425

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

January 15, 2007

(Date of report/date of earliest even reported)

LNB Bancorp, Inc.

(Exact name of registrant as specified in charter)

Ohio	0-13203	34-1406303
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

457 Broadway
Lorain, Ohio 44052-1769

(Address of principal executive offices)

(440) 244-6000

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry into a Material Definitive Agreement.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EX-2.1
EX-10.1

Item 1.01. Entry into a Material Definitive Agreement.

     Merger Agreement

     On January 15, 2007, LNB Bancorp, Inc., an Ohio corporation (“LNB”) and Morgan Bancorp, Inc., an Ohio corporation (“Morgan”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Morgan will merge with and into LNB (the “Merger”).

     Under the terms of the Merger Agreement, at the effective time of the Merger, shareholders of Morgan will be entitled to elect to receive one of the following, subject to certain adjustments: (a) LNB common shares based on a fixed exchange ratio of 3.162 common shares of LNB for each common share of Morgan, (b) cash in the amount of $52.00 for each common share of Morgan, or (c) a combination of cash and stock. The Merger Agreement also contains an allocation mechanism which provides that, in the aggregate, 50% of the Morgan common shares will be exchanged for LNB common shares, and 50% of the Morgan common shares will be exchanged for cash. The merger is intended to qualify as a tax-free reorganization to the extent that shareholders of Morgan receive LNB common shares in the exchange. Each Morgan stock option that is outstanding and unexercised immediately prior to the effective time will be converted into the right to receive a cash payment per underlying share equal to the amount by which $52.00 exceeds the applicable exercise price per share.

     LNB and Morgan have each made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (i) to conduct its business in the ordinary course between the execution of the Merger Agreement and the consummation of the Merger and (ii) not to engage in certain kinds of transactions during such period. In addition, Morgan made certain additional covenants, including, among others, covenants, subject to certain exceptions, (A) to cause a stockholder meeting to be held to consider adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, (B) for its board of directors to recommend adoption by its stockholders of the Merger Agreement and the transactions contemplated by the Merger Agreement, (C) not to solicit proposals relating to alternative business combination transactions and (D) not to enter into discussions concerning or provide confidential information in connection with alternative business combination transactions.

     The consummation of the Merger is subject to certain conditions, including, among others: (i) approval of Morgan’s shareholders, (ii) absence of any order or injunction prohibiting the consummation of the Merger, (iii) the receipt of certain governmental approvals, (iv) subject to certain exceptions, the accuracy of representations and warranties with respect to LNB’s or Morgan’s business, as applicable, (v) delivery of audited consolidated Morgan financial statements, and (vi) receipt of customary tax opinions relating to the treatment of the Merger as a tax-free reorganization within the meaning of the Internal Revenue Code.

     The Merger Agreement contains certain termination rights for both LNB and Morgan. If LNB terminates the Merger Agreement because Morgan’s Board of Directors fails to recommend the Merger and the transactions contemplated by the Merger Agreement to Morgan’s shareholders, or withdraws its recommendation or modifies its recommendation in a manner adverse to LNB; if Morgan terminates the Merger Agreement to accept an alternative transaction; or if the Merger Agreement is terminated in certain circumstances and Morgan enters into or consummates another transaction within eighteen months of such termination, then Morgan may be required to pay LNB a termination fee equal to $1,000,000.

     Pursuant to the Merger Agreement, as of the effective time of the Merger, J. Martin Erbaugh, the Chairman of Morgan’s Board of Directors, will be appointed to LNB’s Board of Directors and become a member of Class II of LNB’s Board of Directors, whose terms will expire at LNB’s 2009 annual meeting of shareholders.

     Following the Merger, and upon the receipt of all necessary regulatory approvals, Morgan’s wholly-owned subsidiary, Morgan Bank N.A., will be merged with LNB’s wholly-owned subsidiary, The Lorain National Bank.

     The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference. The Merger Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about LNB, Morgan, or their respective subsidiaries and affiliates. The Merger Agreement contains representations and warranties of each of LNB, on the one hand, and Morgan, on the other hand, made solely for the benefit of the other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Merger Agreement. The disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between LNB, on the one hand, and Morgan, on the other hand. Accordingly, you should not rely on the representations and warranties in the Merger Agreement as characterizations of the actual state of facts about LNB or Morgan.

     Voting Agreements

     Concurrently with the execution of the Merger Agreement, LNB entered into a Voting Agreement with each of the directors of Morgan (collectively, the “Voting Agreements”), pursuant to which such shareholders agreed to vote to approve the Merger and Merger Agreement and vote against any other acquisition proposal. The Voting Agreements terminate at the earlier of the effective time of the Merger or the termination of the Merger Agreement in accordance with its terms.

     The foregoing description of the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the Voting Agreements, the form of which is attached as Exhibit A to the Merger Agreement filed as Exhibit 2.1 hereto and incorporated herein by reference.

     Employment Agreement

     In connection with the execution of the Merger Agreement, LNB entered into an Employment Agreement (the “Employment Agreement”) with William A. Dougherty, President and Chief Executive Officer of Morgan, the terms of which will be effective subject to and upon consummation of the Merger. The Employment Agreement provides that Mr. Dougherty will serve as president of LNB’s Morgan Bank operations following the closing of the Merger. The Employment Agreement has an initial term of two years commencing on the closing of the Merger. The Employment Agreement provides for an annual base salary of $175,000, and for participation in LNB’s executive incentive plans.

     The agreement also contains non-disclosure and non-compete provisions that, among other things, prohibit Mr. Dougherty from competing with or soliciting employees, customers or clients of LNB for a period of one year following the termination of his employment.

     If (i) Mr. Dougherty terminates his employment with LNB for “good reason” (as defined in the Employment Agreement), (ii) LNB terminates his employment without “cause” (as defined in the Employment Agreement), or (iii) Mr. Dougherty terminates his employment for good reason or LNB terminates Mr. Dougherty’s employment for cause at any time within two years after the occurrence of a “change in control” (as defined in the Employment Agreement), LNB shall pay Mr. Dougherty the greater of (i) his salary through the remainder of the Employment Agreement term or (ii) one year’s salary, as well as health insurance benefits, as in effect immediately prior to the termination, for six months after the termination date.

     The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Employment Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits.

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated January 15, 2007, by and between LNB Bancorp, Inc. and Morgan Bancorp, Inc., including the attached Form of Voting Agreement and Form of Morgan Affiliate Agreement.
10.1	Employment Agreement, dated January 15, 2007, by and among LNB Bancorp, Inc., The Lorain National Bank and William A. Dougherty.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 17, 2007

LNB BANCORP, INC.
By	/s/ Terry M. White
	Terry M. White
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated January 15, 2007, by and between LNB Bancorp, Inc. and Morgan Bancorp, Inc., including the attached Form of Voting Agreement and Form of Morgan Affiliate Agreement.
10.1	Employment Agreement, dated January 15, 2007, by and among LNB Bancorp, Inc., The Lorain National Bank and William A. Dougherty.

EX-2.1

                                                                     Exhibit 2.1

                                                                  EXECUTION COPY

                          AGREEMENT AND PLAN OF MERGER

                                   DATED AS OF

                                JANUARY 15, 2007

                                 BY AND BETWEEN

                              MORGAN BANCORP, INC.

                                       AND

                                LNB BANCORP, INC.



                                TABLE OF CONTENTS



                                                                            PAGE
                                                                            ----
                                                                         
ARTICLE I    CERTAIN DEFINITIONS.........................................     1

ARTICLE II   THE MERGER..................................................     9
         2.01 The Parent Merger..........................................     9
         2.02 The Subsidiary Merger......................................     9
         2.03 Effectiveness of the Parent Merger.........................     9
         2.04 Effective Date and Effective Time..........................     9

ARTICLE III  CONSIDERATION; EXCHANGE PROCEDURES..........................    10
         3.01 Merger Consideration.......................................    10
         3.02 Rights as Shareholders; Stock Transfers....................    14
         3.03 Fractional Shares..........................................    14
         3.04 Exchange Procedures........................................    15
         3.05 Anti-Dilution Provisions...................................    17
         3.06 Treatment of Stock Options.................................    17

ARTICLE IV   ACTIONS PENDING ACQUISITION.................................    17
         4.01 Forbearances of Morgan.....................................    17
         4.02 Forbearances of Parent.....................................    21

ARTICLE V    REPRESENTATIONS AND WARRANTIES..............................    22
         5.01 Disclosure Schedules.......................................    22
         5.02 Standard...................................................    22
         5.03 Representations and Warranties of Morgan...................    22
         5.04 Representations and Warranties of Parent...................    35

ARTICLE VI   COVENANTS...................................................    42
         6.01 Reasonable Best Efforts....................................    42
         6.02 Shareholder Approval.......................................    42
         6.03 Registration Statement.....................................    42
         6.04 Press Releases.............................................    43
         6.05 Access; Confidentiality....................................    44
         6.06 Acquisition Proposals......................................    45
         6.07 Affiliate Agreements.......................................    46
         6.08 Takeover Laws..............................................    46
         6.09 No Rights Triggered........................................    47
         6.10 Conformance of Policies and Practices......................    47
         6.11 Transition.................................................    47
         6.12 Facilities Optimization....................................    48
         6.13 Investments................................................    48
         6.14 NASDAQ Listing or Notification.............................    48
         6.15 Regulatory Applications....................................    48
         6.16 Indemnification............................................    49




                                TABLE OF CONTENTS
                                   (continued)



                                                                            PAGE
                                                                            ----
                                                                         
         6.17 Employee Benefits..........................................    50
         6.18 Notification  of Certain Matters...........................    51
         6.19 Dividend Coordination......................................    51
         6.20 Tax Treatment..............................................    52
         6.21 No Breaches of Representations and Warranties..............    52
         6.22 Consents...................................................    52
         6.23 Insurance Coverage.........................................    52
         6.24 Correction of Information..................................    52
         6.25 Supplemental Assurances....................................    52
         6.26 Regulatory Matters.........................................    53
         6.27 Parent Board of Directors..................................    53

ARTICLE VII  CONDITIONS TO CONSUMMATION OF THE PARENT MERGER.............    54
         7.01 Conditions to Each Party's Obligation to Effect the Parent
              Merger.....................................................    54
         7.02 Conditions to Obligation of Morgan.........................    54
         7.03 Conditions to Obligation of Parent.........................    55
         7.04 Frustration of Closing Conditions..........................    56

ARTICLE VIII TERMINATION.................................................    56
         8.01 Termination................................................    56
         8.02 Effect of Termination and Abandonment; Enforcement of
              Agreement..................................................    58
         8.03 Termination Fee; Expenses..................................    58

ARTICLE IX   MISCELLANEOUS...............................................    59
         9.01 Survival...................................................    59
         9.02 Waiver; Amendment..........................................    60
         9.03 Counterparts...............................................    60
         9.04 Governing Law..............................................    60
         9.05 Expenses...................................................    60
         9.06 Notices....................................................    60
         9.07 Entire Agreement; No Third Party Beneficiaries.............    61
         9.08 Interpretation; Effect.....................................    61
         9.09 Waiver of Jury Trial.......................................    62
         9.10 Severability...............................................    62
         9.11 Assignment.................................................    62
         9.12 Submission to Jurisdiction.................................    62


Exhibit A   Form of Voting Agreement
Exhibit B   Form of Morgan Affiliate Agreement
Exhibit C   Form of Employment Agreement for W. A. Dougherty


                                       ii



     This AGREEMENT AND PLAN OF MERGER, dated as of January 15, 2007 (this
"Agreement"), is by and between Morgan Bancorp, Inc., an Ohio corporation
("Morgan") and LNB Bancorp, Inc., an Ohio corporation ("Parent").

                                    RECITALS

     A. The Proposed Transaction. Upon the terms and conditions of this
Agreement, the parties intend to effect a strategic business combination
pursuant to which Morgan will merge with and into Parent. Parent will be the
surviving corporation in the Parent Merger (as defined below). It is the
intention of Parent that, immediately following the Parent Merger, Morgan Bank,
National Association, a national banking association that is a wholly-owned
subsidiary of Morgan ("Morgan Bank"), will merge with and into The Lorain
National Bank, a national banking association that is a wholly-owned subsidiary
of Parent ("Lorain National"), with Lorain National being the surviving bank.

     B. Board Determinations. The respective boards of directors of Morgan and
Parent have each determined that the Parent Merger and the other transactions
contemplated hereby are consistent with, and will further, their respective
business strategies and goals, and are in the best interests of their respective
shareholders and, therefore, have approved, this Agreement, the Parent Merger
and the other transactions contemplated hereby.

     C. Intended Tax Treatment. The parties intend the Parent Merger to be
treated as a reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code").

     NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements contained herein,
intending to be legally bound hereby, the parties agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

     The following terms are used in this Agreement with the meanings set forth
below:

     "Acquisition Proposal" means, other than with respect to the Parent Merger,
any offer, proposal or inquiry, whether in writing or otherwise, relating to, or
any Third Party indication of interest in, (a) any acquisition, purchase or
other similar transaction, direct or indirect, of 20% or more of the
consolidated assets of Morgan and its Subsidiary or over 20% of any class of
equity or voting securities of Morgan or its Subsidiary (or Morgan securities
convertible or exchangeable into any such equity or voting securities) whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of Morgan, (b) any tender offer (including a self-tender
offer), exchange offer or other similar transaction that, if consummated, would
result in such Third Party beneficially owning 20% or more of any class of
equity or voting securities of Morgan or its Subsidiary (or Morgan securities
convertible or exchangeable into any such equity or voting securities) whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of Morgan, (c) a merger, consolidation, share exchange,
business combination, sale of substantially all the assets, reorganization,



recapitalization, liquidation, dissolution or other similar transaction
involving Morgan or its Subsidiary whose assets, individually or in the
aggregate, constitute more than 20% of the consolidated assets of Morgan or (d)
any other transaction the consummation of which would reasonably be expected to
materially impede, interfere with, prevent or delay the Parent Merger or that
would reasonably be expected to dilute materially the benefits to Parent of the
transactions contemplated hereby.

     "Affiliate" means, with respect to any Person, another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with, such first Person.

     "Agreement" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.

     "Agreement to Merge" has the meaning set forth in Section 2.02.

     "All Cash Election" has the meaning set forth in Section 3.01(b)(ii).

     "All Stock Election" has the meaning set forth in Section 3.01(b)(i).

     "Cash Exchange Amount" has the meaning set forth in Section 3.01(a).

     "Change in Recommendation" has the meaning set forth in Section 8.01(g).

     "Claim" has the meaning set forth in Section 6.16(a).

     "COBRA" has the meaning set forth in Section 6.17(a).

     "Code" has the meaning set forth in the preamble to this Agreement.

     "Compensation and Benefit Plans" has the meaning set forth in Section
5.03(m).

     "Confidentiality Agreement" means the Confidentiality Agreement between
Parent and Morgan, dated August 24, 2006.

     "Consultants" has the meaning set forth in Section 5.03(m).

     "Contract" means, with respect to any Person, any agreement, indenture,
undertaking, debt instrument, contract, lease, understanding or other
commitment, whether oral or in writing, to which such Person or any of its
Subsidiaries is a party or by which any of them is bound or to which any of
their properties is subject.

     "Costs" has the meaning set forth in Section 6.16(a).

     "Directors" has the meaning set forth in Section 5.03(m).

     "Disclosure Schedule" has the meaning set forth in Section 5.01.


                                       2



     "Dissenting Shares" means Morgan Common Shares with respect to which rights
pursuant to Section 1701.85 of the OGCL have been properly exercised.

     "Effective Date" means the date on which the Effective Time occurs, as
provided for in Section 2.04.

     "Effective Time" means the effective time of the Parent Merger, as provided
for in Section 2.04.

     "Election" has the meaning set forth in Section 3.01(e).

     "Election Deadline" has the meaning set forth in Section 3.01(e).

     "Election Form/Letter of Transmittal" has the meaning set forth in Section
3.01(e).

     "Election Period" has the meaning set forth in Section 3.01(e).

     "Employees" has the meaning set forth in Section 5.03(m)(i). All references
herein to "employees of Morgan" or "Morgan employees" shall be deemed to mean
employees of Morgan Bank.

     "Employment Agreement" means the form of employment agreement between
Parent and William A. Dougherty, Morgan's Chief Executive Officer, the form of
which is attached hereto as Exhibit C, which is an inducement to Parent's
willingness to enter into this Agreement.

     "Environmental Laws" means all applicable local, state and federal
environmental, health and safety Laws, permits, authorizations, common Law or
agency requirement, including, without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Clean Water Act, the Federal Clean Air Act, and the
Occupational Safety and Health Act, each as amended, regulations promulgated
thereunder, and state counterparts.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "ERISA Affiliate" has the meaning set forth in Section 5.03(m)(iii).

     "ERISA Affiliate Plan" has the meaning set forth in Section 5.03(m)(iii).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.

     "Exchange Agent" has the meaning set forth in Section 3.04(a).

     "Excluded Representations" has the meaning set forth in Section 5.02.

     "Exchange Fund" has the meaning set forth in Section 3.04(a).

     "FDIA" has the meaning set forth in Section 5.03(dd).


                                       3



     "FDIC" means the Federal Deposit Insurance Corporation.

     "Fill Offer" has the meaning set forth in Section 8.01(e).

     "Fill Option" has the meaning set forth in Section 8.01(e).

     "FRB" means the Federal Reserve Board.

     "GAAP" means generally accepted accounting principles as adopted for U.S.
accounting principles, practices and methods.

     "Governing Documents" means with respect to any Person, such Person's
articles or certificate of incorporation and its code of regulations/bylaws, or
similar governing document.

     "Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.

     "Indemnified Party" has the meaning set forth in Section 6.16(a).

     "Information" has the meaning set forth in Section 6.05(c).

     "Intellectual Property Rights" has the meaning set forth in Section
5.03(ff).

     "IRS" has the meaning set forth in Section 5.03(m)(ii).

     The term "knowledge" means, with respect to a party hereto, knowledge after
due inquiry of any officer of that party with the title of not less than a
senior vice president.

     "Law" means any federal, state, foreign or local statute, law, rule or
regulation or any order, decision, decree, injunction, judgment, award or decree
of any Governmental Authority.

     "Lien" means any charge, mortgage, pledge, security interest, restriction,
claim, lien or encumbrance of any nature whatsoever.

     "Loans" means loans, leases, extensions of credit (including guarantees),
commitments to extend credit and other similar assets or obligations, as the
case may be.

     "Lorain National" has the meaning set forth in the preamble to this
Agreement.

     "Material Adverse Effect" means, with respect to Parent or Morgan, any
effect that (a) is material and adverse to the condition (financial or
otherwise), results of operations, assets, liabilities or business of Parent and
its Subsidiaries taken as a whole, or Morgan and its Subsidiary taken as a
whole, respectively, or (b) would materially impair the ability of either Parent
or Morgan to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Parent Merger
and the other transactions contemplated by this Agreement; provided, however,
that Material Adverse Effect shall not be deemed to include the impact of (i)
changes in banking and similar Laws of general applicability or interpretations
thereof by Governmental Authorities or other changes affecting depository
institutions generally that do not have a materially more adverse effect on such
party than that experienced by similarly situated financial services companies,
including changes in general economic conditions and changes in prevailing
interest and deposit rates that do not have a materially more adverse effect on
such party than that


                                       4



experienced by similarly situated financial services companies, (ii) any
modifications or changes to valuation policies and practices in connection with
the Parent Merger or restructuring charges taken in connection with the Parent
Merger, in each case in accordance with GAAP, (iii) changes resulting from
expenses (such as legal, accounting and investment bankers' fees) incurred in
connection with this Agreement or the transactions contemplated herein, (iv)
changes resulting from the announcement or pendency of this Agreement and the
transactions contemplated thereby, or (v) actions or omissions of a party that
have been waived in accordance with Section 9.02 hereof.

     "Material Interest" has the meaning set forth in the definition of "Related
Person."

     "Merger Consideration" has the meaning set forth in Section 3.01(a).

     "Mixed Election" has the meaning set forth in Section 3.01(b)(iii).

     "Morgan" has the meaning set forth in the preamble to this Agreement.

     "Morgan Affiliate" has the meaning set forth in Section 6.07.

     "Morgan Articles" means the Articles of Incorporation of Morgan, as
amended.

     "Morgan Bank" has the meaning set forth in the preamble to this Agreement.

     "Morgan Board" means the Board of Directors of Morgan.

     "Morgan Code" means Morgan's Code of Regulations.

     "Morgan Common Shares" means common shares, no par value per share, of
Morgan.

     "Morgan Financial Statements" has the meaning set forth in Section 5.03(g).

     "Morgan Meeting" has the meaning set forth in Section 6.02.

     "Morgan Off Balance Sheet Transaction" has the meaning set forth in Section
5.03(v).

     "Morgan Recommendation" has the meaning set forth in Section 6.02.

     "Morgan Stock Plan" means the option plan and agreements of Morgan and its
Subsidiary pursuant to which rights to purchase Morgan Common Shares are
outstanding immediately prior to the Effective Time pursuant to the Morgan
Bancorp 1999 Stock Option Plan.

     "NASD" means The National Association of Securities Dealers, Inc.

     "NASDAQ" means The NASDAQ Stock Market, Inc.'s National Market System.

     "New Certificates" has the meaning set forth in Section 3.04(a).


                                       5



     "OGCL" means the Ohio General Corporation Law.

     "Old Certificates" has the meaning set forth in Section 3.04(a).

     "OSS" means the Office of the Secretary of State of the State of Ohio.

     "Out-of-Pocket Expenses" has the meaning set forth in Section 8.03(c).

     "Parent" has the meaning set forth in the preamble to this Agreement.

     "Parent Articles" means the Second Amended Articles of Incorporation of
Parent.

     "Parent Board" means the Board of Directors of Parent.

     "Parent Code" means the Amended Code of Regulations of Parent.

     "Parent Common Shares" means the common stock, without par value, of
Parent. (together with the preferred share purchase rights attached thereto
issued pursuant to that certain Rights Agreement (the "Rights Agreement"), dated
as of October 24, 2000, by and between Parent and The Registrar and Transfer
Company, as rights agent, as amended May 17, 2006.

     "Parent Financial Statements" has the meaning set forth in Section 5.04(l).

     "Parent Merger" has the meaning set forth in Section 2.01.

     "Parent Preferred Shares" means the serial preferred shares, no par value
per share, of Parent.

     "Parent Reference Price" has the meaning set forth in Section 8.01(e).

     "Parent SEC Documents" has the meaning set forth in Section 5.04(g).

     "Parent Shares" means the Parent Common Shares and Parent Preferred Shares.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Pension Plan" has the meaning set forth in Section 5.03(m)(ii).

     "Person" means any individual, bank, savings bank, corporation,
partnership, limited liability company, association, joint-stock company,
business trust or unincorporated organization.

     "Previously Disclosed" by a party means information set forth in its
Disclosure Schedule.

     "Proxy Statement/Prospectus" has the meaning set forth in Section 6.03(a).

     "Proxy Statement" has the meaning set forth in Section 6.03(a).

     "Registration Statement" has the meaning set forth in Section 6.03(a).


                                       6



     "Regulatory Authority" means any federal or state governmental agency or
authority charged with the supervision or regulation of financial institutions
(or their holding companies) or issuers of securities or engaged in the issuance
of deposits (including, without limitation, the OCC, FRB and the FDIC) or the
supervision or regulation of it or any of its subsidiaries.

     "Regulatory Reporting Document" has the meaning set forth in Section
5.03(g)(i).

     "Related Person" means any Person (or family member of such Person) (a)
that directly or indirectly, controls, or is under common control with, Morgan
or any of its Affiliates, (b) that serves as a director, officer, employee,
partner, member, executor or trustee of Morgan or any of its Affiliates or
Subsidiary (or in any other similar capacity), (c) that has, or is a member of a
group buying, direct or indirect beneficial ownership (as defined for purposes
of Rule 13c1-3 under the Exchange Act) of voting securities or other voting
interests representing at least five percent of the outstanding voting power or
equity securities or other equity interests representing at least five percent
of the outstanding equity interests (a "Material Interest") in Morgan or any of
its Affiliates or (d) in which any Person (or family member of such Person) that
falls under (a), (b) or (c) above directly or indirectly holds a Material
Interest or serves as a director, officer, employee, partner, member, executor
or trustee (or in any other similar capacity).

     "Required Morgan Vote" has the meaning set forth in Section 5.03(d).

     "Required Party" has the meaning set forth in Section 6.05(c).

     "Requisite Regulatory Approvals" has the meaning set forth in Section
7.01(b).

     "Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such Person.

     "Rights Agreement" has the meaning set forth in the definition of "Parent
Common Shares."

     "Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002 and the rules and
regulations thereunder.

     "SEC" means the Securities and Exchange Commission.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

     "Stock Exchange Ratio" has the meaning set forth in Section 3.01(a).

     "Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.

     "Subsidiary Merger" has the meaning set forth in Section 2.02.


                                       7



     "Superior Proposal" means a bona fide, unsolicited written Acquisition
Proposal for at least a majority of the Morgan Common Shares then outstanding on
terms that the Board of Directors of Morgan determines in good faith by a
majority vote (excluding any members of the Board of Directors that are not
independent of the Third Party making such Acquisition Proposal), after
considering the advice of Roetzel & Andress, Morgan's independent legal counsel
and a financial advisor of nationally recognized reputation, and after taking
into account all terms and conditions of such Acquisition Proposal, including
all legal, financial, regulatory, timing and other aspects of the Acquisition
Proposal and the Third Party making such Acquisition Proposal (including the
conditions precedent to (or other conditionality in respect of) consummation of
such Acquisition Proposal relative to those required pursuant to this
Agreement), are more favorable from a financial point of view to Morgan's
shareholders than the Parent Merger and other transactions contemplated by this
Agreement.

     "Surviving Corporation" has the meaning set forth in Section 2.01.

     "Takeover Laws" has the meaning set forth in Section 5.03(o).

     "Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority.

     "Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with respect to any Tax.

     "Termination Fee" has the meaning set forth in Section 8.03(a).

     "Third Party" means any Person, including as defined in Section 13(d) of
the Exchange Act, other than the Parent or any of its Affiliates.

     "Treasury Stock" means Morgan Common Shares held by Morgan or its
Subsidiary, in each case other than in a fiduciary capacity or as a result of
debts previously contracted in good faith.

     "Voting Agreements," the form of which is attached hereto as Exhibit A,
pursuant to which, among other things, certain shareholders have agreed to vote
all of their Morgan Common Shares in favor of approval of this Agreement, the
Parent Merger and any other matters required to be approved or adopted in order
to effect the Parent Merger and the other transactions contemplated hereby, and
are an inducement to Parent's willingness to enter into this Agreement.

     "Walkaway Right" has the meaning set forth in Section 8.01(e).


                                       8



                                   ARTICLE II

                                   THE MERGER

     2.01 The Parent Merger.

          At the Effective Time, (a) Morgan shall be merged with and into Parent
(the "Parent Merger") and (b) the separate corporate existence of Morgan shall
cease and Parent shall survive and continue to exist as an Ohio corporation
(Parent, as the surviving corporation in the Parent Merger, sometimes being
referred to herein as the "Surviving Corporation"). The Parent Articles, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation, and the Parent Code, as in effect
immediately prior to the Effective Time, shall be the Code of Regulations of the
Surviving Corporation. Parent may at any time prior to the Effective Time change
the method of effecting the Parent Merger (including, without limitation, the
provisions of this Article II) if and to the extent it deems such change to be
necessary, appropriate or desirable; provided, however, that no such change
shall (i) alter or change the amount or kind of consideration to be issued to
holders of Morgan Common Shares as provided for in Article III of this Agreement
(subject to adjustment as provided in Sections 3.05 and 8.01(e)), (ii) adversely
affect the tax treatment of Morgan's shareholders as a result of receiving the
Merger Consideration or (iii) materially impede or delay consummation of the
transactions contemplated by this Agreement. If Parent makes such an election,
Parent and Morgan shall execute an appropriate amendment to this Agreement in
order to reflect such election.

     2.02 The Subsidiary Merger.

          At the time determined by Parent, Morgan Bank shall merge with and
into Lorain National (the "Subsidiary Merger") pursuant to an agreement to merge
(the "Agreement to Merge") to be executed by Morgan Bank and Lorain National.
Upon consummation of the Subsidiary Merger, the separate corporate existence of
Morgan Bank shall cease and Lorain National shall survive and continue to exist
as a national banking association. Parent may at any time prior to the Effective
Time change the method of effecting the Subsidiary Merger (including, without
limitation, the provisions of this Section 2.02) if and to the extent it deems
such change to be necessary, appropriate or desirable; provided, however, that
no such change shall adversely affect the tax treatment of Morgan's shareholders
as a result of receiving the Merger Consideration.

     2.03 Effectiveness of the Parent Merger.

          Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Parent Merger shall become effective upon the occurrence of the
filing in the office of the OSS of a Certificate of Merger for the Parent Merger
in accordance with Section 1701.81 of the OGCL, or such later date and time as
may be set forth in such filing.

     2.04 Effective Date and Effective Time.

          Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the parties shall cause the effective date of the Parent Merger
(the "Effective Date") to occur on a


                                       9



date to be determined by Parent and Morgan in their reasonable discretion, which
date shall be within 30 days after the last of the conditions set forth in
Article VII shall have been satisfied or waived in accordance with the terms of
this Agreement; provided, however, that no such designation shall cause the
Effective Date to fall after the date specified in Section 8.01(c) hereof or
after the date or dates on which any Regulatory Authority approval or any
extension thereof expires. The time on the Effective Date when the Parent Merger
shall become effective is referred to as the "Effective Time."

                                   ARTICLE III

                       CONSIDERATION; EXCHANGE PROCEDURES

     3.01 Merger Consideration.

          Subject to the provisions of this Agreement, at the Effective Time,
automatically by virtue of the Parent Merger and without any action on the part
of any Person:

          (a) Outstanding Morgan Common Shares. Except as otherwise provided in
     this Article III, at the Effective Time, each Morgan Common Share
     (excluding Treasury Stock and Morgan Common Shares held by Parent) issued
     and outstanding immediately prior to the Effective Time shall, by virtue of
     the Parent Merger and on the Effective Date, be converted at the election
     of the holder thereof (in accordance with the election and allocation
     procedures set forth in Section 3.01(b), (e), (h), and (i)) into either (i)
     Parent Common Shares based upon a fixed exchange ratio of 3.162 Parent
     Common Shares for each Morgan Common Share (the "Stock Exchange Ratio");
     (ii) cash in the amount of $52.00 for each Morgan Common Share (the "Cash
     Exchange Amount"); or (iii) a combination of such Parent Common Shares and
     cash, as more fully set forth in Section 3.01(b)(iii).

          Subject to adjustment for cash paid in lieu of fractional shares in
     accordance with Section 3.03, it is understood and agreed that the
     aggregate consideration will be a mixture of Parent Common Shares and cash,
     with 50% of the Morgan Common Shares issued and outstanding as of the
     Effective Time being exchanged for Parent Common Shares and 50% of the
     Morgan Common Shares issued and outstanding as of the Effective Time being
     exchanged for cash (collectively, the "Merger Consideration").

          (b) Election as to Outstanding Morgan Common Shares. The Morgan
     shareholders will have the following alternatives in connection with the
     exchange of their Morgan Common Shares in connection with the Parent Merger
     (which alternatives shall in each case be subject to the allocation
     procedures set forth in Sections 3.01(h) and (i)):

               (i) AT THE OPTION OF THE HOLDER, all of such holder's Morgan
          Common Shares deposited with the Exchange Agent shall be converted
          into and become Parent Common Shares at the Stock Exchange Ratio (such
          election, the "All Stock Election"); provided, however, that
          fractional shares will not be issued and cash (payable by check) will
          be paid in lieu thereof as provided in Section 3.03; or


                                       10



               (ii) AT THE OPTION OF THE HOLDER, all of such holder's Morgan
          Common Shares deposited with the Exchange Agent shall be converted
          into and become cash (payable by check) at the Cash Exchange Amount
          (such election, the "All Cash Election"); or

               (iii) AT THE OPTION OF THE HOLDER, any whole number of such
          holder's Morgan Common Shares will be converted into and become Parent
          Common Shares at the rate of the Stock Exchange Ratio and the
          remainder of such holder's Morgan Common Shares deposited with the
          Exchange Agent shall be converted into and become cash (payable by
          check) at the rate of the Cash Exchange Amount (such election, the
          "Mixed Election"); provided, however, that fractional shares will not
          be issued and cash (payable by check) will be paid in lieu thereof as
          provided in Section 3.03; or

               (iv) IF NO ELECTION (AS DEFINED IN SECTION 3.01(e)) IS MADE BY
          THE HOLDER BY THE ELECTION DEADLINE (AS DEFINED IN SECTION 3.01(e)),
          all of such holder's Morgan Common Shares will be converted into the
          right to receive Parent Common Shares as set forth in Section
          3.01(b)(i), cash as set forth in Section 3.01(b)(ii), or any
          combination of Parent Common Shares and cash as determined by Parent
          or, at Parent's direction, by the Exchange Agent at the Stock Exchange
          Ratio and the Cash Exchange Amount, as applicable; provided, however,
          that fractional shares will not be issued and cash will be paid in
          lieu thereof as provided in Section 3.03. Such Morgan Common Shares
          will be allocated by the Exchange Agent pro rata among non-electing
          holders based upon the number of Morgan Common Shares for which an
          election has not been received by the Election Deadline in order to
          (A) achieve the overall ratio of 50% Morgan Common Shares to be
          converted into Parent Common Shares and 50% of Morgan Common Shares to
          be converted into cash, and (B) satisfy the elections made by Morgan
          shareholders to the greatest extent possible. Notice of such
          allocation shall be provided promptly to each shareholder whose Morgan
          Common Shares are allocated pursuant to this Section 3.01(b)(iv).

          (c) Treasury Shares and Shares Held by Parent. Each Morgan Common
     Share held as Treasury Stock or held by Parent immediately prior to the
     Effective Time shall be canceled and retired at the Effective Time and no
     consideration shall be issued in exchange therefor. For purposes of this
     provision, shares held by Subsidiaries of Parent shall not be deemed to be
     held by Parent.

          (d) Outstanding Parent Common Shares. Each Parent Common Share issued
     and outstanding immediately prior to the Effective Time shall remain issued
     and outstanding and shall be unaffected by the Parent Merger.

          (e) Procedures for Election. An election form and other appropriate
     transmittal materials in such form as Morgan and Parent shall mutually
     agree (the "Election Form/Letter of Transmittal") shall be mailed to
     shareholders of Morgan prior to the Election Period (defined below). The
     "Election Period" shall be such period of time as Morgan and Parent shall
     mutually agree, within which Morgan shareholders may


                                       11



     validly elect the form of Merger Consideration set forth in Section 3.01(b)
     (the "Election") that they will receive, occurring between (i) the date of
     the mailing by Morgan of the Proxy Statement for the special meeting of
     shareholders of Morgan at which this Agreement is presented for approval
     and (ii) five days prior to the Effective Date. The "Election Deadline"
     shall be the time, specified by Parent after consultation with Morgan, on
     the last day of the Election Period, which shall be no earlier than the
     fifth trading day prior to the Effective Date.

          (f) Perfection of the Election. An Election shall be considered to
     have been validly made by a Morgan shareholder only if (i) the Exchange
     Agent (as defined in Section 3.04) shall have received an Election
     Form/Letter of Transmittal properly completed and executed by such
     shareholder, accompanied by a certificate or certificates representing the
     Morgan Common Shares as to which such Election is being made, duly endorsed
     in blank or otherwise in form acceptable for transfer on the books of
     Morgan, or containing an appropriate guaranty of delivery in the form
     customarily used in transactions of this nature from a member of a national
     securities exchange or a member of the NASD or a commercial bank or trust
     company in the United States and (ii) such Election Form/Letter of
     Transmittal and such certificate(s) or such guaranty of delivery shall have
     been received by the Exchange Agent prior to the Election Deadline.

          (g) Withdrawal of Election. Any Morgan shareholder may at any time
     prior to the Election Deadline revoke its election and either (i) submit a
     new Election Form/Letter of Transmittal in accordance with the procedures
     in Section 3.01(f), or (ii) withdraw the certificate(s) for Morgan Common
     Shares deposited therewith by providing written notice that is received by
     the Exchange Agent by 5:00 p.m., local time for the Exchange Agent, on the
     business day prior to the Election Deadline. Elections may be similarly
     revoked if this Agreement is terminated.

          (h) Reduction of Shares Deposited for Cash. If more than 50% of the
     total number of Morgan Common Shares issued and outstanding have, at the
     Election Deadline, been deposited with the Exchange Agent for cash pursuant
     to the All Cash Election and the Mixed Election and not withdrawn pursuant
     to Section 3.01(g), the Exchange Agent will promptly eliminate from the
     shares deposited pursuant to the All Cash Election and the Mixed Election
     (subject to the limitations described in Section 3.01(h)(iv)), a sufficient
     number of such shares so that the total number of shares remaining on
     deposit for cash pursuant to the All Cash Election and the Mixed Election
     is 50% of the Morgan Common Shares issued and outstanding on the Effective
     Date. After giving effect to Section 3.01(b)(iv), such elimination will be
     effected as follows:

               (i) Subject to the limitations described in Section 3.01(h)(iv),
          the Exchange Agent will eliminate from the shares deposited for cash
          pursuant to the All Cash Election and the Mixed Election, and will add
          or cause to be added to the shares deposited for Parent Common Shares,
          on a pro rata basis in relation to the total number of shares
          deposited pursuant to the All Cash Election and the Mixed Election
          minus the number of shares so deposited by the holders described in
          Section 3.01(h)(iv), such whole number of Morgan Common Shares on
          deposit for cash pursuant to the All Cash Election and the Mixed
          Election as may be


                                       12



          necessary so that the total number of shares remaining on deposit for
          cash pursuant to All Cash Election and the Mixed Election is 50% of
          the Morgan Common Shares issued and outstanding on the Effective Date;

               (ii) All Morgan Common Shares that are eliminated pursuant to
          Section 3.01(h)(i) from the shares deposited for cash shall be
          converted into Parent Common Shares as provided by Sections 3.01(b)(i)
          and 3.01(b)(iii);

               (iii) Notice of such allocation shall be provided promptly to
          each shareholder whose Morgan Common Shares are eliminated from the
          shares on deposit for cash pursuant to Section 3.01(h)(i); and

               (iv) Notwithstanding the foregoing, the holders of 100 or fewer
          Morgan Common Shares of record on the date of this Agreement who have
          elected the All Cash Election shall not be required to have any of
          their Morgan Common Shares converted into Parent Common Shares.

          (i) Increase of Shares Deposited for Cash. If fewer than 50% of the
     total number of Morgan Common Shares issued and outstanding have, at the
     Election Deadline, been deposited with the Exchange Agent for cash pursuant
     to the All Cash Election and the Mixed Election and not withdrawn pursuant
     to Section 3.01(g), Parent will promptly add, or cause to be added by the
     Exchange Agent, to such deposited shares, a sufficient number of Morgan
     Common Shares deposited for Parent Common Shares pursuant to the All Stock
     Election and the Mixed Election (subject to the limitation described in
     Section 3.01(h)(iv)) so that the total number of Morgan Common Shares on
     deposit for cash pursuant to the All Cash Election and the Mixed Election
     on the Effective Date is 50% of the Morgan Common Shares issued and
     outstanding on the Effective Date. After giving effect to Section
     3.01(b)(iv), such addition will be effected as follows:

               (i) Subject to the limitation described in Section 3.01(h)(iv),
          Parent will add or cause to be added to the shares deposited for cash,
          and the Exchange Agent will eliminate or cause to be eliminated from
          the shares deposited for Parent Common Shares pursuant to the All
          Stock Election and the Mixed Election, on a pro rata basis in relation
          to the total number of Morgan Common Shares deposited for Parent
          Common Shares pursuant to the All Stock Election and the Mixed
          Election, such whole number of Morgan Common Shares not then on
          deposit for cash as may be necessary so that the number of shares
          remaining on deposit for cash is 50% of the Morgan Common Shares
          issued and outstanding on the Effective Date;

               (ii) All Morgan Common Shares that are eliminated pursuant to
          Section 3.01(i)(i) from the shares to be converted into Parent Common
          Shares shall be converted into cash, as provided by Sections
          3.01(b)(ii) and 3.01(b)(iii); and


                                       13



               (iii) Notice of such allocation shall be provided promptly to
          each shareholder whose Morgan Common Shares are added to the shares on
          deposit for cash pursuant to Section 3.01(i)(i).

          (j) Notwithstanding anything in this Agreement to the contrary, to
     preserve the status of the Parent Merger as a tax-free reorganization
     within the meaning of Section 368(a)(1)(A) of the Code, if, based upon the
     closing price of the Parent Common Shares as reported on the primary market
     on which the Parent Common Shares are listed for trading (the "Parent
     Exchange") on the business day immediately preceding the Effective Time,
     the aggregate value of the Parent Common Shares to be issued in connection
     with the Parent Merger would be less than 50% of the sum of the aggregate
     cash to be received by the holders of the Morgan Common Shares (including
     amounts paid to dissenters), plus the value of the Parent Common Shares to
     be received by the holders of the Morgan Common Shares, as consideration in
     connection with the Parent Merger, then Parent will increase the Stock
     Exchange Ratio so that the aggregate value of the Parent Common Shares to
     be issued to the holders of the Morgan Common Shares in connection with the
     Parent Merger, as determined based upon the closing price of the Parent
     Common Shares on the Parent Exchange on the business day immediately
     preceding the Effective Time, is equal to 50% of the sum of the aggregate
     cash to be received by the holders of the Morgan Common Shares (including
     amounts paid to dissenters), plus the value of the Parent Common Shares to
     be received by the holders of the Morgan Common Shares as consideration in
     connection with the Parent Merger.

     3.02 Rights as Shareholders; Stock Transfers.

          At the Effective Time, the Morgan Common Shares shall no longer be
outstanding and shall automatically be canceled and cease to exist and holders
of Morgan Common Shares shall cease to be, and shall have no rights as,
shareholders of Morgan, other than to receive any dividend or other distribution
with respect to such Morgan Common Shares with a record date occurring prior to
the Effective Time, the consideration provided under this Article III and the
appraisal rights in the case of Dissenting Shares. After the Effective Time,
there shall be no transfers on the stock transfer books of Morgan or the
Surviving Corporation of any Morgan Common Shares (other than Dissenting Shares,
if applicable).

     3.03 Fractional Shares.

          Notwithstanding any other provision hereof, no fractional Parent
Common Shares and no certificates or scrip therefor, or other evidence of
ownership thereof, will be issued in the Parent Merger and no Parent dividend or
other distribution or stock split or combination will relate to any fractional
Parent Common Share, and such fractional Parent Common Shares will not entitle
the owner thereof to vote or to any rights of a security holder of Parent;
instead, Parent shall pay to each holder of Morgan Common Shares who would
otherwise be entitled to a fractional Parent Common Share (after taking into
account all Old Certificates delivered by such holder) an amount in cash
(without interest) determined by multiplying such fractional Parent Common Share
to which the holder would be entitled by $52.00.


                                       14



     3.04 Exchange Procedures.

          (a) At or prior to the Effective Time, Parent shall deposit, or shall
     cause to be deposited, with Registrar and Transfer Company (in such
     capacity, the "Exchange Agent"), for the benefit of the holders of
     certificates representing Morgan Common Shares ("Old Certificates"), for
     exchange in accordance with this Article III, certificates representing the
     Parent Common Shares ("New Certificates") and an estimated amount of cash
     (such cash and New Certificates, together with any dividends or
     distributions with a record date occurring on or after the Effective Date
     with respect thereto and any cash to be paid in lieu of fractional Parent
     Common Shares, being hereinafter referred to as the "Exchange Fund") to be
     paid pursuant to this Article III in exchange for outstanding Morgan Common
     Shares. Parent shall make available directly or indirectly to the Exchange
     Agent, from time to time as needed, cash sufficient to pay cash in lieu of
     fractional Parent Common Shares pursuant to Section 3.03 and any dividends
     and other distributions pursuant to Section 3.04(e).

          (b) No interest will be paid on any cash, including any cash to be
     paid in lieu of fractional Parent Common Shares or in respect of dividends
     or distributions that any such Person shall be entitled to receive pursuant
     to this Article III.

          (c) Promptly after the Effective Time, but not later than 10 days
     thereafter, Parent shall cause the Exchange Agent to mail to each holder of
     record of an Old Certificate that was converted pursuant to Section 3.01
     (i) a form of letter of transmittal (the "Letter of Transmittal")
     specifying that delivery will be effected, and risk of loss and title to
     the Old Certificates will pass, only upon proper delivery of the Old
     Certificates to the Exchange Agent and (ii) instructions and procedures for
     surrendering such Old Certificates in exchange for the New Certificates.
     Upon surrender of an Old Certificate for cancellation to the Exchange
     Agent, together with such Letter of Transmittal, duly executed, the holder
     of such Old Certificate shall receive in exchange therefor (A) a New
     Certificate representing that number of whole Parent Common Shares that
     such holder has the right to receive pursuant to the provisions of this
     Article III, and/or (B) a check in an amount equal to the sum of the cash
     to be paid to such holder as part of the Merger Consideration, the cash to
     be paid in lieu of any fractional Parent Common Shares to which such holder
     is entitled pursuant to Section 3.03 and/or the cash to be paid in respect
     of any dividends or distributions to which such holder may be entitled
     pursuant to Section 3.04(e), after giving effect to any required tax
     withholdings, and the Old Certificate so surrendered shall forthwith be
     canceled. In the event of a transfer of ownership of Morgan Common Shares
     that is not registered in the transfer records of Morgan, a New Certificate
     representing the proper number of Parent Common Shares may be issued,
     and/or the cash to be paid as part of the Merger Consideration, in lieu of
     any fractional Parent Common Shares and/or in respect of any dividends or
     distributions may be paid, to a transferee if the Old Certificate is
     presented to the Exchange Agent, accompanied by all documents required to
     evidence and effect such transfer, and by evidence that any applicable
     stock transfer taxes have been paid. Until surrendered as contemplated by
     this Section 3.04(c), each Old Certificate will be deemed at any time after
     the Effective Time to represent only the right to receive upon such
     surrender a New Certificate and/or a check in an amount equal to the sum of
     the cash to be paid as part of


                                       15



     the Merger Consideration, the cash to be paid in lieu of any fractional
     Parent Common Shares and/or the cash to be paid in respect of any dividends
     or distributions to which the holder may be entitled pursuant to Section
     3.04(e) hereof.

          (d) Promptly following the date that is six months after the Effective
     Time, the Exchange Agent shall deliver to the Surviving Corporation all
     cash, certificates and other documents in its possession relating to the
     transactions described in this Agreement; and any holders of Morgan Common
     Shares who have not theretofore complied with this Article III may look
     thereafter only to the Surviving Corporation for the Parent Common Shares,
     any dividends or distributions thereon and any cash to be paid as part of
     the Merger Consideration or in lieu of fractional Parent Common Shares to
     which they are entitled pursuant to this Article III, in each case, without
     any interest thereon. Notwithstanding the foregoing, neither the Exchange
     Agent nor any party hereto shall be liable to any former holder of Morgan
     Common Shares for any Parent Common Shares, any dividends or distributions
     thereon or any cash to be paid as part of the Merger Consideration or in
     lieu of fractional Parent Common Shares delivered to a public official
     pursuant to applicable abandoned property, escheat or similar Laws.

          (e) No dividends or other distributions with respect to Parent Common
     Shares with a record date occurring on or after the Effective Date shall be
     paid to the holder of any unsurrendered Old Certificate representing Morgan
     Common Shares converted in the Parent Merger into the right to receive such
     Parent Common Shares until the holder thereof shall be entitled to receive
     New Certificates in exchange therefor in accordance with the procedures set
     forth in this Section 3.04. After becoming so entitled in accordance with
     this Section 3.04, the record holder thereof also shall be entitled to
     receive any such dividends or other distributions, without any interest
     thereon, which theretofore had become payable with respect to Parent Common
     Shares such holder had the right to receive upon surrender of the Old
     Certificates.

          (f) If any Old Certificate has been lost, stolen or destroyed, upon
     the making of an affidavit of that fact by the Person claiming such Old
     Certificate to be lost, stolen or destroyed and, if required by Parent, the
     posting by such Person of a bond in such reasonable amount as Parent may
     direct as indemnity against any claim that may be made against it with
     respect to such Old Certificate, the Exchange Agent shall deliver in
     exchange for such lost, stolen or destroyed Old Certificate (i) the number
     of Parent Common Shares to which such Person is entitled pursuant to
     Section 3.01(a) with respect to the Morgan Common Shares formerly
     represented thereby, and/or (ii) a check in an amount equal to the sum of
     the cash to be paid to such Person as part of the Merger Consideration, the
     cash to be paid in lieu of any fractional Parent Common Shares to which
     such Person is entitled pursuant to Section 3.03 and/or the cash to be paid
     in respect of any dividends or distributions to which such Person may be
     entitled pursuant to Section 3.04(e).

          (g) Parent is entitled to deduct and withhold from the consideration
     otherwise payable pursuant to this Agreement to any holder of Morgan Common
     Shares and Morgan Stock Options such amounts as it is required to deduct
     and withhold with respect to the making of such payment under the Code and
     the rules and regulations promulgated


                                       16



     thereunder, or any applicable Law. To the extent that amounts are so
     withheld by Parent, such withheld amounts may be treated for all purposes
     of this Agreement as having been paid to the holders of Morgan Common
     Shares and Morgan Stock Options in respect of which such deduction and
     withholding were made by Parent.

     3.05 Anti-Dilution Provisions.

          In the event Parent changes (or establishes a record date for
changing) the number of Parent Common Shares issued and outstanding between the
date hereof and the Effective Date as a result of a stock split, stock dividend,
recapitalization, reclassification, split up, combination, exchange of shares,
readjustment or similar transaction with respect to the outstanding Parent
Common Shares and the record date therefor shall be prior to the Effective Date,
the Stock Exchange Ratio shall be proportionately adjusted. In the event that
Rights are issued under the Rights Agreement, and such Rights are issued between
the date of this Agreement and the Effective Date, then Morgan shareholders who
receive Parent Common Shares as a result of the Parent Merger shall additionally
receive Rights on the Effective Date to the same extent they would have received
Rights if they had held such Parent Common Shares when such Rights were issued.

     3.06 Treatment of Stock Options.

          There are currently outstanding options to purchase 74,500 Morgan
Common Shares under the Morgan Stock Plan (each, a "Morgan Stock Option"). Each
Morgan Stock Option that is outstanding and unexercised immediately prior to the
Effective Time, whether or not then vested and exercisable, shall be terminated
immediately prior to the Effective Time and each grantee thereof shall be
entitled to receive, in lieu of the Morgan Common Shares, that would otherwise
have been issuable upon exercise thereof, an amount in cash computed by
multiplying (a) the excess of (i) $52.00 over (ii) the exercise price of such
Morgan Stock Option by (b) the number of Morgan Common Shares subject to the
Morgan Stock Option. Morgan shall use commercially reasonable efforts to take or
cause to be taken all action necessary to obtain a written consent from each
holder of a Morgan Stock Option to permit such termination effective at the
Effective Date. Morgan may elect to pay immediately prior to the Effective Time
to each holder of a Morgan Stock Option from whom a written consent has been
obtained pursuant to the preceding sentence the aggregate amount to which such
holder is entitled pursuant to this Section 3.06.

                                   ARTICLE IV

                           ACTIONS PENDING ACQUISITION

     4.01 Forbearances of Morgan.

          From the date hereof until the earlier of the Effective Time and the
termination of this Agreement, except as expressly contemplated by this
Agreement and/or disclosed on Morgan's Disclosure Schedule, without the prior
written consent of Parent, which consent shall not be unreasonably withheld,
Morgan shall not, and shall cause its Subsidiary not to:


                                       17



          (a) Ordinary Course. Conduct the business of Morgan and its Subsidiary
     other than in the ordinary and usual course consistent with past practice
     or fail to use reasonable efforts to preserve intact their business
     organizations and assets and maintain their rights, franchises and existing
     relations with customers, suppliers, employees and business associates, or
     voluntarily take any action which, at the time taken, is reasonably likely
     to have an adverse effect upon Morgan's ability to perform any of its
     material obligations under this Agreement.

          (b) New Activities. Engage in any material new activities or lines of
     business or make any material changes to its existing activities or lines
     of business.

          (c) Capital Stock. Other than pursuant to Rights Previously Disclosed
     and outstanding on the date hereof, (i) issue, sell or otherwise permit to
     become outstanding, or authorize the creation of, any additional Morgan
     Common Shares or any Rights, (ii) permit any additional Morgan Common
     Shares to become subject to new grants of employee or director stock
     options, other Rights or similar stock-based employee rights, (iii) permit
     any purchases of Morgan Common Shares to be made under the Morgan Stock
     Plan, (iv) effect any recapitalization, reclassification, stock split or
     like change in capitalization or (iv) enter into, or take any action to
     cause any holders of Morgan Common Shares to enter into, any agreement,
     understanding or commitment relating to the right of holders of Morgan
     Common Shares to vote any Morgan Common Shares, or cooperate in any
     formation of any voting trust or similar arrangement relating to such
     shares, other than the Voting Agreements.

          (d) Dividends, Etc. (i) Make, declare, pay or set aside for payment
     any dividend or distribution on any shares of its capital stock, other than
     (A) quarterly cash dividends on Morgan Common Shares in an amount not to
     exceed the per share amount declared and paid in its most recent quarterly
     cash dividend, with record and payment dates consistent with past practice,
     and (B) dividends from its wholly owned Subsidiary to Morgan; (ii)
     otherwise declare or make any distribution on any shares of its capital
     stock; or (iii) directly or indirectly adjust, split, combine, redeem,
     reclassify, purchase or otherwise acquire any shares of its capital stock.

          (e) Subsidiaries. (i) Issue, sell or otherwise permit to become
     outstanding, (ii) transfer, mortgage, encumber or otherwise dispose of
     (iii) permit the creation of any Lien in respect of, or (iv) amend or
     modify the terms of, any equity interests held in a Subsidiary of Morgan.

          (f) Compensation; Employment Agreements; Etc. Enter into, amend,
     modify, renew or terminate any employment, consulting, severance, change in
     control or similar agreements or arrangements with any director, officer or
     employee of, or independent contractor with respect to, Morgan or its
     Subsidiary, or grant any salary, wage or other increase or increase any
     employee benefit (including incentive or bonus payments), except (i) for
     normal individual increases in compensation to employees in the ordinary
     and usual course of business consistent with past practice, (ii) for other
     changes that are required or made advisable by applicable Law, and (iii) to
     satisfy Previously Disclosed contractual obligations existing as of the
     date hereof.


                                       18



          (g) Benefit Plans. Enter into, establish, adopt, amend, modify or
     terminate (except (i) as may be required by applicable Law, (ii) to satisfy
     Previously Disclosed contractual obligations existing as of the date hereof
     or (iii) the regular annual renewal of insurance Contracts) any pension,
     retirement, stock option, stock purchase, savings, profit sharing, deferred
     compensation, consulting, bonus, group insurance or other employee benefit,
     incentive or welfare contract, plan or arrangement, or any trust agreement
     (or similar arrangement) related thereto, in respect of any director,
     officer or employee of, or independent contractor with respect to, Morgan
     or its Subsidiary (or any dependent or beneficiary of any of the foregoing
     Persons), or take any action to accelerate the vesting or exercisability
     of, or the payment or distribution with respect to, stock options,
     restricted stock or other compensation or benefits payable thereunder,
     other than pursuant to this Agreement.

          (h) Dispositions. Sell, transfer, mortgage, encumber or otherwise
     dispose of or permit the creation of any Lien for sales of Loans, debt
     securities or similar investments (except for a Lien for Taxes not yet due
     and payable) in respect of, or discontinue any portion of, any of its
     assets, deposits, business or properties except in the ordinary and usual
     course of business consistent with past practice.

          (i) Acquisitions. Acquire (other than by way of foreclosures or
     acquisitions of control in a bona fide fiduciary capacity or in
     satisfaction of debts previously contracted in good faith, in each case in
     the ordinary and usual course of business consistent with past practice)
     all or any portion of, the assets, business, deposits or properties of any
     other entity, or acquire mortgage servicing rights, except in connection
     with existing correspondent lending relationships in the ordinary and usual
     course of business consistent with past practice.

          (j) Governing Documents. Amend the Morgan Articles, Morgan Code or the
     Governing Documents of Morgan's Subsidiary.

          (k) Accounting Methods. Implement or adopt any change in its
     accounting principles, practices or methods, other than as may be required
     by GAAP.

          (l) Contracts. Except in the ordinary and usual course of business
     consistent with past practice, enter into or terminate any material
     contract (as defined in Section 5.03(k)) or amend or modify in any material
     respect any of its existing material contracts, or enter into any new
     contract that would be required to be disclosed pursuant to the standards
     set forth in Section 5.03(k).

          (m) Claims. Settle any claim, action or proceeding, except for any
     claim, action or proceeding that does not involve precedent for other
     material claims, actions or proceedings and that involve solely money
     damages in an amount, individually or in the aggregate for all such
     settlements, that is immaterial to Morgan and its Subsidiary, taken as a
     whole.

          (n) Adverse Actions. (i) Take any action while knowing that such
     action would, or is reasonably likely to, prevent or impede the Parent
     Merger from qualifying as


                                       19



     a reorganization within the meaning of Section 368(a) of the Code; or (ii)
     knowingly take any action that is intended or is reasonably likely to
     result in (A) any of its representations and warranties set forth in this
     Agreement being or becoming untrue in any material respect at any time at
     or prior to the Effective Time, (B) any of the conditions to the Parent
     Merger set forth in Article VII not being satisfied or (C) a material
     violation of any provision of this Agreement except, in each case, as may
     be required by applicable Law or (iii) engage in any new line of business
     or make any acquisition that would not be permissible for a United States
     bank holding company (as defined in the Bank Holding Company Act of 1956)
     or would subject Parent, Morgan or any Subsidiary of either to material
     regulation by a Regulatory Authority that does not presently regulate such
     company or to regulation by a Regulatory Authority that is materially
     different from current regulation.

          (o) Risk Management. Except as required by applicable Law, (i)
     implement or adopt any material change in its credit risk and interest rate
     risk management and hedging policies and other risk management policies,
     procedures or practices; (ii) fail to follow its existing policies or
     practices with respect to managing its exposure to credit and interest rate
     and other risk; or (iii) fail to use commercially reasonable means to avoid
     any material increase in its aggregate exposure to interest rate risk.

          (p) Indebtedness. Incur, cancel, release, assign, modify, assume,
     guarantee, endorse or otherwise as an accommodation become responsible for
     the obligations of any other Person with respect to any indebtedness for
     borrowed money in an amount in excess of $500,000; provided, however, that
     Morgan may continue to borrow from the Federal Home Loan Bank of
     Cincinnati, National City Bank and/or Great Lakes Bankers Bank in
     accordance with past practices.

          (q) Related Party Transactions. Make any payment of cash or other
     consideration to, or make any Loan to or on behalf of, or enter into, amend
     or grant a consent or waiver under, or fail to enforce, any Contract with,
     any Related Person.

          (r) Taxes. Make or change any material election with respect to Taxes,
     settle any material Tax audit or proceeding, enter into any Tax closing
     agreement or request any Tax private letter or similar ruling.

          (s) Loans. Extend credit for new loans, renewals and extensions on a
     secured or unsecured basis, except in accordance with the lending limits
     set forth in Morgan's loan policy dated July 27, 2006 and pursuant to
     historic business practices, which policy shall not be modified without the
     prior written consent of Parent.

          (t) Capital Expenditures. Make any capital expenditures in excess of
     $50,000 in any one case or $100,000 in the aggregate or enter into any
     agreement contemplating capital expenditures in excess of $100,000 for any
     twelve-month period.

          (u) Capitalization Status. Fail to maintain Morgan Bank's status as a
     "well-capitalized" bank within the meaning of the risk-based capital
     guidelines issued by the Board of Governors of the Federal Reserve System;
     provided that, for purposes of this


                                       20



     clause (u), charges relating to the transactions contemplated by this
     Agreement shall be excluded from the determination of such status.

          (v) Commitments. Agree or commit to do, or enter into any Contract
     regarding, anything that would be precluded by clauses (a) through (u).

     4.02 Forbearances of Parent.

          From the date hereof until the Effective Time, except as expressly
contemplated by this Agreement and/or disclosed on Parent's Disclosure Schedule,
without the prior written consent of Morgan, which consent shall not be
unreasonably withheld, Parent shall not, and shall cause each of its
Subsidiaries not to:

          (a) Ordinary Course. Conduct the business of Parent and its
     Subsidiaries other than in the ordinary and usual course consistent with
     past practice or fail to use reasonable efforts to preserve intact their
     business organizations and assets and maintain their rights, franchises and
     existing relations with customers, suppliers, employees and business
     associates, or voluntarily take any action which, at the time taken, is
     reasonably likely to have an adverse affect upon Parent's ability to
     perform any of its material obligations under this Agreement.

          (b) Accounting Methods. Implement or adopt any change in its
     accounting principles, practices or methods, other than as may be required
     by GAAP.

          (c) Adverse Actions. (i) Take any action while knowing that such
     action would, or is reasonably likely to, prevent or impede the Parent
     Merger from qualifying as a reorganization within the meaning of Section
     368(a) of the Code; (ii) knowingly take any action that is intended or is
     reasonably likely to result in (A) any of its representations and
     warranties set forth in this Agreement being or becoming untrue in any
     material respect at any time at or prior to the Effective Time, (B) any of
     the conditions to the Parent Merger set forth in Article VII not being
     satisfied or (C) a material violation of any provision of this Agreement
     except, in each case, as may be required by applicable Law.

          (d) Risk Management. Except as required by applicable Law, (i) fail to
     follow its existing policies or practices with respect to managing its
     exposure to credit and interest rate hedging policies and other risk, or
     (ii) fail to use commercially reasonable means to avoid any material
     increase in its aggregate exposure to interest rate risk.

          (e) Commitments. Agree or commit to do, or enter into any Contract
     regarding, anything that would be precluded by clauses (a) through (d).


                                       21


                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     5.01 Disclosure Schedules.

          On or prior to the date hereof, Parent delivered to Morgan a schedule
and Morgan delivered to Parent a schedule (respectively, its "Disclosure
Schedule") setting forth, among other things, items, the disclosure of which are
necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in Section 5.03 or 5.04 or to one or
more of its respective covenants contained in Article IV and Article VI;
provided, however, that (a) no such item is required to be set forth in a
Disclosure Schedule as an exception to a representation or warranty if its
absence would not be reasonably likely to result in the related representation
or warranty being deemed untrue or incorrect under the standard established by
Section 5.02, and (b) the mere inclusion of an item in a Disclosure Schedule as
an exception to a representation or warranty shall not be deemed an admission by
a party that such item represents a material exception or fact, event or
circumstance or that such item is reasonably likely to have or result in a
Material Adverse Effect on the party making the representation. Morgan's
representations, warranties and covenants contained in this Agreement shall not
be deemed to be untrue, incorrect or to have been breached as a result of
effects on Morgan arising solely from actions taken in compliance with a written
request of Parent.

     5.02 Standard.

          No representation or warranty of Morgan or Parent contained in Section
5.03 (other than Sections 5.03(h), (i), (k), (l), (n), (q), (s), (t) and (w)
(collectively, the "Excluded Representations")) or 5.04 shall be deemed untrue
or incorrect, and no party hereto shall be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless such fact, circumstance or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in Section 5.03 (other than the Excluded
Representations) or 5.04 (without giving effect to any limitation set forth in
Section 5.03 (other than in the Excluded Representations) or 5.04 arising from
the use of the words "material" or "materially" or the phrase "Material Adverse
Effect" or similar qualifiers) has had, or is reasonably likely to have, a
Material Adverse Effect.

     5.03 Representations and Warranties of Morgan.

          Subject to Sections 5.01 and 5.02 and except as Previously Disclosed,
Morgan hereby represents and warrants to Parent as follows:

          (a) Organization, Standing and Authority. Morgan is a corporation duly
     organized, validly existing and in good standing under the Laws of the
     State of Ohio and any foreign jurisdictions where its ownership or leasing
     of property or assets or the conduct of its business requires it to be so
     qualified. Morgan is registered as a bank holding company under the Bank
     Holding Company Act of 1956, as amended. Morgan Bank is a national banking
     association, duly organized, validly existing and in good standing under
     the laws of the United States of America. Morgan Bank is not required to


                                       22



     be qualified to do business in any state or in any foreign jurisdictions
     where it owns or leases property or assets or conducts its business.

          (b) Capital Structure of Morgan. The authorized capital stock of
     Morgan consists solely of 600,000 Morgan Common Shares, of which 466,302
     Morgan Common Shares were outstanding as of the date hereof. As of the date
     hereof, no shares of Treasury Stock were held by Morgan and none were
     otherwise owned by Morgan or its Subsidiary. The outstanding Morgan Common
     Shares have been duly authorized, are validly issued and outstanding, fully
     paid and nonassessable, and are not subject to any preemptive rights (and
     were not issued in violation of any preemptive rights). As of the date
     hereof, (i) there were no Morgan Common Shares authorized and reserved for
     issuance, and (ii) Morgan did not have any commitment to authorize, issue
     or sell any Morgan Common Shares or Rights, except pursuant to this
     Agreement and the Morgan Stock Plan. Morgan does not have outstanding any
     bonds, debentures, notes or other obligations the holders of which have the
     right to vote (or that are convertible into or exercisable for securities
     having the right to vote) with the shareholders of Morgan on any matter.

          (c) Subsidiaries.

               (i) (A) Morgan has Previously Disclosed a list of all of its
          Subsidiaries together with the jurisdiction of organization of each
          such Subsidiary, (B) Morgan owns, directly or indirectly, all the
          issued and outstanding equity securities of its Subsidiary, (C) no
          equity securities of its Subsidiary is or may become required to be
          issued (other than to it or its wholly-owned Subsidiary) by reason of
          any Right or otherwise, (D) there are no Contracts by which of such
          Subsidiary is or may be bound to sell or otherwise transfer any equity
          securities of such Subsidiary (other than to Morgan or its
          wholly-owned Subsidiary), (E) there are no Contracts relating to
          Morgan's rights to vote or to dispose of any equity securities of any
          such Subsidiary and (F) all the equity securities of the Subsidiary
          held by Morgan or its Subsidiary are fully paid and nonassessable
          (except pursuant to 12 U.S.C. Section 55) and are owned by Morgan or
          its Subsidiary free and clear of any Liens.

               (ii) Except as Previously Disclosed, Morgan does not own
          beneficially, directly or indirectly, any equity securities or similar
          interests of any Person, or any interest in a partnership or joint
          venture of any kind, other than its Subsidiary. Morgan has Previously
          Disclosed, as of the date of this Agreement, a list of all equity
          securities it or its Subsidiary holds involving, in the aggregate,
          beneficial ownership or control by Morgan or any such Subsidiary of 5%
          or more of any class of the issuer's voting securities or 25% or more
          of any class of the issuer's securities, including a description of
          any such issuer and the percentage of the issuer's voting and/or
          non-voting securities and, as of the Effective Time, no additional
          Persons would need to be included on such a list.

               (iii) Morgan's Subsidiary has been duly organized and is validly
          existing in good standing under the Laws of the jurisdiction of its
          organization,


                                       23



          and is duly qualified to do business and in good standing in the
          jurisdictions where its ownership or leasing of property or the
          conduct of its business requires it to be so qualified. Morgan Bank is
          Morgan's only depository institution Subsidiary, and it (A) is an
          "insured depository institution" as defined in the Federal Deposit
          Insurance Act and the applicable regulations thereunder and (B) has a
          rating of "Satisfactory" or better under the Community Reinvestment
          Act of 1977 as of the date of this Agreement.

          (d) Corporate Power; Authorized and Effective Agreement. Each of
     Morgan and its Subsidiary has full corporate power and authority to carry
     on its business as it is now being conducted and to own all its properties
     and assets. Subject to the adoption of this Agreement by the holders of the
     requisite number of outstanding Morgan Common Shares entitled to vote on
     this Agreement (the "Required Morgan Vote") and the approval of Regulatory
     Authorities, Morgan has the corporate power and authority to execute,
     deliver and perform its obligations under this Agreement and to consummate
     the transactions contemplated hereby and thereby, and, subject to approval
     by the board of directors of Morgan Bank and by Morgan as sole shareholder
     of Morgan Bank, Morgan Bank has the corporate power and authority to
     consummate the Subsidiary Merger as contemplated by Section 2.02.

          (e) Corporate Authority. Subject to adoption of this Agreement by the
     Required Morgan Vote (which is the only shareholder vote required thereon),
     this Agreement and the transactions contemplated hereby have been
     authorized by all necessary corporate action of Morgan and the Morgan Board
     on or before the date hereof. The Agreement to Merge, when executed by
     Morgan Bank, shall have been approved by the Board of Directors of Morgan
     Bank and by the Morgan Board, as the sole shareholder of Morgan Bank. This
     Agreement is a valid and legally binding obligation of Morgan, enforceable
     against Morgan in accordance with its terms (except as enforceability may
     be limited by applicable bankruptcy, insolvency, reorganization,
     moratorium, fraudulent transfer and similar Laws of general applicability
     relating to or affecting creditors' rights or by general equity principles
     and except to the extent such enforceability may be limited by laws
     relating to the safety and soundness of insured depository institutions as
     set forth in 12 U.S.C. Section 1818(b) or the appointment of a conservator
     by the FDIC).

          (f) Fairness Opinion. The Morgan Board has received the written
     opinion of Ryan Beck & Co., Inc., to the effect that, as of the date
     hereof, the consideration to be received by the holders of Morgan Common
     Shares in the Parent Merger is fair to the holders of Morgan Common Shares
     from a financial point of view, which opinion will be updated by Ryan Beck
     & Co., Inc. and provided to the Morgan Board on the date of the Proxy
     Statement.

          (g) Regulatory Filings; No Defaults.

               (i) No consents or approvals of, or filings or registrations
          with, any Governmental Authority or with any third party are required
          to be made or obtained by Morgan or any of its Subsidiaries in
          connection with the execution, delivery or performance by Morgan of
          this Agreement or to consummate the


                                       24



          Parent Merger or the other transactions contemplated hereby except for
          (A) filings of applications and notices, as applicable, with
          Regulatory Authorities, and (B) the filing of the Certificates of
          Merger with the OSS pursuant to the OGCL. As of the date hereof,
          Morgan is not aware of any reason why the Requisite Regulatory
          Approvals (as defined in Section 7.01(b)) will not be received without
          the imposition of a condition, restriction or requirement of the type
          described in Section 7.01(b).

               (ii) Subject to receipt of the regulatory and shareholder
          approvals referred to above and expiration of related regulatory
          waiting periods, and required filings under federal and state
          securities Laws by Parent, except as Previously Disclosed, the
          execution, delivery and performance of this Agreement and the
          consummation of the transactions contemplated hereby do not and will
          not (A) constitute a breach or violation of, or a default under, or
          give rise to any Lien, any acceleration of remedies or any right of
          termination under, any Law, governmental permit or license, or
          Contract of Morgan or its Subsidiary or to which Morgan or its
          Subsidiary or properties is subject or bound, (B) constitute a breach
          or violation of, or a default under, the Governing Documents of Morgan
          or its Subsidiary or (C) require any consent or approval under any
          such Law, governmental permit or license, or governmental Contract.

          (h) Regulatory Reports; Material Adverse Effect.

               (i) Morgan (A) has delivered to Parent copies of the audited
          consolidated balance sheets and the related audited consolidated
          statements of income, shareholders' equity and cash flows (including
          related notes and schedules) of Morgan and its consolidated Subsidiary
          as of and for each of the three full fiscal years ended December 31,
          2005, and of the unaudited balance sheet and the related unaudited
          statement of income, as of and for the three and nine months ended
          September 30, 2006 and 2005 (the "Morgan Financial Statements"), and
          (B) has furnished Parent with a true and complete copy of each
          material report filed by Morgan with the Federal Reserve Board or by
          its Subsidiary with any Regulatory Authorities from and after January
          1, 2001 (each, a "Regulatory Reporting Document"), which are all the
          material documents that Morgan or its Subsidiary was required to file
          with the Regulatory Authorities since such date and all of which
          complied when filed in all material respects with all applicable laws
          and regulations.

               (ii) The Morgan Financial Statements (as of the dates thereof and
          for the periods covered thereby) (A) are in accordance with the books
          and records of Morgan and its Subsidiary, which are complete and
          accurate in all material respects and which have been maintained in
          accordance with good business practices, and (B) present fairly the
          consolidated financial position and the consolidated results of
          operations, changes in shareholders' equity and cash flows of Morgan
          and its Subsidiary as of the dates and for the periods indicated. The
          Morgan Financial Statements have been prepared in accordance with
          GAAP, subject in the case of unaudited interim financial statements
          for the three and nine


                                       25



          months ended September 30, 2006 to normal recurring year-end
          adjustments and except for the absence of certain footnote information
          in such unaudited interim financial statements. Neither S.R.
          Snodgrass, AC nor any other firm of independent certified public
          accountants has prepared or delivered to Morgan any management letters
          that express any material concerns or issues regarding Morgan's
          internal controls, accounting practices or financial conditions since
          January 1, 2001.

               (iii) To the knowledge of Morgan, S.R. Snodgrass, AC, which has
          expressed its opinion with respect to the audited financial statements
          of Morgan and its Subsidiaries included in the Morgan Financial
          Statements (including the related notes), is and has been throughout
          the periods covered by such financial statements an independent
          registered public accounting firm with respect to Morgan within the
          meaning of the Securities Act and the related rules of the SEC and the
          requirements of the Public Company Accounting Oversight Board.

          (i) Litigation. Except as Previously Disclosed, no material
     litigation, claim or other proceeding before any court or governmental
     agency is pending against Morgan or its Subsidiary and, to Morgan's
     knowledge, no such litigation, claim or other proceeding has been
     threatened.

          (j) Regulatory Matters.

               (i) Neither Morgan nor its Subsidiary or properties is a party to
          or is subject to any order, decree, agreement, memorandum of
          understanding or similar arrangement with, or a commitment letter or
          similar submission to, or extraordinary supervisory letter from any
          Regulatory Authorities.

               (ii) Neither Morgan nor its Subsidiary has been advised by any
          Regulatory Authority that such Regulatory Authority is contemplating
          issuing or requesting (or is considering the appropriateness of
          issuing or requesting) any such order, decree, agreement, memorandum
          of understanding, commitment letter, supervisory letter or similar
          submission.

          (k) Compliance with Laws.

               (i) Except as Previously Disclosed, each of Morgan and its
          Subsidiary:

                    (A) is in material compliance with all Laws applicable
               thereto or to the employees conducting such businesses,
               including, without limitation, the USA Patriot Act of 2001, the
               International Money Laundering Abatement and Anti-Terrorist
               Financing Act of 2001, the Equal Credit Opportunity Act, the Fair
               Housing Act, the Community Reinvestment Act, the Home Mortgage
               Disclosure Act and all other applicable fair lending Laws and
               other Laws relating to discriminatory business practices;


                                       26



                    (B) has all material permits, licenses, authorizations,
               orders and approvals of, and has made all filings, applications
               and registrations with, all Regulatory Authorities and
               Governmental Authorities that are required in order to permit
               them to own or lease their properties and to conduct their
               businesses as presently conducted; all such permits, licenses,
               certificates of authority, orders and approvals are in full force
               and effect and, to Morgan's knowledge, no suspension or
               cancellation of any of them is threatened or would reasonably be
               expected to occur, and all such filings, applications and
               registrations are current; and

                    (C) has received, since December 31, 2005, no notification
               or communication from any Regulatory Authority or Governmental
               Authority (1) asserting that Morgan or its Subsidiary is not in
               material compliance with any of the statutes, regulations, or
               ordinances that such Regulatory Authority or Governmental
               Authority enforces, (2) threatening to revoke any license,
               franchise, permit, or governmental authorization (nor, to
               Morgan's knowledge, do any grounds for any of the foregoing
               exist) or (3) restricting or disqualifying their activities
               (except for restrictions generally imposed by rule, regulation or
               administrative policy on banking organizations generally);

                    (D) is not aware of any pending or threatened investigation,
               review or disciplinary proceedings by any Governmental Authority
               against Morgan, its Subsidiary or any officer, director or
               employee thereof;

                    (E) is not subject to any order or decree issued by, or a
               party to any agreement or memorandum of understanding with, or a
               party to any commitment letter or similar undertaking to, or
               subject to any order or directive by, or a recipient of any
               supervisory letter from, and has not adopted any board
               resolutions at the request of, any Governmental Authority and has
               not been advised by any Governmental Authority that it is
               considering issuing or requesting any such agreement or other
               action; and

               (ii) None of Morgan or its Subsidiary has engaged in any of the
          practices listed in Office of the Comptroller of the Currency Advisory
          Letter AL 2000-7 as "indications that an institution may be engaging
          in abusive lending violations" or as practices that "may suggest the
          potential for fair lending violations" or has originated, owned or
          serviced or currently owns or services any Loan subject to the
          requirements of Section 226.32 of title 12 of the Code of Federal
          Regulations.

          (l) Material Contracts; Defaults. Except for this Agreement and
     Contracts which have been Previously Disclosed, neither Morgan nor its
     Subsidiary is a party to, bound by or subject to any Contract (i) that is a
     "material contract" within the meaning of Item 601(b)(10) of the SEC's
     Regulation S-K or (ii) that restricts or limits in any way the conduct of
     business by Morgan or its Subsidiary (including without limitation a
     non-


                                       27



     compete or similar provision). Neither Morgan nor its Subsidiary nor, to
     Morgan's knowledge, any other party thereto is in material default under
     any Contract to which it is a party, by which its respective assets,
     business, or operations may be bound or materially affected in any way, or
     under which it or its respective assets, business, or operations receive
     material benefits, and there has not occurred any event that, with the
     lapse of time or the giving of notice or both, would constitute such a
     material default. Morgan has Previously Disclosed a complete and accurate
     listing and copies of the following materials (other than those that have
     been performed completely and those related to loans made by Morgan Bank,
     deposits in Morgan Bank, investment securities held by Morgan or Morgan
     Bank, or borrowings by the Morgan Bank): (A) each Contract that involves
     performance of services or delivery of goods or materials by Morgan or any
     of its Subsidiaries of an amount or value in excess of $25,000 annually
     with a remaining term greater than one year; and (B) each Contract that
     involves expenditures or receipts of Morgan or its Subsidiaries in excess
     of $25,000 annually with a remaining term greater than one year, including
     but not limited to consulting, systems, software, ATM, network, telephone,
     communications, data processing, reporting, armored transportation, guard,
     security, security monitoring, janitorial, landscaping, maintenance, credit
     card, check printing, marketing or other service agreements.

          (m) No Brokers. No action has been taken by Morgan that would give
     rise to any valid claim against any party hereto for a brokerage
     commission, finder's fee or other like payment with respect to the
     transactions contemplated by this Agreement, except for the fees to be paid
     to Ryan Beck & Co., Inc.

          (n) Employee Benefit Plans.

               (i) Section 5.03(n)(i) of Morgan's Disclosure Schedule contains a
          complete and accurate listing of all existing bonus, incentive,
          deferred compensation, pension, retirement, profit-sharing, thrift,
          savings, employee stock ownership, stock bonus, stock purchase,
          restricted stock, stock option, severance, welfare and fringe benefit
          plans, employment or severance agreements and all similar practices,
          policies and arrangements other than those described in Department of
          Labor Reg. Sections 2510.3-1(b) through (k), 2510.3-2(d) and
          2510.3-3(b) maintained or contributed to by Morgan or its Subsidiary
          and in which any employee or former employee (the "Employees"),
          consultant or former consultant (the "Consultants") or director or
          former director (the "Directors") of Morgan or its Subsidiary
          participates or to which any such Employees, Consultants or Directors
          are a party (the "Compensation and Benefit Plans"). However,
          Compensation and Benefit Plans does not include plans, funds,
          programs, policies, practices or procedures maintained or funded by
          Employees, Consultants, Officers or Directors for their own benefit or
          for the benefit of their employees such as individual retirement
          arrangements or plans described in Section 401(a) of the Code
          benefiting (or intended to benefit) themselves or other persons who
          are not Employees. Neither Morgan nor its Subsidiary has any
          commitment to create any additional Compensation and Benefit Plan or
          to modify or change any existing Compensation and Benefit Plan, except
          as otherwise


                                       28



          contemplated by Section 4.01(g) of this Agreement or as required by
          applicable Law.

               (ii) Each Compensation and Benefit Plan has been operated and
          administered in all material respects in accordance with its terms and
          with applicable Law, including, but not limited to, ERISA, the Code,
          the Age Discrimination in Employment Act, or any regulations or rules
          promulgated thereunder, and all filings, disclosures and notices
          required by ERISA, the Code, the Age Discrimination in Employment Act
          and any other applicable Law have been timely made. Each Compensation
          and Benefit Plan that is an "employee pension benefit plan" within the
          meaning of Section 3(2) of ERISA (a "Pension Plan") and that is
          intended to be qualified under Section 401(a) of the Code has received
          (or has applied for or will timely apply for) a favorable
          determination letter from the Internal Revenue Service ("IRS"), and
          Morgan is not aware of any circumstances likely to result in
          revocation of any such favorable determination letter. There is no
          material pending or, to the knowledge of Morgan, threatened legal
          action, suit or claim relating to the Compensation and Benefit Plans
          other than routine claims for benefits thereunder. Neither Morgan nor
          its Subsidiary has engaged in a transaction, or omitted to take any
          action, with respect to any Compensation and Benefit Plan that would
          reasonably be expected to subject Morgan or any of its Subsidiaries to
          a tax or penalty imposed by either Section 4975 of the Code or Section
          502 of ERISA, assuming for purposes of Section 4975 of the Code that
          the taxable period of any such transaction expired as of the date
          hereof.

               (iii) No liability (other than for payment of premiums to the
          PBGC that have been made or will be made on a timely basis) under
          Title IV of ERISA has been or is expected to be incurred by Morgan or
          its Subsidiary with respect to any ongoing, frozen or terminated
          "single-employer plan," within the meaning of Section 4001(a)(15) of
          ERISA, currently or formerly maintained by any of them, or any
          single-employer plan of any entity (an "ERISA Affiliate") that is
          considered one employer with Morgan under Section 4001(a)(14) of ERISA
          or Section 414(b) or (c) of the Code (an "ERISA Affiliate Plan"). None
          of Morgan, its Subsidiary nor any ERISA Affiliate has contributed, or
          has been obligated to contribute, to a multiemployer plan under
          Subtitle E of Title IV of ERISA at any time since September 26, 1980.
          Except as Previously Disclosed, neither Morgan nor its Subsidiary
          maintains or contributes to or is obligated to contribute to (or ever
          maintained, contributed to or was obligated to contribute to) any
          program subject to Section 412 of the Code or Title IV of ERISA. To
          the knowledge of Morgan and its Subsidiary, there is no pending
          investigation or enforcement action by the Department of Labor or IRS
          or any other governmental agency with respect to any Compensation and
          Benefit Plan.

               (iv) All contributions required to be made under the terms of any
          Compensation and Benefit Plan or any other plan maintained by an
          entity that is considered to be related to Morgan under Section 414(b)
          or (c) of the Code have


                                       29



          been timely made in cash or have been reflected on the Morgan
          Financial Statements as of December 31, 2005.

               (v) Neither Morgan nor its Subsidiary has any obligations to
          provide retiree health and life insurance or other retiree death
          benefits under any Compensation and Benefit Plan, other than benefits
          mandated by Section 4980B of the Code or those derived from a Pension
          Plan. There has been no communication to Employees by Morgan or its
          Subsidiary that would reasonably be expected to promise or guarantee
          such Employees retiree health or life insurance or other retiree death
          benefits on a permanent basis.

               (vi) Morgan and its Subsidiary do not maintain any Compensation
          and Benefit Plans covering foreign Employees.

               (vii) With respect to each Compensation and Benefit Plan, if
          applicable, Morgan has provided or made available to Parent, true and
          complete copies of existing: (A) the current versions of Compensation
          and Benefit Plan documents and all subsequently adopted amendments
          thereto; (B) the current versions of trust instruments and insurance
          Contracts; (C) two most recent Forms 5500 filed with the IRS; (D) most
          recent summary plan description; (E) most recent determination letter
          issued by the IRS; (F) any Form 5310 or Form 5330 filed within the
          past year with the IRS; and (G) most recent nondiscrimination tests
          performed under ERISA and the Code (including 401(k) and 401(m)
          tests).

               (viii) Except as disclosed on Section 5.03(n)(viii) of Morgan's
          Disclosure Schedule, the consummation of the transactions contemplated
          by this Agreement would not, directly or indirectly (including,
          without limitation, as a result of any termination of employment prior
          to or following the Effective Time) reasonably be expected to (A)
          entitle any Employee, Consultant or Director to any payment (including
          severance pay or similar compensation) or any increase in
          compensation, (B) result in the vesting or acceleration of any
          benefits under any Compensation and Benefit Plan or (C) result in any
          material increase in benefits payable under any Compensation and
          Benefit Plan.

               (ix) Neither Morgan nor its Subsidiary maintains any compensation
          plans, programs or arrangements the payments under which would not
          reasonably be expected to be deductible as a result of the limitations
          under Section 162(m) of the Code and the regulations issued
          thereunder.

               (x) Except as disclosed on Section 5.03(n)(x) of Morgan's
          Disclosure Schedule, as a result, directly or indirectly, of the
          transactions contemplated by this Agreement (including, without
          limitation, as a result of any termination of employment prior to or
          following the Effective Time), none of Parent, Morgan or the Surviving
          Corporation, or any of their respective Subsidiaries will be obligated
          to make a payment that would be characterized as an "excess parachute
          payment" to an individual who is a "disqualified individual" (as such
          terms are defined in Section 280G of the Code) of Morgan on a
          consolidated basis, without


                                       30



          regard to whether such payment is reasonable compensation for personal
          services performed or to be performed in the future.

          (o) Labor Matters. Neither Morgan nor its Subsidiary is a party to or
     is bound by any Contract, collective bargaining agreement or other
     understanding with a labor union or labor organization, nor is Morgan or
     its Subsidiary the subject of a proceeding asserting that it or any such
     Subsidiary has committed an unfair labor practice (within the meaning of
     the National Labor Relations Act) or seeking to compel Morgan or such
     Subsidiary to bargain with any labor organization as to wages or conditions
     of employment, nor is there any strike or other labor dispute involving it
     or its Subsidiary pending or, to Morgan's knowledge, threatened, nor is
     Morgan aware of any activity involving its Subsidiary's employees seeking
     to certify a collective bargaining unit or engaging in other organizational
     activity.

          (p) Takeover Laws. Assuming Parent is not an "interested shareholder"
     as that term is defined under Section 1704.01(C)(8) of the OGCL as of the
     date hereof, and will not be prior to the Morgan Board's approval of the
     Voting Agreements, Morgan has taken all action required to be taken by it
     in order to exempt this Agreement and the transactions contemplated hereby
     from, and this Agreement, the Voting Agreements and the transactions
     contemplated hereby are exempt from, (i) the requirements of any
     "moratorium," "control share," "fair price," "affiliate transaction,"
     "business combination" or other antitakeover Laws of the State of Ohio
     (collectively, "Takeover Laws") applicable to it and (ii) any other
     applicable provision of the Governing Documents of Morgan or its
     Subsidiary.

          (q) Environmental Matters. Except as Previously Disclosed, to Morgan's
     knowledge, neither the conduct nor operation of Morgan or its Subsidiaries
     nor any condition of any property presently or previously owned, leased or
     operated by any of them (including, without limitation, in a fiduciary or
     agency capacity), or on which any of them holds a Lien, violates or
     violated Environmental Laws and to Morgan's knowledge, no condition has
     existed or event has occurred with respect to any of them or any such
     property that, with notice or the passage of time, or both, is reasonably
     likely to result in liability under Environmental Laws. To Morgan's
     knowledge, neither Morgan nor its Subsidiary has received any notice from
     any Person that Morgan or its Subsidiary or the operation or condition of
     any property ever owned, leased, operated, or held as collateral or in a
     fiduciary capacity by any of them are or were in violation of or otherwise
     are alleged to have liability under any Environmental Law, including, but
     not limited to, responsibility (or potential responsibility) for the
     cleanup or other remediation of any pollutants, contaminants, or hazardous
     or toxic wastes, substances or materials at, on, beneath, or originating
     from any such property.

          (r) Tax Matters.

               (i) Except as Previously Disclosed, all material Tax Returns that
          are required to be filed by or with respect to Morgan and its
          Subsidiary have been duly filed, (ii) all Taxes shown to be due on the
          Tax Returns referred to in clause (i) have been paid in full as
          required, (iii) except as Previously Disclosed, none of


                                       31



          the Tax Returns referred to in clause (i) the statute of limitations
          of which is still open has been examined by the IRS or the appropriate
          state, local or foreign taxing authority, (iv) all deficiencies
          asserted or assessments made as a result of any examination of a
          taxing authority have been paid in full, (v) no issues that have been
          raised by the relevant taxing authority in connection with the
          examination of any of the Tax Returns referred to in clause (i) are
          currently pending, and (vi) no waivers of statutes of limitations have
          been given by or requested with respect to any Taxes of Morgan or its
          Subsidiary. Morgan has made or will make available to Parent true and
          correct copies of the United States federal income Tax Returns filed
          by Morgan and its Subsidiary for each of the three most recent fiscal
          years ended on or before December 31, 2005. Neither Morgan nor its
          Subsidiary has any liability with respect to income, franchise or
          similar Taxes that accrued on or before the end of the most recent
          period covered by the Morgan Financial Statements in excess of the
          amounts accrued with respect thereto that are reflected in the Morgan
          Financial Statements. As of the date hereof, neither Morgan nor its
          Subsidiary has any reason to believe that any conditions exist that
          might prevent or impede the Parent Merger from qualifying as a
          reorganization within the meaning of Section 368(a) of the Code. No
          Tax is required to be withheld pursuant to Section 1445 of the Code as
          a result of the transactions contemplated by this Agreement.

          (s) Risk Management Instruments. Neither Morgan nor any Morgan
     Subsidiary has any interest rate swaps, caps, floors, option agreements,
     futures and forward Contracts or other similar risk management
     arrangements.

          (t) Accounting Controls. Each of Morgan and its Subsidiaries has
     devised and maintained systems of internal accounting controls sufficient
     to provide reasonable assurances, in the judgment of the Morgan Board, that
     (i) all material transactions are executed in accordance with management's
     general or specific authorization; (ii) all material transactions are
     recorded as necessary to permit the preparation of financial statements in
     conformity with GAAP consistently applied with respect to any criteria
     applicable to such statements, (iii) access to the material property and
     assets of Morgan and its Subsidiaries is permitted only in accordance with
     management's general or specific authorization; and (iv) the recorded
     accountability for items is compared with the actual levels at reasonable
     intervals and appropriate action is taken with respect to any differences.

          (u) Books and Records. The books and records of Morgan and its
     Subsidiary have been fully, properly and accurately maintained in all
     material respects, have been maintained in accordance with sound business
     practices and there are no material inaccuracies or discrepancies of any
     kind contained or reflected therein and they fairly reflect the substance
     of events and transactions included therein.

          (v) Insurance. Section 5.03(v) of Morgan's Disclosure Schedule sets
     forth a list of all of the insurance policies, binders, or bonds maintained
     by Morgan or its Subsidiary. Morgan and its Subsidiary are insured with
     reputable insurers against such risks and in such amounts as the management
     of Morgan reasonably has determined to be


                                       32



     prudent in accordance with industry practices. All such insurance policies
     are in full force and effect; Morgan and its Subsidiary are not in material
     default thereunder; and all claims thereunder have been filed in due and
     timely fashion.

          (w) Morgan Off Balance Sheet Transactions. Section 5.03(w) of Morgan's
     Disclosure Schedule sets forth a true and complete list of all affiliated
     Morgan entities, including, without limitation, all special purpose
     entities, limited purpose entities and qualified special purpose entities,
     in which Morgan or its Subsidiary or any officer or director of Morgan or
     its Subsidiary has an economic or management interest. Section 5.03(w) of
     Morgan's Disclosure Schedule also sets forth a true and complete list of
     all transactions, arrangements, and other relationships between or among
     any such Morgan affiliated entity, on the one hand, and Morgan, its
     Subsidiary, and any officer or director of Morgan or its Subsidiary, on the
     other hand, that are not reflected in the consolidated financial statements
     of Morgan (each, a "Morgan Off Balance Sheet Transaction"), along with the
     following information with respect to each such Morgan Off Balance Sheet
     Transaction: (i) the business purpose, activities, and economic substance;
     (ii) the key terms and conditions; (iii) the potential risk to Morgan or
     its Subsidiary; (iv) the amount of any guarantee, line of credit, standby
     letter of credit or commitment, or any other type of arrangement, that
     could require Morgan or its Subsidiary to fund any obligations under any
     such transaction; and (v) any other information that could have a Material
     Adverse Effect on Morgan or its Subsidiary.

          (x) Disclosure. The information Previously Disclosed by Morgan, when
     taken together with the representations and warranties contained in this
     Section 5.03, do not contain any untrue statement of a material fact or
     omit to state any material fact necessary in order to make the statements
     and information contained therein, in the light of the circumstances in
     which they are being made, not misleading.

          (y) Material Adverse Change. Since December 31, 2005, (i) Morgan and
     its Subsidiary have conducted their respective businesses in the ordinary
     and usual course consistent with past practice (excluding matters related
     to this Agreement and the transactions contemplated hereby) and have not
     taken any action that, if it had been in effect, would have violated or
     been inconsistent with the provisions of Section 4.01 hereto and (ii) no
     event has occurred or circumstance arisen that, individually or taken
     together with all other facts, circumstances and events (described in any
     paragraph of Section 5.03 or otherwise), has had or is reasonably likely to
     have a Material Adverse Effect on Morgan.

          (z) Absence of Undisclosed Liabilities. Except (i) as reflected in
     Morgan's unaudited balance sheet at September 30, 2006 or liabilities
     described in any notes thereto or (ii) for liabilities incurred in the
     ordinary course of business since September 30, 2006 consistent with past
     practice or in connection with this Agreement or the transactions
     contemplated hereby, neither Morgan nor its subsidiary has any material
     liabilities or obligations of any nature.

          (aa) Properties. Morgan and its Subsidiary have good and (as to real
     estate) marketable title, free and clear of all Liens to all of the
     properties and assets, real and


                                       33



     personal, reflected on the Morgan Financial Statements as being owned by
     Morgan as of December 31, 2005 or acquired after such date, except (i)
     statutory Liens for amounts not yet due and payable, (ii) pledges to secure
     deposits and borrowings and other Liens incurred in the ordinary and usual
     course of banking business, (iii) such imperfections of title, easements,
     Liens, defaults or equitable interests, if any, as do not affect the use of
     properties or assets subject thereto or affected thereby or otherwise
     materially impair business operations at such properties, (iv) dispositions
     and encumbrances in the ordinary course of business and (v) Liens on
     properties acquired in foreclosure or on account of debts previously
     contracted. All leases pursuant to which Morgan or its Subsidiary, as
     lessee, leases real or personal property (except for leases that have
     expired by their terms or that Morgan or such Subsidiary has agreed to
     terminate since the date hereof) are with unrelated third parties that are
     not Related Persons and are held under valid leases or subleases
     enforceable in accordance with their respective terms (except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or other Laws affecting creditors' rights
     generally and to general equity principles) without default thereunder by
     the lessee or, to Morgan's knowledge, the lessor. Morgan has Previously
     Disclosed a complete and accurate listing and copies of each lease, rental
     or occupancy agreement, license, installment and conditional sale
     agreement, and other Contracts affecting the ownership of, leasing of,
     title to, use of, or any leasehold or other interest in, any real or
     personal property (except personal property leases and installment and
     conditional sales agreements having a value per item or aggregate payments
     of less than $25,000 and with terms of less than one year).

          (bb) Loans. Except as Previously Disclosed, each Loan reflected as an
     asset in the Morgan Financial Statements and each balance sheet date
     subsequent thereto, other than any Loan the unpaid balance of which does
     not exceed $200,000, (i) is evidenced by notes, agreements or other
     evidences of indebtedness that are true, genuine and what they purport to
     be, (ii) to the extent secured, has been secured by valid liens and
     security interests that have been perfected, and (iii) is the legal, valid
     and binding obligation of the obligor named therein, enforceable in
     accordance with its terms, subject to bankruptcy, insolvency, fraudulent
     conveyance and other Laws of general applicability relating to or affecting
     creditors' rights and to general equity principles. Except as Previously
     Disclosed, as of the date of this Agreement, Morgan Bank is not a party to
     a Loan with any director, executive officer or 5% shareholder of Morgan or
     any of its Subsidiaries or any Person controlling, controlled by or under
     common control with any of the foregoing. All Loans that have been made by
     Morgan Bank and that are subject either to Section 22(g) or (h) of the
     Federal Reserve Act, as amended, comply therewith.

          (cc) Allowance for Loan Losses. The allowance for loan losses
     reflected on the Morgan Financial Statements, as of their respective dates,
     is adequate in all material respects under the requirements of GAAP and
     applicable regulatory requirements and guidelines to provide for reasonably
     anticipated losses on outstanding Loans, net of recoveries.

          (dd) Repurchase Agreements. With respect to all agreements pursuant to
     which Morgan or its Subsidiary has purchased securities subject to an
     agreement to resell, if any, Morgan or such Subsidiary, as the case may be,
     has a valid, perfected first lien or


                                       34



     security interest in or evidence of ownership in book entry form of the
     government securities or other collateral securing the repurchase
     agreement, and the value of such collateral equals or exceeds the amount of
     the debt secured thereby.

          (ee) Deposit Insurance. The deposits of Morgan Bank are insured by the
     FDIC in accordance with The Federal Deposit Insurance Act ("FDIA"), and
     Morgan Bank has paid all assessments and filed all reports required by the
     FDIA.

          (ff) Related Party Transactions. Except as Previously Disclosed,
     Morgan and its Subsidiary have not entered into any transactions with a
     Related Person.

          (gg) Intellectual Property. Morgan and its Subsidiary own or have a
     valid right to use all material patents, trademarks, trade names, service
     marks, domain names, copyrights, and any applications and registrations
     therefor, technology, trade secrets, know-how, computer software and
     tangible and intangible proprietary information and materials
     (collectively, the "Intellectual Property Rights") as are necessary in
     connection with the business of Morgan and its Subsidiary, taken as a
     whole. Morgan has Previously Disclosed a complete and accurate listing of
     each material registration, licensing agreement or other Contract with
     respect to Intellectual Property Rights, including agreements with current
     or former employees, consultants or contractors regarding the appropriation
     or the non-disclosure of any of the intellectual property of Morgan or its
     Subsidiaries. To the knowledge of Morgan, neither Morgan nor its Subsidiary
     have infringed, misappropriated or violated in any material respect any
     Intellectual Property Rights of any third party, and no third party has
     infringed, misappropriated or violated any Intellectual Property Rights
     owned or exclusively licensed by or to Morgan or its Subsidiary.

     5.04 Representations and Warranties of Parent.

          Subject to Sections 5.01 and 5.02 and except as Previously Disclosed
in a paragraph of its Disclosure Schedule corresponding to the relevant
paragraph below, Parent hereby represents and warrants to Morgan as follows:

          (a) Organization, Standing and Authority. Parent is a corporation duly
     organized, validly existing and in good standing under the Laws of the
     State of Ohio. Parent is duly qualified to do business and is in good
     standing in the State of Ohio and any foreign jurisdictions where its
     ownership or leasing of property or assets or the conduct of its business
     requires it to be so qualified. Parent is registered as a financial holding
     company under the Bank Holding Company Act of 1956, as amended. Lorain
     National is a national banking association, duly organized, validly
     existing and in good standing under the laws of the United States of
     America. Lorain National is not required to be qualified to do business in
     any state or in any foreign jurisdictions where it owns or leases property
     or assets or conducts its business.

          (b) Parent Shares.

               (i) The authorized capital stock of Parent consists of 16,000,000
          shares, of which (A) 15,000,000 shares are Parent Common Shares, $1.00
          par


                                       35



          value, of which 6,443,673 shares were issued and outstanding and
          328,194 shares were held in the treasury of Parent as of the close of
          business on the trading day immediately preceding the date hereof, and
          (B) 1,000,000 shares are Parent Preferred Shares, no par value per
          share, of which no shares are outstanding as of the date hereof.
          Pursuant to the Rights Agreement, a dividend distribution of one Right
          is attached to each outstanding Parent Common Share to shareholders of
          record at the close of business on November 6, 2000 and thereafter,
          until the Distribution Date (as defined in the Rights Agreement). Each
          Right entitles the registered holder to purchase from the Company
          units of Parent Preferred Shares, at an exercise price of $60 per
          Right. The outstanding Parent Common Shares have been duly authorized
          and are validly issued and outstanding, fully paid and nonassessable,
          and subject to no preemptive rights (and were not issued in violation
          of any preemptive rights).

               (ii) The Parent Common Shares to be issued in exchange for Morgan
          Common Shares in the Parent Merger, when issued in accordance with the
          terms of this Agreement, will be duly authorized, validly issued,
          fully paid and nonassessable and subject to no preemptive rights. As
          of the date hereof there are, and as of the Effective Time there will
          be, sufficient authorized and unissued Parent Common Shares to enable
          Parent to issue in the Parent Merger the portion of the Merger
          Consideration consisting of Parent Common Shares.

          (c) Subsidiaries. Parent has Previously Disclosed a list of all its
     Subsidiaries together with the jurisdiction or organization of each
     Subsidiary. Each of Parent's Subsidiaries has been duly organized and is
     validly existing in good standing under the Laws of the jurisdiction of its
     organization, and is duly qualified to do business and is in good standing
     in the jurisdictions where its ownership or leasing of property or the
     conduct of its business requires it to be so qualified and, except as
     Previously Disclosed, it owns, directly or indirectly, all the issued and
     outstanding equity securities of each of its Subsidiaries.

          (d) Corporate Power. Each of Parent and its Subsidiaries has the
     corporate power and authority to carry on its business as it is now being
     conducted and to own all its properties and assets; and Parent has the
     corporate power and authority to execute, deliver and perform its
     obligations under this Agreement and to consummate the transactions
     contemplated hereby and thereby.

          (e) Corporate Authority; Authorized and Effective Agreement. This
     Agreement and the transactions contemplated hereby have been authorized by
     all necessary corporate action of Parent and the Parent Board prior to the
     date hereof and no shareholder approval is required on the part of Parent.
     The Agreement to Merge, when executed by Lorain National, shall have been
     approved by the Board of Directors of Lorain National and by the Parent
     Board, as the sole shareholder of Lorain National. This Agreement is a
     valid and legally binding agreement of Parent, enforceable in accordance
     with its terms (except as enforceability may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
     similar Laws of general applicability relating to or affecting creditors
     rights or by general equity principles and


                                       36



     except to the extent such enforceability may be limited by laws relating to
     the safety and soundness of insured depository institutions as set forth in
     12 U.S.C. Section 1818(b) or the appointment of a conservator by the FDIC).

          (f) Regulatory Approvals; No Defaults.

               (i) No consents or approvals of, or filings or registrations
          with, any Governmental Authority or with any third party are required
          to be made or obtained by Parent or any of its Subsidiaries in
          connection with the execution, delivery or performance by Parent of
          this Agreement or to consummate the Parent Merger or the other
          transactions contemplated hereby except for (A) the filing of
          applications and notices, as applicable, with the Regulatory
          Authorities; (B) the filing and declaration of effectiveness of the
          Registration Statement; (C) the filing of the Certificates of Merger
          with the OSS pursuant to the OGCL; (D) such filings as are required to
          be made or approvals as are required to be obtained under the
          securities or "Blue Sky" Laws of various states in connection with the
          issuance of Parent Common Shares in the Parent Merger; and (E) receipt
          of the approvals set forth in Section 7.01(b). As of the date hereof,
          Parent is not aware of any reason why the Requisite Regulatory
          Approvals (as defined in Section 7.01(b)) will not be received without
          the imposition of a condition, restriction or requirement of the type
          described in Section 7.01(b).

               (ii) Subject to the satisfaction of the requirements referred to
          in the preceding paragraph and expiration of the related waiting
          periods, and required filings under federal and state securities Laws,
          the execution, delivery and performance of this Agreement and the
          consummation of the transactions contemplated hereby do not and will
          not (A) constitute a breach or violation of, or a default under, or
          give rise to any Lien, any acceleration of remedies or any right of
          termination under, any Law, governmental permit or license, or
          Contract of Parent or of any of its Subsidiaries or to which Parent or
          any of its Subsidiaries or properties is subject or bound, (B)
          constitute a breach or violation of, or a default under, the Governing
          Documents of Parent or any of its Subsidiaries, or (C) require any
          consent or approval under any such Law, governmental permit or
          license, or governmental Contract.

          (g) Financial Reports and SEC Documents; Material Adverse Effect.
     Parent's Annual Report on Form 10-K for the fiscal years ended December 31,
     2004 and 2005, and all other reports, registration statements, proxy
     statements or information statements filed, or which have been or are to be
     filed by it or any of its Subsidiaries with the SEC subsequent to December
     31, 2005, under the Securities Act, or under Section 13, 14 or 15(d) of the
     Exchange Act, in the form filed or to be filed, together with any
     amendments required to be made with respect thereto, that were required to
     be filed with any applicable Governmental Authority under any applicable
     Law (collectively, "Parent SEC Documents") as of the date filed, (A)
     complied or will comply in all material respects with the applicable
     requirements under the Securities Act or the Exchange Act, as the case may
     be, and (B) did not and will not contain any untrue statement of a material
     fact or omit to state a material fact required to be stated therein or
     necessary to make the


                                       37



     statements therein, in light of the circumstances under which they were
     made, not misleading; and each of the balance sheets or statements of
     condition contained in or incorporated by reference into any such Parent
     SEC Document (including the related notes and schedules thereto) fairly
     presents, or will fairly present, the financial position of Parent and its
     Subsidiaries as of its date, and each of the statements of income or
     results of operations and changes in shareholders' equity and cash flows or
     equivalent statements in such Parent SEC Documents (including any related
     notes and schedules thereto) fairly presents, or will fairly present, the
     results of operations, changes in shareholders' equity and cash flows, as
     the case may be, of Parent and its Subsidiaries for the periods to which
     they relate, in each case in accordance with GAAP consistently applied
     during the periods involved, except in each case as may be noted therein,
     subject to normal year-end audit adjustments and the absence of footnotes
     in the case of unaudited statements.

          (h) Litigation; Regulatory Action.

               (i) No material litigation, claim or other proceeding before any
          court or governmental agency is pending against Parent or any of its
          Subsidiaries and, to Parent's knowledge, no such litigation, claim or
          other proceeding has been threatened.

               (ii) Neither Parent nor any of its Subsidiaries or properties is
          a party to or is subject to any order, decree, agreement, memorandum
          of understanding or similar arrangement with, or a commitment letter
          or similar submission to, or extraordinary supervisory letter from a
          Regulatory Authority, nor has Parent or any of its Subsidiaries been
          advised by a Regulatory Authority that such agency is contemplating
          issuing or requesting (or is considering the appropriateness of
          issuing or requesting) any such order, decree, agreement, memorandum
          of understanding, commitment letter, supervisory letter or similar
          submission.

          (i) Compliance with Laws.

               (i) Each of Parent and its Subsidiaries:

                    (A) is in material compliance with all Laws applicable
               thereto or to the employees conducting such businesses,
               including, without limitation, the USA Patriot Act of 2001, the
               International Money Laundering Abatement and Anti-Terrorist
               Financing Act of 2001, the Equal Credit Opportunity Act, the Fair
               Housing Act, the Community Reinvestment Act, the Home Mortgage
               Disclosure Act and all other applicable fair lending Laws and
               other Laws relating to discriminatory business practices;

                    (B) has all material permits, licenses, authorizations,
               orders and approvals of, and has made all filings, applications
               and registrations with, all Regulatory Authorities and
               Governmental Authorities that are required in order to permit
               them to own or lease their properties and to conduct their
               businesses as presently conducted; all such permits, licenses,


                                       38



               certificates of authority, orders and approvals are in full force
               and effect and, to Parent's knowledge, no suspension or
               cancellation of any of them is threatened or would reasonably be
               expected to occur, and all such filings, applications and
               registrations are current;

                    (C) has received, since December 31, 2005, no notification
               or communication from any Regulatory Authority or Governmental
               Authority (1) asserting that Parent or any of its Subsidiaries is
               not in compliance with any of the statutes, regulations, or
               ordinances that such Regulatory Authority or Governmental
               Authority enforces, (2) threatening to revoke any license,
               franchise, permit, or governmental authorization (nor, to
               Parent's knowledge, do any grounds for any of the foregoing
               exist) or (3) restricting or disqualifying their activities
               (except for restrictions generally imposed by rule, regulation or
               administrative policy on banking organizations generally);

                    (D) is not aware of any pending or threatened investigation,
               review or disciplinary proceedings by any Governmental Authority
               against Parent, any of its Subsidiaries or any officer, director
               or employee thereof;

                    (E) is not subject to any order or decree issued by, or a
               party to any agreement or memorandum of understanding with, or a
               party to any commitment letter or similar undertaking to, or
               subject to any order or directive by, or a recipient of any
               supervisory letter from, and has not adopted any board
               resolutions at the request of, any Governmental Authority and has
               not been advised by any Governmental Authority that it is
               considering issuing or requesting any such agreement or other
               action; and

               (ii) None of Parent or its Subsidiaries has engaged in any of the
          practices listed in Office of the Comptroller of the Currency Advisory
          Letter AL 2000-7 as "indications that an institution may be engaging
          in abusive lending violations" or as practices that "may suggest the
          potential for fair lending violations" or has originated, owned or
          serviced or currently owns or services any Loan subject to the
          requirements of Section 226.32 of title 12 of the Code of Federal
          Regulations.

          (j) Brokerage and Finder's Fees. Parent has not employed any broker,
     finder, or agent, or agreed to pay or incurred any brokerage fee, finder's
     fee, commission or other similar form of compensation in connection with
     this Agreement or the transactions contemplated hereby, except for the fees
     to be paid to Austin Associates, LLC.

          (k) Takeover Laws. Parent has taken all action required to be taken by
     it in order to exempt this Agreement and the transactions contemplated
     hereby from, and this Agreement and the transactions contemplated hereby
     are exempt from, the requirements of any Takeover Laws applicable to Parent
     and the Rights Agreement.


                                       39


          (l) Tax Matters. (i) Except as Previously Disclosed, all material Tax
     Returns that are required to be filed by or with respect to Parent and its
     Subsidiaries have been duly filed, (ii) all Taxes shown to be due on the
     Tax Returns referred to in clause (i) have been paid in full as required,
     (iii) except as Previously Disclosed, none of the Tax Returns referred to
     in clause (i) the statute of limitations of which is still open has been
     examined by the IRS or the appropriate state, local or foreign taxing
     authority, (iv) all deficiencies asserted or assessments made as a result
     of any examination of a taxing authority have been paid in full, (v) no
     issues that have been raised by the relevant taxing authority in connection
     with the examination of any of the Tax Returns referred to in clause (i)
     are currently pending, and (vi) except as Previously Disclosed, no waivers
     of statutes of limitations have been given by or requested with respect to
     any Taxes of Parent or its Subsidiaries. Neither Parent nor any of its
     Subsidiaries has any liability with respect to income, franchise or similar
     Taxes that accrued on or before the end of the most recent period covered
     by the Parent SEC Documents filed prior to the date hereof in excess of the
     amounts accrued with respect thereto that are reflected in the financial
     statements included in the Parent SEC Documents filed on or prior to the
     date hereof (the "Parent Financial Statements"). As of the date hereof,
     neither Parent nor any of its Subsidiaries has any reason to believe that
     any conditions exist that might prevent or impede the Parent Merger from
     qualifying as a reorganization with the meaning of Section 368(a) of the
     Code.

          (m) Books and Records. Except for the minutes relating to the process
     leading to this Agreement and the transactions contemplated hereunder, the
     books and records of Parent and its Subsidiaries have been fully, properly
     and accurately maintained in all material respects, have been maintained in
     accordance with sound business practices and the requirements of Section
     13(b)(2) of the Exchange Act, and there are no material inaccuracies or
     discrepancies of any kind contained or reflected therein, and they fairly
     present the substance of events and transactions included therein.

          (n) Disclosure. The information Previously Disclosed by Parent, when
     taken together with the representations and warranties contained in this
     Section 5.04, do not contain any untrue statement of a material fact or
     omit to state any material fact necessary in order to make the statements
     and information contained therein, in light of the circumstances in which
     they are being made, not misleading.

          (o) Material Adverse Change. Since December 31, 2005, Parent has not,
     on a consolidated basis, suffered a change in its business, financial
     condition or results of operations, except as disclosed in the Parent SEC
     Documents filed prior to the date of this Agreement, that has had or could
     reasonably be expected to have a Material Adverse Effect on Parent and its
     Subsidiaries taken as a whole.

          (p) Absence of Undisclosed Liabilities and Changes. Except as
     disclosed in the Parent's Regulatory filings filed with the SEC prior to
     the date hereof, none of the Parent or its Subsidiaries has any obligation
     or liability (whether or not required to be reflected in financial
     statements prepared in accordance with GAAP or otherwise), that,
     individually or in the aggregate, would reasonably be expected to
     constitute or have a Material Adverse Effect on the Parent, and, since
     December 31, 2005, on a consolidated


                                       40



     basis the Parent and its Subsidiaries have not incurred any liability other
     than in the ordinary course of business consistent with past practice.

          (q) Deposit Insurance. The deposits of Lorain National are insured by
     the FDIC in accordance with the FDIA, and Lorain National has paid all
     assessments and filed all reports required by the FDIA.

          (r) Allowance for Loan Losses. The allowance for loan losses reflected
     on the Parent Financial Statements, as of their respective dates, is
     adequate in all material respects under the requirements of GAAP and
     applicable regulatory requirements and guidelines to provide for reasonably
     anticipated losses on outstanding Loans, net of recoveries.

          (s) Sarbanes-Oxley Act. Parent is in compliance with the provisions of
     the Sarbanes-Oxley Act (including, without limitation, Section 404), and
     the certifications provided and to be provided pursuant to Sections 302 and
     906 thereof are accurate.

          (t) Accounting Controls. Each of Parent and its Subsidiaries has
     devised and maintained systems of internal accounting controls sufficient
     to provide reasonable assurances, in the judgment of the Parent Board, that
     (i) all material transactions are executed in accordance with management's
     general or specific authorization; (ii) all material transactions are
     recorded as necessary to permit the preparation of financial statements in
     conformity with GAAP consistently applied with respect to any criteria
     applicable to such statements, (iii) access to the material property and
     assets of Parent and its Subsidiaries is permitted only in accordance with
     management's general or specific authorization; and (iv) the recorded
     accountability for items is compared with the actual levels at reasonable
     intervals and appropriate action is taken with respect to any differences.

          (u) Sophisticated Investor. Parent has such knowledge and experience
     in financial and business matters that it is capable of evaluating the
     merits of an investment in the Morgan Common Shares, and the matters
     discussed in this Agreement.

          (v) Due Diligence. Prior to the execution of this Agreement, Parent
     received Morgan's Disclosure Schedule, as well as inspected, reviewed, and
     evaluated such documents, reports, financial statements, business records,
     and corporate records of Morgan as were provided by Morgan and as requested
     by Parent, met with and interviewed such officers, directors, employees and
     others as requested by its consultants, attorneys, employees, and
     representatives in the performance of its due diligence.


                                       41



                                   ARTICLE VI

                                    COVENANTS

     6.01 Reasonable Best Efforts.

          (a) Subject to the terms and conditions of this Agreement, each of
     Morgan and Parent agrees to use its reasonable best efforts in good faith
     to take, or cause to be taken, all actions, and to do, or cause to be done,
     all things necessary, proper or desirable, or advisable under applicable
     Laws, so as to permit consummation of the Parent Merger and the Subsidiary
     Merger as promptly as practicable and otherwise to enable consummation of
     the transactions contemplated hereby and shall cooperate fully with the
     other party hereto to that end.

          (b) Without limiting the generality of Section 6.01(a), Morgan shall
     use its reasonable best efforts to obtain the consent or approval of all
     Persons party to a material Contract with Morgan or its Subsidiary, to the
     extent such consent or approval is required in order to consummate the
     Parent Merger and the Subsidiary Merger or for the Surviving Corporation to
     receive the benefits of such Contract.

     6.02 Shareholder Approval.

          Morgan agrees to take, in accordance with applicable Law and the
Morgan Articles and Morgan Code, all action necessary to convene an appropriate
meeting of its shareholders to consider and vote upon the adoption of this
Agreement and any other matters required to be approved or adopted by Morgan's
shareholders for consummation of the Parent Merger and the transactions
contemplated hereby (including any adjournment or postponement, the "Morgan
Meeting"), and to solicit shareholder approval, as promptly as practicable after
the Registration Statement is declared effective. The Morgan Board shall
recommend that Morgan's shareholders adopt this Agreement at the Morgan Meeting
(the "Morgan Recommendation"), unless with respect to such recommendation, the
Morgan Board, after consultation with Roetzel & Andress, Morgan's independent
legal counsel, determines in good faith that it would constitute a breach of its
applicable fiduciary duties. The obligation of Morgan to hold the Morgan Meeting
shall not be affected by any Acquisition Proposal or any other event or
circumstance.

     6.03 Registration Statement.

          (a) Parent agrees to prepare pursuant to all applicable Laws a
     registration statement on Form S-4 (the "Registration Statement") to be
     filed by Parent with the SEC in connection with the issuance of Parent
     Common Shares in the Parent Merger (including the proxy statement and
     prospectus and other proxy solicitation materials of Morgan constituting a
     part thereof (the "Proxy Statement") and all related documents). Morgan
     agrees to cooperate, and to cause its Subsidiary to cooperate, with Parent,
     its counsel and its accountants, in preparation of the Registration
     Statement and the Proxy Statement; and provided that Morgan and its
     Subsidiary have cooperated as required above, Parent agrees to file the
     Proxy Statement and the Registration Statement (together, the "Proxy
     Statement/Prospectus") with the SEC as promptly as reasonably practicable


                                       42



     but not later than 45 days after the date of this Agreement. Parent and
     Morgan shall cause the Proxy Statement/Prospectus to comply as to form and
     substance in all material respects with the applicable requirements of the
     Exchange Act, the Securities Act and the rules of the NASDAQ. Each of
     Morgan and Parent agrees to use all reasonable efforts to cause the Proxy
     Statement/Prospectus to be declared effective under the Securities Act as
     promptly as reasonably practicable after filing thereof. Parent also agrees
     to use all reasonable efforts to obtain, prior to the effective date of the
     Registration Statement, all necessary state securities Law or "Blue Sky"
     permits and approvals required to carry out the transactions contemplated
     by this Agreement. Morgan agrees to furnish to Parent all information
     concerning Morgan, its Subsidiary, officers, directors and shareholders as
     may be reasonably requested in connection with the foregoing. Morgan shall
     use all reasonable best efforts to cause the Proxy Statement to be mailed
     to its shareholders at the earliest practicable date after the Proxy
     Statement/Prospectus is declared effective.

          (b) Each of Morgan and Parent agrees, as to itself and its
     Subsidiaries, that none of the information supplied or to be supplied by it
     for inclusion or incorporation by reference in (i) the Registration
     Statement will, at the time the Registration Statement and each amendment
     or supplement thereto, if any, becomes effective under the Securities Act,
     contain any 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 not misleading, and (ii) the Proxy Statement and any
     amendment or supplement thereto will, at the date of mailing to the Morgan
     shareholders and at the time of the Morgan Meeting, as the case may be,
     contain any 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 not misleading or any statement that, in the light of
     the circumstances under which such statement is made, will be false or
     misleading with respect to any material fact, or that will omit to state
     any material fact necessary in order to make the statements therein not
     false or misleading or necessary to correct any statement in any earlier
     statement in the Proxy Statement or any amendment or supplement thereto.
     Each of Morgan and Parent further agrees that if it shall become aware
     prior to the Effective Date of any information furnished by it that would
     cause any of the statements in the Proxy Statement to be false or
     misleading with respect to any material fact, or to omit to state any
     material fact necessary to make the statements therein not false or
     misleading, to promptly inform the other party thereof and to take the
     necessary steps to correct the Proxy Statement.

          (c) Parent agrees to advise Morgan, promptly after Parent receives
     notice thereof, of the time when the Registration Statement has become
     effective or any supplement or amendment has been filed, of the issuance of
     any stop order or the suspension of the qualification of Parent Shares for
     offering or sale in any jurisdiction, of the initiation or threat of any
     proceeding for any such purpose, or of any request by the SEC for the
     amendment or supplement of the Registration Statement or for additional
     information.

     6.04 Press Releases.

          Parent and Morgan will consult with each other before issuing any
press release, written employee communication or other written shareholder
communication with respect to the


                                       43



Merger or this Agreement and will not issue any such communication or make any
such public statement without the prior consent of the other party, which will
not be unreasonably withheld or delayed; provided that a party may, without the
prior consent of the other party (but after prior consultation, to the extent
practicable under the circumstances), issue such communication or make such
public statement as may be required by applicable law or securities exchange
rules; provided, however, that such party shall immediately inform the other
party of the issuance of such public communication or the making of such public
statement. Parent and Morgan will cooperate to develop all public communications
and make appropriate members of management available at presentations related to
the transactions contemplated hereby as reasonably requested by the other party.

     6.05 Access; Confidentiality.

          (a) Morgan shall, upon reasonable notice and subject to applicable
     Laws relating to the exchange of information, afford Parent and its
     officers, employees, counsel, accountants and other authorized
     representatives, such access during normal business hours throughout the
     period prior to the Effective Time to the books, records (including,
     without limitation, tax returns and work papers of independent auditors),
     properties, personnel and to such other information as Parent may
     reasonably request and, during such period, it shall furnish promptly to
     Parent (i) a copy of each material report, schedule and other document
     filed by it pursuant to federal or state securities or banking Laws, and
     (ii) all other information concerning the business, properties and
     personnel of Morgan as Parent may reasonably request.

          (b) Parent shall, upon reasonable notice and subject to applicable
     Laws relating to the exchange of information, afford Morgan and its
     officers, employees, counsel, accountants and other authorized
     representatives, such access during normal business hours throughout the
     period prior to the Effective Time to the books, records (including,
     without limitation, tax returns and work papers of independent auditors),
     and to such other information as Morgan may reasonably request and, during
     such period, it shall furnish promptly to Morgan (i) a copy of each
     material report, schedule and other document filed by it pursuant to
     federal or state securities or banking Laws, and (ii) all other information
     concerning the business or properties of Parent as Morgan may reasonably
     request.

          (c) Each of Morgan and Parent agrees that it will not, and will cause
     its representatives not to, use any information obtained pursuant to this
     Section 6.05 (as well as any other information obtained prior to the date
     hereof in connection with the entering into of this Agreement) for any
     purpose unrelated to the consummation of the transactions contemplated by
     this Agreement. Except for the use of information in connection with the
     Registration Statement described in Section 6.03 hereof and any other
     governmental filings required in order to complete the transactions
     contemplated by this Agreement, all information (collectively, the
     "Information") received by each of Morgan and Parent, pursuant to the terms
     of this Agreement shall be kept in strictest confidence; provided, however,
     that, subsequent to the filing of the Registration Statement with the SEC,
     this Section 6.05 shall not apply to information included in the
     Registration Statement or to be included in the Proxy Statement/Prospectus
     to be sent to


                                       44



     the shareholders of Morgan and Parent under Section 6.03. Morgan and Parent
     agree that the Information will be used only for the purpose of completing
     the transactions contemplated by this Agreement. Subject to the
     requirements of Law, each party shall keep confidential, and shall cause
     its representatives to keep confidential, all Information and documents
     obtained (as well as any other Information obtained prior to the date
     hereof in connection with the entering into of this Agreement) unless such
     Information (i) was already known to such party, (ii) becomes available to
     such party from other sources not known by such party to be bound by a
     confidentiality obligation, (iii) is disclosed with the prior written
     approval of the party to which such information pertains, (iv) is or
     becomes readily ascertainable from published information or trade sources
     or (v) is such that such party is required by Law or court order to
     disclose. If either party is required or reasonably believes that it is
     required to disclose any information described in this Section 6.05(c) by
     (A) Law, (B) any court of competent jurisdiction or (C) any inquiry or
     investigation by any Governmental Authority that is lawfully entitled to
     require any such disclosure, such party (the "Required Party") shall, so
     far as it is lawful, notify the other party of such required disclosure on
     the same day that the Required Party (1) is notified of a request for such
     disclosure from the relevant Governmental Authority or (2) determines that
     such disclosure is required, whichever is earlier. Immediately thereafter,
     and to the extent practical on the same day, and subject to applicable
     Laws, the parties shall discuss and use their reasonable best efforts to
     agree as to the mandatory nature, the required timing and the required
     content of such disclosure. The Required Party shall furnish only that
     portion of the information described in this Section 6.05 that is legally
     required to be disclosed and shall exercise its reasonable best efforts to
     obtain an order or other reliable assurance that confidential treatment
     will be accorded to the information described in this Section 6.05 so
     furnished. In the event that this Agreement is terminated or the
     transactions contemplated by this Agreement shall otherwise fail to be
     consummated, each party shall promptly cause all copies of documents or
     extracts thereof containing Information and data as to another party hereto
     to be returned to the party that furnished the same. No investigation by
     either party of the business and affairs of the other shall affect or be
     deemed to modify or waive any representation, warranty, covenant or
     agreement in this Agreement, or the conditions to either party's obligation
     to consummate the transactions contemplated by this Agreement.

          (d) During the period from the date of this Agreement to the Effective
     Time, Morgan shall promptly furnish Parent with copies of all monthly and
     other interim financial statements produced in the ordinary and usual
     course of business as the same shall become available.

     6.06 Acquisition Proposals.

          Morgan agrees that it shall not, and shall cause its Subsidiary and
its Subsidiary' officers, directors, agents, advisors and Affiliates not to,
solicit or encourage inquiries or proposals with respect to, or engage in any
negotiations concerning, or provide any confidential information to, or have any
discussions with, any Person relating to, any Acquisition Proposal; provided,
however, that nothing contained in this Agreement shall prevent the Morgan Board
from (a) making any disclosure to its shareholders if, in the good faith
judgment of the Morgan Board, after having consulted with and considered the
advice of Roetzel & Andress, independent


                                       45



legal counsel to the Morgan Board, failure so to disclose would be a breach of
its fiduciary duties under applicable Law; provided further, however, that any
such disclosure regarding an Acquisition Proposal shall be deemed to be a Change
in Recommendation unless the Morgan Board reaffirms the Morgan Recommendation;
(b) before the date of the Morgan Meeting, providing (or authorizing the
provision of) information to, or engaging in (or authorizing) such discussions
or negotiations with, any Person who has made an unsolicited bona fide written
Acquisition Proposal received after the date of this Agreement that did not
result from a breach of this Section 6.06; or (c) recommending such an
Acquisition Proposal to its shareholders if and only to the extent that, in the
case of actions referred to in clause (b) and/or (c), (i) such Acquisition
Proposal is, or is reasonably expected to lead to, a Superior Proposal, (ii) the
Morgan Board, after having consulted with and considered the advice of Roetzel &
Andress, independent legal counsel to Morgan, determines in good faith that
providing such information or engaging in such negotiations or discussions, or
making such recommendation is required in order to discharge the directors'
fiduciary duties to Morgan and its shareholders in accordance with applicable
Law, and (iii) Morgan receives from such Person a confidentiality agreement
substantially in the form of the Confidentiality Agreement. Morgan also shall
immediately cease and cause to be terminated any activities, discussions or
negotiations conducted prior to the date of this Agreement with any parties
other than Parent, with respect to any of the foregoing. Morgan shall promptly
(within one business day) advise Parent following the receipt by Morgan of any
Acquisition Proposal and the material terms thereof (including the identity of
the Person making such Acquisition Proposal), and advise Parent of any
developments (including any change in such terms) with respect to such
Acquisition Proposal promptly upon the occurrence thereof. Morgan agrees that
neither it nor its Subsidiary shall terminate, amend, modify or waive any
provision of or release any of its rights under any confidentiality or
standstill agreement to which it is a party. Morgan shall enforce, to the
fullest extent permitted under applicable Law, the provisions of any such
agreement, including, but not limited to, by obtaining injunctions to prevent
any breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court having jurisdiction. Nothing contained in this
Section 6.06 or any other provision of this Agreement will prohibit Morgan or
the Morgan Board from notifying any third party that contacts Morgan on an
unsolicited basis after the date of this Agreement concerning an Acquisition
Proposal of Morgan's obligations under this Section 6.06.

     6.07 Affiliate Agreements.

          Not later than the 15th day prior to the mailing of the Proxy
Statement, Morgan shall deliver to Parent a schedule of each Person that, to its
knowledge, is or is reasonably likely to be, as of the date of the Morgan
Meeting, deemed to be an "affiliate" of Morgan (each, a "Morgan Affiliate") as
that term is used in Rule 145 under the Securities Act. Morgan shall cause each
Person who may be deemed to be a Morgan Affiliate to execute and deliver to
Morgan on or before the date of mailing of the Proxy Statement an agreement in
the form attached hereto as Exhibit B.

     6.08 Takeover Laws.

          No party hereto shall take any action that would cause the
transactions contemplated by this Agreement to be subject to requirements
imposed by any Takeover Law and each of them shall take all necessary steps
within its control to exempt (or ensure the


                                       46



continued exemption of) the transactions contemplated by this Agreement from, or
if necessary challenge the validity or applicability of, any applicable Takeover
Law, as now or hereafter in effect.

     6.09 No Rights Triggered.

          Morgan shall take all reasonable steps necessary to ensure that the
entering into of this Agreement and the consummation of the transactions
contemplated hereby and any other action or combination of actions, or any other
transactions contemplated hereby, do not and will not result in the grant of any
rights to any Person (a) under the Governing Documents of Morgan or (b) under
any material Contract to which it or its Subsidiary is a party except, in each
case, as Previously Disclosed or contemplated by this Agreement.

     6.10 Conformance of Policies and Practices.

          Prior to the Effective Date, Morgan shall, consistent with GAAP and on
a basis mutually satisfactory to it and Parent, modify and change its loan,
litigation and real estate valuation policies and practices (including loan
classifications and levels of reserves) as well as other management and
operating policies and practices so as to be applied on a basis that is
consistent with that of Parent. Morgan shall not be obligated to take any such
action pursuant to this Section 6.10 earlier than 15 days prior to the Effective
Date, and unless and until Parent acknowledges that all conditions to the
obligations of Parent to consummate the Parent Merger have been satisfied and
certifies to Morgan that Parent's representations and warranties, subject to
Section 5.02, are true and correct as of such date and that Parent is otherwise
materially in compliance with this Agreement.

     6.11 Transition.

          Morgan and its Subsidiary shall reasonably cooperate with Parent and
its Subsidiaries in order to facilitate an orderly transition of the management
of the business of Morgan and its Subsidiary to Parent and in order to
facilitate the integration of the operations of Morgan and Parent and their
Subsidiaries and to permit the coordination of their related operations on a
timely basis. To accelerate to the earliest time possible following the
Effective Time the realization of synergies, operating efficiencies and other
benefits expected to be realized by Morgan and Parent as a result of the Parent
Merger, Morgan shall and shall cause its Subsidiary to consult with Parent on
all strategic and operational matters to the extent such consultation is not in
violation of applicable Laws, including Laws regarding the exchange of
information and other Laws regarding competition. Morgan shall and shall cause
its Subsidiary to make available to Parent at the facilities of Morgan and its
Subsidiary, where determined by Parent to be appropriate and necessary, office
space in order to assist Parent in observing all operations and reviewing all
matters concerning Morgan's affairs. Without in any way limiting the provisions
of Section 6.05(b), Parent, its Subsidiaries, officers, employees, counsel,
financial advisors and other representatives shall, upon reasonable written
notice to Morgan, be entitled to review the operations and visit the facilities
of Morgan and its Subsidiary at all times as may be deemed reasonably necessary
by Parent in order to accomplish the foregoing arrangements. Notwithstanding the
foregoing, nothing contained in this Agreement gives Parent, directly or
indirectly, the right to control or direct or to unreasonably interfere with
Morgan's operations


                                       47



prior to the Effective Time. Prior to the Effective Time, Morgan shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its and its Subsidiary' respective operations.

     6.12 Facilities Optimization.

          Prior to the Effective Time, Morgan shall cooperate with Parent and
use its reasonable best efforts in the filing of regulatory applications and/or
the provision of such notices as may be required in order to permit the
optimization of the combined organization's branch network at the time the
Subsidiary Merger occurs.

     6.13 Investments.

          Following the receipt of all required regulatory and shareholder
approvals necessary to consummate the Parent Merger, Morgan shall sell, prior to
the Effective Time, the number and type of securities held in Morgan's portfolio
as may be requested by Parent. Morgan shall not be obligated to take any such
action pursuant to this Section 6.13 earlier than 15 days prior to the Effective
Date, and unless and until Parent acknowledges that all conditions to the
obligations of Parent to consummate the Parent Merger have been satisfied and
certifies to Morgan that Parent's representations and warranties, subject to
Section 5.02, are true and correct as of such date and that Parent is otherwise
materially in compliance with this Agreement.

     6.14 NASDAQ Listing or Notification.

          As required by NASDAQ, Parent shall file a NASDAQ Notification Form
for Listing of Additional Shares and/or Change in the Number of Shares
Outstanding, with respect to Parent Common Shares to be issued to the holders of
Morgan Common Shares in the Parent Merger.

     6.15 Regulatory Applications.

          (a) Parent and Morgan and their respective Subsidiaries shall
     cooperate and use their respective reasonable best efforts to prepare,
     within 45 days of the execution of this Agreement, all documentation and
     requests for regulatory approval, to timely effect all filings and to
     obtain all permits, consents, approvals and authorizations of all third
     parties and Governmental Authorities and Regulatory Authorities necessary
     to consummate the transactions contemplated by this Agreement. Each of
     Parent and Morgan, and their respective legal counsel, shall have the right
     to review in advance, and to the extent practicable each will consult with
     the other, in each case subject to applicable Laws relating to the exchange
     of information, with respect to, and shall be provided in advance so as to
     reasonably exercise its right to review in advance, all material written
     information submitted to any third party or any Governmental Authority or
     Regulatory Authority in connection with the transactions contemplated by
     this Agreement. In exercising the foregoing right, each of the parties
     hereto agrees to act reasonably and as promptly as practicable. Each party
     hereto agrees that it will consult with the other party hereto with respect
     to the obtaining of all material permits, consents, approvals and
     authorizations of all third parties and Governmental Authorities or
     Regulatory Authorities necessary or advisable to consummate the
     transactions


                                       48



     contemplated by this Agreement and each party will keep the other party
     apprised of the status of material matters relating to completion of the
     transactions contemplated hereby.

          (b) Each party agrees, upon request, to furnish the other party with
     all information concerning itself, its Subsidiaries, directors, officers
     and shareholders and such other matters as may be reasonably necessary or
     advisable in connection with any filing, notice or application made by or
     on behalf of such other party or any of its Subsidiaries to any third
     party, Governmental Authority or Regulatory Authority.

     6.16 Indemnification.

          (a) Following the Effective Date, Parent shall indemnify, defend and
     hold harmless the present and former directors, officers and employees of
     Morgan and its Subsidiary (each, an "Indemnified Party") against all costs
     or expenses (including reasonable attorneys' fees), judgments, fines,
     losses, claims, damages or liabilities (collectively, "Costs") incurred in
     connection with any claim, action, suit, proceeding or investigation,
     whether civil, criminal, administrative or investigative, arising out of
     actions or omissions occurring on or prior to the Effective Time
     (including, without limitation, the transactions contemplated by this
     Agreement) (each, a "Claim") to the fullest extent permitted by Law.

          (b) For a period of three (3) years from the Effective Time, Parent
     shall procure directors' and officers' liability insurance that serves to
     reimburse personally the present and former officers and directors of
     Morgan or its Subsidiary (determined as of the Effective Time) with respect
     to claims against such directors and officers arising from facts or events
     that occurred before the Effective Time and such insurance will have
     substantially the same terms as Morgan's current directors' and officers'
     liability insurance; provided, however, that in no event will Parent be
     required to expend on an annual basis, as the cost of maintaining such
     coverage, more than 200% of the current annual amount for such insurance;
     provided, further, that if the annual premiums of such insurance coverage
     exceed such amount, then Parent will be obligated to obtain a policy with
     the best coverage available for a cost up to but not exceeding such amount.

          (c) Any Indemnified Party wishing to claim indemnification under
     Section 6.16(a), upon learning of any claim, action, suit, proceeding or
     investigation described above, shall promptly notify Parent thereof;
     provided that the failure so to notify shall not affect the obligations of
     Parent under Section 6.16(a) unless and to the extent that Parent is
     actually prejudiced as a result of such failure. In the event of a Claim
     (whether arising before or after the Effective Time), (i) Parent shall have
     the right to assume the defense thereof and Parent shall not be liable to
     such Indemnified Parties for any legal expenses of other counsel or any
     other expenses subsequently incurred by such Indemnified Parties in
     connection with the defense thereof, except that if Parent elects not to
     assume such defense or counsel for the Indemnified Parties advises that
     there are issues that raise conflicts of interest between Parent and the
     Indemnified Parties, the Indemnified Parties may retain counsel
     satisfactory to them, and Parent shall pay all reasonable fees and expenses
     of such counsel for the Indemnified Parties promptly as statements
     therefore are received; provided, however, that Parent shall be obligated
     pursuant to this paragraph (c)


                                       49



     to pay for only one firm of counsel for all Indemnified Parties in any
     jurisdiction unless the use of one counsel for such Indemnified Parties
     would present such counsel with a conflict of interest, (ii) the
     Indemnified Parties will cooperate in the defense of any such matter and
     (iii) Parent shall not be liable for any settlement effected without its
     prior written consent, which consent shall not be unreasonably withheld;
     and provided, further, that Parent shall not have any obligation hereunder
     to any Indemnified Party when and if a court of competent jurisdiction
     shall ultimately determine, and such determination shall have become final
     and nonappealable, that the indemnification of such Indemnified Party in
     the manner contemplated hereby is prohibited by applicable Law.

          (d) If Parent or any of its successors or assigns shall consolidate
     with or merge into any other entity and shall not be the continuing or
     surviving entity of such consolidation or merger or shall transfer all or
     substantially all of its assets to any entity, then and in each case,
     proper provision shall be made so that the successors and assigns of Parent
     shall assume the obligations set forth in this Section 6.16.

          (e) The provisions of this Section 6.16 are intended to be for the
     benefit of, and shall be enforceable by, each Indemnified Party and his or
     her heirs and representatives.

     6.17 Employee Benefits.

          (a) From and after the Effective Time, Morgan employees shall continue
     to participate in the Morgan employee benefit plans in effect at the
     Effective Time unless and until Parent, in its sole discretion, shall
     determine that Morgan employees shall, subject to applicable eligibility
     requirements, participate in employee benefit plans of Parent and that all
     or some of the Morgan plans shall be terminated or merged into certain
     employee benefit plans of Parent. Morgan employees continuing to be
     employed by Parent shall receive credit for service at Morgan and its
     Subsidiary for eligibility and vesting purposes (but not for benefit
     calculation purposes) under Parent's employee benefit plans and shall not
     be subject to any exclusion or penalty for pre-existing conditions that
     were covered under Morgan's welfare plans immediately prior to the
     Effective Date, or to any waiting period relating to such coverage, except
     in each case as otherwise required by applicable Law. Any employees
     terminated by Parent shall be paid for all of their unused vacation and
     sick time and shall be entitled to elect so-called "COBRA" in accordance
     with, and subject to, the provisions of Code Section 4980B(f).

          (b) Parent agrees to make all severance, change of control or similar
     payments to any Morgan employees in accordance with the employment and
     retention Contracts set forth in Section 6.17(b) of Morgan's Disclosure
     Schedule. Notwithstanding anything to the contrary in this Agreement or
     elsewhere, immediately prior to the Effective Time, Morgan shall pay those
     Morgan employees who are entitled to a change of control payment in
     connection with the transactions contemplated by this Agreement in
     accordance with the agreements set forth in Section 6.17(b) of Morgan's
     Disclosure Schedule, the payment to which each such employee is entitled in
     accordance with the terms of such employee's agreement.


                                       50



          (c) Excepting the individuals covered by employment and retention
     Contracts set forth in Section 6.17(b) of Morgan's Disclosure Schedule,
     Parent agrees (i) that any officer or employee of Morgan or its Subsidiary
     who is terminated on or after the Effective Date shall be entitled to
     receive severance pay in an amount equal to two weeks salary for each year
     of service, with a minimum of four weeks severance pay to be payable to
     each such terminated officer or employee.

          (d) It is understood and agreed that nothing in this Section 6.17 or
     elsewhere in this Agreement shall be deemed to be a Contract of employment
     or be construed to give said employees any rights other than as employees
     at will under applicable Law and, with exception to the rights granted
     pursuant to Section 6.16 or 6.17(b), said employees shall not be deemed to
     be third-party beneficiaries of such provisions.

     6.18 Notification of Certain Matters.

          (a) Each of Morgan and Parent shall give prompt notice to the other of
     any fact, event or circumstance known to it that (i) is reasonably likely,
     individually or taken together with all other facts, events and
     circumstances known to it, to result in any Material Adverse Effect with
     respect to it or (ii) would cause or constitute a material breach (without
     regard to any materiality, Material Adverse Effect or similar qualifier
     included in any representation, warranty, covenant or agreement) of any of
     its representations, warranties, covenants or agreements contained herein.

          (b) Morgan shall promptly notify Parent of any written notice or other
     bona fide communication from any Person alleging that the consent of such
     Person is or may be required as a condition to the Parent Merger.

          (c) Morgan and its Subsidiary shall, prior to the Effective Date,
     notify its insurers in writing of all known incidents, events and
     circumstance that would reasonably be expected to give rise to a claim
     against Morgan or its Subsidiary, as applicable.

          (d) Morgan shall notify Parent within two business days of the receipt
     of any summons, subpoena, complaint, or regulatory inquiry or whistleblower
     notice involving Morgan or its Subsidiary.

          (e) Morgan shall promptly provide Parent with a copy of any Suspicious
     Activity Report filed with any regulatory agency.

          (f) Morgan shall promptly notify Parent of the intended filing of
     collections litigation against any customer of Morgan if the principal
     balance is in excess of $100,000.

     6.19 Dividend Coordination.

          It is agreed by the parties hereto that they will cooperate to assure
that as a result of the Parent Merger, during any applicable quarter, there
shall not be a payment of both a Parent and a Morgan dividend for Morgan
shareholders.


                                       51



     6.20 Tax Treatment.

          Between the date of this Agreement and the Effective Time, each of
Parent and Morgan agrees (a) not to take any actions that would adversely affect
the ability of Morgan and its shareholders to characterize the Parent Merger as
a tax-free reorganization under Section 368(a) of the Code, and (b) to take such
action as may be reasonably required, if such action may be reasonably taken to
reverse the impact of any past actions that would adversely impact the ability
for the Parent Merger to be characterized as a tax-free reorganization under
Section 368(a) of the Code. Parent and Morgan shall use reasonable best efforts
to cause the Parent Merger to qualify as a reorganization within the meaning of
Section 368(a) of the Code and to obtain the Tax opinion set forth in Section
7.02(c) hereof. This Agreement is intended to constitute a "plan of
reorganization" within the meaning of Treas. Reg. Sec. 1.368-2(g). Officers of
Parent and Morgan shall execute and deliver to Roetzel & Andress, counsel to
Morgan, certificates containing appropriate representations at such time or
times as may be reasonably requested by such law firm, including the effective
date of the Registration Statement and the Effective Date, in connection with
their delivery of the opinion, pursuant to Section 7.02(c) hereof, with respect
to the Tax treatment of the Parent Merger. Neither Parent nor Morgan shall take
or cause to be taken any action that would cause to be untrue (or fail to take
or cause not to be taken any action that would cause to be untrue) any of such
certificates and representations.

     6.21 No Breaches of Representations and Warranties.

          Between the date of this Agreement and the Effective Time, without the
written consent of the other party, each of Parent and Morgan shall not do any
act or suffer any omission of any nature whatsoever that would cause any of the
representations or warranties made in Article V of this Agreement to become
untrue or incorrect, subject to Section 5.02.

     6.22 Consents.

          Each of Parent and Morgan shall use its best efforts to obtain any
required consents to the transactions contemplated by this Agreement.

     6.23 Insurance Coverage.

          Morgan shall cause the policies of insurance listed in the Disclosure
Schedule to remain in effect between the date of this Agreement and the
Effective Date.

     6.24 Correction of Information.

          Each of Parent and Morgan shall promptly correct and supplement any
information furnished under this Agreement so that such information shall be
correct and complete in all material respects at all times, and shall include
all facts necessary to make such information correct and complete in all
material respects at all times.

     6.25 Supplemental Assurances.

          (a) On the date the Registration Statement becomes effective and on
     the Effective Date, Morgan shall deliver to Parent a certificate signed by
     its principal


                                       52



     executive officer and its principal financial officer to the effect, to
     such officers' knowledge, that the information contained in the
     Registration Statement relating to the business and financial condition and
     affairs of Morgan, does not contain any 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 not misleading.

          (b) On the date the Registration Statement becomes effective and on
     the Effective Date, Parent shall deliver to Morgan a certificate signed by
     its chief executive officer and its chief financial officer to the effect,
     to such officers' knowledge, that the Registration Statement (other than
     the information contained therein relating to the business and financial
     condition and affairs of Morgan) does not contain any 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 not misleading.

     6.26 Regulatory Matters.

          Parent, Morgan and each of their Subsidiaries shall cooperate and each
of them agrees to use its reasonable best efforts to remediate any order,
decree, agreement, memorandum of understanding or similar agreement by Morgan or
its Subsidiary with, or a commitment letter, board resolution or similar
submission by Morgan or its Subsidiary to, or supervisory letter from any
Regulatory Authority to Morgan or its Subsidiary, to the satisfaction of such
Regulatory Authority.

     6.27 Parent Board of Directors; Advisory Board.

          As of the Effective Time, the individual listed in Section 6.27 of the
Morgan Disclosure Schedule shall be appointed to Parent's Board of Directors,
and such individual shall become a member of Class II of the Parent's Board of
Directors whose terms will expire at Parent's 2009 annual meeting. If any such
individual is unable or unwilling to serve as of the Effective Date, his or her
replacement shall be selected by Morgan. Following the Effective Time, Parent
shall form an advisory board with respect to the Morgan Bank business.

     6.28 Use of Morgan Name.

          Following the Effective Time, Parent agrees to use commercially
reasonable efforts to continue the use of the name or service mark of "Morgan
Bank" in Summit County, Ohio in connection with its operations and conduct of
business.


                                       53


                                   ARTICLE VII

                 CONDITIONS TO CONSUMMATION OF THE PARENT MERGER

     7.01 Conditions to Each Party's Obligation to Effect the Parent Merger.

          The respective obligation of each of Parent and Morgan to consummate
the Parent Merger is subject to the fulfillment prior to the Effective Time of
each of the following conditions:

          (a) Shareholder Approval. This Agreement shall have been duly adopted
     by the Required Morgan Vote.

          (b) Regulatory Approvals. All regulatory approvals set forth in
     Section 7.01(b) of the Morgan Disclosure Schedule required to consummate
     the transactions contemplated hereby, including the Parent Merger, shall
     have been obtained and shall remain in full force and effect and all
     statutory waiting periods in respect thereof shall have expired (all such
     approvals and the expiration of all such waiting periods, the "Requisite
     Regulatory Approvals") and no such approvals shall contain (i) any
     conditions, restrictions or requirements that the Parent Board reasonably
     determines would either before or after the Effective Time have or will
     have a Material Adverse Effect on Parent and its Subsidiaries taken as a
     whole after giving effect to the consummation of the Parent Merger, or (ii)
     any conditions, restrictions or requirements that are not customary and
     usual for approvals of such type and that the Parent Board reasonably
     determines would either before or after the Effective Date be unduly
     burdensome.

          (c) No Injunction. No Regulatory Authority or Governmental Authority
     of competent jurisdiction shall have enacted, issued, promulgated, enforced
     or entered any statute, rule, regulation, judgment, decree, injunction or
     other order (whether temporary, preliminary or permanent) that is in effect
     and prohibits, prevents or makes illegal the consummation of the
     transactions contemplated by this Agreement.

          (d) Registration Statement. The Registration Statement shall have
     become effective under the Securities Act and no stop order suspending the
     effectiveness of the Registration Statement shall have been issued and no
     proceedings for that purpose shall have been initiated or threatened by the
     SEC.

     7.02 Conditions to Obligation of Morgan.

          The obligation of Morgan to consummate the Parent Merger is also
subject to the fulfillment or written waiver by Morgan prior to the Effective
Time of each of the following conditions:

          (a) Representations and Warranties. The representations and warranties
     of Parent set forth in this Agreement shall be true and correct, subject to
     Section 5.02, as of the date of this Agreement and as of the Effective Date
     as though made on and as of the Effective Date (except that representations
     and warranties that by their terms speak as of


                                       54



     the date of this Agreement or some other date shall be true and correct as
     of such date), and Morgan shall have received a certificate, dated the
     Effective Date, signed on behalf of Parent by the Chief Executive Officer
     and the Chief Financial Officer of Parent to such effect.

          (b) Performance of Obligations of Parent. Parent shall have performed
     in all material respects all obligations required to be performed by it
     under this Agreement at or prior to the Effective Time, and Morgan shall
     have received a certificate, dated the Effective Date, signed on behalf of
     Parent by the Chief Executive Officer and the Chief Financial Officer of
     Parent to such effect.

          (c) Tax Opinion. Morgan shall have received an opinion of Roetzel &
     Andress, counsel to Morgan, dated the Effective Date, to the effect that,
     on the basis of facts, representations and assumptions set forth in such
     opinion, (i) the Parent Merger constitutes a "reorganization" within the
     meaning of Section 368(a) of the Code and (ii) no gain or loss will be
     recognized by shareholders of Morgan who receive solely Parent Common
     Shares in exchange for Morgan Common Shares, other than the gain or loss to
     be recognized as to cash received in lieu of fractional Parent Common
     Shares. In rendering its opinion, such counsel may require and rely upon
     representations contained in letters from Morgan and Parent.

          (d) Directors' and Officers' Liability Insurance. Parent shall have
     bound coverage for the directors' and officers' liability insurance to the
     extent required by Section 6.16(b) of this Agreement.

          (e) Material Adverse Effect. From the date of this Agreement, there
     shall not have occurred any Material Adverse Effect on Parent and its
     Subsidiaries taken as a whole, or any change, condition, event or
     development that, individually or in the aggregate, has resulted in or
     could reasonably be expected to result in a Material Adverse Effect on
     Parent and its Subsidiaries taken as a whole.

     7.03 Conditions to Obligation of Parent.

          The obligation of Parent to consummate the Parent Merger is also
subject to the fulfillment or written waiver by Parent prior to the Effective
Time of each of the following conditions:

          (a) Representations and Warranties. The representations and warranties
     of Morgan set forth in this Agreement shall be true and correct, subject to
     Section 5.02, as of the date of this Agreement and as of the Effective Date
     as though made on and as of the Effective Date (except that representations
     and warranties that by their terms speak as of the date of this Agreement
     or some other date shall be true and correct as of such date), and Parent
     shall have received a certificate, dated the Effective Date, signed on
     behalf of Morgan by the Chief Executive Officer and the Chief Financial
     Officer of Morgan to such effect.

          (b) Performance of Obligations of Morgan. Morgan shall have performed
     in all material respects all obligations required to be performed by it
     under this Agreement


                                       55



     at or prior to the Effective Time, and Parent shall have received a
     certificate, dated the Effective Date, signed on behalf of Morgan by the
     Chief Executive Officer and the Chief Financial Officer of Morgan to such
     effect.

          (c) Material Adverse Effect. From the date of this Agreement, there
     shall not have occurred any Material Adverse Effect on Morgan and its
     Subsidiary taken as a whole, or any change, condition, event or development
     that, individually or in the aggregate, has resulted in or could reasonably
     be expected to result in a Material Adverse Effect on Morgan and its
     Subsidiary taken as a whole.

          (d) Affiliate Agreements. Parent shall have received the agreements
     referred to in Section 6.07 from each Morgan Affiliate.

     7.04 Frustration of Closing Conditions.

          Neither Parent nor Morgan may rely on the failure of any condition set
forth in Section 7.01, 7.02 or 7.03, as the case may be, to be satisfied if such
failure was caused by such party's failure to use reasonable best efforts to
consummate the Parent Merger and the other transactions contemplated by this
Agreement, as required by and subject to Section 6.01.

                                  ARTICLE VIII

                                   TERMINATION

     8.01 Termination.

          This Agreement may be terminated, and the Parent Merger may be
abandoned at any time prior to the Effective Time, whether before or after
shareholder approval:

          (a) Mutual Consent. At any time prior to the Effective Time, by the
     mutual consent of Parent and Morgan, if the Parent Board and Morgan Board
     so determine by vote of a majority of the members of each of the Parent
     Board and the Morgan Board.

          (b) Breach. At any time prior to the Effective Time, by Parent or
     Morgan, upon written notice to the other party, if its Board of Directors
     so determines by vote of a majority of the members of its entire Board, in
     the event of either: (i) a breach by the other party of any representation
     or warranty contained herein (subject to the standard set forth in Section
     5.02), which breach cannot be or has not been cured within 30 days after
     the giving of written notice to the breaching party of such breach; or (ii)
     a breach by the other party of any of the covenants or agreements contained
     herein, which breach cannot be or has not been cured within 30 days after
     the giving of written notice to the breaching party of such breach,
     provided that such breach (whether under (i) or (ii)) would be reasonably
     likely, individually or in the aggregate with other breaches, to result in
     a Material Adverse Effect.

          (c) Delay. At any time prior to the Effective Time, by Parent or
     Morgan, upon written notice to the other party, if its Board of Directors
     so determines by vote of a majority of the members of its entire Board, in
     the event that the Parent Merger is not


                                       56



     consummated by September 30, 2007; provided, however, that the right to
     terminate this Agreement pursuant to this Section 8.01(c) shall not be
     available to any party whose failure to comply with any provision hereof
     has been the cause, or resulted in, the failure of the Effective Time to
     occur on or before such date.

          (d) No Governmental Approval. By Morgan or Parent, upon written notice
     to the other party, if its Board of Directors so determines by vote of a
     majority of the members of its entire Board, in the event (i) any
     Governmental Authority of competent jurisdiction which must grant a
     Requisite Regulatory Approval has denied approval of the Parent Merger and
     the other transactions contemplated by this Agreement and such denial has
     become final and non-appealable; or (ii) any Governmental Authority or
     Regulatory Authority of competent jurisdiction shall have issued an order,
     decree or ruling or taken any other action permanently restraining,
     enjoining or otherwise prohibiting the Parent Merger, and such order,
     decree, ruling or other action has become final and non-appealable.

          (e) Parent Common Shares. By Morgan, upon written notice to Parent, in
     the event that: (i) the market value of a Parent Common Share, based on the
     average closing price for Parent Common Shares for the twenty (20) trading
     days ending on the tenth (10th) trading day prior to the date then
     established for the Effective Date (such value referred to herein as the
     "Parent Reference Price"), is less than $13.16, appropriately adjusted for
     any stock splits, reverse stock splits, stock dividends, recapitalizations
     or other similar transactions, and (ii) the Parent Reference Price
     represents a decline as a percentage of $16.44, that exceeds by more than
     10% the decline, if any, in the SNL Bank Index during the period beginning
     on the last trading day prior to signing and ending on the tenth (10th)
     trading day prior to the date then established for the Effective Date (the
     "Walkaway Right"); provided, however, that in the event Morgan determines
     to exercise the Walkaway Right, Parent may, at its option (the "Fill
     Option"), for a period of ten business days commencing on the date that
     Morgan provides written notice of such determination, offer to distribute
     to Morgan's shareholders, in connection with the Merger Consideration, the
     number of shares of Parent Common Shares necessary for the Stock Exchange
     Ratio per share to equal $41.61 divided by the Parent Reference Price (the
     "Fill Offer"). In the event Parent determines not to exercise the Fill
     Option, it will so advise Morgan in writing, and thereafter, for a period
     of three business days Morgan may exercise its right to terminate this
     Agreement pursuant to this Section 8.01(e). If Parent determines to
     exercise the Fill Option, Morgan shall accept the Fill Offer and shall no
     longer be entitled to a right of termination under this Section 8.01(e).

          (f) Superior Proposal. At any time prior to the adoption of this
     Agreement by Morgan's shareholders contemplated by Section 7.01(a), by
     Morgan, if Morgan's Board so determines by vote of a majority of the
     members of the entire Morgan Board if (i) Morgan is not in breach of any
     material term of this Agreement including Section 6.06, (ii) the Morgan
     Board authorized Morgan, subject to complying with the terms of this
     Agreement, to enter into a definitive written agreement concerning a
     transaction that constitutes a Superior Proposal, (iii) Morgan notifies
     Parent in writing that it intends to enter into such an agreement as soon
     as practicable upon termination of this Agreement, attaching the most
     current version of such agreement to such notice and (iv) at least five


                                       57



     business days elapse after Parent receives the notice provided for in
     clause (iii) above and the Morgan Board continues to consider the
     Acquisition Proposal to be a Superior Proposal after taking into account in
     good faith any amendment or modification to this Agreement proposed by
     Parent during such five business day period.

          (g) Change in Recommendation. By Parent, upon written notice to
     Morgan, if (i) in connection with the presentation of this Agreement to
     Morgan's shareholders as contemplated by Section 7.01(a), the Morgan Board
     shall have failed to make the Morgan Recommendation; or withdrawn, modified
     or qualified (or proposed to withdraw, modify or qualify) in any manner
     adverse to Parent, the Morgan Recommendation; or taken any other action or
     made any other statement in connection with the Morgan Meeting inconsistent
     with the Morgan Recommendation (any such action in this clause (i), a
     "Change in Recommendation"), whether or not permitted by the terms of this
     Agreement, (ii) materially breached its obligations under this Agreement by
     reason of a failure to call the Morgan Meeting in accordance with Section
     6.02 or the failure to prepare and mail to its shareholders the Proxy
     Statement/Prospectus in accordance with Section 6.02 or (iii) the Morgan
     Board takes the actions described in Section 6.06(c).

          (h) Shareholder Approval. By Morgan or Parent, upon written notice to
     the other party, if the Required Morgan Vote shall not have been obtained
     upon a vote for that purpose taken at a duly convened Morgan Meeting.

     8.02 Effect of Termination and Abandonment; Enforcement of Agreement.

          In the event of termination of this Agreement and the abandonment of
the Parent Merger pursuant to this Article VIII, no party to this Agreement
shall have any liability or further obligation to any other party hereunder
except (a) as set forth in Sections 8.03 and 9.01; and (b) that termination will
not relieve a breaching party from liability for any material breach of this
Agreement giving rise to such termination. Notwithstanding anything contained
herein to the contrary, the parties hereto agree that irreparable damage will
occur in the event that a party breaches any of its obligations, duties,
covenants and agreements contained herein. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches or
threatened breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled by Law or in equity.

     8.03 Termination Fee; Expenses.

          (a) Morgan shall pay to Parent, by wire transfer of immediately
     available funds, a termination fee in the amount of $1,000,000 (the
     "Termination Fee") if:

               (i) this Agreement is terminated by Morgan pursuant to Section
          8.01(f); or

               (ii) (A) this Agreement is terminated by Parent pursuant to
          Section 8.01(b)(ii) or 8.01(g), or by Parent or Morgan pursuant to
          Section 8.01(h); (B) at any time after the date of this Agreement and
          prior to any such termination, an Acquisition Proposal with respect to
          Morgan shall have been publicly announced,


                                       58



          publicly proposed or commenced; and (C) within 18 months after the
          date of such termination, Morgan shall have entered into an agreement
          relating to an Acquisition Proposal or any Acquisition Proposal shall
          have been consummated.

          (b) The Termination Fee shall be payable (i) on the date of
     termination of this Agreement in the case of clause (a)(i) above; and (ii)
     two business days after the first to occur of the execution of the
     agreement relating to an Acquisition Proposal or consummation of the
     Acquisition Proposal in the case of clause (a)(ii) above. Upon payment of
     the Termination Fee in accordance with this Section 8.03(b), Morgan shall
     have no further liability to Parent at law or in equity with respect to
     such termination under Section 8.01(f), 8.01(b) or 8.01(g), with respect to
     any Out-of-Pocket Expenses under Section 8.03(c), or with respect to this
     Agreement.

          (c) In the event that this Agreement is terminated (i) by Morgan
     pursuant to Section 8.01(b), as a result of a breach by Parent, (ii) by
     Parent pursuant to Section 8.01(b)(i), as a result of a breach by Morgan,
     or (iii) by either party pursuant to Section 8.01(c), as a result of the
     other party's failure to comply with any provision hereof which failure was
     the cause, or resulted in, the failure of the Effective Time to occur on or
     before the date specified in Section 8.01(c), then the other party shall
     promptly (but not later than two business days after receipt of notice of
     such termination from the terminating party) pay to the terminating party
     an amount equal to all documented out-of-pocket expenses and fees incurred
     by the terminating party (including, without limitation, fees and expenses
     payable to all legal, accounting, financial, public relations and other
     professional advisors arising out of or in connection with or related to
     the Parent Merger or the other transactions contemplated by this Agreement)
     ("Out-of-Pocket Expenses"). Upon payment of such Out-of-Pocket Expenses in
     accordance with this Section 8.03(c), the other party shall have no further
     liability to the terminating party at law or in equity with respect to such
     termination under Section 8.01(b) by Morgan, Section 8.01(b)(i) by Parent,
     or Section 8.01(c) by either party, or with respect to this Agreement.

          (d) If either Parent or Morgan fails to pay all amounts due to the
     other party on the dates specified, then the breaching party shall pay all
     costs and expenses (including legal fees and expenses) incurred by the
     other party in connection with any action or proceeding (including the
     filing of any lawsuit) taken by it to collect such unpaid amounts, together
     with interest on such unpaid amounts at the prime lending rate prevailing
     at such time, as published in the Wall Street Journal, from the date such
     amounts were required to be paid until the date actually received by either
     Morgan or Parent, as the case may be.

                                   ARTICLE IX

                                  MISCELLANEOUS

     9.01 Survival.

          None of the representations or warranties in this Agreement or any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. The covenants and


                                       59



agreements in this Agreement shall survive after the date of this Agreement in
accordance with their terms.

     9.02 Waiver; Amendment.

          Prior to the Effective Time, any provision of this Agreement may be
(a) waived by the party benefited by the provision, or (b) amended or modified
at any time, in each case, by an agreement in writing between the parties hereto
executed in the same manner as this Agreement, except that after the Morgan
Meeting, this Agreement may not be amended if it would violate Section
1701.78(G) of the OGCL or the federal securities Laws.

     9.03 Counterparts.

          This Agreement may be executed in one or more counterparts, each of
which shall be considered one and the same agreement and shall become effective
when both counterparts have been signed by each of the parties, and delivered to
the other party, it being understood that both parties need not sign the same
counterparts.

     9.04 Governing Law.

          This Agreement shall be governed by, and interpreted in accordance
with, the Laws of the State of Ohio applicable to contracts made and to be
performed entirely within such State (except to the extent that mandatory
provisions of federal Law are applicable).

     9.05 Expenses.

          Each party hereto will bear all expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby, except that
printing and mailing expenses and all fees to be paid to Regulatory Authorities
and the SEC in connection with the transactions contemplated by this Agreement
shall be borne by Parent.

     9.06 Notices.

          All notices, requests and other communications hereunder to a party
shall be in writing and shall be deemed given (a) on the date of delivery if
personally delivered, or telecopied (with confirmation), (b) on the first
business day following date of dispatch if delivered by a recognized next-day
courier service, or (c) on the third business day following the date of mailing
if mailed by registered or certified mail (return receipt requested), postage
prepaid. All notices shall be delivered to such party at its address set forth
below or such other address as such party may specify by notice to the parties
hereto.

          If to Morgan, to:

          Morgan Bancorp, Inc.
          178 West Streetsboro Street
          Hudson, OH 44236
          Attn: William A. Dougherty
          Facsimile: (800) 309-6487


                                       60



          With a copy to:

          Roetzel & Andress
          222 South Main Street
          Akron, OH 44308
          Attn: Kevin C. O'Neil
          Fax: (330) 376-4577

          If to Parent, to:

          LNB Bancorp, Inc.
          457 Broadway,
          Lorain, OH 44052
          Attn: Daniel E. Klimas
          Facsimile: (440) 244-4815

          With a copy to:

          Calfee, Halter & Griswold LLP
          1400 McDonald Investment Center
          800 Superior Avenue
          Cleveland, OH 44114
          Attn: John J. Jenkins
          Facsimile: (216) 241-0816

     9.07 Entire Agreement; No Third Party Beneficiaries.

          This Agreement and all schedules and exhibits attached hereto,
together with the Voting Agreements (executed copies of which have been
delivered to Parent prior to the execution of this Agreement) represent the
entire agreement of the parties hereto with reference to the transactions
contemplated hereby and thereby and this Agreement supersedes any and all other
oral or written agreements or understandings heretofore made. Except for
Sections 6.16 and 6.17(c) hereof, nothing in this Agreement, whether express or
implied, is intended to confer upon any Person, other than the parties hereto or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.

     9.08 Interpretation; Effect.

          When a reference is made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of, or Exhibit or Schedule to,
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and are not part of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." References herein to "transaction contemplated by this Agreement"
include the Parent Merger as well as the other transactions contemplated hereby
and the transactions contemplated by the Voting Agreements. No rule of
construction against the


                                       61



draftsperson shall be applied in connection with the interpretation or
enforcement of this Agreement. Whenever this Agreement shall require a party to
take an action, such requirement shall be deemed to constitute an undertaking by
such party to take, to cause its Subsidiaries to take, and to use its reasonable
best efforts to cause its other Affiliates to take, appropriate action in
connection therewith. All references to "dollars" or "$" mean the lawful
currency of the United States unless otherwise indicated. Any reference in this
Agreement to any Law, rule or regulation shall be deemed to include a reference
to any amendments, revisions or successor provisions to such Law, rule or
regulation.

     9.09 Waiver of Jury Trial.

          Each of the parties hereto hereby irrevocably waives any and all right
to trial by jury in any legal proceeding arising out of or related to this
Agreement or the transactions contemplated hereby.

     9.10 Severability.

          Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability and, unless the effect of
such invalidity or unenforceability would prevent the parties from realizing the
major portion of the economic benefits of the Parent Merger that they currently
anticipate obtaining therefrom, shall not render invalid or unenforceable the
remaining terms and provisions of this Agreement or affect the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

     9.11 Assignment.

          Neither this Agreement nor any of the rights, interests or obligations
of the parties hereunder shall be assigned by either of the parties hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other party, and any attempt to make any such assignment without such
consent shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.

     9.12 Submission to Jurisdiction.

          Each party hereto irrevocably submits to the jurisdiction of (a) the
Court of Common Pleas of Lorain County, Ohio and (b) the United States District
Court for the Northern District of Ohio, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby. Each party hereto agrees to commence any action, suit or proceeding
relating hereto either in the United States District Court for the Northern
District of Ohio, or, if such suit, action or other proceeding may not be
brought in such court for reasons of subject matter jurisdiction, in the Court
of Common Pleas of Lorain County, Ohio. Each party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Court of Common Pleas of Lorain County, Ohio or (ii) the
United


                                       62



States District Court for the Northern District of Ohio and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. Each party hereto further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such suit, action or other proceeding by the mailing of copies thereof by
mail to such party at its address set forth in this Agreement, such service of
process to be effective upon acknowledgment of receipt of such registered mail;
provided that nothing in this Section 9.12 shall affect the right of any party
to serve legal process in any other manner permitted by Law. The consent to
jurisdiction set forth in this Section 9.12 shall not constitute a general
consent to service of process in the State of Ohio and shall have no effect for
any purpose except as provided in this Section 9.12. The parties hereto agree
that final judgment in any such suit, action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law.


                                       63



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.

ATTEST                                  MORGAN BANCORP, INC.


By:  /s/ J. Martin Erbaugh              By:  /s/ William A. Dougherty
    ---------------------------------       ------------------------------------
Name:    J. Martin Erbaugh              Name: William A. Dougherty
      -------------------------------   Title: President and CEO
Title: Secretary


                                        LNB BANCORP, INC.


                                        By:  /s/ Daniel E. Klimas
                                            ------------------------------------
                                        Name: Daniel E. Klimas
                                        Title: President and CEO


                                       64


                                                                       Exhibit A

                            FORM OF VOTING AGREEMENT

     This VOTING AGREEMENT (this "Agreement") is entered into on January 15,
2007, by and between LNB Bancorp, Inc., an Ohio corporation ("LNB"), and the
party signing this agreement (the "Shareholder"), a resident of the State of
Ohio solely in his individual capacity as beneficial owner of Common Shares, no
par value per share (the "Common Shares"), of Morgan Bancorp, Inc., an Ohio
corporation ("Morgan").

     WHEREAS, the Shareholder has sole or shared power to vote the Common Shares
listed on the signature page hereto (all shares of such stock now owned and
which may hereafter be acquired by the Shareholder prior to the termination of
this Agreement, except Common Shares held by the Shareholder in a fiduciary
capacity, shall be referred to herein as the "Control Shares"); and

     WHEREAS, LNB and Morgan propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, that Morgan will merge with and into LNB pursuant to the
Parent Merger (this and other capitalized terms used and not defined herein
shall have the meanings given to such terms in the Merger Agreement);

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereby agree as follows:

A.   VOTING OF CONTROL SHARES

     1.1 Voting Agreement. The Shareholder hereby agrees that during the time
this Agreement is in effect, at any meeting of the shareholders of Morgan,
however called, and in any action by consent of the shareholders of Morgan, the
Shareholder shall vote the Control Shares: (i) in favor of the Parent Merger and
the Merger Agreement (as amended from time to time) and (ii) against any
proposal for any recapitalization, merger, sale of assets or other business
combination between Morgan and any person or entity other than LNB, or any other
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of Morgan under
the Merger Agreement or that would result in any of the conditions to the
obligations of Morgan under the Merger Agreement not being fulfilled. Nothing
contained in this Agreement shall be deemed to vest in LNB any direct or
indirect ownership of the Control Shares.

B.   REPRESENTATIONS AND WARRANTIES

     The Shareholder hereby represents and warrants to LNB as follows:

     2.1 Authority Relative to this Agreement. The Shareholder has all necessary
power and authority or capacity to execute and deliver this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and



validly executed and delivered by the Shareholder and constitutes a legal, valid
and binding obligation of the Shareholder, enforceable against the Shareholder
in accordance with its terms.

     2.2 No Conflict.

          (a) The execution and delivery of this Agreement by the Shareholder
does not, and the performance of this Agreement by the Shareholder will not (i)
conflict with or violate any law, rule, judgment or decree applicable to the
Shareholder or the Control Shares, or (ii) result in any breach of or constitute
a default (or event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment or
acceleration of, or result in the creation of, a lien or encumbrance on any of
the Control Shares.

          (b) The execution and delivery of this Agreement by the Shareholder
does not, and the performance of this Agreement by the Shareholder will not,
require any consent or approval of, or filing with or notification to, any
regulatory body.

C.   MISCELLANEOUS

     3.1 Termination. This Agreement shall terminate on the earlier to occur of
(i) the Effective Time and (ii) the date of termination of the Merger Agreement
for any reason whatsoever.

     3.2 Specific Performance. The Shareholder agrees that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that LNB shall be entitled to specific
performance of the terms hereof, in addition to any other remedy at law or in
equity.

     3.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings with
respect to the subject matter hereof.

     3.4 Amendment. This Agreement may not be amended except by an instrument in
writing signed by all the parties hereto.

     3.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio applicable to contracts made and
to be performed entirely within such State.

     3.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.

     3.7 Assignments. This Agreement shall not be assigned by operation of law
or otherwise.

     3.8 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.


                                       2



     3.9 Fiduciary Duty. Anything in this Agreement to the contrary
notwithstanding, this Agreement will not require the Shareholder to take any
action or omit to take any action if, after consultation with independent legal
counsel, the Shareholder determines in good faith that the action or the failure
to take such action would constitute, or could reasonably be expected to
constitute, a breach of the Shareholder's fiduciary duties as a director or
officer of Morgan or otherwise under applicable Ohio or federal law, or Morgan's
Articles or Code of Regulations.

                                      *****


                                       3



     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day first written above.

SHAREHOLDER                             LNB BANCORP, INC.


                                        By:
- -------------------------------------       ------------------------------------
[Signature]                             Name: Daniel E. Klimas
                                        Title: President and CEO

- -------------------------------------
[Print Name]

- -------------------------------------
[Number of Common Shares]


                                       4


                                                                       Exhibit B

                       FORM OF MORGAN AFFILIATE AGREEMENT

                                _________, 2007

LNB Bancorp, Inc.
457 Broadway
Lorain, Ohio 44052-1769

Ladies and Gentlemen:

I have been advised that as of the date hereof I may be deemed to be an
"Affiliate" of Morgan Bancorp, Inc. ("Morgan"), as that term is defined for
purposes of Paragraphs (c) and (d) of Rule 145 of the Rules and Regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") promulgated under the Securities Act of 1933, as amended (the
"Act").

Pursuant to the terms of the Agreement and Plan of Merger by and between LNB
Bancorp, Inc. ("LNB") and Morgan dated as of January 15, 2007 (the "Merger
Agreement"), I may receive LNB common shares ("LNB Common Shares") in exchange
for Morgan common shares ("Morgan Common Shares").

This letter is being delivered pursuant to Section 6.07 of the Merger Agreement.
I represent and warrant to LNB that in such event:

A. I will sell, assign or transfer the LNB Common Shares that I receive only in
compliance with the Act and the Rules and Regulations.

B. I have carefully read this letter and the Merger Agreement. I have discussed
their requirements and limitations upon my ability to sell, transfer or
otherwise dispose of the LNB Common Shares received, with legal counsel.

C. I understand that LNB is relying on the representations I am making in this
letter.

D. I have been advised that the issuance of the LNB Common Shares issued to me
pursuant to the Parent Merger will have been registered with the Commission
under the Act on a Registration Statement on Form S-4. However, I have also been
advised that since I may be deemed to be an Affiliate under the Rules and
Regulations at the time the merger between LNB and Morgan (the "Parent Merger")
was submitted for a vote of the shareholders of Morgan, that the LNB Common
Shares must be held by me unless my subsequent sale, transfer or distribution of
LNB Common Shares has been (i) registered under the Act; (ii) made in conformity
with the volume and other limitations under Rule 145 promulgated by the
Commission under the Act to which I have submitted to LNB satisfactory evidence
of compliance, or (iii) in a transaction in which, in the opinion of counsel
reasonably acceptable



to LNB or in accordance with a no-action letter from the Commission, some other
exemption from registration is available with respect to any such proposed sale,
transfer or other disposition of the LNB Common Shares.

E. I understand that stop transfer instructions will be given to LNB's transfer
agent with respect to any LNB Common Shares that I receive in the Parent Merger
and that there will be placed on my certificates for such LNB Common Shares, a
legend stating in substance:

"The shares represented by this certificate have been issued or transferred to
the registered holder as a result of a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "Act"), applies. The shares represented
by this certificate may not be sold, transferred or assigned, and the issuer
shall not be required to give effect to any attempted sale, transfer or
assignment, except pursuant to (i) an effective registration statement under the
Act, (ii) a transaction permitted by Rule 145 and as to which the issuer has
received reasonable and satisfactory evidence of compliance with the provisions
of Rule 145, or (iii) a transaction in which, in the opinion of counsel
satisfactory to the issuer, such sale, transfer or assignment is exempt from
registration under the Securities Act of 1933, as amended."

The restrictive legend above shall be promptly removed and any stop order
instructions with respect thereto shall be canceled upon receipt of advice from
Calfee, Halter & Griswold LLP, or other counsel satisfactory to LNB, that such
actions are appropriate under the then-existing circumstances.

AFFILIATE


- -------------------------------------
[Signature]

- -------------------------------------
[Print Name]


LNB BANCORP, INC.


By:
    ---------------------------------
Its:
     --------------------------------

EX-10.1

                                                                  Exhibit 10.1
                              WILLIAM A. DOUGHERTY

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement"), made at Lorain, Ohio, as of
the 15th day of January, 2007, by and among WILLIAM A. DOUGHERTY (of Hudson,
Ohio), herein referenced as "Employee", and LNB BANCORP, INC. (an Ohio
corporation) and its wholly-owned subsidiary, THE LORAIN NATIONAL BANK (a
banking organization organized and existing under the laws of the United States
of America), which together with their respective successors and assigns are
herein collectively referenced as "Employer", is to EVIDENCE THAT:

     WHEREAS Employer desires to secure and retain the employment services of
Employee as the President of the Morgan Bank Division (as defined in Section
1.1) and as a Senior Vice-President of The Lorain National Bank, and Employee
desires to accept such employment; and

     WHEREAS, but for Employee's promises made in this Agreement, especially in
Section 8, Employer would not employ Employee under the terms and conditions of
this Agreement and, therefore, expressly to induce Employer to execute this
Agreement, Employee represents that Employee fully understands and accepts the
restrictive covenants in Section 8 and agrees to be bound thereby;

     NOW, THEREFORE, in consideration of the mutual covenants and promises made
herein, Employer and Employee (collectively the "Parties" and individually a
"Party") hereby agree as follows:

     1. EMPLOYMENT AND TERM.

          1.1 Employee will render management services to Employer in the
capacity as the President of the Morgan Bank Division of Employer for the term
of this Agreement (herein called the "Agreement Term"), commencing on the date
of the closing of Employer's acquisition of the Morgan Bank of Hudson, Ohio
(herein called the "Morgan Bank Division") and continuing thereafter for a
period of two (2) years, or until terminated earlier pursuant to the termination
provisions of this Agreement, including (but not limited to) the provisions of
Section 7.

          1.2 Employee will devote Employee's full business-time and best
efforts to performing conscientiously, faithfully and loyally all duties: (A)
required of Employee in his positions as the President of the Morgan Bank
Division and as a Senior Vice-President of The Lorain National Bank, and (B)
commensurate with Employee's position and assigned or delegated to Employee by
Employer's President and Chief Executive Officer and/or by Employer's Board of
Directors. Employee may attend to personal investments and may serve as a
director, trustee or officer of, or otherwise participate in, educational,
welfare, social, religious or civic organizations (whether for compensation or
otherwise), provided that such activities do not materially interfere with
Employee's duties and responsibilities under this Agreement as determined by
Employer's President and Chief Executive Officer.

     2. COMPENSATION.

          2.1 Employer shall pay Employee a basic salary (herein called the
"Basic Salary") equal to One Hundred Seventy-Five Thousand Dollars ($175,000.00)
for each twelve (12) consecutive monthly period (a "Contract Year") of the
Agreement Term. The Basic Salary shall be payable in twenty-six (26) equal
bi-weekly payments and prorated if the Agreement Term is terminated prior to the
completion of any Contract Year. Employee's Basic Salary shall be evaluated
annually for adjustment in connection with an annual performance review at the
conclusion of each fiscal year.

          2.2 Employee shall participate in Employer's Management Incentive Plan
for Key Executives and, subject to the terms and conditions of such Plan, may
receive an annual bonus of a maximum of thirty percent (30%) of the Basic Salary
for the Contract Year to which such bonus relates, with the target being fifteen
percent (15%) of Basic Salary. Such bonus (and Employee's eligibility therefor)
shall be determined in accordance with the performance goals for each Contract
Year as established by the Compensation Committee of the Board of Directors and
based, in part, upon the overall financial performance of Employer and the
Morgan Bank Division's COIN program.

          2.3 The obligations of Employer to pay Employee's Basic Salary,
bonuses, and other benefits under this Agreement are expressly conditioned upon
Employee's continued and faithful performance of and adherence to each and every
material promise, duty and obligation assigned to or made by Employee under this
Agreement.



     3. VACATIONS AND TIME-OFF.

          3.1 Employee shall be entitled to four (4) weeks of compensated
vacation for each Contract Year, pursuant to the terms and conditions of
Employer's general vacation time-off policy (as may be periodically changed by
Employer), to be taken at times as approved by Employer's President and Chief
Executive Officer. Except as may be approved by Employer's President and Chief
Executive Officer, all vacation time-off shall be non-cumulative if not taken
within the applicable Contract Year or within the first quarter of the
succeeding Contract Year.

          3.2 Employee shall also be entitled to additional days of time-off
with full compensation for holidays in accordance with Employer's general
holiday time-off policy (as may be periodically changed by Employer).

     4. FRINGE BENEFITS.

          4.1 Employee shall be entitled to all fringe benefits to which other
employees of Employer in Employee's employment classification are entitled and
such other fringe benefits as mutually determined by Employee and Employer's
President and Chief Executive Officer.

          4.2 Employer shall also:

               (A) include Employee in Employer's retirement plan and flexible
benefit plan, as such plans may be periodically changed or terminated by
Employer; and

               (B) provide Employee with such plan of hospitalization insurance
as maintained by Employer for Employee's employment classification and as may be
periodically changed or terminated by Employer; and

               (C) provide Employee with such sick leave as presently in effect
by Employer and as may be periodically changed or terminated by Employer; and

               (D) reimburse Employee for all reasonable expenses as approved by
Employer's President and Chief Executive Officer and related to the performance
of Employee's duties under this Agreement; and

               (E) provide Employee: (i) a term life insurance policy on the
life of Employee (provided that Employee is insurable under the standard rate
criteria of a commercial life insurance company) in an amount equal to 2.75
times the Basic Salary of Employee, but not to exceed Five Hundred Thousand
Dollars ($500,000.00), as may be periodically increased by the mutual agreement
of the Parties, and payable to the beneficiary or beneficiaries of Employee's
choice, and (ii) an accidental death and dismemberment insurance policy upon
Employee in an amount equal to 2.75 times the Basic Salary, but not to exceed
Five Hundred Thousand Dollars ($500,000.00), as may be increased by the mutual
agreement of the Parties, and payable to the beneficiary or beneficiaries of
Employer's choice.

     5. STOCK OPTIONS. Employee shall participate in any stock option and other
stock equity programs developed by Employer in accordance with each such
program's eligibility and participation terms and conditions. Employee shall be
eligible to participate in and receive equity grants or stock options
commensurate with Employee's position and level in any stock option plan and
restricted stock plan or other equity-based or equity related compensation plan,
programs or agreements adopted by Employer and made available to its executives.

     6. PROHIBITION AGAINST TRANSFER. Employee's duties, obligations and
services rendered under this Agreement are personal in nature and are unique to
Employer. Therefore, without Employer's prior written consent, Employee shall
not assign or otherwise transfer any such duties, obligations or
responsibilities hereunder.



     7. TERMINATION OF THE AGREEMENT TERM AND TERMINATION BENEFITS.

          7.1 Termination by Employer for any reason other than Cause or by
Employee for Good Reason.

               (A) If Employer terminates Employee for any reason other than
"Cause" or Employee terminates for "Good Reason", then Employer shall provide
Employee the amount of remuneration set forth in either Section 7.1(A)(i) or
7.1(A)(ii), whichever is greater:

                    (i)  Employee's Accrued Compensation; and the sum of
                         Employee's Basic Salary, as measured from the Date of
                         Termination through the remainder of the Agreement
                         Term; and any bonuses which have been earned through
                         the Date of Termination and are payable to the extent
                         not theretofore paid or deferred; provided that
                         Employer shall have the option to pay Employee's
                         Accrued Compensation and all other amounts designated
                         in this Section immediately upon termination or in
                         bi-weekly installments over the remainder of the two
                         (2)-year period set forth in Section 1.1; or

                    (ii) Employee's Accrued Compensation; and any bonuses which
                         have been earned through the Date of Termination and
                         are payable to the extent not theretofore paid or
                         deferred; and an additional severance payment equal to
                         one (1) times Employee's then current Basic Salary;
                         provided, that Employer shall provide Employee's
                         Accrued Compensation and all other amounts designated
                         in this Section immediately upon termination or in
                         bi-weekly installments over the twelve (12)-month
                         period commencing upon the Date of Termination.

               (B) In addition, if Employer terminates Employee for any reason
other than "Cause" or Employee terminates for "Good Reason", then Employer shall
also pay or reimburse Employee's health insurance coverage payments or COBRA
payments, as applicable, for six (6) months after the termination date.

          7.2 Termination by Employer for Cause or by Employee without Good
Reason. In the case of a termination of Employee's employment by Employer for
Cause or by Employee without Good Reason, Employer shall pay to Employee all
amounts earned or accrued as of the date of such termination, but not yet paid
as of such date, including Basic Salary, pro-rated Bonus, reimbursement of
reasonable business expenses and accrued, but unused, vacation pay, less any
applicable federal, social security, state and local tax withholdings or other
applicable deductions ("Accrued Compensation").

          7.3 Termination Procedures.

               (A) Notice of Termination. Any termination of Employee's
employment shall be communicated by written Notice of Termination from one party
hereto to the other party in accordance with the notice provision hereunder. A
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee's employment under the provision so indicated.

               (B) Date of Termination. "Date of Termination", with respect to
any termination of Employee's employment shall mean the date specified in the
Notice of Termination, which, in the case of a termination by Employer, shall
not be less than thirty (30) days (except in the case of a termination for
Cause) and, in the case of a termination by Employee, shall also not be less
than thirty (30) days from the date such Notice of Termination is given.

          7.4 Termination Definitions.

               (A) Good Reason Defined: For the purposes of this Section 7, the
term "Good Reason" shall have the same meaning set forth and defined in Section
9, below, of this Agreement in the event any of the events enumerated thereunder
occur within the term of this Agreement prior to a Change in Control. Prior to
Employee's termination of this Agreement for Good Reason, Employee shall provide
written notice to Employer and an opportunity to cure of not less than ten (10)
days.



               (B) Cause Defined: For the purposes of this Section 7, the term
"Cause" shall have the same meaning set forth and defined in Section 9, below,
of this Agreement in the event any of the events enumerated thereunder occur
within the term of this agreement prior to a Change in Control. Prior to any
termination of Employee for Cause, Employer shall provide written notice to
Employee and an opportunity to cure of not less than ten (10) days; provided,
however, that Employer may immediately terminate the Agreement Term if Employee
violates or fails to adhere to any provision of Section 8 (pertaining to
non-disclosure and non-competition).

          7.5 Subject to the terms and conditions of Section 9, Employee may
terminate the Agreement Term upon the occurrence of a "Change in Control" as
defined in Section 9.1(C) for "Good Reason" as defined in Section 9.1(F) and,
upon Employee's termination as authorized under this Section, Employee shall be
provided all compensation, benefits and other remuneration set forth in Section
9.2.

          7.6 The Agreement Term shall automatically and immediately terminate
upon the death of Employee, and Employee shall be entitled to Accrued
Compensation, including that portion of any unpaid Basic Salary and other
benefits accrued and earned hereunder up to and including the date of death,
together with a pro rata portion of the annual bonus applicable to the Contract
Year in which Employee's death occurs, as determined under the Management
Incentive Plan for Key Executives in accordance with Section 2.2.

          7.7 In the event of the Disability of Employee as defined in Section
9.1(E) of this Agreement, the Agreement Term shall terminate and Employee shall
be entitled to Accrued Compensation, including that portion of any unpaid Basic
Salary and other benefits accrued and earned by Employee up to and including the
date of Disability, together with a pro rata portion of the annual bonus
applicable to the Contract Year in which such Disability occurs, as determined
under the Management Incentive Plan for Key Executives in accordance with
Section 2.2.

          7.8 Either Employer or Employee may terminate the Agreement Term for
any reason (with or without cause) upon thirty (30) days' written notice to the
other Party. In the event Employer terminates this Agreement without Cause or
Employee terminates this Agreement for Good Reason, Employee shall be provided
all compensation, benefits and other remuneration set forth in Section 7.1 of
this Agreement.

          7.9 Employer shall have the sole discretion to determine whether
Employee shall continue to render services hereunder during such notice periods
as provided for in this Section 7.

          7.10 If Employer terminates the Employment Term under Section 7.8
prior to the expiration of the two (2)-year period designated in Section 1.1 and
such termination is other than for Cause (as defined in Section 9.1(B)),
Employer shall also continue to pay Employee's Basic Salary through the
remainder of the two (2)-year period or, at Employer's option, in a lump-sum
payment equal to the present value thereof; provided, however, that Employer's
obligation set forth in this Section 7.10 shall immediately cease in the event
Employee breaches any of Employee's material promises, duties or obligations set
forth in Section 8.

     8. EMPLOYEE'S NON-DISCLOSURE AND NON-COMPETITION PROMISES.

          8.1 For purposes of this Section 8, the Parties agree to and
understand the following definitions:

               (A) "Competitive Act" means any of the following: (i) Employee's
rendering services (whether or not for compensation) to, for or on behalf of a
Competitor (as defined herein) as an employee, independent contractor,
consultant, advisor, representative, agent or in any other capacity; and (ii)
Employee's investment in or ownership (partial or total) of a Competitor, unless
the Competitor's stock is publicly traded on a national exchange and Employee
owns less than two percent (2%) of such stock.

               (B) "Competitive Activity" means the performance or rendering of
any banking services; trust services and investment services; portfolio
management services; retirement planning services; administration of employee
benefit plans services; administration of decedents' estates and
court-supervised accounts, guardianships, and custodial arrangements services;
personal tax and estate tax planning services; financial consulting services;
investment advising services; and any other business activity, service or
product which competes with any existing or future business activity, service or
product of Employer.



               (C) "Competitor" means any of the following: (i) any person, sole
proprietorship, partnership, association (other than Employer), organization,
corporation (other than Employer), limited liability company or other entity
(governmental or otherwise) who or which provides, renders or performs a
Competitive Activity (as defined herein) within the Service Area (as defined
herein), even if the Competitor has no office or other facilities located within
the Service Area; and (ii) any parent, subsidiary or other person or entity
affiliated with, or related by ownership to, any of the foregoing designated in
Subitem (i) of this Section 8.1(C).

               (D) "Confidential Information" means all of the following
(whether written or verbal) pertaining to Employer: (i) trade secrets (as
defined by Ohio law); Client or Customer lists, records and other information
regarding Employer's Clients or Customers (whether or not evidenced in writing);
Client or Customer fee or price schedules and fee or price policies; financial
books, plans, records, ledgers and information; business development plans;
sales and marketing plans; research and development plans; employment and
personnel manuals, records, data and policies; business manuals, methods and
operations; business forms, correspondence, memoranda and other records;
computer records and related data; and any other confidential or proprietary
data and information of Employer or its Clients or Customers which Employee
encounters during the Employment Term (as defined in Section 8.1(F)); and (ii)
all products, technology, ideas, inventions, discoveries, developments, devices,
processes, business notes, forms and documents, business products, computer
programs, and other creations (and improvements of any of the foregoing),
whether patentable or copyrightable, which Employee has acquired, developed,
conceived or made (whether directly or indirectly, whether solicited or
unsolicited, or whether during normal work hours or during off-time) during the
Employment Term or during the Restricted Period and which relate to any business
activity of Employer or are derived from the Confidential Information designated
in Subsection (i) of this Section 8.1(D).

               (E) "Client" or "Customer" means a person, sole proprietorship,
partnership, association, organization, corporation, limited liability company,
or other entity (governmental or otherwise), wherever located: (i) to or for
which Employer sells any products or renders or performs services either during
the one hundred eighty (180)-day period immediately preceding commencement of
the Restricted Period or during the Restricted Period, or (ii) which Employer
solicits or (as demonstrated by plans, strategies or other tangible preparation)
intends to solicit to purchase products or services from Employer either during
the one hundred eighty (180)-day period immediately preceding commencement of
the Restricted Period or during the Restricted Period.

               (F) "Employment Term" means the period of time starting on the
date Employee's employment with Employer commences and terminating at the close
of business on the date Employee's employment with Employer terminates.

               (G) "Restricted Period" means a one- (1-) year period, commencing
on the date the Employment Term is terminated by either Party (for any reason,
with or without cause) or, if either Party terminates under Section 7.8, the
"Restricted Period" means the remainder of the two (2)-year period designated in
Section 1.1, commencing on the date the Employment Term terminates; provided,
however, that such periods shall be extended to include any period of time
during which Employee engages in any activity constituting a breach of this
Agreement and any period of time during which litigation transpires wherein
Employee is held to have breached this Agreement.

               (H) "Service Area" means: (i) Lorain County, Ohio, all counties
immediately contiguous to Lorain County, Summit County, Ohio, and all counties
immediately contiguous to Summit County, constituting those geographic areas in
which Employer presently conducts substantial business activities; and (ii)
those counties located in the State of Ohio in which Employer conducts or
transacts substantial business activities on the date the Employment Term
terminates; and (iii) those counties in the State of Ohio in which, on the date
the Employment Term terminates, Employer intends to conduct or transact
substantial business activities as demonstrated by plans, strategies or other
tangible preparation for such business activities and known to Employee.

               (I) "Employer" means, for purposes of this Section 8, LNB
Bancorp, Inc. (the parent), The Lorain National Bank (a national bank
association), all subsidiary entities thereof, and all entities related to LNB
Bancorp, Inc. or to The Lorain National Bank by common ownership which may exist
before or after the commencement of the Employment Term.

          8.2 Expressly in consideration for Employer's promises made in this
Agreement and to induce Employer to sign this Agreement, Employee promises and
agrees that:



               (A) Confidentiality. The Confidential Information is and, at all
times, shall remain the exclusive property of Employer, and Employee: (i) shall
hold the Confidential Information in strictest confidence and in a position of
trust for Employer and its Clients and Customers, and (ii) except as may be
necessary to perform Employee's employment duties with Employer but only in
compliance with Employer's confidentiality policies and all applicable laws,
shall not (directly or indirectly) use for any purpose, copy, duplicate,
disclose, convey to any third-party or convert any Confidential Information,
either during the Employment Term or at any time following termination of the
Employment Term (by any Party, for any reason, with or without cause), and (iii)
upon the request of Employer at any time during or after the Employment Term,
shall immediately deliver to Employer all the Confidential Information in
Employee's possession and shall neither convey to any third-party nor retain any
copies or duplicates thereof; and

               (B) Competitive Acts. During the Employment Term or during the
Restricted Period, Employee (or any entity owned or controlled by Employee)
shall not directly or indirectly, without the prior written approval of
Employer, perform a Competitive Act; and

               (C) Employees. During the Restricted Period or during the
Employment Term, Employee (or any entity owned or controlled by Employee) shall
not directly or indirectly: (i) employ, engage, contract for the services of, or
solicit or otherwise induce the services of any person who, during the one
hundred eighty (180)-day period immediately preceding commencement of the
Restricted Period or during the Restricted Period, is or was an employee of
Employer, or (ii) otherwise interfere with (or attempt to interfere with) any
employment relationship of Employer with any employee; and

               (D) Customers and Clients. During the Restricted Period and
during the Employment Term, Employee (or any entity owned or controlled by
Employee) shall not directly or indirectly: (i) except for or on behalf of
Employer, solicit from or perform for any Client or Customer a Competitive
Activity, wherever such Client or Customer is located; or (ii) influence (or
attempt to influence) any Client or Customer to transfer such Client's or
Customer's patronage or business from Employer; or (iii) otherwise interfere
with any business relationship of Employer or with any Customer or Client; and

               (E) Other Employment or Engagement. Except as otherwise permitted
under Section 1.2, during the Employment Term, Employee shall not perform
services (whether or not for compensation) as an employee, independent
contractor, consultant, representative or agent of any person, sole
proprietorship, partnership, limited liability company, corporation (other than
Employer), association (other than Employer), organization, or other entity
(governmental or otherwise) without the prior, written consent of Employer; and

          8.3 Employee understands and agrees that:

               (A) During the Employment Term, Employee will materially assist
Employer in the generation, development or enhancement of certain Confidential
Information, Clients and Customers and certain other business assets and
activities for Employer; and

               (B) Employee's promises in this Section 8: (i) were negotiated at
arm's-length and with ample time for Employee to seek the advice of legal
counsel, (ii) are required for the fair and reasonable protection of Employer
and the Confidential Information, and (iii) do not constitute an unreasonable
hardship to Employee in working for Employer or in subsequently earning a
livelihood in Employee's field of expertise outside the Service Area; and

               (C) If Employee breaches any or all of the promises in this
Section 8: the privacy and thereby the value of the Confidential Information
will be significantly jeopardized; Employer will be subject to the immediate
risk of material, immeasurable, and irreparable damage and harm; the remedies at
law for Employee's breach shall be inadequate; and Employer shall therefore be
entitled to injunctive relief against Employee in addition to any and all other
legal or equitable remedies; and

               (D) If Employee had not agreed to the restrictive promises in
this Agreement, Employer would not have signed this Agreement.



          8.4 Employee's promises, duties and obligations made in this Section 8
shall apply to Employee irrespective of whether a Change in Control (as defined
in Section 9.1) occurs and shall survive the voluntary or involuntary cessation
or termination of the Employment Term by either Party (for any reason, with or
without cause). If any of the restrictions contained in this Section 8 are ever
judicially held to exceed the geographic or time limitations permitted by law,
then such restrictions shall be deemed to be reformed to comply with the maximum
geographic and time limitations permitted by law. The existence of any claim or
cause of action by Employee against Employer (whether or not derived from or
based upon Employee's employment with Employer) shall not constitute a defense
to Employer's enforcement of any covenant, duty or obligation of Employee in
this Section 8.

     9. CHANGE IN CONTROL.

          9.1 For purposes solely of this Section 9, the following terms shall
have the respective meanings set forth below but all other capitalized terms
shall have the meanings and definitions contained in other provisions of this
Agreement:

               (A) "Bonus Amount" means an amount equal to Employee's bonus
under Employer's Management Incentive Plan for Key Executives for the applicable
Contract Year, as determined in accordance with Section 2.2 of this Agreement.

               (B) "Cause" means any one or more of the following: (i) the
willful and continued failure of Employee to perform substantially Employee's
duties with Employer (other than any such failure resulting from Employee's
Disability as defined in Section 9.1(E) of this Agreement or any such failure
subsequent to Employee's being delivered a Notice of Termination without Cause
by Employer or after Employee's delivering a Notice of Termination for Good
Reason to Employer) after a written demand for substantial performance is
delivered to Employee by Employer which specifically identifies the manner in
which Employer believes that Employee has not substantially performed Employee's
duties and provides Employee with ten (10) days to correct such failure, or (ii)
the willful engaging by Employee in illegal conduct or gross misconduct which is
injurious to Employer or any Subsidiary, or (iii) the conviction of Employee of,
or a plea by Employee of nolo contendere to, a felony, or (iv) Employee's breach
of or failure to perform any of the non-competition and non-disclosure covenants
contained in Section 8 of this Agreement.

               (C) "Change in Control" means the occurrence of any one of the
following events:

                    (i)  if individuals who, on the date of this Agreement,
                         constitute the Board of Directors (the "Incumbent
                         Directors") of LNB Bancorp, Inc. ("Company") cease for
                         any reason to constitute at least a majority of
                         Company's Board of Directors; provided, however, that:
                         (A) any person becoming a director subsequent to the
                         date of this Agreement, whose election or nomination
                         for election was approved by a vote of at least
                         two-thirds (2/3) of the Incumbent Directors then on
                         Company's Board of Directors (either by a specific vote
                         or by approval of the proxy statement of Company in
                         which such person is named as a nominee for director,
                         without written objection by such Incumbent Directors
                         to such nomination), shall be deemed to be an Incumbent
                         Director, and (B) no individual elected or nominated as
                         a director of Company initially as a result of an
                         actual or threatened election contest with respect to
                         directors or any other actual or threatened
                         solicitation of proxies by or on behalf of any person
                         other than Company's Board of Directors shall be deemed
                         to be an Incumbent Director;

                    (ii) if any "person" (as such term is defined in Section
                         3(a)(9) of the Securities Exchange Act of 1934, as
                         amended (the "Exchange Act"), and as used in Sections
                         13(d)(3) and 14(d)(2) of the Exchange Act) is or
                         becomes a "beneficial owner" (as defined in Rule 13d-3
                         under the Exchange Act), directly or indirectly, of
                         securities of Company representing twenty percent (20%)
                         or more of the combined voting power of Company's
                         then-outstanding securities eligible to vote for the
                         election of Company's Board of Directors (the "Company
                         Voting Securities"); provided, however, that the events
                         described in this



                         clause (ii) shall not be deemed to be a Change in
                         Control by virtue of any of the following acquisitions:
                         (A) by Company or any Subsidiary, (B) by any employee
                         benefit plan sponsored or maintained by Employer or any
                         Subsidiary or by any employee stock benefit trust
                         created by Employer or any Subsidiary, (C) by any
                         underwriter temporarily holding securities pursuant to
                         an offering of such securities, (D) pursuant to a
                         Non-Qualifying Transaction (as defined in clause (iii)
                         of this paragraph (C), below), (E) pursuant to any
                         acquisition by Employee or any group of persons
                         including Employee (or any entity controlled by
                         Employee or by any group of persons including
                         Employee), or (F) a transaction (other than one
                         described in clause (iii) of this paragraph (C), below)
                         in which Company Voting Securities are acquired from
                         Company, if a majority of the Incumbent Directors
                         approves a resolution providing expressly that the
                         acquisition pursuant to this subparagraph does not
                         constitute a Change in Control under this clause (ii);

                    (iii) upon the consummation of a merger, consolidation,
                         share exchange or similar form of corporate transaction
                         involving Company or any of its Subsidiaries that
                         requires the approval of Company's shareholders,
                         whether for such transaction or the issuance of
                         securities in the transaction (a "Business
                         Combination"), unless immediately following such
                         Business Combination: (A) more than fifty percent (50%)
                         of the total voting power of either (x) the corporation
                         resulting from the consummation of such Business
                         Combination (the "Surviving Corporation") or, if
                         applicable, (y) the ultimate parent corporation that
                         directly or indirectly has beneficial ownership of one
                         hundred percent (100%) of the voting securities
                         eligible to elect directors of the Surviving
                         Corporation (the "Parent Corporation") is represented
                         by Company Voting Securities that were outstanding
                         immediately prior to such Business Combination (or, if
                         applicable, represented by shares into which such
                         Company Voting Securities were converted pursuant to
                         such Business Combination), and such voting power among
                         the holders thereof is in substantially the same
                         proportion as the voting power of such Company Voting
                         Securities among the holders thereof immediately prior
                         to the Business Combination, (B) no person (other than
                         any employee benefit plan sponsored or maintained by
                         the Surviving Corporation or the Parent Corporation or
                         any employee stock benefit trust created by the
                         Surviving Corporation or the Parent Corporation) is or
                         becomes the beneficial owner, directly or indirectly,
                         of twenty percent (20%) or more of the total voting
                         power of the outstanding voting securities eligible to
                         elect directors of the Parent Corporation (or, if there
                         is no Parent Corporation, the Surviving Corporation),
                         and (C) at least a majority of the members of the board
                         of directors of the Parent Corporation (or, if there is
                         no Parent Corporation, the Surviving Corporation) were
                         Incumbent Directors at the time of the Board of
                         Director's approval of the execution of the initial
                         agreement providing for such Business Combination (any
                         Business Combination which satisfies all of the
                         criteria specified in (A), (B) and (C) of this Section
                         9.1(C)(iii) shall be deemed to be a "Non-Qualifying
                         Transaction"); or

                    (iv) if the shareholders of Company approve a plan of
                         complete liquidation or dissolution of Company or a
                         sale of all or substantially all of Company's assets
                         but only if, pursuant to such liquidation or sale, the
                         assets of Company are transferred to an entity not
                         owned (directly or indirectly) by Company's
                         shareholders.



Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more than twenty
percent (20%) of Company Voting Securities as a result of the acquisition of
Company Voting Securities by Company which reduces the number of Company Voting
Securities outstanding; provided, however, that if (after such acquisition by
Company) such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control shall then
occur. Notwithstanding anything in this Agreement to the contrary, if (1)
Employee's employment is terminated prior to a Change in Control for reasons
that would have constituted a Qualifying Termination if they had occurred
following a Change in Control, (2) Employee reasonably demonstrates that such
termination was at the request of a third party who had indicated an intention
or taken steps reasonably calculated to effect a Change in Control, and (3) a
Change in Control involving such third party (or a party competing with such
third party to effectuate a Change in Control) does occur, then (for purposes of
this Agreement) the date immediately prior to the date of such termination of
employment (or event constituting Good Reason) shall be treated as a Change in
Control.

               (D) "Date of Termination" means: (i) the effective date on which
Employee's employment by Employer terminates as specified in a prior written
notice by Employer or Employee (as the case may be) to the other, or (ii) if
Employee's employment by Employer terminates by reason of death, the date of
death of Employee, or (iii) if the Employee incurs a Disability, the date of
such Disability as determined by a physician chosen by Employer. For purposes of
determining the timing of payments and benefits to Employee under Section 9.2,
the date of the actual Change in Control shall be treated as Employee's Date of
Termination.

               (E) "Disability" means Employee's inability to perform Employee's
then-existing duties with Employer on a full-time basis for at least one hundred
eighty (180) consecutive days as a result of Employee's incapacity due to
physical or mental illness, as determined by a physician chosen by Employer.

               (F) "Good Reason" means, without Employee's express written
consent, the occurrence of any of the following events after a Change in
Control:

                    (i)  (1) any change in the duties or responsibilities
                         (including reporting responsibilities) of Employee that
                         is inconsistent in any material and adverse respect
                         with Employee's positions, duties, responsibilities or
                         status with Employer immediately prior to such Change
                         in Control (including any material and adverse
                         diminution of such duties or responsibilities), or (2)
                         a material and adverse change in Employee's titles or
                         offices with Employer from those existing immediately
                         prior to such Change in Control;

                    (ii) (1) a reduction by Employer in Employee's Basic Salary
                         as in effect immediately prior to such Change in
                         Control (or as such Basic Salary may be increased from
                         time to time thereafter), or (2) the failure by
                         Employer to pay Employee an annual bonus in respect of
                         the year in which such Change in Control occurs or any
                         subsequent year in an amount greater than or equal to
                         the annual bonus earned for the year ended prior to the
                         year in which such Change in Control occurs;

                    (iii) any requirement of Employer that Employee: (1) be
                         based anywhere more than fifty (50) miles from the
                         office where Employee is located at the time of the
                         Change in Control, or (2) travel on Employer business
                         to an extent substantially greater than the travel
                         obligations of Employee immediately prior to such
                         Change in Control; or

                    (iv) the failure of Employer to: (1) continue in effect any
                         material employee benefit plan, compensation plan,
                         welfare benefit plan or other material fringe benefit
                         plan in which Employee is participating immediately
                         prior to such Change in Control or the taking of any
                         action by Employer which would materially and adversely
                         affect Employee's participation in or reduce Employee's
                         benefits under any such plan, unless Employee is
                         permitted to participate in other plans providing
                         Employee with substantially equivalent benefits in the
                         aggregate, or (2) provide Employee with paid vacation
                         in accordance with the vacation policies



                         of Employer as in effect for Employee immediately prior
                         to such Change in Control, including the crediting of
                         all service for which Employee had been credited under
                         such vacation policies prior to the Change in Control.

Notwithstanding any contrary provision in this Agreement: (a) an isolated,
insubstantial and inadvertent action taken in good faith and which is remedied
by Employer within ten (10) days after receipt of notice thereof given by
Employee shall not constitute Good Reason; and (b) Employee's right to terminate
employment for Good Reason shall not be affected by Employee's incapacities due
to mental or physical illness; and (c) Employee's continued employment shall not
constitute a consent to, or a waiver of rights with respect to, any event or
condition constituting Good Reason (provided, however, that Employee must
provide notice of termination of employment within ninety (90) days following
Employee's knowledge of an event constituting Good Reason or such event shall
not constitute Good Reason under this Agreement).

               (G) "Qualifying Termination" means a termination of Employee's
employment with Employer after a Change in Control: (i) by Employer other than
for Cause, or (ii) by Employee for Good Reason. Termination of Employee's
employment on account of death, Disability or Retirement shall not constitute a
Qualifying Termination.

               (H) "Retirement" means the termination of Employee's employment
with Employer: (i) on or after the first of the month coincident with or next
following Employee's attainment of age sixty-five (65), or (ii) on such later
date as may be provided in a written agreement between Employer and Employee.

               (I) "Subsidiary" means any corporation or other entity in which
Company: (i) has a direct or indirect ownership interest of fifty percent (50%)
or more of the total combined voting power of the then-outstanding securities or
interests of such corporation or other entity entitled to vote generally in the
election of directors, or (ii) has the right to receive fifty percent (50%) or
more of the distribution of profits or fifty percent (50%) of the assets upon
liquidation or dissolution of such corporation or other entity.

               (J) "Termination Period" means the period of time beginning with
a Change in Control and ending two (2) years following such Change in Control.

               (K) "Company" means LNB Bancorp, Inc. and its successors.

          9.2 Notwithstanding any contrary provision in Section 7 or in any
other Section of this Agreement, if (during the Termination Period) Employee's
employment with Employer terminates pursuant to a Qualifying Termination:

               (A) Employer shall pay to Employee, within twenty (20) days
following the Date of Termination under this Section 9, a lump sum cash amount
equal to the amount of remuneration set forth in either Section 9.2(A)(i) or
Section 9.2(A)(ii), whichever is greater:

                    (i)  Employee's Accrued Compensation; and the sum of
                         Employee's Basic Salary, as measured from the Date of
                         Termination through the remainder of the Agreement
                         Term, and any bonuses which have been earned through
                         the Date of Termination and are payable to the extent
                         not theretofore paid or deferred; or

                    (ii) Employee's Accrued Compensation; and any bonuses which
                         have been earned through the Date of Termination and
                         are payable to the extent not theretofore paid or
                         deferred; and an additional severance payment equal to
                         one (1) times Employee's then current Basic Salary.

               (B) In addition to the foregoing, Employer shall pay or reimburse
Employee's health insurance payments or COBRA payments, as applicable, for six
(6) months following the Qualifying Termination.

          9.3 Employer shall withhold from all payments due to Employee (or
Employee's beneficiaries or estate) hereunder all taxes which, by applicable
federal, state, local or other law, Employer is required to withhold therefrom.



          9.4 This Section 9 shall not be terminated by any Business Combination
as defined in Section 9.1(C)(iii). In the event of any Business Combination, the
provisions of this Section 9 shall be binding upon the Surviving Corporation and
such Surviving Corporation shall be treated as Employer hereunder. This Section
9 shall inure to the benefit of and be enforceable by Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee dies while any amounts would
have been payable to Employee under this Section 9 if Employee had continued to
live, all such amounts (unless otherwise provided herein) shall be paid in
accordance with the terms of this Section 9 to such person or persons appointed
in writing by Employee to receive such amounts or, if no person is so appointed,
to Employee's estate.

          9.5 In the event of a tender or exchange offer, proxy contest, or the
execution of any agreement which, if consummated, would constitute a Change in
Control, Employee agrees (as a condition to receiving any payments and benefits
under Section 9.2 of this Agreement) not to leave voluntarily the employ of the
Employer (other than as a result of Disability or an event which would
constitute Good Reason if a Change in Control had occurred) until the Change in
Control occurs or, if earlier, such tender or exchange offer, proxy contest or
agreement is terminated or abandoned.

     10. MISCELLANEOUS.

          10.1 This Agreement constitutes the entire agreement among the Parties
with respect to the subject matter hereof and supersedes any and all other prior
or contemporaneous negotiations, representations, statements, promises,
agreements or contracts (either oral or written) between the Parties with
respect to the subject matter hereof.

          10.2 The invalidity or unenforceability of any particular provision of
this Agreement shall not affect its other provisions and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision had been
omitted.

          10.3 Except as otherwise expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of Employer, its successors and
assigns and upon Employee, Employee's administrators, executors, legatees, heirs
and assigns. At any time, Employer may assign this Agreement and Employer's
rights, duties, obligations and benefits thereunder to any Subsidiary as defined
in Section 9.1(I) of this Agreement.

          10.4 This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Ohio. For all litigation arising
hereunder, the State Courts of Lorain County, Ohio shall have exclusive venue
and each Party (separately and collectively), irrespective of such Party's
current or subsequent domicile or residence, hereby submits to the personal
jurisdiction of the State Courts of Lorain County, Ohio for all litigation
arising under this Agreement.

          10.5 All promises, representations, warranties and covenants of the
Parties shall survive termination of the Agreement Term, unless otherwise
expressly provided herein.

          10.6 Except as otherwise expressly provided herein, this Agreement may
be changed or amended only by a written document which is clearly designated as
an amendment to this specific Agreement and only if such document is signed by
all Parties.

          10.7 No action by any Party and no refusal or neglect of any Party to
exercise a right granted under this Agreement or to enforce compliance with any
provision of this Agreement shall constitute a waiver of any provision of or any
right under this Agreement, unless such waiver is expressed in a written
document which is clearly designated as a waiver to a specific provision(s) of
this Agreement and unless such document is signed by the waiving Party.



          10.8 Employee shall not be required to seek other employment or
otherwise mitigate damages to recover any payments or benefits under this
Agreement, and any such payment or benefit will not be reduced by any
compensation earned by Employee as a result of subsequent employment by a new
employer, so long as such subsequent employment is not in violation of this
Agreement.

     IN WITNESS WHEREOF, the Parties have set their hands as of the day and year
first above written.

In the Presence of:

/s/ Illegible                           /s/ William A. Dougherty
- -------------------------------------   ----------------------------------------
(Signature of First Witness)            William A. Dougherty


/s/ Charles R. Crowley                  "Employee"
- -------------------------------------
(Signature of Second Witness)


                                        LNB BANCORP, INC.


/s/ Sharon S. Friedmann                 By: /s/ Daniel E. Klimas
- -------------------------------------       ------------------------------------
(Signature of First Witness)                      January 15         2007
                                            ---------------------, -----------

/s/ Sharon L. Churchill
- -------------------------------------
(Signature of Second Witness)


                                        THE LORAIN NATIONAL BANK


 /s/ Sharon S. Friedmann                 By: /s/ Daniel E. Klimas
- -------------------------------------       ------------------------------------
(Signature of First Witness)                     January 15           2007
                                            ---------------------, -----------


 /s/ Sharon L. Churchill                "Employer"
- -------------------------------------
(Signature of Second Witness)