ______________ County, MI
[seal] My Commission expires: _________________

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<PAGE> 58

EXHIBIT A

(FORM OF FACE OF DEBENTURE)

This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except
in such limited circumstances.

Unless this Debenture is presented by an authorized representative of
State Street Bank and Trust Company ( address:________________________) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of State Street Bank and Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.

No. ______________________________ $ ____________________

CUSIP No. ________________________

INDEPENDENT BANK CORPORATION

___% JUNIOR SUBORDINATED DEBENTURE
DUE ____________, 2026

Independent Bank Corporation, a Michigan corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to, ______________ or
registered assigns, the principal sum of _____________ Dollars ($___________)
on _________, 2026 (the "Stated Maturity"), and to pay interest on said
principal sum from ____________, 1997, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of each year
commencing ___________, 1997, at the rate of ___% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the same rate per annum compounded quarterly. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on

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<PAGE> 59

which interest is payable on this Debenture is not a business day, then payment
of interest payable on such date will be made on the next succeeding day that
is a business day (and without any interest or other payment in respect of any
such delay), except that, if such business day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding business
day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Securities, as
defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the close of
business on the business day next preceding such Interest Payment Date unless
otherwise provided in the Indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered Holders of this series of Debentures not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Debentures may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Debenture shall be payable at
the office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Debenture is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Debenture will be made at such place and to such account as
may be designated by the Institutional Trustee.

The Stated Maturity may be shortened at any time by the Company to any
date not earlier than _________________, 2001, subject to the Company having
received prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. Such date
may also be extended at any time at the election of the Company for one or more
periods, but in no event to a date later than ________________________, 2045,
subject to certain limitations described in the Indenture.

The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each Holder hereof, by his
or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.

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<PAGE> 60

This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.

The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.

IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.

Dated ____________________________

INDEPENDENT BANK CORPORATION

By:________________________________
Name:
Title:

Attest:

By: ______________________________
Name:
Title:

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<PAGE> 61

[FORM OF CERTIFICATE OF AUTHENTICATION]

CERTIFICATE OF AUTHENTICATION

This is one of the Debentures described in the within-mentioned
Indenture.

Dated:

STATE STREET BANK AND TRUST COMPANY _______________________________
as Trustee or Authentication Agent

By___________________________________ By_____________________________
Authorized Signatory

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<PAGE> 62

[FORM OF REVERSE OF DEBENTURE]

______________% SUBORDINATED DEBENTURE
(CONTINUED)

This Debenture is one of the subordinated debentures of the Company
(herein sometimes referred to as the "Debentures"), specified in the Indenture,
all issued or to be issued in one or more series under and pursuant to an
Indenture dated as of _____________, 1996 (the "Indenture") duly executed and
delivered between the Company and State Street Bank and Trust Company, as
Trustee (the "Trustee"), to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Debentures. The Debentures are limited in aggregate principal amount as
specified in the Indenture.

Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Debenture may become due and payable at the principal
amount together with any interest accrued thereon (the "Redemption Price").
The Redemption Price shall be paid prior to 12:00 noon, Eastern Standard Time,
time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall have the right to redeem this Debenture at the
option of the Company, without premium or penalty, in whole or in part at any
time on or after ________, 2001 (an "Optional Redemption"), or at any time in
certain circumstances upon the occurrence of a Tax Event, at a redemption price
equal to 100% of the principal amount plus any accrued but unpaid interest, to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days notice, at the Optional Redemption Price. If the Debentures are
only partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures will be redeemed pro rata or by lot or by any other method utilized
by the Trustee; provided that if, at the time of redemption, the Debentures are
registered as a Global Debenture, the Depositary shall determine the principal
amount of such Debentures held by each Debenture holder to be redeemed in
accordance with its procedures.

In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.

In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.

The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner

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<PAGE> 63

the rights of the Holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of the Debentures
except as provided in the Indenture, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce
any premium payable upon the redemption thereof, without the consent of the
Holder of each Debenture so affected, or (ii) reduce the aforesaid percentage
of Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding affected thereby, on behalf of all of the
Holders of the Debentures, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Debentures of such
series. Any such consent or waiver by the registered Holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Debenture and
of any Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.

No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at
the rate and in the money herein prescribed.

The Company shall have the right at any time during the term of the
Debentures and from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for
the Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment
of all accrued and unpaid interest and any additional amounts then due, the
Company may commence a new Extended Interest Payment Period.

As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
in _________________ accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the

58
<PAGE> 64

Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.

Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Security
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.

No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. This Global Debenture
is exchangeable for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without coupons in denominations of $25
and any integral multiple thereof.

<PAGE> 1
EXHIBIT 4.3

CERTIFICATE OF TRUST
OF
IBC CAPITAL FINANCE

This Certificate of Trust of IBC CAPITAL FINANCE (the "Trust"), dated
November 7, 1996, is being duly executed and filed by Wilmington Trust
Company, a Delaware banking corporation, Charles C. Van Loan, William R. Kohls,
and James J. Twarozynski, each an individual, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).

1. NAME. The name of the business trust formed hereby is IBC Capital
Finance.

2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attn:
Corporate Trust Administration.

3. EFFECTIVE DATE. This Certificate of Trust shall be effective on
November , 1996.

IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
has executed this Certificate of Trust as of the date first above written.

WILMINGTON TRUST COMPANY,
as trustee

By: /s/ Norma Closs
---------------------------------
Name: Norma Closs
Title: Vice President

/s/ Charles C. Van Loan
------------------------------------
CHARLES C. VAN LOAN, as Trustee

/s/ William R. Kohls
------------------------------------
WILLIAM R. KOHLS, as Trustee

/s/ James J. Twarozynski
------------------------------------
JAMES J. TWAROZYNSKI, as Trustee

<PAGE> 1
EXHIBIT 4.4

TRUST AGREEMENT

This TRUST AGREEMENT, dated as of November 7, 1996 (this "Trust
Agreement"), among (i) Independent Bank Corporation, a Michigan corporation
(the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as trustee, and (iii) Charles C. Van Loan, William R. Kohls and
James J. Twarozynski, each an individual, as trustees (each of such trustees in
(ii) and (iii) a "Trustee" and collectively, the "Trustees"). The Depositor
and the Trustees hereby agree as follows:

1. The trust created hereby (the "Trust") shall be known as "IBC
Capital Finance" in which name the Trustees, or the Depositor to the extent
provided herein, may engage in the transactions contemplated hereby, make and
execute contracts, and sue and be sued.

2. The Depositor hereby assigns, transfers, conveys and sets over
the Trustees the sum of Ten Dollars ($10.00). The Trustees hereby acknowledge
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Trustees hereby declare that they
will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, et
seq. (the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Business Trust Act.

3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain prior to such execution and
delivery of any licenses, consents or approvals required by applicable law or
otherwise.

4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-2 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Preferred Securities of
the Trust and possibly certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under the Securities
Exchange Act of 1934, as amended; (ii) to file with the Nasdaq National Market
or a national stock exchange (each, an "Exchange") and execute on behalf of the
Trust one or more listing applications and all other applications, statements,
certificates,

<PAGE> 2

agreements and other instruments as shall be necessary or desirable to cause
the Preferred Securities to be listed on any of the Exchanges; (iii) to file
and execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable and (iv) to execute on behalf of the Trust that certain Underwriting
Agreement relating to the Preferred Securities, among the Trust, the Depositor
and the several Underwriters named therein, substantially in the form included
as an exhibit to the 1933 Act Registration Statement. In the event that any
filing referred to in clauses (i), (ii) and (iii) above is required by the
rules and regulations of the Commission, an Exchange or state securities or
blue sky laws, to be executed on behalf of the Trust by one or more of the
Trustees, each of the Trustees, in its or his capacity as a Trustee of the
Trust, is hereby authorized and, to the extent so required, directed to join in
any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that Wilmington Trust Company in its capacity as
a Trustee of the Trust shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the Exchange or state securities or blue sky
laws. In connection with the filings referred to above, the Depositor and
Charles C. Van Loan, William R. Kohls and James J. Twarozynski, each as
Trustees and not in their individual capacities, hereby constitutes and
appoints Charles C. Van Loan, William R. Kohls and James J. Twarozynski, and
each of them, as its true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for the Depositor or such Trustee or
in the Depositor's or such Trustees' name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement and the 1934 Act
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, the Exchange and
administrators of the state securities or blue sky laws, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor or such
Trustee might or could to in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue hereof.

5. This Trust Agreement may be executed in one or more
counterparts.

6. The number of Trustees initially shall be four (4) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware
and otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.

<PAGE> 3

7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).

IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.

INDEPENDENT BANK CORPORATION,
as Depositor

By /s/ William R. Kohls
----------------------------------
Name: William R. Kohls
Title: Executive Vice President

WILMINGTON TRUST COMPANY,
as Trustee

By /s/ Norma Class
----------------------------------
Name:
Title:

/s/ Charles C. Van Loan
---------------------------------------
CHARLES C. VAN LOAN, as Trustee

/s/ William R. Kohls
---------------------------------------
WILLIAM R. KOHLS, as Trustee

/s/ James J. Twarozynski
-------------------------------------
JAMES J. TWAROZYNSKI, as Trustee

<PAGE> 1
EXHIBIT 4.5

[FORM OF AMENDED AND RESTATED TRUST AGREEMENT OF IBC CAPITAL FINANCE]

WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Trustee

Name: Norma Closs
Title: Vice President

WILLIAM R. KOHLS

William R. Kohls
not in his individual capacity but solely as
Trustee

IBC CAPITAL FINANCE

AMENDED AND RESTATED

TRUST AGREEMENT

among

INDEPENDENT BANK CORPORATION, as Depositor

STATE STREET BANK AND TRUST COMPANY, as Property Trustee

WILMINGTON TRUST COMPANY, as Delaware Trustee,

and

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

Dated as of November _________, 1996

<PAGE> 2

TABLE OF CONTENTS

PAGE
----
<S> <C>
ARTICLE I
Defined Terms ....................................................................................2
Section 101. Definitions ........................................................................2

ARTICLE II
Establishment of the Trust ......................................................................11
Section 201. Name ..............................................................................11
Section 202. Office of the Delaware Trustee; Principal Place of Business .......................11
Section 203. Initial Contribution of Trust Property; Organizational Expenses ...................11
Section 204. Issuance of the Preferred Securities ..............................................11
Section 205. Issuance of the Common Securities; Subscription and Purchase of Debentures ........12
Section 206. Declaration of Trust ..............................................................12
Section 207. Authorization to Enter into Certain Transactions ..................................12
Section 208. Assets of Trust ...................................................................16
Section 209. Title to Trust Property ...........................................................16

ARTICLE III
Payment Account .................................................................................16
Section 301. Payment Account ...................................................................16

ARTICLE IV
Distributions; Redemption .......................................................................16
Section 401. Distributions .....................................................................16
Section 402. Redemption ........................................................................17
Section 403. Subordination of Common Securities ................................................19
Section 404. Payment Procedures ................................................................20
Section 405. Tax Returns and Reports ...........................................................20
Section 406. Payment of Taxes, Duties, Etc. of the Trust .......................................20
Section 407. Payments under Indenture ..........................................................21

ARTICLE V
Trust Securities Certificates ...................................................................21
Section 501. Initial Ownership .................................................................21
Section 502. The Trust Securities Certificates .................................................21
Section 503. Execution and Delivery of Trust Securities Certificates ...........................21
Section 504. Registration of Transfer and Exchange of Preferred Securities Certificates ........22
Section 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates ................22
Section 506. Persons Deemed Securityholders ....................................................23
Section 507. Access to List of Securityholders' Names and Addresses ............................23
Section 508. Maintenance of office or Agency ...................................................24

</TABLE>

Section 509. Appointment of Paying Agent .......................................................24
Section 510. Ownership of Common Securities by Depositor .......................................24
Section 511. Book-Entry Preferred Securities Certificates; Common Securities Certificate .......25
Section 512. Notices to Clearing Agency ........................................................26
Section 513. Definitive Preferred Securities Certificates ......................................26
Section 514. Rights of Securityholders .........................................................26

ARTICLE VI Acts of Securityholders; Meetings; Voting ................................................27
Section 601. Limitations on Voting Rights ......................................................27
Section 602. Notice of Meetings ................................................................28
Section 603. Meetings of Preferred Securityholders .............................................28
Section 604. Voting Rights .....................................................................29
Section 605. Proxies, etc ......................................................................29
Section 606. Securityholder Action by Written Consent ..........................................29
Section 607. Record Date for Voting and Other Purposes .........................................29
Section 608. Acts of Securityholders ...........................................................30
Section 609. Inspection of Records .............................................................31

ARTICLE VII
Representations and Warranties ..................................................................31
Section 701. Representations and Warranties of the Bank and the Property Trustee ...............31
Section 702. Representations and Warranties of the Delaware Bank and the Delaware Trustee ......32
Section 703. Representations and Warranties of Depositor .......................................33

ARTICLE VIII
The Trustees ....................................................................................34
Section 801. Certain Duties and Responsibilities ...............................................34
Section 802. Certain Notices ...................................................................35
Section 803. Certain Rights of Property Trustee ................................................35
Section 804. Not Responsible for Recitals or Issuance of Securities ............................37
Section 805. May Hold Securities ...............................................................38
Section 806. Compensation; Indemnity; Fees .....................................................38
Section 807. Corporate Property Trustee Required; Eligibility of Trustees ......................38
Section 808. Conflicting Interests .............................................................39
Section 809. Co-Trustees and Separate Trustee ..................................................39
Section 810. Resignation and Removal; Appointment of Successor .................................40
Section 811. Acceptance of Appointment by Successor ............................................42
Section 812. Merger, Conversion, Consolidation or Succession to Business .......................42
Section 813. Preferential Collection of Claims Against Depositor or Trust ......................43
Section 814. Reports by Property Trustee .......................................................43
Section 815. Reports to the Property Trustee ...................................................43
</TABLE>

iii

<PAGE> 4

<TABLE>

<S> <C>
Section 816. Evidence of Compliance with Conditions Precedent ..................................44
Section 817. Number of Trustees ................................................................44
Section 818. Delegation of Power ...............................................................44
Section 819. Voting ............................................................................44

ARTICLE IX
Termination, Liquidation and Merger .............................................................45
Section 901. Termination upon Expiration Date ..................................................45
Section 902. Early Termination .................................................................45
Section 903. Termination .......................................................................45
Section 904. Liquidation .......................................................................45
Section 905. Mergers, Consolidations, Amalgamations or Replacements of the Trust ...............47

ARTICLE X
Miscellaneous Provisions ........................................................................48
Section 1001. Limitation of Rights of Securityholders ..........................................48
Section 1002. Amendment ........................................................................48
Section 1003. Separability .....................................................................49
Section 1004. Governing Law ....................................................................50
Section 1005. Payments Due on Non-Business Day .................................................50
Section 1006. Successors .......................................................................50
Section 1007. Headings .........................................................................50
Section 1008. Reports, Notices and Demands .....................................................50
Section 1009. Agreement Not to Petition ........................................................51
Section 1010. Trust Indenture Act; Conflict with Trust Indenture Act ...........................51
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and Indenture ..................52

Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>

<PAGE> 5

CROSS-REFERENCE TABLE

SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED INDENTURE
- ------------------- ----------

310(a)(1) ...............................................807
310(a)(2) ...............................................807
310(a)(3) ...............................................807
310(a)(4) ...............................................207(a)(ii)
310(b) ..................................................808
311(a) ..................................................813
311(b) ..................................................813
312(a) ..................................................507
312(b) ..................................................507
312(c) ..................................................507
313(a) ..................................................814(a)
313(a)(4) ...............................................814(b)
313(b) ..................................................814(b)
313(c) ..................................................108
313(d) ..................................................814(c)
314(a) ..................................................815
314(b) ..................................................Not Applicable
314(c)(1) ...............................................816
314(c)(2) ...............................................816
314(c)(3) ...............................................Not Applicable
314(d) ..................................................Not Applicable
314(e) ..................................................101, 816
315(a) ..................................................801(a), 803(a)
315(b) ..................................................802, 108
315(c) ..................................................801(a)
315(d) ..................................................801, 803
315(e) ..................................................Not Applicable
316(a) ..................................................Not Applicable
316(a)(1)(A) ............................................Not Applicable
316(a)(1)(B) ............................................Not Applicable
316(a)(2) ...............................................Not Applicable
316(b) ..................................................Not Applicable
316(c) ..................................................607
317(a)(1) ...............................................Not Applicable
317(a)(2) ...............................................Not Applicable
317(b) ..................................................509
318(a) ..................................................1010

v
<PAGE> 6

AMENDED AND RESTATED TRUST AGREEMENT, dated as of November , 1996,
among (i) Independent Bank Corporation, a Michigan corporation (including any
successors or assigns, the "Depositor"), (ii) State Street Bank and Trust
Company, a Massachusetts banking corporation duly organized and existing under
the laws of the State of Massachusetts, as property trustee (the "Property
Trustee" and, in its separate corporate capacity and not in its capacity as
Property Trustee, the "Bank") , (iii) Wilmington Trust Company, a Delaware
banking corporation duly organized and existing under the laws of the State of
Delaware, as Delaware trustee (the "Delaware Trustee," and, in its separate
corporate capacity and not in its capacity as Delaware Trustee, the "Delaware
Bank") (iv) Charles C. VanLoan, an individual, and William R. Kohls, an
individual, and James J. Twarozynski, an individual, each of whose address is
c/o Independent Bank Corporation (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.

W I T N E S S E T H:

WHEREAS, the Depositor, the Delaware Trustee, and Charles C. Van Loan,
William R. Kohls and James J. Twarozynsk, each as an Administrative Trustee,
have heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of November ___, 1996 (the "Original Trust Agreement"), and
by the execution and filing by the Delaware Trustee, the Depositor and the
Administrative Trustees with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on November ___, 1996, the form of which is
attached as Exhibit A; and

WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and the
Prior Administrative Trustee desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities by the Trust to the
Depositor, (ii) the issuance and sale of the Preferred Securities by the Trust
pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust from
the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of the Property Trustees;

NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:

ARTICLE I
DEFINED TERMS

SECTION 101. DEFINITIONS.

For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

<PAGE> 7

(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;

(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;

(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and

(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.

"Act" has the meaning specified in Section 608.

"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.

"Additional Sums" has the meaning specified in section ____ of the
Indenture.

"Administrative Trustee" means each of William R. Kohls, Charles C. Van
Loan, and James J. Twarozynski, solely in his capacity as Administrative
Trustee of the Trust formed and continued hereunder and not in his individual
capacity, or such Administrative Trustee's successor in interest in such
capacity, or any successor trustee appointed as herein provided.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Bank" has the meaning specified in the preamble to this Trust
Agreement.

"Bankruptcy Event" means, with respect to any Person:

(a) the entry of a decree or order by a court having jurisdiction in the
premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the Federal Bankruptcy Code or any other similar
applicable Federal or State law, and the continuance of any such decree or
order unvacated and unstayed for a period of 90 days; or the commencement of an
involuntary case under the Federal Bankruptcy Code in respect of such Person,
which shall continue undismissed for a period of 90 days

2
<PAGE> 8

or entry of an order for relief in such case; or the entry of a decree or order
of a court having jurisdiction in the premises for the appointment on the
ground of insolvency or bankruptcy of a receiver, custodian, liquidator,
trustee or assignee in bankruptcy or insolvency of such Person or of its
property, or for the winding up or liquidation of its affairs, and such decree
or order shall have remained in force unvacated and unstayed for a period of 90
days; or

(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a bankruptcy
proceeding against it, or the filing by such Person of a petition or answer or
consent seeking liquidation or reorganization under the Federal Bankruptcy Code
or other similar applicable Federal or State law, or the consent by such Person
to the filing of any such petition or to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or trustee or
assignee in bankruptcy or insolvency of such Person or of its property, or
shall make a general assignment for the benefit of creditors.

"Bankruptcy Laws" has the meaning specified in Section 1009.

"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the appropriate Trustee.

"Book Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form to
the Clearing Agency as described in Section 511.

"Business Day" means a day other than (a) a Saturday or Sunday,
(b) a day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed, or (c) a day on which
the Property Trustee's Corporate Trust Office or the Corporate Trust Office of
the Debenture Trustee is closed for business.

"Certificate Depository Agreement" means the agreement among the
Trust, the Depositor and The Depositary Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.

"Certificate of Trust" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.

"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depositary Trust Company will be the initial Clearing Agency.

3
<PAGE> 9

"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.

"Closing Date" means the date of execution and delivery of this
Trust Agreement.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.

"Common Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.

"Corporate Trust Office" means the principal corporate trust
office of the Property Trustee located at 2 International Place, 5th Floor,
Boston, Massachusetts 02110.

"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.

"Debenture Redemption Date" means, with respect to any Debentures
to be redeemed under the Indenture, the date fixed for redemption under the
Indenture.

"Debenture Tax Event" means a "Tax Event" as defined in the
Indenture.

"Debenture Trustee" means State Street Bank and Trust Company, a
Massachusetts banking corporation organized under the laws of the State of
Massachusetts and any successor thereto, as trustee under the Indenture.

"Debentures" means the $ aggregate principal
amount of the Depositor's % Junior Subordinated Deferrable Interest
Debentures, issued pursuant to the Indenture.

"Definitive Preferred Securities Certificates" means either or
both (as the context requires) of (a) Preferred Securities Certificates issued
as Book-Entry Preferred Securities Certificates as provided in Section 511(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 513.

"Delaware Bank" has the meaning specified in the preamble to this
Trust Agreement.

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<PAGE> 10

"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq as it may be amended from
time to time.

"Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.

"Depositor" has the meaning specified in the preamble to this Trust
Agreement.

"Distribution Date" has the meaning specified in Section 401(a).

"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 401.

"Event of Default" means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(a) the occurrence of a Debenture Event of Default; or

(b) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or

(c) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or

(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c), above) and continuation of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate liquidation preference of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

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<PAGE> 11

"Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.

"Expiration Date" has the meaning specified in Section 901.

"Extension Period" has the meaning specified in Section ____ of the
Indenture.

"Global Debenture" has the meaning specified in the Indenture.

"Guarantee" means the Guarantee Agreement executed and delivered
by the Depositor and State Street Bank and Trust Company as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.

"Indenture" means the Indenture, dated as of November __, 1996,
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.

"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Trust Agreement.

"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interestor preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.

"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture and the proceeds of which will be used to pay the Redemption Price of
such Trust Securities and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a termination or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.

"Liquidation Amount" means the stated amount of $25 per Trust
Security.

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"Liquidation Date" means the date on which Debentures are to
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 904(a).

"Liquidation Distribution" has the meaning specified in Section
904(d).

"1940 Act" means the Investment Company Act of 1940, as amended.

"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 816
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant Provided for in this Trust Agreement shall include:

(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;

(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;

(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.

"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.

"Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, except:

(a) Preferred securities theretofore canceled by the
Property Trustee or delivered to the Property Trustee for cancellation;

<PAGE> 13

(b) Preferred Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Preferred Securities;
provided that, if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement; and

(c) Preferred Securities which have been paid or in
exchange for or in lieu of which other Preferred Securities have been executed
and delivered pursuant to Sections 504, 505, 511 and 513; provided, however,
that in determining whether the Holders of the requisite Liquidation Amount of
the Outstanding Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Preferred Securities that such Trustee knows to be so
owned shall be so disregarded and (b) the foregoing shall not apply at any time
when all of the outstanding Preferred Securities are owned by the Depositor,
one or more of the Trustees and/or any such Affiliate. Preferred Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Administrative Trustees the
pledgee's right so to the Depositor or any Affiliate of the Depositor.

"Owner" means each Person who is the beneficial owner of a
Book Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such clearing
Agency).

"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 509 and shall initially be the Bank.

"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the Bank in its
trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Debentures will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Sections
401 and 402.

"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability Company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.

"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.

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<PAGE> 14

"Preferred Securities Certificate", means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.

"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee", in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
herein provided.

"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.

"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount
of Debentures, allocated on a pro rata basis (based on Liquidation Amounts)
among the Trust Securities.

"Relevant Trustee" shall have the meaning specified in Section 810.

"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 504.

"Security holder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act.

"Tax Event" means the receipt by the Trust of an opinion of
Counsel, rendered by a law firm having a recognized national tax and securities
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Preferred
Securities under this Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date of such opinion
of Counsel, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Depositor
on the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Depositor, in whole or in part, for
United States federal income tax purposes or (iii) the Trust is, or will be
within 90 days after the date of such opinion of Counsel, subject to more than
a de minimis amount of other taxes, duties, assessments or other governmental
charges.

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<PAGE> 15

"Trust" means the Delaware business trust created and continued
hereby and identified on the cover page to this Trust Agreement.

"Trust Agreement" means this Amended and Restated Trust Agreement,
as the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

"Trust Property" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.

"Trust Security" means any one of the Common Securities or the
Preferred Securities.

"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.

"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.

"Underwriting Agreement" means the Underwriting Agreement, dated
as of , 1996, among the Trust, the Depositor and the Underwriters
named therein.

ARTICLE II
ESTABLISHMENT OF THE TRUST

SECTION 201. NAME.

The Trust created and continued hereby shall be known as "IBC Capital," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may engage in the transactions
contemplated hereby, make and execute contracts and other instruments on behalf
of the Trust and sue and be sued.

SECTION 202. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.

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The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration, or such other address in the State
of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is c/o Independent Bank Corporation, 230 West Main Street, Ionia, Michigan
48846.

SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.

The Trustees acknowledge receipt in trust from the Depositor in connection
with the original Trust Agreement of the sum of $10, which constituted the
initial Trust Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of any Trustee, promptly reimburse
such Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.

SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES.

On November _____, 1996 the Depositor and an Administrative Trustee, on

behalf of the Trust and pursuant to the Original Trust Agreement, executed and
delivered the Underwriting Agreement. Contemporaneously with the execution and
delivery of this Trust Agreement, an Administrative Trustee, on behalf of the
Trust, shall execute in accordance with Section 502 and deliver in accordance
with the Underwriting Agreement Preferred Securities Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of Preferred Securities having an aggregate
Liquidation Amount of $ against receipt of the
aggregate purchase price of such Preferred Securities of $ , which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee.

SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
OF DEBENTURES.

Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 502 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $ against payment by the
Depositor of such amount. Contemporaneously therewith, an Administrative
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Depositor Debentures, registered in the name of the Property Trustee on behalf
of the Trust and having an aggregate principal amount equal to $ ,
and, in satisfaction of the purchase price for such Debentures, the Property
Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $ .

SECTION 206. DECLARATION OF TRUST.

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<PAGE> 17

The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust
for the sole and limited purpose of fulfilling the requirements of Section 3807
of the Delaware Business Trust Act.

SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.

(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:

(i) As among the Trustees, each Administrative Trustee, acting singly or
jointly, shall have the power and authority to act on behalf of the Trust with
respect to the following matters:

(A) the issuance and sale of the Trust Securities;

(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the Certificate
Depository Agreement and such other agreements or documents as may be necessary
or desirable in connection with the purposes and function of the Trust;

(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state securities
or blue sky laws, and the qualification of this Trust Agreement
as a trust indenture under the Trust Indenture Act;

(D) assisting in the listing of the Preferred Securities upon the
Nasdaq National Market or such securities exchange or exchanges as shall be
determined by the Depositor and the registration of the Preferred Securities
under the Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant to the
foregoing;

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<PAGE> 18

(E) the sending of notices (other than notices of default)
and other information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;

(F) the appointment of a Paying Agent, authenticating
agent and securities Registrar in accordance with this Trust Agreement;

(G) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the Secretary of
State of the State of Delaware;

(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in which
such existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created; and

(I) the taking of any action incidental to the foregoing
as the Administrative Trustees may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement for the benefit
of the Securityholders (without consideration of the effect of any such action
on any particular Securityholder).

(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:

(A) the establishment of the Payment Account;

(B) the receipt of the Debentures;

(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;

(D) the distribution of amounts owed to the
Securityholders in respect of the trust securities in accordance with the terms
of this Trust Agreement;

(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;

(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;

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<PAGE> 19

(G) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;

(H) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust;

(I) after an Event of Default the taking of any action

incidental to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on any
particular Securityholder);

(J) registering transfers of the Trust Securities in
accordance with this Trust Agreement; and

(K) except as otherwise provided in this Section 207(a)
(ii), the Property Trustee shall have none of the duties, liabilities, powers
or the authority of the Administrative Trustees set forth in Section 207(a)(i).

(b) So long as this Trust Agreement remains in effect, the Trust

(or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.

(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all
respects):

(i) the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration statement
on the appropriate form in relation to the Preferred Securities and the
Debentures, including any amendments thereto;

(ii) the determination of the states in which to take
appropriate action to qualify or, register for sale all or part of the
Preferred Securities and to do any and all such acts, other

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<PAGE> 20

than actions which must be taken by or on behalf of the Trust, and advise the
Trustees of actions they must take on behalf of the Trust, and prepare for
execution and filing any documents to be executed and filed by the Trust or on
behalf of the Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States;

(iii) the preparation for filing by the Trust and execution
on behalf of the Trust of an application to the Nasdaq National Market or a
national stock exchange or other organizations for listing upon notice of
issuance of any Preferred Securities and to file or cause an Administrative
Trustee to file thereafter with such exchange or organization such
notifications and documents as may be necessary from time to time;

(iv) the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration statement
on Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto;

(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and

(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.

(d) Notwithstanding anything herein to the contrary,
the Administrative Trustees are authorized and directed to conduct the affairs
of the Trust and to operate the Trust so that the Trust will not be deemed to
be an "investment Company" required to be registered under the 1940 Act, will
be classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
federal income tax purposes. In this connection, subject to Section 1002, the
Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in their discretion to be
necessary or desirable for such purposes.

SECTION 208. ASSETS OF TRUST.

The assets of the Trust shall consist of the Trust Property.

SECTION 209. TITLE TO TRUST PROPERTY.

Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.

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<PAGE> 21

ARTICLE III
PAYMENT ACCOUNT

SECTION 301. PAYMENT ACCOUNT.

(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.

(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.

ARTICLE IV
DISTRIBUTIONS; REDEMPTION

SECTION 401. DISTRIBUTIONS.

(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the payment
of Distributions. Distributions shall accumulate from , 1996, and, except
during any Extension Period with respect to the Debentures, shall be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on __________, 1997. If any date on which a Distribution is
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, payment of such Distribution shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date (each date on which distributions are payable in accordance with this
Section 401(a) a "Distribution Date").

(b) The Trust Securities represent undivided beneficial interests in the
Trust Property, and, as a practical matter, the Distributions on the Trust
Securities shall be payable at a rate of % per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full period shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of Distributions for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30 day months. During any Extension Period with respect to the Debentures,
Distributions on the Preferred Securities will be deferred for

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<PAGE> 22

a period equal to the Extension Period. The amount of Distributions payable for
any period shall include the Additional Amounts, if any.

(c) Distributions on the Trust Securities shall be made by the Property
Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available in the Payment Account for the payment of such
Distributions.

(d) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in the
event that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant
Distribution Date.

SECTION 402. REDEMPTION.

(a) on each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.

(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. The Property
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the CUSIP number;

(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed; and

(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that distributions
thereon will cease to accumulate on and after said date.

(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
Debentures. Redemptions of the Trust Securities shall be made and the
Redemption Price shall be payable on each

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<PAGE> 23

Redemption Date only to the extent that the Trust has immediately available
funds then on hand and available in the Payment Account for the payment of such
Redemption Price.

(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 402(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, deposit with the Clearing
Agency for the Preferred Securities funds sufficient to pay the applicable
Redemption Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the holders thereof. If the Preferred
Securities are no longer in book-entry-only form, the Property Trustee, subject
to Section 402(c), will deposit with the Paying Agent funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof
upon surrender of' their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Register for the Trust Securities on the
relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of Securityholders holding Trust Securities so
called for redemption will cease, except the right of such Securityholders to
receive the Redemption Price and any Distribution payable on or prior to the
Redemption Date, but without interest, and such Securities will cease to be
Outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately precedig Business Day, in each case, with the same force
and effect as if made on such date. In the event that payment of the Redemption
Price in respect of any Trust Securities called for redemption is improperly
withheld or refused and not paid either by the Trust or by the Depositor
pursuant to the Guarantee, Distributions on such Trust Securities will continue
to accumulate, at the then applicable rate, from the Redemption Date originally
established by the Trust for such Trust Securities to the date such Redemption
Price is actually paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the Redemption Price.

(e) Payment of the Redemption Price on the Trust Securities shall be made
to the record holders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event that
the Preferred Securities do not remain in book-entry-only form, the relevant
record date shall be the date fifteen days prior to the relevant Redemption
Date.

(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from

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<PAGE> 24

the outstanding Preferred Securities not previously called for redemption, by
such method (including, without limitation, by lot) as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or an integral multiple of $25 in excess
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities selected for redemption and, in
the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to the
redemption of Preferred Securities shall relate, in the case of any Preferred
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Preferred Securities which has been or is to be redeemed.

SECTION 403. SUBORDINATION OF COMMON SECURITIES.

(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 402(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from a Debenture Event of Default shall have occurred and
be continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Preferred Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Preferred Securities then due and payable.

(b) In the case of the occurrence of any Event of Default resulting from a
Debenture Event of Default, the Holder of Common Securities will be deemed to
have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with respect
to the Preferred Securities shall have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities shall have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.

SECTION 404. PAYMENT PROCEDURES.

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<PAGE> 25

Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable distribution dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.

SECTION 405. TAX RETURNS AND REPORTS.

The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee shall comply with United States federal withholding and backup
withholding tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.

SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.

Upon receipt under the Debentures of Additional Sums (as defined in the
Indenture), the Property Trustee, at the direction of an Administrative Trustee
or the Depositor, shall promptly pay any taxes, duties or governmental charges
of whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.

SECTION 407. PAYMENTS UNDER INDENTURE.

Any amount payable hereunder to any Holder of Preferred Securities shall be
reduced by the amount of any corresponding payment such Holder has directly
received under the Indenture pursuant to Section 514(b) or (c) hereof.

ARTICLE V
TRUST SECURITIES CERTIFICATES

SECTION 501. INITIAL OWNERSHIP.

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<PAGE> 26

Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.

SECTION 502. THE TRUST SECURITIES CERTIFICATES.

The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $25 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 504, 511
and 513.

SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.

On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 204 and 205, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, any Vice President, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.

SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES.

The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 508, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 510 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Property Trustee
shall be the initial Securities Registrar.

Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 508, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount

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<PAGE> 27

dated the date of execution by such Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 508.

Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.

No service charge shall be made for any registration of transfer or
exchange of Preferred securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.

SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.

If (a) any mutilated Trust Securities certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection
with the issuance of any new Trust Securities Certificate under this Section,
the Administrative Trustees or the Securities Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Trust Securities Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.

SECTION 506. PERSONS DEEMED SECURITYHOLDERS.

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<PAGE> 28

The Trustees, the Paying Agent and the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.

SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.

At any time when the Property Trustee is not also acting as the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished to the Property Trustee (a) semi-annually on or before January
15 and July 15 in each year, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Securityholders as of the
most recent Record Date and (b) promptly after receipt by any Administrative
Trustee or the Depositor of a request therefor from the Property Trustee in
order to enable the Property Trustee to discharge its obligations under this
Trust Agreement, in each case to the extent such information is in the
possession or control of the Administrative Trustees or the Depositor and is not
identical to a previously supplied list or has not otherwise been received by
the Property Trustee in its capacity as Securities Registrar. The rights of
Securityholders to communicate with other Securityholders with respect to their
rights under this Trust Agreement or under the Trust Securities, and the
corresponding rights of the Trustee shall be as provided in the Trust Indenture
Act. Each Holder, by receiving and holding a Trust Securities Certificate, and
each owner shall be deemed to have agreed not to hold the Depositor, the
Property Trustee or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.

SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.

The Administrative Trustees shall maintain in The City of New York, an
office or offices or agency or agencies where Preferred Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially designate the
principal corporate trust office of the Property Trustee, [insert address], as
the principal corporate trust office for such purposes. The Administrative
Trustees shall give prompt written notice to the Depositor and to the
Securityholders of any change in the location of the Securities Register or any
such office or agency.

SECTION 509. APPOINTMENT OF PAYING AGENT.

The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole

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<PAGE> 29

discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Property Trustee
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee The provisions of Sections 801, 803 and 806 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.

SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.

On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, any attempted transfer of the Common Securities (other than a transfer in
connection with a merger or consolidation of the Depositor into another
corporation pursuant to Section 10.01 of the Indenture) shall be void. The
Administrative Trustees shall cause each common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".

SECTION 511. BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON
SECURITIES CERTIFICATE.

(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to or held on behalf of the Depositary Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no beneficial owner will receive a Definitive Preferred
Securities Certificate representing such beneficial owner's interest in such
Preferred Securities, except as provided in section 513, unless and until
Definitive Preferred Securities Certificates have been issued to beneficial
owners pursuant to Section 513:

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<PAGE> 30

(i) the provisions of this Section 511(a) shall be in full force and
effect;

(ii) the Securities Registrar, the Paying Agent and the Trustees shall
be entitled to deal with the Clearing Agency for all purposes of this Trust
Agreement relating to the Book Entry Preferred Securities Certificates
(including the payment of the Liquidation Amount of and Distributions on the
Book-Entry Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to the Owners thereof;

(iii) to the extent that the provisions of this Section 511 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 511 shall control; and

(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Owners and the
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Preferred
Securities Certificates are issued pursuant to Section 513, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Preferred Securities to such Clearing
Agency Participants. Any Clearing Agency designated pursuant hereto will not be
deemed an agent of the Trustees for any purpose.

(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.

SECTION 512. NOTICES TO CLEARING AGENCY.

To the extent that a notice or other communication to the owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
513, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.

SECTION 513. DEFINITIVE PREFERRED SECURITIES CERTIFICATES.

If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency, or (c) after the occurrence of a Debenture Event of
Default, owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Property Trustee in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of the owners of
Preferred Securities Certificates, then the Property Trustee shall notify the
Clearing Agency, and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates, of the occurrence of any such event and of the
availability

<PAGE> 31
of the Definitive Preferred Securities Certificates to owners of such class or
classes, as applicable, requesting the same. Upon surrender to the Property
Trustee of the typewritten Preferred Securities certificate or Certificates
representing the Book-Entry Preferred Securities Certificates by the Clearing
Agency, accompanied by registration instructions, the Administrative Trustees,
or any one of them, shall execute the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing Agency.
Neither the Securities Registrar nor the Trustees shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.

SECTION 514. RIGHTS OF SECURITYHOLDERS.

(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 209, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights. When issued and
delivered to Holders of the Preferred Securities against payment of the purchase
price therefor, the Preferred Securities will be fully paid and nonassessable
interests in the Trust. The Holders of the Preferred Securities, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.

(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall have such right by a notice in writing to the Depositor and
the Debenture Trustee; and upon any such declaration such principal amount of
and the accrued interest on all of the Debentures shall become immediately due
and payable, provided that the payment of principal and interest on such
Debentures shall remain subordinated to the extent provided in the Indenture.

(c) For so long as any Preferred Securities remain outstanding, if, upon a
Debenture Event of Default arising from the failure to pay interest or
principal on the Debentures, the Holders of any Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of payment to such Holders of
principal of or interest

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<PAGE> 32

on the Debentures having a principal amount equal to the Liquidation Amount of
the Preferred Securities of such Holders.

ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 601. LIMITATIONS ON VOTING RIGHTS.

(a) Except as provided in this Section, in Sections 514, 810 and 1002 and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.

(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Article Six of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each Holder of Outstanding Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each holder of Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the outstanding Preferred Securities. The Property Trustee shall
notify each Holder of the Outstanding Preferred Securities of any notice of
default received from the Debenture Trustee with respect to the Debentures. In
addition to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Depositor, obtain an opinion of Counsel experienced in such
matters to the effect that the Trust will continue to be classified as a grantor
trust and not as an association taxable as a corporation for United States
federal income tax purposes on account of such action.

(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in

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<PAGE> 33

Liquidation Amount of the Outstanding Preferred Securities. No amendment to
this Trust Agreement may be made if, as a result of such amendment, the Trust
would cease to be classified as a grantor trust or would be classified as an
association taxable as a corporation for United States federal income tax
purposes.

SECTION 602. NOTICE OF MEETINGS.

Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 1008 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.

SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS.

No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
25% of the Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount) and the Administrative Trustees or the Property Trustee may,
at any time in their discretion, call a meeting of Preferred Securityholders to
vote on any matters as to which the Preferred Securityholders are entitled to
vote.

Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.

If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their aggregate Liquidation
Amount) held by the Preferred Securityholders of record present, either in
person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.

SECTION 604. VOTING RIGHTS.

Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.

SECTION 605. PROXIES, ETC.

At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy, shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the

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Administrative Trustees may direct, for verification prior to the time at which
such vote shall be taken. When Trust Securities are held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Trust Securities, but if more than one of them shall be present
at such meeting in person or by proxy, and such joint owners or their proxies
so present disagree as to any vote to be cast, such vote shall not be received
in respect of such Trust securities. A proxy purporting to be executed by or
on behalf of a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and, the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.

SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.

Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their aggregate Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion thereof
as shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their aggregate Liquidation
Amount).

SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.

For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a date,
not more than 90 days prior to the date of any meeting of Securityholders or
the payment of Distribution or other action, as the case may be, as a record
date for the determination of the identity of the Securityholders of record for
such purposes.

SECTION 608. ACTS OF SECURITYHOLDERS.

Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
or Owners signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Trust Agreement and (subject to Section 801) conclusive
in favor of the Trustees, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other

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<PAGE> 35

officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which any Trustee
receiving the same deems sufficient.

The ownership of Preferred Securities shall be proved by the Securities
Register.

Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.

Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such liquidation
amount.

A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any Person.

SECTION 609. INSPECTION OF RECORDS.

Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably related
to such Securityholder's interest as a Securityholder.

ARTICLE VII
REPRESENTATIONS AND WARRANTIES

SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE PROPERTY
TRUSTEE.

The Bank and the Property Trustee, each severally on behalf of and as to
itself, as of the date hereof, and each Successor Property Trustee at the time
of the Successor Property Trustee's acceptance of its appointment as Property
Trustee hereunder (the term "Bank" being used to refer to such Successor
Property Trustee in its separate corporate capacity) hereby represents and
warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:

<PAGE> 36

(a) the Bank is a Massachusetts banking corporation duly organized,
validly existing and in good standing under the laws of the State of
Massachusetts;

(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;

(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;

(d) the execution, delivery and performance by the Property Trustee of
this Trust Agreement has been duly authorized by all necessary corporate or
other action on the part of the Property Trustee and does not require any
approval of stockholders of the Bank and such execution, delivery and
performance will not (i) violate the Bank's charter or by-laws, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of, any Lien on any properties
included in the Trust Property pursuant to the provisions of, any indenture,
mortgage, credit agreement, license or other agreement or instrument to which
the Property Trustee or the Bank is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Massachusetts, as the case may be, governing the banking or trust
powers of the Bank or the Property Trustee (as appropriate in context) or any
order, judgment or decree applicable to the Property Trustee or the Bank;

(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Property Trustee contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the Bank or the
Property Trustee, as the case may be, under the laws of the United States or the
State of Massachusetts; and

(f) there are no proceedings pending or, to the best of the Property
Trustee's knowledge, threatened against or affecting the Bank or the Property
Trustee in any court or before any governmental authority, agency or arbitration
board or tribunal which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and authority of
the Property Trustee to enter into or perform its obligations as one of the
Trustees under this Trust Agreement.

SECTION 702. REPRESENTATIONS AND WARRANTIES OF THE DELAWARE BANK AND THE
DELAWARE TRUSTEE.

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<PAGE> 37

The Delaware Bank and the Delaware Trustee, each severally on behalf of and
as to itself, as of the date hereof, and each Successor Delaware Trustee at the
time of the Successor Delaware Trustee's acceptance of appointment as Delaware
Trustee hereunder (the term "Delaware Bank" being used to refer to such
Successor Delaware Trustee in its separate corporate capacity) , hereby
represents and warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:

(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;

(b) the Delaware Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;

(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors, rights and to general equity principles;

(d) the execution, delivery and performance by the Delaware Trustee of
this Trust Agreement has been duly authorized by all necessary corporate or
other action on the part of the Delaware Trustee and does not require any
approval of stockholders of the Delaware Bank and such execution, delivery and
performance will not (i) violate the Delaware Bank's charter or by-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Delaware Bank or the Delaware Trustee is a party or by which it is
bound, or (iii) violate any law, governmental rule or regulation of the United
States or the State of Delaware, as the case may be, governing the banking or
trust powers of the Delaware Bank or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Delaware Bank or the
Delaware Trustee;

(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Delaware Trustee contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the Delaware Bank
or the Delaware Trustee, as the case may be, under the laws of the United States
or the State of Delaware; and

(f) there are no proceedings pending or, to the best of the Delaware
Trustee's knowledge, threatened against or affecting the Delaware Bank or the
Delaware Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or

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in the aggregate, would materially and adversely affect the Trust or would
question the right, power and authority of the Delaware Trustee to enter into or
perform its obligations as one of the Trustees under this Trust Agreement.

SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.

The Depositor hereby represents and warrants for the benefit of the
Securityholders that:

(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Administrative Trustees pursuant
to the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Securityholders will be, as of such date, entitled to
the benefits of this Trust Agreement; and

(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.

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ARTICLE VIII
THE TRUSTEES

SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.

(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. No Administrative Trustee nor the Delaware Trustee shall be liable for its
act or omissions hereunder except as a result of its own gross negligence or
willful misconduct. The Property Trustee's liability shall be determined under
the Trust Indenture Act. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section. To the extent that, at law or in equity, the
Delaware Trustee an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the
Securityholders, the Delaware Trustee such Administrative Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
the Delaware Trustee the Administrative Trustees otherwise existing at law or
in equity, are agreed by the Depositor and the Securityholders to replace such
other duties and liabilities of the Administrative Trustees.

(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 801(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.

(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;

(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in Liquidation Amount of
the Trust Securities relating to the time, method and place

<PAGE> 40

of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under this
Trust Agreement;

(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment Account shall be to deal with such Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Trust Agreement and the Trust Indenture Act;

(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the Depositor and
money held by the Property Trustee need not be segregated from other funds held
by it except in relation to the Payment Account maintained by the Property
Trustee pursuant to Section 301 and except to the extent otherwise required by
law; and

(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property Trustee be
liable for the negligence, default or misconduct of the Administrative Trustees
or the Depositor.

SECTION 802. CERTAIN NOTICES.

(a) within 15 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
For purposes of this Section the term "Event of Default" means any event that
is, or after notice or lapse of time or both would become, an Event of Default.

(b) The Administrative Trustees shall transmit, to the Securityholders
in the manner and to the extent provided in Section 1008, notice of the
Depositor's election to begin or further extend an Extension Period on the
Debentures (unless such election shall have been revoked) within the time
specified for transmitting such notice to the holders of the Debentures pursuant
to the Indenture as originally executed.

SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.

Subject to the provisions of Section 801:

(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of

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<PAGE> 41

indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;

(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;

(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;

(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;

(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;

(f) the Property Trustee may consult with counsel of its choice (which
counsel may be counsel to the Depositor or any of its Affiliates) and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon and in accordance with such advice, such counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;

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<PAGE> 42

(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;

(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;

(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and

(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement. No provision of
this Trust Agreement shall be deemed to impose any duty or obligation on the
Property Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it, in any jurisdiction in which it shall
be illegal, or in which the Property Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Property Trustee shall be construed to be a duty.

SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.

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SECTION 805. MAY HOLD SECURITIES.

Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.

SECTION 806. COMPENSATION; INDEMNITY; FEES.

The Depositor agrees:

(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);

(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to such Trustee's negligence, bad faith or
willful misconduct (or, in the case of the Administrative Trustees or the
Delaware Trustee, any such expense, disbursement or advance as may be
attributable to its, his or her gross negligence, bad faith or willful
misconduct); and

(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except any such expense, disbursement or advance as
may be attributable to such Trustee's negligence, bad faith or willful
misconduct for (or, in the case of the Administrative Trustees or the Delaware
Trustee, any such expense, disbursement or advance as may be attributable to
its, his or her gross negligence, bad faith or willful misconduct.

No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 806.

SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.

(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to
the

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Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.

(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.

SECTION 808. CONFLICTING INTERESTS.

If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.

SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.

Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, the Depositor shall have power to appoint, and upon the
written request of the Property Trustee, the Depositor shall for such purpose
join with the Property Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.

Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property,

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title, right, or power, any and all such instruments shall, on request, be
executed, acknowledged, and delivered by the Depositor.

Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:

(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be exercised,
solely by such Trustees and not by such co-trustee or separate trustee.

(b) The rights, powers, duties and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.

(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in this Section 809.

(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.

(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.

(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.

SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

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No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 811.

Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 811 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the Relevant Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Relevant Trustee with
respect to the Trust Securities.

Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If
a Debenture Event of Default shall have occurred and be continuing, the Property
Trustee or the Delaware Trustee, or both of them, may be removed at such time by
Act of the Holders of a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.

If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 811. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default shall have
occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 811. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 811. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 811, any Securityholder
who has been a Securityholder of Trust Securitie on behalf of himself and all
others similarly situated may petition a court of competent jurisdiction for
the appointment Trustee with respect to the Trust Securities.

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<PAGE> 47

The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 1008 and shall give notice to the Depositor.
Each notice shall include the name of the successor Relevant Trustee and the
address of its Corporate Trust office if it is the Property Trustee.

Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 807).

SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

In case of the appointment hereunder of a successor Relevant Trustee with
respect to the Trust Securities and the Trust, the retiring Relevant Trustee and
each successor Relevant Trustee with respect to the Trust Securities shall
execute and deliver an instrument hereto wherein each successor Relevant Trustee
shall accept such appointment and which shall contain such provisions as shall
be necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee with respect to the Trust Securities and the Trust
and upon the execution and delivery of such instrument the resignation or
removal of the retiring Relevant Trustee shall become effective to the extent
provided therein and each such successor Relevant Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Relevant Trustee with respect to the Trust
Securities and the Trust; but, on request of the Trust or any successor
Relevant Trustee such retiring Relevant Trustee shall duly assign, transfer and
deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder with
respect to the Trust Securities and the Trust.

Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the immediately preceding paragraph, as the case may be.

No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.

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SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto.

SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.

If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities) , the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).

SECTION 814. REPORTS BY PROPERTY TRUSTEE.

(a) Not later than July 15 of each year commencing with
______________, 199___, the Property Trustee shall transmit to all
Securityholders in accordance with Section 1008, and to the Depositor, a brief
report dated as of such December 31 with respect to:

(i) its eligibility under Section 807 or, in lieu thereof, if to
the best of its knowledge it has continued to be eligible under said Section, a
written statement to such effect; and

(ii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by the
Property Trustee in the performance of its duties hereunder which it has not
previously reported and which in its opinion materially affects the Trust
Securities.

(b) In addition the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.

(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national securities
exchange or other organization upon which the Trust Securities are listed, with
the Commission and with the Depositor.

SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.

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The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.

SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.

SECTION 817. NUMBER OF TRUSTEES.

(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same Person.

(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 817(a), or if the
number of Trustees is increased pursuant to Section 817(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 810.

(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 810, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.

SECTION 818. DELEGATION OF POWER.

(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated In Section
207(a); and

(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise

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as the Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of the Trust,
as set forth herein.

SECTION 819. VOTING.

Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.

ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER

SECTION 901. TERMINATION UPON EXPIRATION DATE.

Unless earlier dissolved, the Trust shall automatically dissolve on,
[2051] (the "Expiration Date") subject to distribution of the Trust Property in
accordance with Section 904.

SECTION 902. EARLY TERMINATION.

The first to occur of any of the following events is an "Early Termination
Event":

(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;

(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to dissolve the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities in
accordance with Section 904;

(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction.

SECTION 903. TERMINATION

The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 904, or upon the
redemption of all of the Trust Securities pursuant to Section 402, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative

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Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders, and (d) the filing of a
Certificate of cancelation by the Administrative Trustee under the Business
Trust Act.

SECTION 904. LIQUIDATION.

(a) If an Early Termination Event specified in clause (a), (b), or (d)
of Section 902 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 904(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:

(i) state the Liquidation Date;

(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a Like
Amount of Debentures; and

(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities certificates for Debentures, or if
Section 904(d) applies receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.

(b) Except where Section 902(c) or 904(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.

(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) representing a Like
Amount of Debentures will be issued to holders of Trust Securities Certificates
upon surrender of such certificates to the Administrative Trustees or their
agent for exchange, (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on The Nasdaq National Market or on such other securities
exchange or other organization as the Preferred Securities are then listed or
traded, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest

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or principal will be made to holders of Trust Securities Certificates
with respect to such Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders to
receive Debentures upon surrender of Trust Securities Certificates.

(d) In the event that, notwithstanding the other provisions of this
Section 904, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders will
be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding-up or termination, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then, subject
to the next succeeding sentence, the amounts payable by the Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred securities, except that, if
a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.

SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
THE TRUST.

The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 905. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities) so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as the holder
of the Debentures, (iii) the Successor Securities are listed or traded, or any
Successor Securities will be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which the Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation,

<PAGE> 53

replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, (vi)
prior to suh merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
opinion of Counsel to the effect that (a) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, and
(b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity will
be required to register as an investment Company under the 1940 Act and (vii)
the Depositor owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of holders of 100%
in Liquidation Amount of the Preferred Securities, consolidate, amalgamate,
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to any other Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.

ARTICLE X
MISCELLANEOUS PROVISIONS

SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.

The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.

SECTION 1002. AMENDMENT.

(a) This Trust Agreement may be amended from time to time by the Trustees
and the Depositor, without the consent of any Securityholders, (i) as provided
in Section 811 with respect to acceptance of appointment by a successor
Trustee, (ii) to cure any ambiguity, correct or supplement any provision herein
or therein which may be inconsistent with any other provision herein or
therein, or to make any other provisions with respect to matters or questions
arising under this Trust Agreement, that shall not be inconsistent with the
other provisions of this Trust Agreement, or (iii) to modify, eliminate or add
to any provisions of this Trust Agreement to such extent as shall be necessary
to ensure that the Trust will be classified for United States federal income
tax purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Trust will not be required to register as an
"Investment Company" under the 1940 Act; provided, however, that in the case of
clause (ii), such action shall not adversely affect in any material respect the
interests of

<PAGE> 54

any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.

(b) Except as provided in Section 601(c) or Section 1002(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not
less than a majority (based upon Liquidation Amounts) of the Trust
Securities then Outstanding and (ii) upon receipt by the Trustees of an
opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status of an "investment
company" under the 1940 Act.

(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 603 or 606 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (ii) restrict the right of a Securityholder to institute
suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of
the Securityholders (such consent being obtained in accordance with Section 603
or 606 hereof), this paragraph (c) of this Section 1002 may not be amended.

(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the 1940 Act or to fail or cease to be
classified as a grantor trust for United States federal income tax purposes.

(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.

(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.

(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.

SECTION 1003. SEPARABILITY.

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In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

SECTION 1004. GOVERNING LAW.

THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES).

SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.

If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day which is a Business Day (except as
otherwise provided in Sections 401(a) and 402(d)), with the same force and
effect as though made on the date fixed for such payment, and no distribution
shall accumulate thereon for the period after such date.

SECTION 1006. SUCCESSORS.

This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee(s),
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Ten of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.

SECTION 1007. HEADINGS.

The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.

SECTION 1008. REPORTS, NOTICES AND DEMANDS.

Any report, notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon any Securityholder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and
(b) in the case of the Common Securityholder or the Depositor, to Independent
Bank Corporation, 230 West Main Street, Ionia, Michigan 48846, Attention:
Treasurer, facsimile no.: (616) 527-5634. Any notice to Preferred
Securityholders shall

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also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.

Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee to State Street Bank and Trust
Company, ____________________, Attention: Corporate Trust Trustee
Administration; (b) with respect to the Delaware Trustee, to Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Trustee Administration; and (c) with
respect to the Administrative Trustees, to them at the address above for

notices to the Depositor, marked "Attention: Administrative Trustees of IBC
Capital." Such notice, demand or other communication to or upon the Trust or
the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.

SECTION 1009. AGREEMENT NOT TO PETITION.

Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 1009, the
Property Trustee agrees, for the benefit of Securityholders, that at the
expense of the Depositor (which expense shall be paid prior to the filing), it
shall file an answer with the bankruptcy court or otherwise properly contest
the filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be stopped and precluded
therefrom. The provisions of this Section 1009 shall survive the termination
of this Trust Agreement.

SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.

(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.

(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.

(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by
any of the provisions of the Trust

51
<PAGE> 57

Indenture Act, such required provision shall control. If any provision of this
Trust Agreement modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Trust Agreement as so modified or to be excluded, as the case may
be.

(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.

<PAGE> 58

SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.

INDEPENDENT BANK CORPORATION

By:_________________________________

Name:
Title:

STATE STREET BANK AND TRUST COMPANY
as Property Trustee

By:_________________________________

Name:
Title:

WILMINGTON TRUST COMPANY
as Delaware Trustee

By:_________________________________

Name:
Title:

<PAGE> 59

__ ________________________________________

As Administrative Trustee

__ ________________________________________

As Administrative Trustee

__ ________________________________________

As Administrative Trustee

54
<PAGE> 60

EXHIBIT A

CERTIFICATE OF TRUST
OF
IBC CAPITAL FINANCE

This Certificate of Trust of IBC CAPITAL FINANCE (the "Trust"), dated
November ___, 1996, is being duly executed and filed by Wilmington Trust
Company, a Delaware banking corporation, Charles C. Van Loan, William R. Kohls,
and James J. Twarozynski, each an individual, as trustees, to form a business
trust under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).

1. NAME. The name of the business trust formed hereby is IBC Capital
Finance.

3. EFFECTIVE DATE. This Certificate of Trust shall be effective on
November , 1996.

IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
has executed this Certificate of Trust as of the date first above written.

WILMINGTON TRUST COMPANY,
as trustee

By:_________________________________
Name:
Title:

____________________________________
CHARLES C. VAN LOAN, as Trustee

____________________________________
WILLIAM R. KOHLS, as Trustee

____________________________________
JAMES J. TWAROZYNSKI, as Trustee

A-1
<PAGE> 61

EXHIBIT B

__________ ____, 1996

The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.

Attention:___________________
General Counsel's Office

Re: IBC Capital Finance
Cumulative Trust Preferred Securities

Ladies and Gentlemen:

The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DEPOSITORY TRUST
COMPANY") of IBC Capital Finance Preferred Securities (the "Preferred
Securities"), of IBC Capital Finance, a Delaware business trust (the
"Issuer"),created pursuant to a Trust Agreement between Independent Bank
Corporation, a Michigan corporation ("IBC"), State Street Bank and Trust
Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee and
the Administrative Trustees named therein. The payment of distributions on the
Preferred Securities and payments due upon liquidation of Issuer or redemption
of the Preferred Securities, to the extent the Issuer has funds available for
the payment thereof, are guaranteed by IBC to the extent set forth in a
Guarantee Agreement dated November _, 1996 by IBC with respect to the Preferred
Securities. IBC and the Issuer propose to sell the Preferred Securities to
certain Underwriters (the "Underwriters") pursuant to an Underwriting Agreement
dated November _, 1996 by and among the Underwriters, the Issuer and IBC, and
the Underwriters wish to take delivery of the Preferred Securities through
DEPOSITORY TRUST COMPANY. State Street Bank and Trust Company is acting as
transfer agent and registrar with respect to the Preferred Securities (the
"Transfer Agent and Registrar").

To induce DEPOSITORY TRUST COMPANY to accept the Preferred Securities as
eligible for deposit at DEPOSITORY

B-1
<PAGE> 62

TRUST COMPANY, and to act in accordance with DEPOSITORY TRUST COMPANY's rules
with respect to the Preferred Securities, the Issuer, the Transfer Agent and
Registrar and DEPOSITORY TRUST COMPANY agree among each other as follows:

1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about November _, 1996, there
shall be deposited with DEPOSITORY TRUST COMPANY one or more global
certificates (individually and collectively, the "Global Certificate")
registered in the name of DEPOSITORY TRUST COMPANY's Preferred Securities
nominee, Cede & Co., representing an aggregate of Preferred Securities and
bearing the following legend:

Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DEPOSITORY TRUST COMPANY"), to Issuer or its
agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an
authorized representative of DEPOSITORY TRUST COMPANY (and
any payment is made to Cede & Co. or to such other entity
as is requested by an authorized representative of DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.

2. The Amended and Restated Trust Agreement of the Issuer provides for
the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DEPOSITORY TRUST COMPANY notice of such
record date not less than 15 calendar days in advance of such record date.

3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation
of all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice of
such event at least 5 business days prior to the effective date of such event.

4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice
specifying: (a) the amount of and conditions, if any, applicable to the payment
of any such distribution or any such offering or issuance of rights; (b) any
applicable expiration or deadline date, or any date by which any action on the
part of the holders of Preferred Securities is required; and (c) the date any
required notice is to be mailed by or on behalf of the Issuer to holders of
Preferred Securities or published by or on behalf of the Issuer (whether by
mail or publication, the "Publication Date"). Such notice shall be sent to
DEPOSITORY TRUST COMPANY by a secure means (e.g., legible telecopy, registered
or certified mail, overnight delivery) in a timely manner designed to assure
that such notice is in DEPOSITORY TRUST COMPANY's possession no later than t '
he close of business on the business day before the Publication Date. The

B-2
<PAGE> 63

Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such
notice shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on
the Preferred Securities, the Issuer or the Transfer Agent and Registrar will
notify DEPOSITORY TRUST COMPANY's Dividend Department of such payment 5
business days prior to payment date. Notices to DEPOSITORY TRUST COMPANY's
Dividend Department by telecopy shall be sent to (212) 09-1723. Such notices
by mail or by any other means shall be sent to:

Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695

The Issuer or the Transfer Agent and Registrar shall confirm DEPOSITORY
TRUST COMPANY's receipt of such telecopy by telephoning the Dividend Department
at (212) 709- 1270.

5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DEPOSITORY TRUST COMPANY not less than 30 calendar days prior to
such event by a secure means in the manner set forth in paragraph 4. Such
redemption notice shall be sent to DEPOSITORY TRUST COMPANY's Call Notification
Department at (516) 227-4164 or (516) 227-4190, and receipt of such notice
shall be confirmed by telephoning (516) 227-4070. Notice by mail or by any
other means shall be sent to:

Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719

6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to
DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as described
in paragraph 4. Notices to DEPOSITORY TRUST COMPANY pursuant to this paragraph
and notices of other corporate actions (including mandatory tenders, exchanges
and capital changes), shall be sent, unless notification to another department
is expressly provided for herein, by telecopy to DEPOSITORY TRUST COMPANY's
Reorganization Department at (212)709-1093 or (212) 709-1094 and receipt of
such notice shall be confirmed by telephoning (212)709-6884, or by mail or any
other means to:

B-3
<PAGE> 64

B-4
<PAGE> 65

Manager, Reorganization Department
Reorganization window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695

7. All notices and payment advices sent to DEPOSITORY TRUST COMPANY shall
contain the CUSIP number or numbers of the Preferred Securities and the
accompanying designation of the Preferred Securities, which, as of the date of
this letter, is IBC Capital Trust Preferred Securities."

8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DEPOSITORY TRUST COMPANY, or its registered assigns
in next day funds on each payment date (or in accordance with existing
arrangements between the Issuer or the Transfer Agent and Registrar and
DEPOSITORY TRUST COMPANY). Such payments shall be made payable to the order of
Cede & Co., and shall be addressed as follows:

NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695

9. DEPOSITORY TRUST COMPANY may by prior written notice direct the Issuer
and the Transfer Agent and Registrar to use any other telecopy number or
address of DEPOSITORY TRUST COMPANY as the number or address to which notices
or payments may be sent.

10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DEPOSITORY TRUST COMPANY, in its discretion: (a) may request the
Issuer or the Transfer Agent and Registrar to issue and countersign a new
Global Certificate; or (b) may make an appropriate notation on the Global
Certificate indicating the date and amount of such reduction.

11. DEPOSITORY TRUST COMPANY may discontinue its services as a securities
depositary with respect to the Preferred Securities at any time by giving at
least 90 days' prior written notice to the Issuer and the Transfer Agent and
Registrar (at which time DEPOSITORY TRUST COMPANY will confirm with the Issuer
or the Transfer Agent and Registrar the aggregate number of Preferred

B-5
<PAGE> 66

Securities deposited with it) and discharging its responsibilities with respect
thereto under applicable law. Under such circumstances, the Issuer may
determine to make alternative arrangements for book-entry settlement for the
Preferred Securities, make available one or more separate global certificates
evidencing Preferred Securities to any Participant having Preferred Securities
credited to its DEPOSITORY TRUST COMPANY account, or issue definitive Preferred
Securities to the beneficial holders thereof, and in any such case, DEPOSITORY
TRUST COMPANY agrees to cooperate fully with the Issuer and the Transfer Agent
and Registrar and to

return the Global Certificate, duly endorsed for transfer as directed by the
Issuer or the Transfer Agent and Registrar, together with any other documents
of transfer reasonably requested by the Issuer or the Transfer Agent and
Registrar.

12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DEPOSITORY TRUST
COMPANY of the availability of certificates. In such event, the Issuer or the
Transfer Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DEPOSITORY TRUST COMPANY and others, and
DEPOSITORY TRUST COMPANY agrees to cooperate fully with the Issuer and the
Transfer Agent and Registrar and to return the Global Certificate, duly
endorsed for transfer as directed by the Issuer or the Transfer Agent and
Registrar, together with any other documents of transfer reasonably requested
by the Issuer or the Transfer Agent and Registrar.

13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

B-6
<PAGE> 67

Nothing herein shall be deemed to require the Transfer Agent and Registrar
to advance funds on behalf of IBC Capital.

Very truly yours,

INDEPENDENT BANK CORPORATION
(As Issuer)

By: __________________________________
Name:
Title:

STATE STREET BANK AND TRUST COMPANY
as Property Trustee
and as Transfer Agent and Registrar

By: __________________________________
Name:
Title:

RECEIVED AND ACCEPTED:

THE DEPOSITORY TRUST COMPANY

B-7

<PAGE> 68

EXHIBIT C

THIS CERTIFICATE IS NOT TRANSFERABLE

Certificate Number ______ Number of Common Securities

Certificate Evidencing Common Securities
of
IBC Capital Finance

% Common Securities
(liquidation amount $25 per Common Security)

IBC CAPITAL FINANCE, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that INDEPENDENT BANK
CORPORATION (the "Holder") is the registered owner of _________________________
(_______) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the _____% Common
Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). In accordance with Section 510 of the Trust Agreement (as
defined below), the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of November ____, 1996, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.

Upon receive of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ____________day of November, 1996.

IBC CAPITAL FINANCE

By ____________________________
Name:
Title:

C-1
<PAGE> 69

EXHIBIT D

AGREEMENT AS TO EXPENSES AND LIABILITIES

AGREEMENT dated as of November ____, 1996, between Independent Bank
Corporation, a Michigan corporation ("IBC"), and IBC Capital Finance, a
Delaware business trust (the "Trust").

WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, IBC and to issue and sell _____%
Preferred Securities (the "Preferred Securities") with such powers, preferences
and special rights and restrictions as are set forth in the Trust Agreement of
the Trust dated as of November ___, 1996, as the same may be amended from time
to time (the "Trust Agreement");

WHEREAS, IBC will directly or indirectly own all of the Common Securities
of the Trust and will issue the Debentures;

NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase IBC hereby agrees shall benefit IBC and
which purchase IBC acknowledges will be made in reliance upon the execution and
delivery of this Agreement, IBC, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:

ARTICLE I

SECTION 1. 1. GUARANTEE BY IBC.

Subject to the terms and conditions hereof, IBC, including in its capacity
as holder of the Common Securities, hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Trust other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.

SECTION 1.2. TERM OF AGREEMENT.

This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which there
are no Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any holder of Preferred Securities

D-1

<PAGE> 70

or any Beneficiary must restore payment of any sums paid under the Preferred
Securities, under any obligation, under the Guarantee Agreement dated the date
hereof by IBC and State Street Bank & Trust Company as guarantee trustee or
under this Agreement for any reason whatsoever. This Agreement is continuing,
irrevocable, unconditional and absolute.

SECTION 1.3. WAIVER OF NOTICE.

IBC hereby waives notice of acceptance of this Agreement and of any
obligation to which it applies or may apply, and IBC hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.

SECTION 1.4. NO IMPAIRMENT.

The obligations, covenants, agreements and duties of IBC under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:

(a) the extension of time for the payment by the Trust of all or any
portion of the obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;

(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the obligations or any
action on the part of the Trust granting indulgence or extension of any kind;
or

(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.

There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, IBC with respect to the happening of any of the foregoing.

SECTION 1.5. ENFORCEMENT.

A Beneficiary may enforce this Agreement directly against IBC, and IBC
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against IBC.

D-2
<PAGE> 71

ARTICLE II

SECTION 2. 1. BINDING EFFECT.

All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of IBC and shall
inure to the benefit of the Beneficiaries.

SECTION 2.2. AMENDMENT.

So long as there remains any Beneficiary or any Preferred Securities of
any series are outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.

SECTION 2.3. NOTICES.

Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answerback, if sent by telex):

IBC Capital
c/o State Street Bank and Trust Company

________________________________________

Facsimile No.: _________________________

Attention: _____________________________

Independent Bank Corporation
230 West Main Street
Ionia, MI 48846
Facsimile No.:________________________
Attention: ..... Chief Financial Officer

Section 2.4. This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Michigan (without
regard to conflict of laws principles).

[SIGNATURES ARE ON THE FOLLOWING PAGE]

D-3
<PAGE> 72

THIS AGREEMENT is executed as of the day and year first above written.

INDEPENDENT BANK CORPORATION

By:
_____________________________
Name:
Title:

IBC CAPITAL FINANCE

By:
_____________________________

Name:
Title: Administrative Trustee

D-4

<PAGE> 73

EXHIBIT E

This Preferred Security is a Global Certificate within the meaning of the
Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement (as defined below) and
no transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.

Unless this Preferred Security is presented by an authorized
representative of State Street Bank and Trust Company to IBC Capital Finance or
its agent for registration of transfer, exchange or payment, and any Preferred
Security issued is registered in the name of Cede & Co., or such other name as
requested by an authorized representative of State Street Bank and Trust
Company and any payment hereon is made to Cede & Co. ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co. has an interest herein.

Certificate Number Number of Preferred Securities
P-
CUSIP NO.

Certificate Evidencing Preferred Securities
of
IBC Capital Finance

% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)

IBC CAPITAL FINANCE, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that INDEPENDENT BANK
CORPORATION (the "Holder") is the registered owner of ( ) preferred securities
of the Trust representing undivided beneficial interests in the assets of the
Trust and designated the % Trust Preferred Securities (liquidation
amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer as provided in Section 504 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of November , 1996, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The

E-1
<PAGE> 74

Holder is entitled to the benefits of the Guarantee Agreement entered into by
Independent Bank Corporation, a Michigan corporation, and State Street Bank &
Trust Company, as guarantee trustee, dated as of November , 1996 (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.

Upon receive of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this day of November, 1996.

IBC CAPITAL FINANCE

By ______________________________
NAME:
Title:

E-2

<PAGE> 1
EXHIBIT 4.7

=========================================================================

PREFERRED SECURITIES GUARANTEE AGREEMENT

INDEPENDENT BANK CORPORATION

AND

STATE STREET BANK AND TRUST COMPANY

DATED: NOVEMBER , 1996

=========================================================================

<PAGE> 2

TABLE OF CONTENTS

Page No.

ARTICLE I - DEFINITIONS AND INTERPRETATION 1

SECTION 1.1 Definitions and Interpretation 1

ARTICLE II - TRUST INDENTURE ACT 4

SECTION 2.1 Trust Indenture Act; Application 4

SECTION 2.2 Lists of Holders of Securities 4

SECTION 2.3 Reports by the Preferred Guarantee Trustee 4

SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee 5

SECTION 2.5 Evidence of Compliance with Conditions Precedent 5

SECTION 2.6 Events of Default; Waiver 5

SECTION 2.7 Event of Default; Notice 5

SECTION 2.8 Conflicting Interests 6

ARTICLE III - POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE 6

SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee 6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee 7
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee 9

ARTICLE IV - PREFERRED GUARANTEE TRUSTEE 9

SECTION 4.1 Preferred Guarantee Trustee; Eligibility 9
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees 10

ARTICLE V - GUARANTEE 11

SECTION 5.1 Guarantee 11
SECTION 5.2 Waiver of Notice and Demand 11
SECTION 5.3 Obligations Not Affected 11
SECTION 5.4 Rights of Holders 12
SECTION 5.5 Guarantee of Payment 12
SECTION 5.6 Subrogation 12
SECTION 5.7 Independent Obligations 13

<PAGE> 3

ARTICLE VI - LIMITATION OF TRANSACTIONS; SUBORDINATION 13

SECTION 6.1 Limitation of Transactions 13
SECTION 6.2 Ranking 13

ARTICLE VII - TERMINATION 13

SECTION 7.1 Termination 13

ARTICLE VIII - INDEMNIFICATION 14

SECTION 8.1 Exculpation 14
SECTION 8.2 Indemnification 14

ARTICLE IX - MISCELLANEOUS 15

SECTION 9.1 Successors and Assigns 15
SECTION 9.2 Amendments 15
SECTION 9.3 Notices 15
SECTION 9.4 Benefit 16
SECTION 9.5 Governing Law 16

<PAGE> 4

CROSS REFERENCE TABLE

Section of Trust Section of
Indenture Act of Guarantee
1939, as Amended Agreement
- ---------------- -----------------

310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 3.6, 5.4
316(b) 5.3
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1(b)
318(b) 2.1
318(c) 2.1(a)

iii

<PAGE> 5
[Form of Preferred Securities Guarantee Agreement]

PREFERRED SECURITIES GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of November __, 1996, is executed and delivered by Independent Bank
Corporation, a Michigan corporation (the "Guarantor"), and State Street Bank
and Trust Company, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of IBC Capital Finance, a Delaware statutory
business trust ("IBC Capital").

WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of ________, 1996, among the trustees of IBC Capital
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of IBC Capital, IBC Capital is
issuing on the date hereof [ ] preferred
securities, having an aggregate liquidation amount of $[ ], designated the
_____% Preferred Securities (the "Preferred Securities");

WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.

ARTICLE I
DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

In this Preferred Securities Guarantee, unless the context otherwise
requires:

(a) Capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;

(b) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;

(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;

(d) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;

<PAGE> 6

(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and

(f) a reference to the singular includes the plural and vice versa.

"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.

"Business Day" means any day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.

"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at [address].

"Covered Person" means any Holder or beneficial owner of Preferred
Securities.

"Debentures" means the series of convertible junior subordinated debt
securities of the Guarantor designated the ___% Cumulative Subordinated
Debentures due [ ] held by the Property Trustee (as defined in the Trust
Agreement) of IBC Capital.

"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.

"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by IBC Capital: (i) any accrued and unpaid Distributions (as
defined in the Trust Agreement) that are required to be paid on such Preferred
Securities to the extent IBC Capital shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price") to the extent IBC Capital has funds
available therefor, with respect to any Preferred Securities called for
redemption by IBC Capital, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of IBC Capital (other than in connection
with the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Trust Agreement), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent IBC Capital shall
have funds available therefor, and (b) the amount of assets of IBC Capital
remaining available for distribution to Holders in liquidation of IBC Capital
(in either case, the "Liquidation Distribution").

"Holder" shall mean any holder, as registered on the books and records of
IBC Capital of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite

2
<PAGE> 7

percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.

"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of the Preferred Guarantee Trustee.

"Indenture" means the Indenture dated as of _______, 1996, among the
Guarantor (the "Debenture Issuer") and State Street Bank and Trust Company, as
trustee, and any indenture supplemental thereto pursuant to which certain
subordinated debt securities of the Debenture Issuer are to be issued to the
Property Trustee of IBC Capital.

"Majority in liquidation amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.

"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee shall include:

(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definition relating thereto;

(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;

(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.

"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.

"Preferred Guarantee Trustee" means State Street Bank and Trust Company,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.

3
<PAGE> 8

"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.

ARTICLE II
TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application

(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and

(b) If and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

SECTION 2.2 Lists of Holders of Securities

(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within 1 Business Day after January 1 and June
30 of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.

(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3 Reports by the Preferred Guarantee Trustee

4
<PAGE> 9

Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.

SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee

The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.

SECTION 2.5 Evidence of Compliance with Conditions Precedent

The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

SECTION 2.6 Events of Default; Waiver

The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities,
waive any past Event of Default and its consequences. Upon such waiver, any
such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

SECTION 2.7 Event of Default; Notice

(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.

(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Trust Agreement shall
have obtained actual knowledge.

5
<PAGE> 10

SECTION 2.8 Conflicting Interests

The Trust Agreement shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust

Indenture Act.

ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee

(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred
Securities Guarantee to any Person except a Holder of Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Preferred Guarantee Trustee on acceptance by such Successor Preferred Guarantee
Trustee of its appointment to act as Successor Preferred Guarantee Trustee.
The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.

(b) If an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.

(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read
into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred
Securities Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:

(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred

6
<PAGE> 11

Guarantee Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee Trustee; and

(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Preferred
Guarantee Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;

(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;

(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in liquidation
amount of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee, or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee; and

(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the Preferred
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Preferred Securities Guarantee or indemnity, reasonably
satisfactory to the Preferred Guarantee Trustee, against such risk or liability
is not reasonably assured to it.

SECTION 3.2 Certain Rights of Preferred Guarantee Trustee

(a) Subject to the provisions of Section 3.1:

(i) The Preferred Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.

7
<PAGE> 12

(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a Direction
or an Officers' Certificate.

(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.

(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).

(v) The Preferred Guarantee Trustee may consult with counsel, and the
written advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion. Such counsel may be counsel to the Guarantor or any of
its Affiliates and may include any of its employees. The Preferred Guarantee
Trustee shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court of
competent jurisdiction.

(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Preferred Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Preferred
Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Preferred Guarantee Trustee, upon the occurrence
of an Event of Default, of its obligation to exercise the rights and powers
vested in it by this Preferred Securities Guarantee.

(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.

(viii) The Preferred Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Preferred Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder.

<PAGE> 13

(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the signature
of the Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Preferred Guarantee Trustee to so act or as
to its compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.

(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions.

(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available
to the Preferred Guarantee Trustee shall be construed to be a duty.

SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee

The recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.

ARTICLE IV
PREFERRED GUARANTEE TRUSTEE

SECTION 4.1 Preferred Guarantee Trustee; Eligibility

(a) There shall at all times be a Preferred Guarantee Trustee which shall:

(i) not be an Affiliate of the Guarantor; and

(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities
and Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to

9
<PAGE> 14

supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.

(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).

(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees

(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.

(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or
until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.

(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Preferred Guarantee Trustee may petition any court of competent jurisdiction
for appointment of a Successor Preferred Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Preferred Guarantee Trustee.

(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.

<PAGE> 15

(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.

ARTICLE V
GUARANTEE

SECTION 5.1 Guarantee

The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by IBC Capital), as and when due, regardless of any defense, right of set-off
or counterclaim that IBC Capital may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing IBC Capital
to pay such amounts to the Holders.

SECTION 5.2 Waiver of Notice and Demand

The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against IBC Capital or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

SECTION 5.3 Obligations Not Affected

The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by IBC Capital of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by IBC Capital;

(b) the extension of time for the payment by IBC Capital of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or
in connection with, the Preferred Securities (other than an extension of time
for payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest payment
period on the Debentures or any extension of the maturity date of the
Debentures permitted by the Indenture);

(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the

<PAGE> 16

terms of the Preferred Securities, or any action on the part of IBC Capital
granting indulgence or extension of any kind;

(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, IBC Capital or any of the assets of IBC
Capital;

(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4 Rights of Holders

(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.

(b) Any Holder of Preferred Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against IBC
Capital, the Preferred Guarantee Trustee or any other Person.

SECTION 5.5 Guarantee of Payment

This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.

SECTION 5.6 Subrogation

The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against IBC Capital in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment,

12
<PAGE> 17

any amounts are due and unpaid under this Preferred Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

SECTION 5.7 Independent Obligations

The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of IBC Capital with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions

So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Trust
Agreement, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor which rank pari passu with or junior to the Debentures
or (c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee
Agreement); provided, however, the Guarantor may declare and pay a stock
dividend where the dividend stock is the same stock as that on which the
dividend is being paid.

SECTION 6.2 Ranking

This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor, (ii) pari passu with the
most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.

ARTICLE VII
TERMINATION

SECTION 7.1 Termination

This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Preferred Securities, (ii) upon full payment of
the amounts payable in accordance with the Trust Agreement upon liquidation of
IBC Capital or (iii) upon distribution of the Debentures to

<PAGE> 18

the holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1 Exculpation

(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.

(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

SECTION 8.2 Indemnification

The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this Section
8.2 shall survive the termination of this Preferred Securities Guarantee.

14
<PAGE> 19

ARTICLE IX
MISCELLANEOUS

SECTION 9.1 Successors and Assigns

All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.

SECTION 9.2 Amendments

Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the prior approval
of the Holders of at least a Majority in liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all the outstanding Preferred Securities. The provisions of
Article VI of the Trust Agreement with respect to meetings of Holders of the
Securities apply to the giving of such approval.

SECTION 9.3 Notices

All notices provided for in this Preferred Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:

(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):

State Street Bank and Trust Company

___________________________________

___________________________________
Attention:_________________________

(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):

Independent Bank Corporation
230 West Main Street
Ionia, MI 48846
Attention: Chief Financial Officer

<PAGE> 20
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

SECTION 9.4 Benefit

This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law

THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MICHIGAN.

THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

Independent Bank Corporation,
as Guarantor

By:_________________________________
Name:
Title:

State Street Bank and Trust Company,
as Preferred Guarantee Trustee

By:_________________________________
Name:
Title:

<PAGE> 1

EXHIBIT 5.1

November _, 1996

Board of Directors
Independent Bank Corporation
230 West Main Street
Ionia, MI 48846

Gentlemen:

We have acted as counsel to Independent Bank Corporation, a Michigan
corporation (the "Company") in connection with the Registration Statement on
Form S-2 (the "Registration Statement"), as amended, filed with the Securities
and Exchange Commission (Registration No. 333-14507) for the purpose of
registering under the Securities Act of 1933, as amended, 690,000 %
Cumulative Trust Preferred Securities ("Preferred Securities") of IBC Capital
Finance ("IBC Capital"), a Delaware statutory business trust, wholly owned by
the Company. The Preferred Securities represent beneficial interests in IBC
Capital. IBC Capital will exist solely to issue the Preferred Securities and
to invest the proceeds in % Debentures ("Subordinated Debentures") to be
issued by the Company.

We are familiar with the corporate action taken by the Board of Directors
of the Company (1) authorizing the establishment of a Delaware statutory
business trust to be known as IBC Capital Finance, (2) creating and authorizing
for sale to IBC Capital the % Junior Subordinated Debentures, (3)
executing a Debenture Indenture which shall operate as the formal agreement
governing the relationship between the Company as issuer of the Debentures and
IBC Capital as holder of such Debentures, (4) creating and executing a
Guarantee Agreement which shall require the Company to guarantee certain
obligations of IBC Capital with respect to its Preferred Securities, (5)
authorizing the execution of an Expense Agreement as to the expenses and
liabilities between the Company and IBC Capital which shall guarantee to
parties to whom the IBC Capital becomes indebted or liable full payment of such
obligations, other than the obligation of IBC Capital to pay the holders of any
Preferred Securities the amounts due under such securities, and we have
examined such documents and questions of law as we consider necessary or
appropriate for the purpose of furnishing this opinion.

It is our opinion that the 690,000 Debentures being issued by the Company
to IBC Capital as described in the Registration Statement in accordance with
the terms stated in the Registration Statement, at the time it becomes
effective, and as described in the Debenture Indenture, will be legally and
validly authorized and issued.

<PAGE> 2

Board of Directors
Independent Bank Corporation
November 8, 1996
Page 2

We hereby consent to the reference to us in the caption "Validity of
Securities" in the Prospectus forming a part of the Registration Statement. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or under the rules and regulations of the Securities and
Exchange Commission relating thereto.

Very truly yours,

VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP

Michael G. Wooldridge

<PAGE> 1

EXHIBIT 5.2

November __, 1996

IBC Capital Finance
c/o Independent Bank Corporation
230 West Main Street
Ionia, Michigan 48846

Re: IBC Capital Finance

Ladies and Gentlemen:

We have acted as special Delaware counsel for IBC Capital Finance, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.

For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:

(a) The Certificate of Trust of the Trust, dated November __, 1996 (the
"Certificate"), as filed in the office of the Secretary of State of the State
of Delaware (the "Secretary of State") on November __, 1996;

(b) The Trust Agreement of the Trust, dated as of November __, 1996, among
Independent Bank Corporation, a Michigan corporation ("IBC"), and the trustees
of the Trust named therein;

(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a prospectus (the "Prospectus") relating to the __% Preferred
Securities of the Trust representing preferred undivided beneficial interests
in the Trust (each, a "Preferred Security" and

<PAGE> 2

Independent Bank Corporation
November __, 1996
Page 2

collectively, the "Preferred Securities"), as filed by IBC, the Trust and
others as set forth therein with the Securities and Exchange Commission on
November __, 1996;

(d) A form of Amended and Restated Trust Agreement of the Trust, to be
entered into among IBC, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the Trust (the
"Trust Agreement"), attached as an exhibit to the Registration Statement; and

(e) A Certificate of Good Standing for the Trust, dated the date hereof,
obtained from the Secretary of State.

Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.

For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.

For purposes of this opinion, we have assumed (i) that the Trust Agreement
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Trust Agreement and the Certificate are
in full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Trust Agreement and the Prospectus, and (vii) that the Preferred Securities are
issued and sold to the Preferred Security Holders in accordance with the Trust
Agreement and the Prospectus. We have not

<PAGE> 3
Independent Bank Corporation
November __, 1996
Page 3

participated in the preparation of the Registration Statement and assume no
responsibility for its contents.

This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders thereunder
which are currently in effect.

Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:

1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
Section 3801, et seq.

2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.

3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.

We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.

Very truly yours,

EAM

<PAGE> 1
EXHIBIT 23.1

Consent of Independent Certified Public Accountants

The Board of Directors
Independent Bank Corporation:

We consent to the use of our report included herein and incorporated herein by
reference and to the reference to our firm under the heading "Experts" in the
prospectus.

KPMG Peat Marwick LLP

Lansing, Michigan
November 8, 1996

<PAGE> 1
EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the use in this Current Report of Independent Bank Corporation on
Form S-2 of our report dated March 8, 1996, included herein, on the financial
statements of North Bank Corporation as of December 31, 1995 and 1994 and for
each of the three years in the period ended December 31, 1995.

/s/ Crowe, Chizek and Company LLP
Grand Rapids, Michigan
November 8, 1996