Document:

<PAGE>
                                                                    EXHIBIT 10.2
                          CITIZENS BANKING CORPORATION

                            25,000 CAPITAL SECURITIES

                        FLOATING RATE CAPITAL SECURITIES
               (LIQUIDATION AMOUNT $1,000.00 PER CAPITAL SECURITY)

                               PLACEMENT AGREEMENT

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

                                                                   June 16, 2003

FTN Financial Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117

Keefe, Bruyette & Woods, Inc.
787 7th Avenue
4th Floor
New York, New York  10019

Ladies and Gentlemen:

         Citizens Banking Corporation, a Michigan corporation (the "Company"),
and its financing subsidiary, Citizens Michigan Statutory Trust I, a Connecticut
statutory trust (the "Trust," and hereinafter together with the Company, the
"Offerors"), hereby confirm their agreement (this "Agreement") with you as
placement agents (the "Placement Agents"), as follows:

SECTION 1. ISSUANCE AND SALE OF SECURITIES.

         1.1. INTRODUCTION. The Offerors propose to issue and sell at the
Closing (as defined in Section 2.3.1 hereof) 25,000 of the Trust's Floating Rate
Capital Securities, with a liquidation amount of $1,000.00 per capital security
(the "Capital Securities"), to First Tennessee Bank National Association, a
national banking association organized under the laws of the United States of
America and Preferred Term Securities X, Ltd., a company with limited liability
established under the laws of the Cayman Islands (the "Purchasers") pursuant to
the terms of Subscription Agreements entered into, or to be entered into on or
prior to the Closing Date (as defined in Section 2.3.1 hereof), between the
Offerors and the Purchasers (the "Subscription Agreements"), the forms of which
are attached hereto as Exhibit A-1 and Exhibit A-2 and incorporated herein by
this reference.

         1.2. OPERATIVE AGREEMENTS. The Capital Securities shall be fully and
unconditionally guaranteed on a subordinated basis by the Company with respect
to distributions and amounts payable upon liquidation, redemption or repayment
(the "Guarantee") pursuant and subject to the Guarantee Agreement (the
"Guarantee Agreement"), to be dated as of the Closing Date and executed and
delivered by the Company and U.S. Bank National Association ("U.S. Bank"), as
trustee (the "Guarantee Trustee"), for the benefit from time to time of the
holders of the Capital Securities. The entire proceeds from the sale by

<PAGE>

the Trust to the holders of the Capital Securities shall be combined with the
entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities"), and shall be used by the Trust to purchase
$25,774,000.00 in principal amount of the Floating Rate Junior Subordinated
Deferrable Interest Debentures (the "Debentures") of the Company. The Capital
Securities and the Common Securities for the Trust shall be issued pursuant to
an Amended and Restated Declaration of Trust among U.S. Bank, as institutional
trustee (the "Institutional Trustee"), the Administrators named therein, and the
Company, to be dated as of the Closing Date and in substantially the form
heretofore delivered to the Placement Agents (the "Trust Agreement"). The
Debentures shall be issued pursuant to an Indenture (the "Indenture"), to be
dated as of the Closing Date, between the Company and U.S. Bank, as indenture
trustee (the "Indenture Trustee"). The documents identified in this Section 1.2
and in Section 1.1 are referred to herein as the "Operative Documents."

         1.3. RIGHTS OF PURCHASERS. The Capital Securities shall be offered and
sold by the Trust directly to the Purchasers without registration of any of the
Capital Securities, the Debentures or the Guarantee under the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable securities laws
in reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreements and the
Purchasers shall be entitled to each of the benefits of the Placement Agents and
the Purchasers under this Agreement and shall be entitled to enforce obligations
of the Offerors under this Agreement as fully as if the Purchasers were a party
to this Agreement. The Offerors and the Placement Agents have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.

         1.4. LEGENDS. Upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the
Securities Act, the Capital Securities and Debentures certificates shall each
contain a legend as required pursuant to any of the Operative Documents.

SECTION 2. PURCHASE OF CAPITAL SECURITIES.

         2.1. EXCLUSIVE RIGHTS; PURCHASE PRICE. From the date hereof until the
Closing Date (which date may be extended by mutual agreement of the Offerors and
the Placement Agents), the Offerors hereby grant to the Placement Agents the
exclusive right to arrange for the sale of the Capital Securities to the
Purchasers at a purchase price of $1,000.00 per Capital Security.

         2.2. SUBSCRIPTION AGREEMENTS. The Offerors hereby agree to evidence
their acceptance of the subscription by countersigning a copy of the
Subscription Agreements and returning the same to the Placement Agents.

         2.3. CLOSING AND DELIVERY OF PAYMENT.

                  2.3.1. CLOSING; CLOSING DATE. The sale and purchase of the
Capital Securities by the Offerors to the Purchasers shall take place at a
closing (the "Closing") at the offices of Lewis, Rice & Fingersh, L.C., at 10:00
a.m. (St. Louis time) on June 26, 2003, or such other business day as may be
agreed upon by the Offerors and the Placement Agents (the "Closing Date");
provided, however, that in no event shall the Closing Date occur later than June
30, 2003 unless consented to by the Purchasers. Payment by the Purchasers shall
be payable in the manner set forth in the Subscription Agreements and shall be
made prior to or on the Closing Date.

                  2.3.2. DELIVERY. The certificates for the Capital Securities
shall be in definitive form, each registered in the name of the applicable
Purchaser and in the aggregate amount of the Capital Securities purchased by the
Purchaser.

                                       2
<PAGE>

                  2.3.3. TRANSFER AGENT. The Offerors shall deposit the
certificates representing the Capital Securities with the Institutional Trustee
or other appropriate party prior to the Closing Date.

         2.4. PLACEMENT AGENTS' FEES AND EXPENSES.

                  2.4.1. PLACEMENT AGENTS' COMPENSATION. Because the proceeds
from the sale of the Capital Securities shall be used to purchase the Debentures
from the Company, the Company shall pay an aggregate of $20.00 for each
$1,000.00 of principal amount of Debentures sold to the Trust (excluding the
Debentures related to the Common Securities purchased by the Company). Of this
amount, $10.00 for each $1,000.00 of principal amount of Debentures shall be
payable to FTN Financial Capital Markets and $10.00 for each $1,000.00 of
principal amount of Debentures shall be payable to Keefe, Bruyette & Woods, Inc.
Such amount shall be delivered to the Trustee or such other person designated by
the Placement Agents on the Closing Date and shall be allocated between and paid
to the respective Placement Agents as directed by the Placement Agents.

                  2.4.2. COSTS AND EXPENSES. Whether or not this Agreement is
terminated or the sale of the Capital Securities is consummated, the Company
hereby covenants and agrees that it shall pay or cause to be paid (directly or
by reimbursement) all reasonable costs and expenses incident to the performance
of the obligations of the Offerors under this Agreement, including all fees,
expenses and disbursements of counsel and accountants for the Offerors; all
reasonable expenses incurred by the Offerors incident to the preparation,
execution and delivery of the Trust Agreement, the Indenture, and the Guarantee;
and all other reasonable costs and expenses incident to the performance of the
obligations of the Company hereunder and under the Trust Agreement.

         2.5. FAILURE TO CLOSE. If any of the conditions to the Closing
specified in this Agreement shall not have been fulfilled to the satisfaction of
the Placement Agents or if the Closing shall not have occurred on or before
10:00 a.m. (St. Louis time) on June 30, 2003, then each party hereto,
notwithstanding anything to the contrary in this Agreement, shall be relieved of
all further obligations under this Agreement without thereby waiving any rights
it may have by reason of such nonfulfillment or failure; provided, however, that
the obligations of the parties under Sections 2.4.2, 7.5 and 9 shall not be so
relieved and shall continue in full force and effect.

SECTION 3. CLOSING CONDITIONS. The obligations of the Purchasers and the
Placement Agents on the Closing Date shall be subject to the accuracy, at and as
of the Closing Date, of the representations and warranties of the Offerors
contained in this Agreement, to the accuracy, at and as of the Closing Date, of
the statements of the Offerors made in any certificates pursuant to this
Agreement, to the performance by the Offerors of their respective obligations
under this Agreement, to compliance, at and as of the Closing Date, by the
Offerors with their respective agreements herein contained, and to the following
further conditions:

         3.1. OPINIONS OF COUNSEL. On the Closing Date, the Placement Agents
shall have received the following favorable opinions, each dated as of the
Closing Date: (a) from Dykema Gossett PLLC, counsel for the Offerors and
addressed to the Purchasers and the Placement Agents in substantially the form
set forth on Exhibit B-1 attached hereto and incorporated herein by this
reference, (b) from Shipman & Goodwin LLP, special Connecticut counsel to the
Offerors and addressed to the Purchasers, the Placement Agents and the Offerors,
in substantially the form set forth on Exhibit B-2 attached hereto and
incorporated herein by this reference and (c) from Lewis, Rice & Fingersh, L.C.,
special tax counsel to the Offerors, and addressed to the Placement Agents and
the Offerors, in substantially the form set forth on Exhibit B-3 attached hereto
and incorporated herein by this reference, subject to the receipt by Lewis, Rice
& Fingersh, L.C. of a representation letter from the Company in the form set
forth in Exhibit B-3 completed in a manner reasonably satisfactory to Lewis,
Rice & Fingersh, L.C. (collectively, the "Offerors' Counsel Opinions"). In
rendering the Offerors' Counsel Opinions, counsel to the Offerors

                                       3
<PAGE>

may rely as to factual matters upon certificates or other documents furnished by
officers, directors and trustees of the Offerors (copies of which shall be
delivered to the Placement Agents and the Purchasers) and by government
officials, and upon such other documents as counsel to the Offerors may, in
their reasonable opinion, deem appropriate as a basis for the Offerors' Counsel
Opinions. Counsel to the Offerors may specify the jurisdictions in which they
are admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. If the
Offerors' counsel is not admitted to practice in the State of New York, the
opinion of Offerors' counsel may assume, for purposes of the opinion, that the
laws of the State of New York are substantively identical, in all respects
material to the opinion, to the internal laws of the state in which such counsel
is admitted to practice. Such Offerors' Counsel Opinions shall not state that
they are to be governed or qualified by, or that they are otherwise subject to,
any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).

         3.2. OFFICER'S CERTIFICATE. At the Closing Date, the Purchasers and the
Placement Agents shall have received certificates from the Chief Executive
Officer of the Company, dated as of the Closing Date, stating that (i) the
representations and warranties of the Offerors set forth in Section 5 hereof are
true and correct as of the Closing Date and that the Offerors have complied with
all agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date, (ii) since the date of this Agreement
the Offerors have not incurred any liability or obligation, direct or
contingent, or entered into any material transactions, other than in the
ordinary course of business, which is material to the Offerors, and (iii)
covering such other matters as the Placement Agents may reasonably request.

         3.3. ADMINISTRATOR'S CERTIFICATE. At the Closing Date, the Purchasers
and the Placement Agents shall have received a certificate of one or more
Administrators of the Trust, dated as of the Closing Date, stating that the
representations and warranties of the Trust set forth in Section 5 are true and
correct as of the Closing Date and that the Trust has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Date.

         3.4. PURCHASE PERMITTED BY APPLICABLE LAWS; LEGAL INVESTMENT. The
purchase of and payment for the Capital Securities as described in this
Agreement and pursuant to the Subscription Agreements shall (a) not be
prohibited by any applicable law or governmental regulation, (b) not subject the
Purchasers or the Placement Agents to any penalty or, in the reasonable judgment
of the Purchasers and the Placement Agents, other onerous conditions under or
pursuant to any applicable law or governmental regulation, and (c) be permitted
by the laws and regulations of the jurisdictions to which the Purchasers and the
Placement Agents are subject.

         3.5. CONSENTS AND PERMITS. The Company and the Trust shall have
received all consents, permits and other authorizations, and made all such
filings and declarations, as may be required from any person or entity pursuant
to any law, statute, regulation or rule (federal, state, local and foreign), or
pursuant to any agreement, order or decree to which the Company or the Trust is
a party or to which either is subject, in connection with the transactions
contemplated by this Agreement.

         3.6. SALE OF PURCHASER SECURITIES. Preferred Term Securities X, Ltd.
shall have sold securities issued by it in an amount such that the net proceeds
of such sale shall be (i) available on the Closing Date and (ii) in an amount
sufficient to purchase that portion of the Capital Securities Preferred Term
Securities X, Ltd. agrees to purchase pursuant to the Subscription Agreement to
be entered into by it and all other capital or similar securities contemplated
to be purchased by Preferred Term Securities X, Ltd. in agreements similar to
this Agreement and the Subscription Agreement to be entered into by it.

         3.7. INFORMATION. Prior to or on the Closing Date, the Offerors shall
have furnished to the Placement Agents such further information, certificates,
opinions and documents addressed to the

                                       4
<PAGE>

Purchasers and the Placement Agents, which the Placement Agents may reasonably
request, including, without limitation, a complete set of the Operative
Documents or any other documents or certificates required by this Section 3; and
all proceedings taken by the Offerors in connection with the issuance, offer and
sale of the Capital Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Placement Agents.

         If any condition specified in this Section 3 shall not have been
fulfilled when and as required in this Agreement, or if any of the opinions or
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Placement Agents, this
Agreement may be terminated by the Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date. Notice of such termination shall be
given to the Offerors in writing or by telephone or facsimile confirmed in
writing.

SECTION 4. CONDITIONS TO THE OFFERORS' OBLIGATIONS. The obligations of the
Offerors to sell the Capital Securities to the Purchasers and consummate the
transactions contemplated by this Agreement shall be subject to the accuracy, at
and as of the Closing Date, of the representations and warranties of the
Placement Agents contained in this Agreement and to the following further
conditions:

         4.1. EXECUTED AGREEMENT. The Offerors shall have received from the
Placement Agents an executed copy of this Agreement.

         4.2. FULFILLMENT OF OTHER OBLIGATIONS. The Placement Agents shall have
fulfilled all of their other obligations and duties required to be fulfilled
under this Agreement prior to or at the Closing.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS. Except as set forth
on the Disclosure Schedule (as defined in Section 11.1) attached hereto, if any,
the Offerors jointly and severally represent and warrant to the Placement Agents
and the Purchasers as of the date hereof and as of the Closing Date as follows:

         5.1. SECURITIES LAW MATTERS.

                  (A) Neither the Company nor the Trust, nor any of their
"Affiliates" (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), nor any person acting on any of their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration under the
Securities Act of any of the Capital Securities, the Guarantee or the Debentures
(collectively, the "Securities") or any other securities to be issued, or which
may be issued, by Preferred Term Securities X, Ltd.

                  (B) Neither the Company nor the Trust, nor any of their
Affiliates, nor any person acting on its or their behalf has (i) other than the
Placement Agents, offered for sale or solicited offers to purchase the
Securities, (ii) engaged in any form of offering, general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of any of the Securities, or (iii) engaged or will engage in any
"directed selling efforts" within the meaning of Regulation S of the Securities
Act ("Regulation S") with respect to the Securities.

                  (C) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.

                  (D) Neither the Company nor the Trust is or, after giving
effect to the offering and sale of the Capital Securities and the consummation
of the transactions described in this Agreement, will be an "investment company"
or an entity "controlled" by an "investment company," in each case within the

                                       5
<PAGE>

meaning of Section 3(a) of the Investment Company Act of 1940, as amended (the
"Investment Company Act") without regard to Section 3(c) of the Investment
Company Act.

                  (E) Neither the Company nor the Trust has paid or agreed to
pay to any person or entity (other than the Placement Agents) any compensation
for soliciting another to purchase any of the Securities.

         5.2. ORGANIZATION, STANDING AND QUALIFICATION OF THE TRUST. The Trust
has been duly created and is validly existing in good standing as a statutory
trust under the Connecticut Statutory Trust Act (the "Statutory Trust Act") with
the power and authority to own property and to conduct the business it transacts
and proposes to transact and to enter into and perform its obligations under the
Operative Documents. The Trust is duly qualified to transact business as a
foreign entity and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust. The Trust is not
a party to or otherwise bound by any agreement other than the Operative
Documents. The Trust is and will, under current law, be classified for federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation.

         5.3. TRUST AGREEMENT. The Trust Agreement has been duly authorized by
the Company and, on the Closing Date, will have been duly executed and delivered
by the Company and the Administrators of the Trust, and, assuming due
authorization, execution and delivery by the Institutional Trustee, will be a
valid and binding obligation of the Company and such Administrators, enforceable
against them in accordance with its terms, subject to (a) applicable bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation and other laws
relating to or affecting creditors' rights generally, and (b) general principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law) ("Bankruptcy and Equity"). Each of the Administrators of the
Trust is an employee or a director of the Company or of a financial institution
subsidiary of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.

         5.4. GUARANTEE AGREEMENT AND THE INDENTURE. Each of the Guarantee and
the Indenture has been duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Guarantee Trustee, in the case of
the Guarantee, and by the Indenture Trustee, in the case of the Indenture, will
be a valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to Bankruptcy and Equity.

         5.5. CAPITAL SECURITIES AND COMMON SECURITIES. The Capital Securities
and the Common Securities have been duly authorized by the Trust Agreement and,
when issued and delivered against payment therefor on the Closing Date to the
Purchasers, in the case of the Capital Securities, and to the Company, in the
case of the Common Securities, will be validly issued and represent undivided
beneficial interests in the assets of the Trust. None of the Capital Securities
or the Common Securities is subject to preemptive or other similar rights. On
the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance.

         5.6. DEBENTURES. The Debentures have been duly authorized by the
Company and, at the Closing Date, will have been duly executed and delivered to
the Indenture Trustee for authentication in accordance with the Indenture, and,
when authenticated in the manner provided for in the Indenture and delivered
against payment therefor by the Trust, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture enforceable
against the Company in accordance with their terms, subject to Bankruptcy and
Equity.

                                       6
<PAGE>

         5.7. POWER AND AUTHORITY. This Agreement has been duly authorized,
executed and delivered by the Company and the Trust and constitutes the valid
and binding obligation of the Company and the Trust, enforceable against the
Company and the Trust in accordance with its terms, subject to Bankruptcy and
Equity except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws.

         5.8. NO DEFAULTS. The Trust is not in violation of the Trust Agreement
or, to the knowledge of the Administrators, any provision of the Statutory Trust
Act. The execution, delivery and performance by the Company or the Trust of this
Agreement or the Operative Documents to which it is a party, and the
consummation of the transactions contemplated herein or therein and the use of
the proceeds therefrom, will not conflict with or constitute a breach of, or a
default under, or result in the creation or imposition of any lien, charge or
other encumbrance upon any property or assets of the Trust, the Company or any
of the Company's Subsidiaries (as defined in Section 5.11 hereof) pursuant to
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Trust, the Company or any of its Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the property or
assets of any of them is subject, except for a conflict, breach, default, lien,
charge or encumbrance which could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect nor will such action result in any
violation of the Trust Agreement or the Statutory Trust Act or require the
consent, approval, authorization or order of any court or governmental agency or
body. As used herein, the term "Material Adverse Effect" means any one or more
effects that individually or in the aggregate are material and adverse to the
Offeror's ability to consummate the transactions contemplated herein or in the
Operative Documents or any one or more effects that individually or in the
aggregate are material and adverse to the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Company
and its Subsidiaries taken as whole, whether or not occurring in the ordinary
course of business.

         5.9. ORGANIZATION, STANDING AND QUALIFICATION OF THE COMPANY. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Michigan, with all requisite corporate power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of the Company
to be so qualified would not, singly or in the aggregate, have a Material
Adverse Effect.

         5.10. SUBSIDIARIES OF THE COMPANY. Each of the Company's significant
subsidiaries (as defined in Section 1-02(w) of Regulation S-X to the Securities
Act (the "Significant Subsidiaries")) is listed in Exhibit C attached hereto and
incorporated herein by this reference. Each Significant Subsidiary has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, with all requisite power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of any such
Significant Subsidiary to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect. All of the issued and outstanding shares of
capital stock of the Significant Subsidiaries (a) have been duly authorized and
are validly issued, (b) are fully paid and nonassessable, and (c) are wholly
owned, directly or indirectly, by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, restriction upon voting or
transfer (other than restrictions imposed by applicable law or regulation on
banks and bank holding companies generally), preemptive rights, claim, equity or
other defect.

         5.11. PERMITS. The Company and each of its subsidiaries (as defined in
Section 1-02(x) of Regulation S-X to the Securities Act) (the "Subsidiaries")
have all requisite power and authority, and all

                                       7
<PAGE>

necessary authorizations, approvals, orders, licenses, certificates and permits
of and from regulatory or governmental officials, bodies and tribunals, to own
or lease their respective properties and to conduct their respective businesses
as now being conducted, except such authorizations, approvals, orders, licenses,
certificates and permits which, if not obtained and maintained, would not,
singly or in the aggregate, have a Material Adverse Effect, and neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such authorizations,
approvals, orders, licenses, certificates or permits which, if such revocation
or modification occurred, would, singly or in the aggregate, have a Material
Adverse Effect; and the Company and its Subsidiaries are in compliance with all
applicable laws, rules, regulations and orders and consents, the violation of
which would, singly or in the aggregate, have a Material Adverse Effect.

         5.12. CONFLICTS, AUTHORIZATIONS AND APPROVALS. Neither the Company nor
any of its Subsidiaries is in violation of its respective articles or
certificate of incorporation, charter or by-laws or similar organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which either the
Company or any of its Subsidiaries is a party, or by which it or any of them may
be bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, the effect of which violation or default in performance
or observance would have, singly or in the aggregate, a Material Adverse Effect.

         5.13. HOLDING COMPANY REGISTRATION AND DEPOSIT INSURANCE. The Company
is duly registered (i) as a bank holding company or financial holding company
under the Bank Holding Company Act of 1956, as amended, and the regulations of
the Board of Governors of the Federal Reserve System or (ii) as a savings and
loan holding company under the Home Owners' Loan Act of 1933, as amended, and
the regulations of the Office of Thrift Supervision, and the deposit accounts of
the Company's Subsidiary depository institutions are insured by the Federal
Deposit Insurance Corporation ("FDIC") to the fullest extent permitted by law
and the rules and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or threatened.

         5.14. FINANCIAL STATEMENTS.

                  (A) The consolidated balance sheets of the Company and all of
its consolidated subsidiaries as of December 31, 2002 and December 31, 2001 and
related consolidated income statements and statements of changes in
shareholders' equity for the 3 years ended December 31, 2002 together with the
notes thereto, and the consolidated balance sheets of the Company and all of its
Subsidiaries as of March 31, 2003 and the related consolidated income statements
and statements of changes in shareholders' equity for the 3 months then ended,
copies of each of which have been provided to the Placement Agents (together,
the "Financial Statements"), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
disclosed therein) and fairly present in all material respects the financial
position and the results of operations and changes in shareholders' equity of
the Company and all of its Subsidiaries as of the dates and for the periods
indicated (subject, in the case of the interim financial statements, to normal
recurring year-end adjustments, none of which shall be material). The books and
records of the Company and all of its Subsidiaries have been, and are being,
maintained in all material respects in accordance with generally accepted
accounting principles and any other applicable legal and accounting requirements
and reflect only actual transactions.

                  (B) The information in the Company's report on form FR Y-9C
dated December 31, 2002 (the "FR Y-9C") previously provided to the Placement
Agents fairly presents in all material respects the financial position of the
Company and all of its Subsidiaries as of such date.

                                       8
<PAGE>

                  (C) Since the respective dates of the Financial Statements and
the FR Y-9C, except as disclosed in the Financial Statements, there has been no
material adverse change or development with respect to the financial condition
or earnings of the Company and all of its Subsidiaries, taken as a whole.

                  (D) The accountants of the Company who certified the Financial
Statements are independent public accountants of the Company and its
Subsidiaries within the meaning of the Securities Act and the rules and
regulations thereunder.

         5.15. EXCHANGE ACT REPORTING. The reports containing the Financial
Statements filed with the Securities and Exchange Commission (the "Commission")
by the Company under the Securities Exchange Act of 1934, as amended (the "1934
Act") and the regulations thereunder at the time they were filed with the
Commission complied as to form in all material respects with the requirements of
the 1934 Act and such reports did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading.

         5.16. REGULATORY ENFORCEMENT MATTERS. Neither the Company nor any of
its Subsidiaries is subject or is party to, or has received any notice or advice
that any of them may become subject or party to, any investigation with respect
to, any cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar undertaking to, or is
subject to any directive by, or has been since January 1, 2000, a recipient of
any supervisory letter from, or since January 1, 2000, has adopted any board
resolutions at the request of, any Regulatory Agency (as defined below) that
currently restricts in any material respect the conduct of their business or
that in any material manner relates to their capital adequacy, their credit
policies, their ability or authority to pay dividends or make distributions to
their shareholders or make payments of principal or interest on their debt
obligations, their management or their business (each, a "Regulatory
Agreement"), nor has the Company or any of its Subsidiaries been advised since
January 1, 2000, by any Regulatory Agency that it is considering issuing or
requesting any such Regulatory Agreement. There is no material unresolved
violation, criticism or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations of the Company or any of its
Subsidiaries. As used herein, the term "Regulatory Agency" means any federal or
state agency charged with the supervision or regulation of depository
institutions, bank, financial or savings and loan holding companies, or engaged
in the insurance of depository institution deposits, or any court,
administrative agency or commission or other governmental agency, authority or
instrumentality having supervisory or regulatory authority with respect to the
Company or any of its Subsidiaries.

         5.17. NO MATERIAL CHANGE. Since December 31, 2002, except as disclosed
in the Financial Statements, there has been no material adverse change or
development with respect to the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Company or its
Subsidiaries on a consolidated basis, whether or not arising in the ordinary
course of business.

         5.18. NO UNDISCLOSED LIABILITIES. Neither the Company nor any of its
Subsidiaries has any material liability, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its Subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the Financial Statements and (ii) normal
fluctuation in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of the Company and all of its
Subsidiaries since the date of the most recent balance sheet included in the
Financial Statements.

                                       9
<PAGE>

         5.19. LITIGATION. No charge, investigation, action, suit or proceeding
is pending or, to the knowledge of the Offerors, threatened, against or
affecting the Company or its Subsidiaries or any of their respective properties
before or by any courts or any regulatory, administrative or governmental
official, commission, board, agency or other authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could have,
singly or in the aggregate, a Material Adverse Effect.

         5.20. DEFERRAL OF INTEREST PAYMENTS ON DEBENTURES. The Company has no
present intention to exercise its option to defer payments of interest on the
Debentures as provided in the Indenture. The Company believes that the
likelihood that it would exercise its right to defer payments of interest on the
Debentures as provided in the Indenture at any time during which the Debentures
are outstanding is remote because of the restrictions that would be imposed on
the Company's ability to declare or pay dividends or distributions on, or to
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Company's capital stock and on the Company's ability to make any payments of
principal, interest or premium on, or repay, repurchase or redeem, any of its
debt securities that rank pari passu in all respects with, or junior in interest
to, the Debentures.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENTS. Each
Placement Agent represents and warrants to the Offerors as to itself (but not as
to the other Placement Agent) as follows:

         6.1. ORGANIZATION, STANDING AND QUALIFICATION.

                  (A) FTN Financial Capital Markets is a division of First
Tennessee Bank National Association, a national banking association duly
organized, validly existing and in good standing under the laws of the United
States, with full power and authority to own, lease and operate its properties
and conduct its business as currently being conducted. FTN Financial Capital
Markets is duly qualified to transact business as a foreign corporation and is
in good standing in each other jurisdiction in which it owns or leases property
or conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of FTN Financial Capital Markets.

                  (B) Keefe, Bruyette & Woods, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, with full power and authority to own, lease and operate its properties
and conduct its business as currently being conducted. Keefe, Bruyette & Woods,
Inc. is duly qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases property or
conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of Keefe, Bruyette & Woods, Inc.

         6.2. POWER AND AUTHORITY. The Placement Agent has all requisite power
and authority to enter into this Agreement, and this Agreement has been duly and
validly authorized, executed and delivered by the Placement Agent and
constitutes the legal, valid and binding agreement of the Placement Agent,
enforceable against the Placement Agent in accordance with its terms, subject to
Bankruptcy and Equity and except as any indemnification or contribution
provisions thereof may be limited under applicable securities laws.

         6.3. GENERAL SOLICITATION. In the case of the offer and sale of the
Capital Securities, no form of general solicitation or general advertising was
used by the Placement Agent or its representatives including, but not limited
to, advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

                                       10
<PAGE>

         6.4. PURCHASERS. The Placement Agent has made such reasonable inquiry
as is necessary to determine that the Purchasers are acquiring the Capital
Securities for their own accounts, except as contemplated under the Call Option
(as defined in Section 7.8 herein), and that the Purchasers do not intend to
distribute the Capital Securities in contravention of the Securities Act or any
other applicable securities laws.

         6.5. QUALIFIED PURCHASERS. The Placement Agent has not offered or sold
and will not arrange for the offer or sale of the Capital Securities except (i)
to those the Placement Agent reasonably believes are "accredited investors" (as
defined in Rule 501 of Regulation D), (ii) in an offshore transaction complying
with Rule 903 of Regulation S, or (iii) in any other manner that does not
require registration of the Capital Securities under the Securities Act. In
connection with each such sale, the Placement Agent has taken or will take
reasonable steps to ensure that the Purchasers are aware that (a) such sale is
being made in reliance on an exemption under the Securities Act and (b) future
transfers of the Capital Securities will not be made except in compliance with
applicable securities laws.

         6.6. OFFERING CIRCULARS. Neither the Placement Agent nor its
representatives will include any non-public information about the Company, the
Trust or any of their affiliates in any registration statement, prospectus,
offering circular or private placement memorandum used in connection with any
purchase of Capital Securities without the prior written consent of the Trust
and the Company.

SECTION 7. COVENANTS OF THE OFFERORS. The Offerors covenant and agree with the
Placement Agents and the Purchasers as follows:

         7.1. COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. During the period
from the date of this Agreement to the Closing Date, the Offerors shall use
their best efforts and take all action necessary or appropriate to cause their
representations and warranties contained in Section 5 hereof to be true as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.

         7.2. SALE AND REGISTRATION OF SECURITIES. The Offerors and their
Affiliates shall not nor shall any of them permit any person acting on their
behalf (other than the Placement Agents), to directly or indirectly (i) sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) that would or could be integrated
with the sale of the Capital Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) make offers or
sales of any such Security, or solicit offers to buy any such Security, under
circumstances that would require the registration of any of such Securities
under the Securities Act.

         7.3. USE OF PROCEEDS. The Trust shall use the proceeds from the sale of
the Capital Securities to purchase the Debentures from the Company.

         7.4. INVESTMENT COMPANY. The Offerors shall not engage, or permit any
Subsidiary to engage, in any activity which would cause it or any Subsidiary to
be required to register as an "investment company" under the provisions of the
Investment Company Act.

         7.5. REIMBURSEMENT OF EXPENSES. If the sale of the Capital Securities
provided for herein is not consummated (i) because any condition set forth in
Section 3 hereof is not satisfied, or (ii) because of any refusal, inability or
failure on the part of the Company or the Trust to perform any agreement herein
or comply with any provision hereof other than by reason of a breach by the
Placement Agents, the Company shall reimburse the Placement Agents upon demand
for all of their pro rata share of out-of-pocket expenses (including reasonable
fees and disbursements of counsel) in an amount not to exceed $50,000.00 that
shall have been incurred by them in connection with the proposed purchase and
sale of the Capital Securities. Notwithstanding the foregoing, the Company shall
have no obligation to

                                       11
<PAGE>

reimburse the Placement Agents for their out-of-pocket expenses if the sale of
the Capital Securities fails to occur because the Placement Agents fail to
fulfill a condition set forth in Section 4.

         7.6. SOLICITATION AND ADVERTISING. In connection with any offer or sale
of any of the Securities, the Offerors shall not, nor shall either of them
permit any of their Affiliates or any person acting on their behalf, other than
the Placement Agents, to (i) engage in any "directed selling efforts" within the
meaning of Regulation S, or (ii) engage in any form of general solicitation or
general advertising (as defined in Regulation D).

         7.7. COMPLIANCE WITH RULE 144A(D)(4) UNDER THE SECURITIES ACT. So long
as any of the Securities are outstanding and are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Offerors will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Offerors are not exempt from such reporting requirements
pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser in connection with any proposed
transfer, any information required to be provided by Rule 144A(d)(4) under the
Securities Act, if applicable. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities. The information provided by the
Offerors pursuant to this Section 7.7 will not, at the date thereof, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.

         7.8. OPTION TO PURCHASE. The Offerors acknowledge that the Placement
Agents have an irrevocable option to purchase or arrange for the purchase of
certain of the Capital Securities from First Tennessee Bank National
Association, in whole or in part, at any time and from time to time following
the Closing Date pursuant to this Agreement and the applicable Subscription
Agreement (the "Call Option"), exercisable by delivering the notice attached as
Exhibit B to the Subscription Agreement to be entered into by First Tennessee
Bank National Association (the "Option Exercise Notice"). In order to facilitate
the Placement Agents' exercise of the Call Option, the Company shall execute in
blank five additional Capital Securities certificates, to be delivered at
Closing, such certificates to be completed with the name of the transferee(s) to
which the Capital Securities purchased by First Tennessee Bank National
Association, in whole or in part, will be transferred upon an exercise of a Call
Option and authenticated by the Institutional Trustee at the time of each such
transfer.

         7.9. QUARTERLY REPORTS. Within 50 days of the end of each calendar year
quarter and within 100 days of the end of each calendar year during which the
Debentures are issued and outstanding, the Offerors shall submit to The Bank of
New York a completed quarterly report in the form attached hereto as Exhibit D,
with a copy provided to First Tennessee Bank National Association during the
period when it holds any of the Capital Securities. If the Placement Agents
exercise their option under Section 7.8, the Offerors shall submit to the
trustee designated in the Option Exercise Notice such periodic reports as are
required by this Section 7.9. The Offerors acknowledge and agree that The Bank
of New York and such designated trustee and its successors and assigns are third
party beneficiaries of this Section 7.9.

SECTION 8. COVENANTS OF THE PLACEMENT AGENTS. The Placement Agents covenant and
agree with the Offerors that, during the period from the date of this Agreement
to the Closing Date, the Placement Agents shall use their best efforts and take
all action necessary or appropriate to cause their representations and
warranties contained in Section 6 to be true as of Closing Date, after giving
effect to the transactions contemplated by this Agreement, as if made on and as
of the Closing Date. The

                                       12
<PAGE>

Placement Agents further covenant and agree not to engage in hedging
transactions with respect to the Capital Securities unless such transactions are
conducted in compliance with the Securities Act.

SECTION 9. INDEMNIFICATION.

         9.1. INDEMNIFICATION OBLIGATION. The Offerors shall jointly and
severally indemnify and hold harmless the Placement Agents and the Purchasers
and each of their respective agents, employees, officers and directors and each
person that controls either of the Placement Agents or the Purchasers within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and agents, employees, officers and directors or any such controlling person of
either of the Placement Agents or the Purchasers (each such person or entity, an
"Indemnified Party") from and against any and all losses, claims, damages,
judgments, liabilities or expenses, joint or several, to which such Indemnified
Party may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Offerors), insofar as such losses, claims, damages,
judgments, liabilities or expenses (or actions in respect thereof) arise out of,
or are based upon, or relate to, in whole or in part, (a) any untrue statement
or alleged untrue statement of a material fact contained in any information
(whether written or oral) or documents executed in favor of, furnished or made
available to the Placement Agents or the Purchasers by the Offerors, or (b) any
omission or alleged omission to state in any information (whether written or
oral) or documents executed in favor of, furnished or made available to the
Placement Agents or the Purchasers by the Offerors a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Indemnified Party for any legal and other expenses as
such expenses are reasonably incurred by such Indemnified Party in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, judgments, liability, expense or action described in this Section
9.1. In addition to their other obligations under this Section 9, the Offerors
hereby agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of, or based
upon, or related to the matters described above in this Section 9.1, they shall
reimburse each Indemnified Party on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Indemnified Party
shall promptly return such amounts to the Offerors together with interest,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by First
Tennessee Bank National Association (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Indemnified Party within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request.

         9.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
an Indemnified Party under this Section 9 of notice of the commencement of any
action, such Indemnified Party shall, if a claim in respect thereof is to be
made against the Offerors under this Section 9, notify the Offerors in writing
of the commencement thereof; but, subject to Section 9.4, the omission to so
notify the Offerors shall not relieve them from any liability pursuant to
Section 9.1 which the Offerors may have to any Indemnified Party unless and to
the extent that the Offerors did not otherwise learn of such action and such
failure by the Indemnified Party results in the forfeiture by the Offerors of
substantial rights and defenses. In case any such action is brought against any
Indemnified Party and such Indemnified Party seeks or intends to seek indemnity
from the Offerors, the Offerors shall be entitled to participate in, and, to the
extent that they may wish, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party; provided, however, if the defendants in
any such action include both the Indemnified Party and the Offerors and the
Indemnified Party shall have reasonably concluded that there

                                       13
<PAGE>

may be a conflict between the positions of the Offerors and the Indemnified
Party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other Indemnified Parties which are different
from or additional to those available to the Offerors, the Indemnified Party
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
Indemnified Party. Upon receipt of notice from the Offerors to such Indemnified
Party of their election to so assume the defense of such action and approval by
the Indemnified Party of counsel, the Offerors shall not be liable to such
Indemnified Party under this Section 9 for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof unless (i) the Indemnified Party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
in the preceding sentence (it being understood, however, that the Offerors shall
not be liable for the expenses of more than one separate counsel representing
the Indemnified Parties who are parties to such action), or (ii) the Offerors
shall not have employed counsel reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel of such Indemnified Party shall be at the expense of the Offerors.

         9.3. CONTRIBUTION. If the indemnification provided for in this Section
9 is required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an Indemnified Party under Section 9.1
in respect of any losses, claims, damages, liabilities or expenses referred to
herein or therein, then the Offerors shall contribute to the amount paid or
payable by such Indemnified Party as a result of any losses, claims, damages,
judgments, liabilities or expenses referred to herein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the other hand, from the offering of
such Capital Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Offerors, on the one hand, and the Placement Agents,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein or other breaches
which resulted in such losses, claims, damages, judgments, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Offerors, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion, in the
case of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors to the Purchasers (net of the compensation paid
to the Placement Agents hereunder, but before deducting expenses), and in the
case of the Placement Agents, as the compensation received by them, bears to the
total of such amounts paid to the Offerors and received by the Placement Agents
as compensation. The relative fault of the Offerors and the Placement Agents
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or the omission or
alleged omission of a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Offerors
or the Placement Agents and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The provisions set forth in Section 9.2 with respect to notice of commencement
of any action shall apply if a claim for contribution is made under this Section
9.3; provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 9.2 for purposes of
indemnification. The Offerors and the Placement Agents agree that it would not
be just and equitable if contribution pursuant to this Section 9.3 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this Section
9.3. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages, judgments, liabilities or expenses referred to in this
Section 9.3 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. In no
event shall the liability of the Placement Agents hereunder be greater in amount
than the dollar amount of the compensation (net of payment of all expenses)
received by the Placement Agents upon the sale of the

                                       14
<PAGE>

Capital Securities giving rise to such obligation. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.

         9.4. ADDITIONAL REMEDIES. The indemnity and contribution agreements
contained in this Section 9 are in addition to any liability that the Offerors
may otherwise have to any Indemnified Party.

         9.5. ADDITIONAL INDEMNIFICATION. The Company shall indemnify and hold
harmless the Trust against all loss, liability, claim, damage and expense
whatsoever, as due from the Trust under Sections 9.1 through 9.4 hereof.

SECTION 10. RIGHTS AND RESPONSIBILITIES OF PLACEMENT AGENTS.

         10.1. RELIANCE. In performing their duties under this Agreement, the
Placement Agents shall be entitled to rely upon any notice, signature or writing
which they shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. The Placement Agents may rely upon any
opinions or certificates or other documents delivered by the Offerors or their
counsel or designees to either the Placement Agents or the Purchasers.

         10.2. RIGHTS OF PLACEMENT AGENTS. In connection with the performance of
their duties under this Agreement, the Placement Agents shall not be liable for
any error of judgment or any action taken or omitted to be taken unless the
Placement Agents were grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agents to expend or risk their own funds
or otherwise incur any financial liability on behalf of the Purchasers in
connection with the performance of any of their duties hereunder. The Placement
Agents shall be under no obligation to exercise any of the rights or powers
vested in them by this Agreement.

SECTION 11. MISCELLANEOUS.

         11.1. DISCLOSURE SCHEDULE. The term "Disclosure Schedule," as used
herein, means the schedule, if any, attached to this Agreement that sets forth
items the disclosure of which is necessary or appropriate as an exception to one
or more representations or warranties contained in Section 5 hereof; provided,
that any item set forth in the Disclosure Schedule as an exception to a
representation or warranty shall be deemed an admission by the Offerors that
such item represents an exception, fact, event or circumstance that is
reasonably likely to result in a Material Adverse Effect. The Disclosure
Schedule shall be arranged in paragraphs corresponding to the section numbers
contained in Section 5. Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein
unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. Without
limiting the generality of the immediately preceding sentence, the mere listing
(or inclusion of a copy) of a document or other item in the Disclosure Schedule
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein unless the representation or warranty has to do with the
existence of the document or other item itself. Information provided by the
Company in response to any due diligence questionnaire shall not be deemed part
of the Disclosure Schedule and shall not be deemed to be an exception to one or
more representations or warranties contained in Section 5 hereof unless such
information is specifically included on the Disclosure Schedule in accordance
with the provisions of this Section 11.1.

         11.2. LEGAL EXPENSES. At Closing, the Placement Agents shall provide a
credit for the Offerors' transaction-related legal expenses in the amount of
$10,000.00.

                                       15
<PAGE>

         11.3. NOTICES. Prior to the Closing, and thereafter with respect to
matters pertaining to this Agreement only, all notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier or overnight air courier guaranteeing next
day delivery:

         if to the Placement Agents, to:

                                 FTN Financial Capital Markets
                                 845 Crossover Lane, Suite 150
                                 Memphis, Tennessee  38117
                                 Telecopier: 901-435-4706
                                 Telephone:  800-456-5460
                                 Attention:  James D. Wingett

                                         and

                                 Keefe, Bruyette & Woods, Inc.
                                 787 7th Avenue
                                 4th Floor
                                 New York, New York  10019
                                 Telecopier: 212-403-2000
                                 Telephone:  212-403-1004
                                 Attention:  Mitchell Kleinman, General Counsel

         with a copy to:

                                 Lewis, Rice & Fingersh, L.C.
                                 500 North Broadway, Suite 2000
                                 St. Louis, Missouri  63102
                                 Telecopier: 314-241-6056
                                 Telephone:  314-444-7600
                                 Attention:  Thomas C. Erb, Esq.

                                         and

                                 Sidley Austin Brown & Wood LLP
                                 787 7th Avenue
                                 New York, New York  10019
                                 Telecopier: 212-839-5599
                                 Telephone:  212-839-5300
                                 Attention:  Renwick Martin, Esq.

         if to the Offerors, to:

                                 Citizens Banking Corporation
                                 328 South Saginaw Street
                                 Flint, Michigan  48502
                                 Telecopier: 810-342-7076
                                 Telephone:  810-766-7854
                                 Attention:  Stephen C. Schlott

                                       16
<PAGE>

         with a copy to:

                                 Dykema Gossett PLLC
                                 400 Renaissance Center
                                 Detroit, Michigan  48243
                                 Telecopier: 313-568-6832
                                 Telephone:  313-568-5434
                                 Attention:  Mark A. Metz

         All such notices and communications shall be deemed to have been duly
given (i) at the time delivered by hand, if personally delivered, (ii) five
business days after being deposited in the mail, postage prepaid, if mailed,
(iii) when answered back, if telexed, (iv) the next business day after being
telecopied, or (v) the next business day after timely delivery to a courier, if
sent by overnight air courier guaranteeing next day delivery. From and after the
Closing, the foregoing notice provisions shall be superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company, and their respective counsel, may change their respective
notice addresses from time to time by written notice to all of the foregoing
persons.

         11.4. PARTIES IN INTEREST, SUCCESSORS AND ASSIGNS. Except as expressly
set forth herein, this Agreement is made solely for the benefit of the Placement
Agents, the Purchasers and the Offerors and any person controlling the Placement
Agents, the Purchasers or the Offerors and their respective successors and
assigns; and no other person shall acquire or have any right under or by virtue
of this Agreement. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties.

         11.5. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

         11.6. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         11.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS
OF LAWS) OF THE STATE OF NEW YORK.

         11.8. ENTIRE AGREEMENT. This Agreement, together with the Operative
Documents and the other documents delivered in connection with the transactions
contemplated by this Agreement, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, together with the Operative Documents and the other
documents delivered in connection with the transaction contemplated by this
Agreement, supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

         11.9. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Placement Agents' and the Purchasers' rights and
privileges shall be enforceable to the fullest extent permitted by law.

                                       17
<PAGE>

         11.10. SURVIVAL. The Placement Agents and the Offerors, respectively,
agree that the representations, warranties and agreements made by each of them
in this Agreement and in any certificate or other instrument delivered pursuant
hereto shall remain in full force and effect and shall survive the delivery of,
and payment for, the Capital Securities.

                     Signatures appear on the following page

                                       18
<PAGE>

         If this Agreement is satisfactory to you, please so indicate by signing
the acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.

                                         Very truly yours,

CITIZENS BANKING CORPORATION                 CITIZENS MICHIGAN STATUTORY TRUST I

By:  /s/ William R. Hartman                  By: /s/ William R. Hartman
     ----------------------------------         --------------------------------
Name:    William R. Hartman                  Name: William R. Hartman
      ---------------------------------            -----------------------------
Title:  Chairman, President and CEO          Title:  Administrator

By: /s/ Charles D. Christy                   By:/s/ Charles D. Christy
     ----------------------------------         --------------------------------
Name: Charles D. Christy                     Name:  Charles D. Christy
      ---------------------------------            -----------------------------
Title: Executive Vice President,             Title:  Administrator
       CFO and Treasurer
                                             By: /s/ Thomas W. Gallagher
                                                --------------------------------
                                             Name: Thomas W. Gallagher
                                                  ------------------------------
                                             Title:  Administrator

CONFIRMED AND ACCEPTED,
as of the date first set forth above

FTN FINANCIAL CAPITAL MARKETS,
A DIVISION OF FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
AS A PLACEMENT AGENT

By:/s/ James D. Wingett
   --------------------------------------------------------------------
Name:James D. Wingett
     ------------------------------------------------------------------
Title: Senior Vice President
      -----------------------------------------------------------------

KEEFE, BRUYETTE & WOODS, INC.,
A NEW YORK CORPORATION, AS A PLACEMENT AGENT

By: /s/ Peter J. Wirth
    -------------------------------------------------------------------
Name: Peter J. Wirth
      -----------------------------------------------------------------
Title: Managing Director
      -----------------------------------------------------------------

                                       19
<PAGE>

                                   EXHIBIT A-1

                         FORM OF SUBSCRIPTION AGREEMENT

                       CITIZENS MICHIGAN STATUTORY TRUST I
                          CITIZENS BANKING CORPORATION

                             SUBSCRIPTION AGREEMENT

                                  JUNE 26, 2003

          THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Citizens
Michigan Statutory Trust I (the "Trust"), a statutory trust created under the
Connecticut Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut
General Statutes, Section 500, et seq.), Citizens Banking Corporation, a
Michigan corporation, with its principal offices located at 328 South Saginaw
Street, Flint, Michigan 48502 (the "Company" and, collectively with the Trust,
the "Offerors"), and First Tennessee Bank National Association (the
"Purchaser"), and, for purposes of the rights and obligations in Sections 1.2
and 1.4 and Article III only, FTN Financial Capital Markets and Keefe, Bruyette
& Woods, Inc. (the "Placement Agents").

                                    RECITALS:

         A. The Trust desires to issue 25,000 of its Floating Rate Capital
Securities (the "Capital Securities"), liquidation amount $1,000.00 per Capital
Security, representing an undivided beneficial interest in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration") by and among the Company, U.S. Bank
National Association ("U.S. Bank"), the administrators named therein, and the
holders (as defined therein), which Capital Securities are to be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the terms of a Guarantee Agreement between
the Company and U.S. Bank, as trustee (the "Guarantee"); and

         B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale by the Trust to the Company of its
common securities, and will be used by the Trust to purchase an equivalent
amount of Floating Rate Junior Subordinated Deferrable Interest Debentures of
the Company (the "Debentures") to be issued by the Company pursuant to an
indenture to be executed by the Company and U.S. Bank, as trustee (the
"Indenture"); and

         C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                     PURCHASE AND SALE OF CAPITAL SECURITIES

         1.1. Upon the execution of this Agreement, the Purchaser hereby agrees
to purchase from the Trust 3,030 Capital Securities at a price equal to
$1,000.00 per Capital Security (the "Purchase Price") and the Trust agrees to
sell such Capital Securities to the Purchaser for said Purchase Price. The
rights and preferences of the Capital Securities are set forth in the
Declaration. The Purchase Price is payable in immediately available funds on
June 26, 2003, or such other business day as may be designated by the Purchaser,
but in no event later than June 30, 2003 (the "Closing Date"). The Offerors
shall provide the Purchaser wire transfer instructions no later than 1 day
following the date hereof.

                                     A-1-1
<PAGE>

         1.2. As a condition to its purchase of the Capital Securities,
Purchaser shall enter into the Custodian Agreement, the form of which is
attached hereto as Exhibit A (the "Custodian Agreement") and, in accordance
therewith, the certificate for the Capital Securities shall be delivered by the
Trust on the Closing Date to the custodian in accordance with the Custodian
Agreement. On or before the Purchase Date (as defined below), Purchaser shall
take all actions necessary or advisable to cause the Capital Securities to be
delivered in accordance with the terms of the Custodian Agreement. Purchaser
shall not transfer the Capital Securities to any person or entity except in
accordance with the terms of the Custodian Agreement.

         1.3. The Placement Agreement, dated June 16, 2003 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein (the
"Placement Agents") includes certain representations and warranties, covenants
and conditions to closing and certain other matters governing the Offering. The
Placement Agreement is hereby incorporated by reference into this Agreement and
the Purchaser shall be entitled to each of the benefits of the Placement Agents
and the Purchaser under the Placement Agreement and shall be entitled to enforce
the obligations of the Offerors under such Placement Agreement as fully as if
the Purchaser were a party to such Placement Agreement.

         1.4. Purchaser hereby grants to the Placement Agents an option (the
"Call Option") to purchase, or arrange for the purchase of, the Capital
Securities in whole or in part from time to time, in an amount not to exceed
their stated aggregate liquidation amount of $3,030,000.00. The Call Option may
be exercised by the Placement Agents at any time and from time to time until the
first to occur of: (i) the transfer of all the Capital Securities from the
Purchaser, or (ii) the redemption, exchange or maturity of all the Capital
Securities held by the Purchaser. A Call Option shall be exercised by delivering
to Purchaser an exercise notice substantially in the form of Exhibit B attached
hereto, such notice to specify the date on which the Capital Securities shall be
purchased (the "Purchase Date") and the amount of the Capital Securities to be
purchased.

                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         2.1. The Purchaser understands and acknowledges that none of Capital
Securities, the Debentures nor the Guarantee have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities law, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.

         2.2. The Purchaser represents and warrants that, except as contemplated
under Section 1.4 hereof, it is purchasing the Capital Securities for its own
account, for investment, and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act or
other applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Capital Securities pursuant to an effective
registration statement under the Securities Act or under Rule 144A or any other
exemption from registration available under the Securities Act or any other
applicable securities law.

         2.3. The Purchaser represents and warrants that neither the Offerors
nor the Placement Agents are acting as a fiduciary or financial or investment
adviser for the Purchaser.

                                     A-1-2
<PAGE>

         2.4. The Purchaser represents and warrants that it is not relying (for
purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of the Offerors or of the
Placement Agents.

         2.5. The Purchaser represents and warrants that (a) it has consulted
with its own legal, regulatory, tax, business, investment, financial and
accounting advisers in connection herewith to the extent it has deemed
necessary, (b) it has had a reasonable opportunity to ask questions of and
receive answers from officers and representatives of the Offerors concerning
their respective financial condition and results of operations and the purchase
of the Capital Securities, and any such questions have been answered to its
satisfaction, (c) it has had the opportunity to review all publicly available
records and filings concerning the Offerors and it has carefully reviewed such
records and filings that it considers relevant to making an investment decision,
and (d) it has made its own investment decisions based upon its own judgment,
due diligence and advice from such advisers as it has deemed necessary and not
upon any view expressed by the Offerors or the Placement Agents.

         2.6. The Purchaser represents and warrants that it is a "qualified
institutional buyer" as defined under Rule 144A under the Securities Act. If the
Purchaser is a dealer of the type described in paragraph (a)(1)(ii) of Rule 144A
under the Securities Act, it owns and invests on a discretionary basis not less
than U.S. $25,000,000.00 in securities of issuers that are not affiliated with
it. The Purchaser is not a participant-directed employee plan, such as a 401(k)
plan, or any other type of plan referred to in paragraph (a)(1)(i)(D) or
(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F)
of Rule 144A that holds the assets of such a plan, unless investment decisions
with respect to the plan are made solely by the fiduciary, trustee or sponsor of
such plan.

         2.7. The Purchaser represents and warrants that on each day from the
date on which it acquires the Capital Securities through and including the date
on which it disposes of its interests in the Capital Securities, either (i) it
is not (a) an "employee benefit plan" (as defined in Section 3(3) of the United
States Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
which is subject to the provisions of Part 4 of Subtitle B of Title I of ERISA,
or any entity whose underlying assets include the assets of any such plan (an
"ERISA Plan"), (b) any other "plan" (as defined in Section 4975(e)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code")) which is
subject to the provisions of Section 4975 of the Code or any entity whose
underlying assets include the assets of any such plan (a "Plan"), (c) an entity
whose underlying assets include the assets of any such ERISA Plan or other Plan
by reason of Department of Labor regulation section 2510.3-101 or otherwise, or
(d) a governmental or church plan that is subject to any federal, state or local
law which is substantially similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code (a "Similar Law"); or (ii) the purchase, holding and
disposition of the Capital Securities by it will satisfy the requirements for
exemptive relief under Prohibited Transaction Class Exemption ("PTCE") 84-14,
PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or, in the
case of a plan subject to a Similar Law, will not result in a non-exempt
violation of such Similar Law.

         2.8. The Purchaser represents and warrants that it is acquiring the
Capital Securities as principal for its own account for investment and, except
as contemplated under Section 1.4 hereof, not for sale in connection with any
distribution thereof. It was not formed solely for the purpose of investing in
the Capital Securities, and additional capital or similar contributions were not
specifically solicited from any person owning a beneficial interest in it for
the purpose of enabling it to purchase any Capital Securities. The Purchaser is
not a (i) partnership, (ii) common trust fund or (iii) special trust, pension,
profit sharing or other retirement trust fund or plan in which the partners,
beneficiaries or participants, as applicable, may designate the particular
investments to be made or the allocation of any investment among such partners,
beneficiaries or participants, and it agrees that it shall not hold the Capital
Securities for the benefit of any other person and shall be the sole beneficial
owner thereof for all purposes and that it shall

                                     A-1-3
<PAGE>
not sell participation interests in the Capital Securities or enter into any
other arrangement pursuant to which any other person shall be entitled to a
beneficial interest in the distribution on the Capital Securities. The Capital
Securities purchased directly or indirectly by the Purchaser constitute an
investment of no more than 40% of its assets. The Purchaser understands and
agrees that any purported transfer of the Capital Securities to a purchaser
which would cause the representations and warranties of Section 2.6 and this
Section 2.8 to be inaccurate shall be null and void ab initio and the Offerors
retain the right to resell any Capital Securities sold to non-permitted
transferees.

         2.9. The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for Capital Securities and
perform its obligations pursuant to this Agreement.

         2.10. The Purchaser represents and warrants that (i) the Purchaser is
not in violation or default of any term of its Charter or Bylaws, of any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is a party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to the Purchaser which would prevent the Purchaser from performing
any material obligation set forth in this Agreement; and (ii) the execution,
delivery and performance of and compliance with this Agreement, and the
consummation of the transactions contemplated herein, will not, with or without
the passage of time or giving of notice, result in any such material violation,
or be in conflict with or constitute a default under any such term, or the
suspension, revocation, impairment, forfeiture or non-renewal of any permit,
license, authorization or approval applicable to the Purchaser, its business or
operations or any of its assets or properties which would prevent the Purchaser
from performing any material obligations set forth in this Agreement.

         2.11. The Purchaser represents and warrants that the Purchaser is a
duly organized bank and in good standing under the laws of the jurisdiction
where it is organized, with full power and authority to perform its obligations
under this Agreement.

         2.12. The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required for the performance by the Purchaser of its obligations under this
Agreement or to consummate the transactions contemplated herein.

         2.13. The Purchaser represents and warrants that this Agreement has
been duly authorized, executed and delivered by the Purchaser.

         2.14. The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.

         2.15. The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.

                                     A-1-4
<PAGE>

                                   ARTICLE III

                                  MISCELLANEOUS

         3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:

                  To the Offerors:   Citizens Banking Corporation
                                     328 South Saginaw Street
                                     Flint, Michigan 48502
                                     Attention: Stephen C. Schlott
                                     Fax: 810-342-7076

                  To the Purchaser:  First Tennessee Bank National Association
                                     845 Crossover Lane, Suite 150
                                     Memphis, Tennessee 38117
                                     Attention: David Work
                                     Fax: 901-435-7983

                  Unless otherwise expressly provided herein, notices shall be
deemed to have been given on the date of mailing, except notice of change of
address, which shall be deemed to have been given when received.

         3.2. This Agreement shall not be changed, modified or amended except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.

         3.3. Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall become a binding obligation of the Purchaser
with respect to the purchase of Capital Securities as herein provided.

         3.4. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

         3.5. The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.

         3.6. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.

         3.7. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Offerors' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.

                                     A-1-5
<PAGE>

                     Signatures appear on the following page

                                     A-1-6
<PAGE>

         IN WITNESS WHEREOF, this Agreement is agreed to and accepted as of the
day and year first written above.

FIRST TENNESSEE BANK NATIONAL ASSOCIATION

By:
   -----------------------------------
Print Name:
            --------------------------
Title:
       -------------------------------

                                      CITIZENS BANKING CORPORATION

                                      By:
                                         --------------------------------------

                                      Name:
                                           ------------------------------------

                                      Title:
                                            -----------------------------------

                                      CITIZENS MICHIGAN STATUTORY TRUST I

                                      By:
                                         --------------------------------------

                                      Name:
                                           ------------------------------------

                                      Title:  Administrator

                                      FTN FINANCIAL CAPITAL MARKETS
                                      (for purposes of the rights and
                                      obligations in Sections 1.2 and 1.4 and
                                      Article III only)

                                      By:
                                         --------------------------------------

                                      Name:
                                           ------------------------------------

                                      Title:
                                            -----------------------------------

                                      KEEFE, BRUYETTE & WOODS, INC.
                                      (for purposes of the rights and
                                      obligations in Sections 1.2 and 1.4 and
                                      Article III only)

                                      By:
                                         --------------------------------------

                                      Name:
                                           ------------------------------------

                                      Title:
                                            -----------------------------------

                                     A-1-7
<PAGE>

                       EXHIBIT A TO SUBSCRIPTION AGREEMENT

                           FORM OF CUSTODIAN AGREEMENT

         This Custodian Agreement (this "Agreement") is made and entered into as
of June 26, 2003 by and among FTN Financial Capital Markets, a division of First
Tennessee Bank National Association, and Keefe, Bruyette & Woods, Inc. (the
"Placement Agents"), Citizens Banking Corporation, a Michigan corporation (the
"Company"), First Tennessee Bank National Association, a national banking
association (the "Purchaser" and, together with the Company and the Placement
Agents, the "Interested Parties") and U. S. Bank National Association, a
national banking association (the "Custodian").

                                    RECITALS

         A. The Purchaser intends to purchase from Citizens Michigan Statutory
Trust I, a Connecticut statutory trust (the "Trust"), $3,030,000.00 aggregate
liquidation amount of the Trust's Floating Rate Capital Securities (the "Capital
Securities").

         B. The Purchaser intends to grant an option (the "Call Option") to the
Placement Agents to purchase the Capital Securities at any time and from time to
time immediately following the date hereof (the "Option Exercise Period") in an
amount not to exceed the Capital Securities' aggregate liquidation amount.

         C. The Interested Parties intend to provide for the custody of the
Capital Securities and certain other securities on the terms set forth herein.

         D. The Custodian is willing to hold and administer such securities and
to distribute the securities held by it in accordance with the agreement of the
Interested Parties and/or arbitral or judicial orders and decrees as set forth
in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
herein contained and other good and valuable consideration (the receipt,
adequacy and sufficiency of which are hereby acknowledged by the parties by
their execution hereof), the parties agree as follows:

1.  Delivery of Securities.  On or before the date hereof:

         (a) The Company shall deliver to the Custodian a signed, authenticated
         Capital Securities certificate, with the Purchaser designated as owner
         thereof (the "Original Securities"). The Custodian shall have no
         responsibility for the genuineness, validity, market value, title or
         sufficiency for any intended purpose of the Original Securities.

         (b) The Company shall deliver to the Custodian five signed,
         unauthenticated and undated Capital Securities certificates with no
         holder designated (the "Replacement Securities"). The Custodian shall
         have no responsibility for the genuineness, validity, market value,
         title or sufficiency for any intended purpose of the Replacement
         Securities.

2.  Timing of Release from Custody.

         (a) Upon receipt of a copy of an option exercise notice to be delivered
         in connection with the Placement Agents' exercise of a Call Option, on
         the effective date set forth in such option exercise notice, the
         Custodian shall:

                                    A-1-A-1
<PAGE>

                  (i) Deliver the Original Securities certificate to U.S. Bank
                  National Association, as Institutional Trustee (the "Trustee")
                  under the Amended and Restated Declaration of Trust, dated as
                  of the date hereof, among the Trustee, the Company and the
                  administrators named therein (the "Declaration") for the
                  purpose of canceling the Original Securities certificate in
                  accordance with the terms of the Declaration; and

                  (ii) Deliver the Replacement Securities certificate(s) in the
                  amount designated in the option exercise notice to the Trustee
                  for the purpose of completing and authenticating the
                  Replacement Securities certificate(s) in accordance with the
                  terms of the Declaration.

         Upon expiration of the Call Option, this Agreement shall terminate and
         the Custodian and the Interested Parties shall be released from all
         obligations hereunder.

3.   Concerning the Custodian.

         (a) Each Interested Party acknowledges and agrees that the Custodian
         (i) shall not be responsible for any of the agreements referred to or
         described herein (including without limitation the Declaration), or for
         determining or compelling compliance therewith, and shall not otherwise
         be bound thereby, (ii) shall be obligated only for the performance of
         such duties as are expressly and specifically set forth in this
         Agreement on its part to be performed, each of which are ministerial
         (and shall not be construed to be fiduciary) in nature, and no implied
         duties or obligations of any kind shall be read into this Agreement
         against or on the part of the Custodian, (iii) shall not be obligated
         to take any legal or other action hereunder which might in its judgment
         involve or cause it to incur any expense or liability unless it shall
         have been furnished with acceptable indemnification, (iv) may rely on
         and shall be protected in acting or refraining from acting upon any
         written notice, instruction, instrument, statement, certificate,
         request or other document furnished to it hereunder and believed by it
         to be genuine and to have been signed or presented by the proper
         person, and shall have no responsibility for determining the accuracy
         thereof, and (v) may consult counsel satisfactory to it, including
         in-house counsel, and the opinion or advice of such counsel in any
         instance shall be full and complete authorization and protection in
         respect of any action taken, suffered or omitted by it hereunder in
         good faith and in accordance with the opinion or advice of such
         counsel.

         (b) The Custodian shall not be liable to anyone for any action taken or
         omitted to be taken by it hereunder except in the case of the
         Custodian's negligence or willful misconduct in breach of the terms of
         this Agreement. In no event shall the Custodian be liable for indirect,
         punitive, special or consequential damage or loss (including but not
         limited to lost profits) whatsoever, even if the Custodian has been
         informed of the likelihood of such loss or damage and regardless of the
         form of action.

         (c) The Custodian shall have no more or less responsibility or
         liability on account of any action or omission of any book-entry
         depository, securities intermediary or other subcustodian employed by
         the Custodian than any such book-entry depository, securities
         intermediary or other subcustodian has to the Custodian, except to the
         extent that such action or omission of any book-entry depository,
         securities intermediary or other subcustodian was caused by the
         Custodian's own negligence, bad faith or willful misconduct in breach
         of this Agreement.

         (d) The recitals contained herein shall be taken as the statements of
         the Company, and the Custodian assumes no responsibility for the
         correctness of the same. The Custodian makes no representations as to
         the validity or sufficiency of this Agreement or the Capital
         Securities. The Custodian shall not be accountable for the use or
         application by the Company of any Capital Securities or the proceeds of
         any Capital Securities.

                                    A-1-A-2
<PAGE>

4. Compensation, Expense Reimbursement and Indemnification.

         (a) The Custodian hereby waives its customary fees for services
         rendered hereunder.

         (b) Each of the Interested Parties agree, jointly and severally, to
         reimburse the Custodian on demand for all costs and expenses incurred
         in connection with the administration of this Agreement or the
         performance or observance of its duties hereunder which are in excess
         of its customary compensation for normal services hereunder, including
         without limitation, payment of any legal fees and expenses incurred by
         the Custodian in connection with resolution of any claim by any party
         hereunder.

         (c) Each of the Interested Parties covenant and agree, jointly and
         severally, to indemnify the Custodian (and its directors, officers and
         employees) and hold it (and such directors, officers and employees)
         harmless from and against any loss, liability, damage, cost and expense
         of any nature incurred by the Custodian arising out of or in connection
         with this Agreement or with the administration of its duties hereunder,
         including but not limited to attorney's fees and other costs and
         expenses of defending or preparing to defend against any claim of
         liability unless and except to the extent such loss, liability, damage,
         cost and expense shall be caused by the Custodian's negligence, bad
         faith, or willful misconduct. The provisions in this paragraph 4 shall
         survive the expiration of this Agreement.

5. Voting Rights. The Custodian shall be under no obligation to preserve,
protect or exercise rights in the Original Securities, and shall be responsible
only for reasonable measures to maintain the physical safekeeping thereof, and
otherwise to perform and observe such duties on its part as are expressly set
forth in this Agreement. The Custodian shall not be responsible for forwarding
to any Party, notifying any Party with respect to, or taking any action with
respect to, any notice, solicitation or other document or information, written
or otherwise, received from an issuer or other person with respect to the
Original Securities, including but not limited to, proxy material, tenders,
options, the pendency of calls and maturities and expiration of rights.

6. Resignation. The Custodian may at any time resign as Custodian hereunder by
giving thirty (30) days' prior written notice of resignation to each of the
Interested Parties. Prior to the effective date of the resignation as specified
in such notice, the Interested Parties will issue to the Custodian a written
instruction authorizing redelivery of the Original Securities and the
Replacement Securities to a bank or trust company that they select as successor
to the Custodian hereunder. If, however, the Interested Parties shall fail to
name such a successor custodian within twenty days after the notice of
resignation from the Custodian, the Placement Agents shall be entitled to name
such successor custodian. If no successor custodian is named by the Interested
Parties or the Placement Agents, the Custodian may apply to a court of competent
jurisdiction for appointment of a successor custodian.

7. Dispute Resolution. It is understood and agreed that should any dispute arise
with respect to the delivery, ownership, right of possession, and/or disposition
of the Original Securities or the Replacement Securities, or should any claim be
made upon the Custodian, the Original Securities or the Replacement Securities
by a third party, the Custodian upon receipt of notice of such dispute or claim
is authorized and shall be entitled (at its sole option and election) to retain
in its possession without liability to anyone, all or any of said Original
Securities and Replacement Securities until such dispute shall have been settled
either by the mutual written agreement of the parties involved or by a final
order, decree or judgment of a court in the United States of America, the time
for perfection of an appeal of such order, decree or judgment having expired.
The Custodian may, but shall be under no duty whatsoever to, institute or defend
any legal proceedings which relate to the Original Securities and Replacement
Securities.

                                    A-1-A-3
<PAGE>

8. Consent to Jurisdiction and Service. Each of the Interested Parties hereby
absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the Commonwealth of Massachusetts and of any Federal court located in said
Commonwealth in connection with any actions or proceedings brought against any
of the Interested Parties (or each of them) by the Custodian arising out of or
relating to this Agreement. In any such action or proceeding, the Interested
Parties each hereby absolutely and irrevocably (i) waives any objection to
jurisdiction or venue, (ii) waives personal service of any summons, complaint,
declaration or other process, and (iii) agrees that the service thereof may be
made by certified or registered first-class mail directed to such party, as the
case may be, at their respective addresses in accordance with paragraph 10
hereof.

9. Force Majeure. The Custodian shall not be responsible for delays or failures
in performance resulting from acts beyond its control. Such acts shall include
but not be limited to acts of God, strikes, lockouts, riots, acts of war,
epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.

10.  Notices.

         (a) Any notice permitted or required hereunder shall be in writing, and
         shall be sent by personal delivery, overnight delivery by a recognized
         courier or delivery service, mailed by registered or certified mail,
         return receipt requested, postage prepaid, or by confirmed facsimile
         accompanied by mailing of the original on the same day by first class
         mail, postage prepaid, in each case the parties at their address set
         forth below (or to such other address as any such party may hereafter
         designate by written notice to the other parties).

         If to the Placement Agents:

        FTN Financial Capital Markets
        845 Crossover Lane, Suite 150
        Memphis, Tennessee  38117
        Attention:  James D. Wingett

        Keefe, Bruyette & Woods, Inc.
        787 7th Avenue
        4th Floor
        New York, New York  10019
        Attention:  Mitchell Kleinman, General Counsel

         If to the Company:

        Citizens Banking Corporation
        328 South Saginaw Street
        Flint, Michigan  48502
        Attention:  Stephen C. Schlott

         If to the Purchaser:

        First Tennessee Bank National Association
        845 Crossover Lane, Suite 150
        Memphis, Tennessee  38117
        Attention:  David Work

                                    A-1-A-4
<PAGE>

         If to the Custodian:

         U.S. Bank National Association
         1 Federal Street - 3rd Floor
         Boston, Massachusetts 02110
         Attention:        Corporate Trust Services Division
                           Attention: Paul D. Allen
                           Fax:  617-603-6665

11.  Miscellaneous.

         (a) Binding Effect. This Agreement shall be binding upon the respective
         parties hereto and their heirs, executors, successors and assigns.

         (b) Modifications. This Agreement may not be altered or modified
         without the express written consent of the parties hereto. No course of
         conduct shall constitute a waiver of any of the terms and conditions of
         this Agreement, unless such waiver is specified in writing, and then
         only to the extent so specified. A waiver of any of the terms and
         conditions of this Agreement on one occasion shall not constitute a
         waiver of the other terms of this Agreement, or of such terms and
         conditions on any other occasion.

         (c) Governing Law. This Agreement shall be governed by and construed in
         accordance with the internal laws of the Commonwealth of Massachusetts.

         (d) Reproduction of Documents. This Agreement and all documents
         relating thereto, including, without limitation, (a) consents, waivers
         and modifications which may hereafter be executed, and (b) certificates
         and other information previously or hereafter furnished, may be
         reproduced by any photographic, photostatic, microfilm, optical disk,
         micro-card, miniature photographic or other similar process. The
         parties agree that any such reproduction shall be admissible in
         evidence as the original itself in any judicial or administrative
         proceeding, whether or not the original is in existence and whether or
         not such reproduction was made by a party in the regular course of
         business, and that any enlargement, facsimile or further reproduction
         of such reproduction shall likewise be admissible in evidence.

         (e) Counterparts. This Agreement may be executed in several
         counterparts, each of which shall be deemed an original, but all of
         which together shall constitute one and the same instrument.

                     signatures appear on the following page

                                    A-1-A-5
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first above written.

                                FTN FINANCIAL CAPITAL MARKETS

                                By:
                                   --------------------------------------------
                                Print Name:
                                           ------------------------------------
                                Title:
                                      -----------------------------------------

                                KEEFE, BRUYETTE & WOODS, INC.

                                By:
                                   --------------------------------------------
                                Print Name:
                                           ------------------------------------
                                Title:
                                      -----------------------------------------

                                U. S. BANK NATIONAL ASSOCIATION

                                By:
                                   --------------------------------------------
                                Print Name:
                                           ------------------------------------
                                Title:
                                      -----------------------------------------

                                CITIZENS BANKING CORPORATION

                                By:
                                   --------------------------------------------
                                Print Name:
                                           ------------------------------------
                                Title:
                                      -----------------------------------------

                                FIRST TENNESSEE BANK NATIONAL
                                ASSOCIATION

                                By:
                                   --------------------------------------------
                                Print Name:
                                           ------------------------------------
                                Title:
                                      -----------------------------------------

                                    A-1-A-6
<PAGE>

                       EXHIBIT B TO SUBSCRIPTION AGREEMENT

                         FORM OF OPTION EXERCISE NOTICE

                                     [DATE]

First Tennessee Bank National Association
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117
Attention:  David Work

Ladies and Gentlemen:

         The undersigned hereby exercises its option to purchase, or arrange for
the purchase of [_________] of the Capital Securities of Citizens Michigan
Statutory Trust I in accordance with the terms of the Subscription Agreement
dated June 26, 2003 among you, the undersigned, Citizens Banking Corporation and
Citizens Michigan Statutory Trust I (the "Offerors"), such purchase to be
effective on [DATE OF PURCHASE]. In accordance with Section 7.9 of the Placement
Agreement dated June 16, 2003 between the Offerors and the undersigned (the
"Placement Agreement"), periodic reports shall be delivered to [_______________]
on each March 26, June 16, September 26 and December 26 during the term of the
Capital Securities, commencing [___________], in the form attached thereto.
Capitalized terms used in this notice and not otherwise defined shall have the
meanings ascribed to such terms in the Placement Agreement.

         By copy of this notice, the undersigned hereby instructs the Custodian
to deliver the Original Securities certificate to U.S. Bank National
Association, as Institutional Trustee (the "Trustee") under the Amended and
Restated Trust Agreement dated June 26, 2003 among the Trustee, Citizens Banking
Corporation and the administrative trustees named therein (the "Trust
Agreement") for cancellation in accordance with the terms of the Trust Agreement
and to deliver the Replacement Securities certificate to the Trustee for
authentication in accordance with the terms of the Trust Agreement.

         By copy of this notice, the Institutional Trustee is hereby instructed
to make the Replacement Securities certificate payable to [______________] in
the liquidation amount of [_________] and to authenticate and deliver the
Replacement Securities certificate to [_____________] on or before the [DATE OF
PURCHASE].

                                          FTN FINANCIAL CAPITAL MARKETS

                                          By:
                                             ----------------------------------
                                          Name:
                                               --------------------------------
                                          Title:
                                                -------------------------------

                                          KEEFE, BRUYETTE & WOODS, INC.

                                          By:
                                             ----------------------------------
                                          Name:
                                               --------------------------------
                                          Title:
                                                -------------------------------
cc:  Citizens Banking Corporation

                                    A-1-B-1
<PAGE>

                                   EXHIBIT A-2

                         FORM OF SUBSCRIPTION AGREEMENT

                       CITIZENS MICHIGAN STATUTORY TRUST I
                          CITIZENS BANKING CORPORATION

                             SUBSCRIPTION AGREEMENT

                                  JUNE 26, 2003

THIS SUBSCRIPTION AGREEMENT (this "Agreement") made among Citizens Michigan
Statutory Trust I (the "Trust"), a statutory trust created under the Connecticut
Statutory Trust Act (Chapter 615 of Title 34 of the Connecticut General
Statutes, Section 500, et seq.), Citizens Banking Corporation, a Michigan
corporation, with its principal offices located at 328 South Saginaw Street,
Flint, Michigan 48502 (the "Company" and, collectively with the Trust, the
"Offerors"), and Preferred Term Securities X, Ltd. (the "Purchaser").

                                    RECITALS:

         A. The Trust desires to issue 25,000 of its Floating Rate Capital
Securities (the "Capital Securities"), liquidation amount $1,000.00 per Capital
Security, representing an undivided beneficial interest in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration") by and among the Company, U. S. Bank
National Association ("U. S. Bank"), the administrators named therein, and the
holders (as defined therein), which Capital Securities are to be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the terms of a Guarantee Agreement between
the Company and U. S. Bank, as trustee (the "Guarantee"); and

         B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale by the Trust to the Company of its
common securities, and will be used by the Trust to purchase an equivalent
amount of Floating Rate Junior Subordinated Deferrable Interest Debentures of
the Company (the "Debentures") to be issued by the Company pursuant to an
indenture to be executed by the Company and U. S. Bank, as trustee (the
"Indenture"); and

         C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:

                                    ARTICLE I

                     PURCHASE AND SALE OF CAPITAL SECURITIES

         1.1. Upon the execution of this Agreement, the Purchaser hereby agrees
to purchase from the Trust 21,970 Capital Securities at a price equal to
$1,000.00 per Capital Security (the "Purchase Price") and the Trust agrees to
sell such Capital Securities to the Purchaser for said Purchase Price. The
rights and preferences of the Capital Securities are set forth in the
Declaration. The Purchase Price is payable in immediately available funds on
June 26, 2003, or such other business day as may be designated by the Purchaser,
but in no event later than June 30, 2003 (the "Closing Date"). The Offerors
shall provide the Purchaser wire transfer instructions no later than 3 days
prior to the Closing Date.

         1.2. The certificate for the Capital Securities shall be delivered by
the Trust on the Closing Date to the Purchaser or its designee.

                                     A-2-1
<PAGE>

         1.3. The Placement Agreement, dated June 16, 2003 (the "Placement
Agreement"), among the Offerors and the Placement Agents identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the Offering. The Placement
Agreement is hereby incorporated by reference into this Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agents and
the Purchaser under the Placement Agreement and shall be entitled to enforce the
obligations of the Offerors under such Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement.

                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         2.1. The Purchaser understands and acknowledges that neither the
Capital Securities, the Debentures nor the Guarantee have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or any other
applicable securities law, are being offered for sale by the Trust in
transactions not requiring registration under the Securities Act, and may not be
offered, sold, pledged or otherwise transferred by the Purchaser except in
compliance with the registration requirements of the Securities Act or any other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.

         2.2. The Purchaser represents, warrants and certifies that (i) it is
not a "U.S. person" as such term is defined in Rule 902 under the Securities
Act, (ii) it is not acquiring the Capital Securities for the account or benefit
of any such U.S. person, (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S of the
Securities Act, and (iv) it will not engage in hedging transactions with regard
to the Capital Securities unless such transactions are conducted in compliance
with the Securities Act and the Purchaser agrees to the legends and transfer
restrictions set forth on the Capital Securities certificate.

         2.3. The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment, and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A or any other exemption from registration available under the
Securities Act or any other applicable Securities law.

         2.4. The Purchaser represents and warrants that it has full power and
authority to execute and deliver this Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for Capital Securities and
perform its obligations pursuant to this Agreement.

         2.5. The Purchaser, a Cayman Islands Company whose business includes
issuance of certain notes and acquiring the Capital Securities and other similar
securities, represents and warrants that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of purchasing the Capital Securities, has had the opportunity to ask
questions of, and receive answers and request additional information from, the
Offerors and is aware that it may be required to bear the economic risk of an
investment in the Capital Securities.

         2.6. The Purchaser represents and warrants that no filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required

                                     A-2-2
<PAGE>

for the performance by the Purchaser of its obligations under this Agreement or
to consummate the transactions contemplated herein.

         2.7. The Purchaser represents and warrants that this Agreement has been
duly authorized, executed and delivered by the Purchaser.

         2.8. The Purchaser represents and warrants that (i) the Purchaser is
not in violation or default of any term of its Memorandum of Association or
Articles of Association, of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is a party or by which it is bound
or of any judgment, decree, order, writ or, to its knowledge, any statute, rule
or regulation applicable to the Purchaser which would prevent the Purchaser from
performing any material obligation set forth in this Agreement; and (ii) the
execution, delivery and performance of and compliance with this Agreement, and
the consummation of the transactions contemplated herein, will not, with or
without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or the suspension, revocation, impairment, forfeiture or non-renewal of any
permit, license, authorization or approval applicable to the Purchaser, its
business or operations or any of its assets or properties which would prevent
the Purchaser from performing any material obligations set forth in this
Agreement.

         2.9. The Purchaser represents and warrants that the Purchaser is an
exempted company with limited liability duly incorporated, validly existing and
in good standing under the laws of the jurisdiction where it is organized, with
full power and authority to perform its obligations under this Agreement.

         2.10. The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.

         2.11. The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.

                                  ARTICLE III

                                  MISCELLANEOUS

         3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:

                  To the Offerors:          Citizens Banking Corporation
                                            328 South Saginaw Street
                                            Flint, Michigan 48502
                                            Attention:  Stephen C. Schlott
                                            Fax:  810-342-7076

                  To the Purchaser:         Preferred Term Securities X, Ltd.
                                            c/o Maples Finance Limited
                                            P.O. Box 1093 GT
                                            Queensgate House
                                            South Church Street

                                     A-2-3
<PAGE>

                                            George Town, Grand Cayman
                                            Cayman Islands
                                            Attention:  The Directors
                                            Fax:  345-945-7100

         Unless otherwise expressly provided herein, notices shall be deemed to
have been given on the date of mailing, except notice of change of address,
which shall be deemed to have been given when received.

         3.2. This Agreement shall not be changed, modified or amended except by
a writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.

         3.3. Upon the execution and delivery of this Agreement by the
Purchaser, this Agreement shall become a binding obligation of the Purchaser
with respect to the purchase of Capital Securities as herein provided.

         3.4. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND
PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

         3.5. The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.

         3.6. This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.

         3.7. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Offerors' and the Purchaser's rights and
privileges shall be enforceable to the fullest extent permitted by law.

                     Signatures appear on the following page

                                     A-2-4
<PAGE>

         IN WITNESS WHEREOF, I have set my hand the day and year first written
above.

PREFERRED TERM SECURITIES X, LTD.

By:
   --------------------------------------
Print Name:
            -----------------------------
Title:
       ----------------------------------

         IN WITNESS WHEREOF, this Subscription Agreement is agreed to and
accepted as of the day and year first written above.

                                          CITIZENS BANKING CORPORATION

                                          By:
                                             ----------------------------------

                                          Name:
                                               --------------------------------

                                          Title:
                                                -------------------------------

                                          CITIZENS MICHIGAN STATUTORY TRUST I

                                          By:
                                             ----------------------------------

                                          Name:
                                               --------------------------------

                                          Title:  Administrator

                                     A-2-5
<PAGE>

                                   EXHIBIT B-1

                         FORM OF COMPANY COUNSEL OPINION

                                  June 26, 2003

First Tennessee Bank National Association       FTN Financial Capital Markets
845 Crossover Lane, Suite 150                   845 Crossover Lane, Suite 150
Memphis, Tennessee  38117                       Memphis, Tennessee  38117

Preferred Term Securities X, Ltd.               Keefe, Bruyette & Woods, Inc.
c/o Maples Finance Limited                      787 7th Avenue, 4th Floor
P. O. Box 1093 GT                               New York, New York  10019
Queensgate House
South Church Street
George Town, Grand Cayman
Cayman Islands

Ladies and Gentlemen:

          We have acted as counsel to Citizens Banking Corporation (the
"Company"), a Michigan corporation in connection with a certain Placement
Agreement, dated June 16, 2003, (the "Placement Agreement"), between the Company
and Citizens Michigan Statutory Trust I (the "Trust"), on one hand, and FTN
Financial Capital Markets and Keefe, Bruyette & Woods, Inc. (the "Placement
Agents"), on the other hand. Pursuant to the Placement Agreement, and subject to
the terms and conditions stated therein, the Trust will issue and sell to First
Tennessee Bank National Association and Preferred Term Securities X, Ltd. (the
"Purchasers"), $21,970,000.00 aggregate principal amount of Floating Rate
Capital Securities (liquidation amount $1,000.00 per capital security) (the
"Capital Securities").

          Capitalized terms used herein and not otherwise defined shall have the
same meanings ascribed to them in the Placement Agreement.

          The law covered by the opinions expressed herein is limited to the law
of the United States of America and of the State of Michigan.

          We have made such investigations of law as, in our judgment, were
necessary to render the following opinions. We have also reviewed (a) the
Company's Articles of Incorporation, as amended, and its By-Laws, as amended;
and (b) such corporate documents, records, information and certificates of the
Company and its Subsidiaries, certificates of public officials or government
authorities and other documents as we have deemed necessary or appropriate as a
basis for the opinions hereinafter expressed. As to certain facts material to
our opinions, we have relied, with your permission, upon statements,
certificates or representations, including those delivered or made in connection
with the above-referenced transaction, of officers and other representatives of
the Company and its Subsidiaries and the Trust.

          As used herein, the phrase "to our knowledge" or "to the best of our
knowledge" or other similar phrase means the actual knowledge of the attorneys
who have had active involvement in the transactions described above or who have
prepared or signed this opinion letter, or who otherwise have devoted
substantial attention to legal matters for the Company.

          Based upon and subject to the foregoing and the further qualifications
set forth below, we are of the opinion as of the date hereof that:

                                     B-1-1
<PAGE>

         1. The Company is validly existing and in good standing under the laws
of the State of Michigan and is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended. Each of the Significant
Subsidiaries is validly existing and in good standing under the laws of its
jurisdiction of organization. Each of the Company and the Significant
Subsidiaries has full corporate power and authority to own or lease its
properties and to conduct its business as such business is currently conducted
in all material respects. To the best of our knowledge, all outstanding shares
of capital stock of the Significant Subsidiaries have been duly authorized and
validly issued, and are fully paid and nonassessable except to the extent such
shares may be deemed assessable under 12 U.S.C. Section 1831o or 12 U.S.C.
Section 55, and are owned of record and beneficially, directly or indirectly, by
the Company.

         2. The issuance, sale and delivery of the Debentures in accordance with
the terms and conditions of the Placement Agreement and the Operative Documents
have been duly authorized by all necessary actions of the Company. The issuance,
sale and delivery of the Debentures by the Company and the issuance, sale and
delivery of the Trust Securities by the Trust do not give rise to any preemptive
or other rights to subscribe for or to purchase any shares of capital stock or
equity securities of the Company or the Significant Subsidiaries pursuant to the
corporate Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or the Significant Subsidiaries, or, to the best of our
knowledge, any agreement or other instrument to which either Company or the
Subsidiaries is a party or by which the Company or the Significant Subsidiaries
may be bound.

         3. The Company has all requisite corporate power to enter into and
perform its obligations under the Placement Agreement and the Subscription
Agreements, and the Placement Agreement and the Subscription Agreements have
been duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their terms, except as the enforcement thereof may be limited
by general principles of equity and by bankruptcy or other laws affecting
creditors' rights generally, and except as the indemnification and contribution
provisions thereof may be limited under applicable laws and certain remedies may
not be available in the case of a non-material breach.

         4. Each of the Indenture, the Trust Agreement and the Guarantee
Agreement has been duly authorized, executed and delivered by the Company, and
is a valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.

         5. The Debentures have been duly authorized, executed and delivered by
the Company, are entitled to the benefits of the Indenture and are legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.

         6. To the best of our knowledge, neither the Company, the Trust, nor
any other Subsidiaries of the Company is in breach or violation of, or default
under, with or without notice or lapse of time or both, its Articles of
Incorporation or Charter, By-Laws or other governing documents (including
without limitation, the Trust Agreement). The execution, delivery and
performance of the Placement Agreement and the Operative Documents and the
consummation of the transactions contemplated by the Placement Agreement and the
Operative Documents do not and will not (i) result in the creation or imposition
of any material lien, claim, charge, encumbrance or restriction upon any
property or assets of the Company or its Subsidiaries, or (ii) conflict with,
constitute a material breach or violation of, or constitute a material default
under, with or without notice or lapse of time or both, any of the terms,
provisions or conditions of

                                     B-1-2
<PAGE>

(A) the Articles of Incorporation or Charter, By-Laws or other governing
documents of the Company or its Subsidiaries, or (B) to the best of our
knowledge, any material contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease, franchise, license or any other agreement or
instrument to which the Company or its Subsidiaries is a party or by which any
of them or any of their respective properties may be bound or (C) any order,
decree, judgment, franchise, license, permit, rule or regulation of any court,
arbitrator, government, or governmental agency or instrumentality, domestic or
foreign, known to us having jurisdiction over the Company or its Subsidiaries or
any of their respective properties which, in the case of each of (i) or (ii)
above, is material to the Company and its Subsidiaries on a consolidated basis.

         7. Except for filings, registrations or qualifications that may be
required by applicable securities laws, no authorization, approval, consent or
order of, or filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is required under
the laws of the State of Michigan in connection with the transactions
contemplated by the Placement Agreement and the Operative Documents in
connection with the offer and sale of the Capital Securities as contemplated by
the Placement Agreement and the Operative Documents.

         8. To the best of our knowledge (i) no action, suit or proceeding at
law or in equity is pending or threatened to which the Offerors or their
Subsidiaries are or may be a party, and (ii) no action, suit or proceeding is
pending or threatened against or affecting the Offerors or their Subsidiaries or
any of their properties, before or by any court or governmental official,
commission, board or other administrative agency, authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could reasonably
be expected to have a material adverse effect on the consummation of the
transactions contemplated by the Placement Agreement and the Operative Documents
or the issuance and sale of the Capital Securities as contemplated therein or
the condition (financial or otherwise), earnings, affairs, business, or results
of operations of the Offerors and their Subsidiaries on a consolidated basis.

         9. Assuming the truth and accuracy of the representations and
warranties of the Placement Agents in the Placement Agreement and the Purchasers
in the Subscription Agreements, it is not necessary in connection with the
offering, sale and delivery of the Capital Securities, the Debentures and the
Guarantee Agreement (or the Guarantee) to register the same under the Securities
Act of 1933, as amended, under the circumstances contemplated in the Placement
Agreement and the Subscription Agreements.

         10. Neither the Company nor the Trust is or after giving effect to the
offering and sale of the Capital Securities and the consummation of the
transactions described in the Placement Agreement will be, an "investment
company" or an entity "controlled" by an "investment company," in each case
within the meaning of the Investment Company Act of 1940, as amended, without
regard to Section 3(c) of such Act.

          The opinion expressed in the first two sentences of numbered paragraph
1 of this Opinion Letter is based solely upon certain certificates and
confirmations issued by the applicable governmental officer or authority with
respect to each of the Company and the Significant Subsidiaries.

          With respect to the foregoing opinions, since no member of this firm
is actively engaged in the practice of law in the States of Connecticut or New
York, we do not express any opinions as to the laws of such states and have (i)
relied, with your approval, upon the opinion of Shipman & Goodwin LLP with
respect to matters of Connecticut law and (ii) assumed, with your approval and
without rendering any opinion to such effect, that the laws of the State of New
York, in all respects material to this opinion, are substantively identical to
the laws of the State of Michigan, without regard to conflict of law provisions.

                                     B-1-3
<PAGE>

          This opinion is rendered to you solely pursuant to Section 3.1(a) of
the Placement Agreement. As such, it may be relied upon by you only and may not
be used or relied upon by any other person for any purpose whatsoever without
our prior written consent.

                                                     Very truly yours,

                                     B-1-4
<PAGE>

                                   EXHIBIT B-2

                       FORM OF CONNECTICUT COUNSEL OPINION

TO THE PARTIES LISTED
ON SCHEDULE I HERETO

Ladies and Gentlemen:

         We have acted as special counsel in the State of Connecticut (the
"State") for Citizens Michigan Statutory Trust I (the "Trust"), a Connecticut
statutory trust formed pursuant to the Amended and Restated Declaration of Trust
(the "Trust Agreement") dated as of the date hereof, among Citizens Banking
Corporation, a Michigan corporation (the "Sponsor"), U. S. Bank National
Association, a national banking association ("U.S. Bank"), in its capacity as
Institutional Trustee (the "Institutional Trustee"), and William R. Hartman,
Charles D. Christy and Thomas W. Gallagher, each, an individual, (each, an
"Administrator") in connection with the issuance by the Trust to the Holders (as
defined in the Trust Agreement) of its capital securities (the "Capital
Securities") pursuant to the Placement Agreement dated as of June 16, 2003 (the
"Placement Agreement"), the issuance by the Trust to the Sponsor of its Common
Securities, pursuant to the Trust Agreement and the acquisition by the Trust
from the Sponsor of Debentures, issued pursuant to the Indenture dated as of the
date hereof (the "Indenture").

         The Institutional Trustee has requested that we deliver this opinion to
you in accordance with Section 3.1(b) of the Placement Agreement. Capitalized
terms not otherwise defined herein shall have the meanings specified in, or
defined by reference in or set forth in the Operative Documents (as defined
below).

         Our representation of the Trust has been as special counsel for the
limited purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied, with your permission, entirely upon (i)
the representations and warranties of the parties set forth in the Operative
Documents and (ii) certificates delivered to us by the management of U.S. Bank,
and have assumed, with your permission, without independent inquiry, the
accuracy of those representations, warranties and certificates.

         We have examined the following documents to which the Trust is a party,
each of which is dated the date hereof, unless otherwise noted:

                           (i)      the Trust Agreement;

                           (ii)     the Placement Agreement;

                           (iii)    the Subscription Agreements;

                           (iv)     the Certificate of Common Securities;

                           (v)      the Certificate of Capital Securities;

                           (vi)     the Guarantee Agreement;

                           (vii)    the  Certificate  of Trust  filed with the
                                    Secretary  of State of the State of
                                    Connecticut dated June 13, 2003; and

                                     B-2-1
<PAGE>

                           (viii)   a Certificate of Legal Existence for the
                                    Trust obtained from the Secretary of State
                                    of the State of Connecticut dated June 16,
                                    2003 (the "Certificate of Legal Existence").

         The documents referenced in subparagraphs (i) through (vii) above are
hereinafter referred to collectively as the "Operative Documents."

         We have also examined originals, or copies, certified or otherwise
identified to our satisfaction, of such other corporate and public records and
agreements, instruments, certificates and other documents as we have deemed
necessary or appropriate for the purposes of rendering this opinion. For
purposes of our opinion rendered in paragraph 1 below, with respect to the legal
existence of the Trust, our opinion relies entirely upon and is limited by the
Certificate of Legal Existence, which is attached hereto as Exhibit A.

         We have assumed, with your permission, the genuineness of all
signatures (other than those on behalf of U.S. Bank, the Guarantee Trustee,
Indenture Trustee, Institutional Trustee and the Trust), the conformity of the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document.

         When an opinion set forth below is given to the best of our knowledge,
or to our knowledge, or with reference to matters of which we are aware or which
are known to us, or with another similar qualification, the relevant knowledge
or awareness is limited to the actual knowledge or awareness of the individual
lawyers in the firm who have participated directly and substantively in the
specific transactions to which this opinion relates and without any special or
additional investigation undertaken for the purposes of this opinion except as
indicated herein.

         For the purposes of this opinion we have made such examination of law
as we have deemed necessary. The opinions expressed below are limited solely to
the internal substantive laws of the State (as applied by courts located in the
State without regard to choice of law) and we express no opinion as to the laws
of any other jurisdiction. To the extent to which this opinion deals with
matters governed by or relating to the laws of any other state or jurisdiction,
we have assumed, with your permission, that the Operative Documents are governed
by the internal substantive laws of the State.

         We express no opinion as to (i) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to the obligations of any
applicable guarantor, joint obligor, surety, accommodation party, or other
secondary obligor or any provisions of the Trust Agreement with respect to
indemnification or contribution and (ii) the accuracy or completeness of any
exhibits or schedules to the Operative Documents. No opinion is given herein as
to the choice of law or internal substantive rules of law that any court or
other tribunal may apply to the transactions contemplated by the Operative
Documents. No opinion is expressed herein as to the application or effect of
federal securities laws or as to the securities or so-called "Blue Sky" laws of
Connecticut or of any other state or other jurisdiction.

         Our opinion, with your permission, is further subject to the following
exceptions, qualifications and assumptions:

                  (a) We have assumed without any independent investigation that
         (i) each party to the Operative Documents, other than U.S. Bank, the
         Guarantee Trustee, Indenture Trustee, Institutional Trustee and the
         Trust, as applicable, at all times relevant thereto, is validly
         existing and in good standing under the laws of the jurisdiction in
         which it is organized, and is qualified to do business and in good
         standing under the laws of each jurisdiction where such qualification
         is required generally or necessary in order for such party to enforce
         its rights under such Operative

                                     B-2-2

<PAGE>

         Documents, (ii) each party to the Operative Documents, at all times
         relevant thereto, had and has the full power, authority and legal right
         under its certificate of incorporation, partnership agreement, by-laws,
         and other governing organizational documents, and the applicable
         corporate, partnership, or other enterprise legislation and other
         applicable laws, as the case may be (other than U.S. Bank, the
         Guarantee Trustee, Indenture Trustee, Institutional Trustee or the
         Trust) to execute, deliver and to perform its obligations under, the
         Operative Documents, and (iii) each party to the Operative Documents
         other than U.S. Bank, the Guarantee Trustee, Indenture Trustee,
         Institutional Trustee or the Trust has duly executed and delivered each
         of such agreements and instruments to which it is a party and that the
         execution and delivery of such agreements and instruments and the
         transactions contemplated thereby have been duly authorized by proper
         corporate or other organizational proceedings as to each such party.

                  (b) We have assumed without any independent investigation (i)
         that the Institutional Trustee, the Sponsor and the Administrators have
         received the agreed to and stated consideration for the incurrence of
         the obligations applicable to it under the Trust Agreement and each of
         the other Operative Documents, (ii) that each of the Operative
         Documents (other than the Trust Agreement) is a valid, binding and
         enforceable obligation of each party thereto other than the Trust, U.S.
         Bank and the Institutional Trustee, as applicable; and, for the
         purposes of this opinion letter, we herein also assume that each of the
         Operative Documents (other than the Trust Agreement) constitutes a
         valid, binding and enforceable obligation of U.S. Bank, the Guarantee
         Trustee and the Indenture Trustee, as applicable under Connecticut and
         federal law (as to which such matters we are delivering to you a
         separate opinion letter on this date, which is subject to the
         assumptions, qualifications and limitations set forth therein).

                  (c) The enforcement of any obligations of U.S. Bank, the
         Sponsor and the Administrators, as applicable, under the Trust
         Agreement and the obligations of the Trust under the other Operative
         Documents may be limited by the receivership, conservatorship and
         supervisory powers of depository institution regulatory agencies
         generally, as well as by bankruptcy, insolvency, reorganization,
         moratorium, marshaling or other laws and rules of law affecting the
         enforcement generally of creditors' rights and remedies (including such
         as may deny giving effect to waivers of debtors' or guarantors'
         rights); and we express no opinion as to the status under any
         fraudulent conveyance laws or fraudulent transfer laws of any of the
         obligations of U.S. Bank, the Sponsor, the Administrators or the Trust
         under any of the Operative Documents.

                  (d) We express no opinion as to the enforceability of any
         particular provision of the Trust Agreement or the other Operative
         Documents relating to remedies after default.

                  (e) We express no opinion as the  availability  of any
         specific or  equitable  relief of any kind.

                  (f) The enforcement of any rights may in all cases be subject
         to an implied duty of good faith and fair dealing and to general
         principles of equity (regardless of whether such enforceability is
         considered in a proceeding at law or in equity).

                  (g) We express no opinion as to the enforceability of any
         particular provision of any of the Operative Documents relating to (i)
         waivers of rights to object to jurisdiction or venue, or consents to
         jurisdiction or venue, (ii) waivers of rights to (or methods of)
         service of process, or rights to trial by jury, or other rights or
         benefits bestowed by operation of law, (iii) waivers of any applicable
         defenses, setoffs, recoupments, or counterclaims, (iv) waivers or
         variations of provisions which are not capable of waiver or variation
         under Sections 1-102, 9-602, 9-603 or other provisions of the Uniform
         Commercial Code ("UCC") of the State, (v) the grant of powers

                                     B-2-3

<PAGE>

         of attorney to any person or entity, or (vi) exculpation or exoneration
         clauses, indemnity clauses, and clauses relating to releases or waivers
         of unmatured claims or rights.

                  (h) We have made no examination of, and no opinion is given
         herein as to the Trustee's or the Trust's title to or other ownership
         rights in, or the existence of any liens, charges or encumbrances on,
         or adverse claims against, any asset or property held by the
         Institutional Trustee or the Trust. We express no opinion as to the
         creation, validity, attachment, perfection or priority of any mortgage,
         security interest or lien in any asset or property held by the
         Institutional Trustee or the Trust.

                  (i) We express no opinion as to the effect of events
         occurring, circumstances arising, or changes of law becoming effective
         or occurring, after the date hereof on the matters addressed in this
         opinion letter, and we assume no responsibility to inform you of
         additional or changed facts, or changes in law, of which we may become
         aware.

                  (j) We express no opinion as to any requirement that any party
         to the Operative Documents (or any other persons or entities
         purportedly entitled to the benefits thereof) qualify or register to do
         business in any jurisdiction in order to be able to enforce its rights
         thereunder or obtain the benefits thereof.

         Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that:

         1. The Trust has been duly formed and is validly existing as a
statutory trust under the Connecticut Statutory Trust Act, Chapter 615 of Title
34 of the Connecticut General Statutes, Section 500, et seq. (the "Act").

         2. The Trust Agreement constitutes a valid and binding obligation of
U.S. Bank and the Institutional Trustee enforceable against U.S. Bank and the
Institutional Trustee in accordance with the terms thereof.

         3. The Trust Agreement constitutes a valid and binding obligation of
the Sponsor and the Administrators, enforceable against the Sponsor and the
Administrators in accordance with its terms.

         4. The Trust has the requisite trust power and authority to (a) execute
and deliver, and to perform its obligations under, the Operative Documents, and
(b) perform its obligations under such Operative Documents.

         5. Each of the Operative Documents to which the Trust is a party
constitutes a valid and binding obligation of the Trust, enforceable against the
Trust in accordance with the terms thereof.

         6. The Capital Securities have been duly authorized by the Trust under
the Trust Agreement, and the Capital Securities, when duly executed and
delivered to the Holders in accordance with the Trust Agreement, the Placement
Agreement and the Subscription Agreements, will be validly issued, fully paid
and nonassessable and will evidence undivided beneficial interests in the assets
of the Trust and will be entitled to the benefits of the Trust Agreement.

         7. The Common Securities have been duly authorized by the Trust
Agreement, and the Common Securities, when duly executed and delivered to the
Company in accordance with the Trust Agreement, the Placement Agreement and the
Subscription Agreements and delivered and paid for in accordance therewith, will
be validly issued, fully paid and nonassessable (subject to Section 9.1(b) of
the Trust Agreement which provides that the Holders of Common Securities are
liable for debts and

                                     B-2-4
<PAGE>

obligations of the Trust to the extent such debts and obligations are not
satisfied out of the Trust's assets) and will evidence undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Trust Agreement.

         8. Neither the execution, delivery or performance by the Trust of the
Operative Documents, the consummation by the Trust of the transactions
contemplated thereby, nor compliance by the Trust with any of the terms and
provisions thereof, (a) violates the Trust Agreement, or, to the best of our
knowledge, contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the creation of any
lien (other than as permitted under the Operative Documents) upon property of
the Trust under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement, license or other
agreement or instrument, in each case known to us, to which it is a party or by
which it is bound or (b) violates any applicable State law governing the Trust,
or, to the best of our knowledge, any judgment or order of any court or other
tribunal, in each case known to us, applicable to or binding on it.

         9. No consent, approval, order or authorization of, giving of notice
to, or registration with, or taking of any other action in respect of, any State
governmental authority regulating the Trust is required for the execution,
delivery, validity or performance of, or the carrying out by, the Trust of any
of the transactions contemplated by the Operative Documents, other than any such
consent, approval, order, authorization, registration, notice or action as has
been duly obtained, given or taken.

         10. The Holders, as the beneficial holders of the Capital Securities,
will be entitled to the same limitation of personal liability extended to
shareholders of domestic corporations organized under the laws of the State.

         11. Under the Trust Agreement, the issuance of the Capital Securities
is not subject to preemptive rights.

         12. Assuming that the Trust will not be taxable as a corporation for
federal income tax purposes, but rather will be classified for such purposes as
a grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, the Trust will not be subject to any tax, fee or other
government charge under the laws of the State of Connecticut or any political
subdivision thereof.

         This opinion is rendered solely for the benefit of those institutions
listed on Schedule I hereto and their successors and assigns in connection with
the transactions contemplated by the Operative Documents and may not be used or
relied upon by any other person or for any other purpose.

                                      Very truly yours,

                                      SHIPMAN & GOODWIN LLP

                                     B-2-5

<PAGE>

                                   SCHEDULE I

         U. S. Bank National Association

         FTN Financial Capital Markets

         Keefe, Bruyette & Woods, Inc.

         First Tennessee Bank National Association

         Preferred Term Securities X, Ltd.

         Preferred Term Securities X, Inc.

         Lewis, Rice & Fingersh, L.C.

         Citizens Banking Corporation

         Dykema Gossett PLLC

                                     B-2-6
<PAGE>

                            EXHIBIT A TO EXHIBIT B-2

                         CERTIFICATE OF LEGAL EXISTENCE

                                 (See Tab No. 6)

                                     B-2-7
<PAGE>

                                   EXHIBIT B-3

                           FORM OF TAX COUNSEL OPINION

Citizens Banking Corporation
328 South Saginaw Street
Flint, Michigan  48502

Citizens Michigan Statutory Trust I
c/o Citizens Banking Corporation
328 South Saginaw Street
Flint, Michigan  48502

FTN Financial Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117

Keefe, Bruyette & Woods, Inc.
787 7th Avenue
4th Floor
New York, New York 10019

Ladies and Gentlemen:

         We have acted as special tax counsel to Citizens Banking Corporation
and to Citizens Michigan Statutory Trust I in connection with the proposed
issuance of (i) Floating Rate Capital Securities, liquidation amount $1,000.00
per Capital Security (the "Capital Securities") of Citizens Michigan Statutory
Trust I, a statutory business trust created under the laws of Connecticut (the
"Trust"), pursuant to the terms of the Amended and Restated Declaration of Trust
dated as of the date hereof by Citizens Banking Corporation, a Michigan
corporation (the "Company"), U.S. Bank National Association, as institutional
trustee, and William R. Hartman, Charles D. Christy and Thomas W. Gallagher, as
Administrators (the "Trust Agreement"), (ii) Junior Subordinated Deferrable
Interest Debentures (the "Corresponding Debentures") of the Company issued
pursuant to the terms of an Indenture dated as of the date hereof from the
Company to U.S. Bank National Association, as trustee (the "Indenture"), which
Debentures are to be sold by the Company to the Trust, and (iii) the Guarantee
Agreement of the Company with respect to the Capital Securities dated as of the
date hereof (the "Guarantee") between the Company and U.S. Bank National
Association, as guarantee trustee. The portion of the Capital Securities and the
Corresponding Debentures to be purchased by Preferred Term Securities X, Ltd.
are to be issued as contemplated by the Offering Circular (the "Offering
Circular") dated June 16, 2003 prepared by Preferred Term Securities X, Ltd., an
entity formed under the Companies Law of the Cayman Islands, and Preferred Term
Securities X, Inc., a Delaware corporation.

         We have examined originals or copies, certified or otherwise identified
to our satisfaction, of documents, corporate records and other instruments as we
have deemed necessary or appropriate for purposes of this opinion including (i)
the Offering Circular, (ii) the Indenture, (iii) the form of the Corresponding
Debentures attached as an exhibit to the Indenture, (iv) the Trust Agreement,
(v) the Guarantee, and (vi) the form of Capital Securities Certificate attached
as an exhibit to the Trust Agreement (collectively the "Documents").
Furthermore, we have relied upon certain representations made by the Company and
upon the opinion of Shipman & Goodwin LLP as to certain matters of Connecticut
law. In such examination, we have assumed the authenticity of all documents
submitted to

                                     B-3-1

<PAGE>

us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, the authenticity of the originals of
such latter documents, the genuineness of all signatures and the correctness of
all representations made therein. We have further assumed that there are no
agreements or understandings contemplated therein other than those contained in
the Documents.

         Based upon the foregoing, and assuming (i) that the final Documents
will be substantially identical to the forms examined, (ii) full compliance with
all the terms of the final Documents, and (iii) the accuracy of representations
made by the Company and delivered to us, we are of the opinion that:

         (a)      The  Corresponding Debentures will be classified as
                  indebtedness of the Company for U.S. federal income tax
                  purposes.

         (b)      The Trust will be characterized as a grantor trust and not as
                  an association taxable as a corporation for U.S. federal
                  income tax purposes.

         The opinions expressed above are based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations by the Internal Revenue Service of the
Code and such Treasury regulations, and existing court decisions, any of which
could be changed at any time. Any such changes may or may not be retroactively
applied, and may result in federal income tax consequences that differ from
those reflected in the opinions set forth above. We note that there is no
authority directly on point dealing with securities such as the Capital
Securities or with transactions of the type described herein, and that the
authorities on which this opinion is based are subject to various
interpretations. Further, you should be aware that opinions of counsel have no
official status and are not binding on the Internal Revenue Service or the
courts. Accordingly, we can provide no assurance that the interpretation of the
federal income tax laws set forth in our opinions will prevail if challenged by
the IRS in an administrative or judicial proceeding.

         We have also assumed that each transaction contemplated herein will be
carried out strictly in accordance with the Documents. Any variance in the facts
may result in Federal income tax consequences that differ from those reflected
in the opinions set forth above.

         Additionally, we undertake no obligation to update this opinion in the
event there is either a change in the legal authorities, in the facts (including
the taking of any action by any party to any of the transactions described in
the Documents relating to such transactions) or in the Documents on which this
opinion is based, or an inaccuracy in any of the representations upon which we
have relied in rendering this opinion.

         We express no opinion with respect to any matter not specifically
addressed by the foregoing opinions, including state or local tax consequences,
or any federal, state, or local issue not specifically referred to and discussed
above including, without limitation, the effect on the matters covered by this
opinion of the laws of any other jurisdiction.

         This letter is delivered for the benefit of the specified addressees
and may not be relied upon by any other person. No portion of this letter may be
quoted or otherwise referred to in any document or delivered to any other person
or entity without the express written consent of Lewis, Rice & Fingersh, L.C.
This opinion letter is rendered as of the date set forth above.

                                         Very truly yours,

                                         LEWIS, RICE & FINGERSH, L.C.

                                      B-3-2
<PAGE>

Lewis, Rice & Fingersh, L.C.
500 N. Broadway, Suite 2000
St. Louis, Missouri  63102
Attention:  Lawrence H. Weltman, Esq.

         RE:      REPRESENTATIONS CONCERNING THE ISSUANCE OF FLOATING RATE
                  JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES (THE
                  "DEBENTURES") TO CITIZENS MICHIGAN STATUTORY TRUST I (THE
                  "TRUST") AND SALE OF TRUST SECURITIES (THE "TRUST SECURITIES")
                  OF THE TRUST

Ladies and Gentlemen:

         In accordance with your request, Citizens Banking Corporation (the
"Company") hereby makes the following representations in connection with the
preparation of your opinion letter as to the United States federal income tax
consequences of the issuance by the Company of the Debentures to the Trust and
the sale of the Trust Securities.

         Company hereby represents that:

         1. The sole assets of the Trust will be the Debentures, any interest
paid on the Debentures to the extent not distributed, proceeds of the
Debentures, or any of the foregoing.

         2. The Company intends to use the net proceeds from the sale of the
Debentures for general corporate purposes.

         3. The Trust was not formed to conduct any trade or business and is not
authorized to conduct any trade or business. The Trust exists for the exclusive
purposes of (i) issuing and selling the Trust Securities, (ii) using the
proceeds from the sale of Trust Securities to acquire the Debentures, and (iii)
engaging only in activities necessary or incidental thereto.

         4. The Trust was formed to facilitate direct investment in the assets
of the Trust, and the existence of multiple classes of ownership is incidental
to that purpose. There is no intent to provide holders of such interests in the
Trust with diverse interests in the assets of the Trust.

         5. The Company intends to create a debtor-creditor relationship between
the Company, as debtor, and the Trust, as a creditor, upon the issuance and sale
of the Debentures to the Trust by the Company. The Company will (i) record and
at all times continue to reflect the Debentures as indebtedness on its separate
books and records for financial accounting purposes, and (ii) treat the
Debentures as indebtedness for all United States tax purposes.

         6. During each year, the Trust's income will consist solely of payments
made by the Company with respect to the Debentures. Such payments will not be
derived from the active conduct of a financial business by the Trust. Both the
Company's obligation to make such payments and the measurement of the amounts
payable by the Company are defined by the terms of the Debentures. Neither the
Company's obligation to make such payments nor the measurement of the amounts
payable by the Company is dependent on income or profits of Company or any
affiliate of the Company.

         7. The Company expects that it will be able to make, and will make,
timely payment of amounts identified by the Debentures as principal and interest
in accordance with the terms of the Debentures with available capital or
accumulated earnings.

                                      B-3-3

<PAGE>

         8. The Company presently has no intention to defer interest payments on
the Debentures, and it considers the likelihood of such a deferral to be remote
because, if it were to exercise its right to defer payments of interest with
respect to the Debentures, it would not be permitted to declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any capital stock of the Company or any
affiliate of the Company (other than payments of dividends or distributions to
the Company) or make any payment of principal of or interest or premium, if any,
on or repay, repurchase, or redeem any debt securities of the Company or any
affiliate of the Company that rank pari passu in all respects with or junior in
interest to the Debentures, in each case subject to limited exceptions stated in
Section 2.11 of the Indenture to be entered into in connection with the issuance
of the Debentures.

         9. Immediately after the issuance of the Debentures, the debt-to-equity
ratio of the Company (as determined for financial accounting purposes, but
excluding deposit liabilities from the Company's debt) will be within standard
depository institution industry norms and, in any event, will be no higher than
four to one (4 : 1).

         10. To the best of our knowledge, the Company is currently in
compliance with all federal, state, and local capital requirements, except to
the extent that failure to comply with any such requirements would not have a
material adverse effect on the Company and its affiliates.

         11. The Company will not issue any class of common stock or preferred
stock senior to the Debentures during their term.

         12. The Internal Revenue Service has not challenged the interest
deduction on any class of the Company's subordinated debt in the last ten (10)
years on the basis that such debt constitutes equity for federal income tax
purposes.

         The above representations are accurate as of the date below and will
continue to be accurate through the issuance of the Trust Securities, unless you
are otherwise notified by us in writing. The undersigned understands that you
will rely on the foregoing in connection with rendering certain legal opinions,
and possesses the authority to make the representations set forth in this letter
on behalf of the Company.

                                            Very truly yours,

                                            CITIZENS BANKING CORPORATION

Date: [__________], 2003                    By:    _____________________________

                                            Title: _____________________________

                                     B-3-4
<PAGE>

                                    EXHIBIT C

                            SIGNIFICANT SUBSIDIARIES

Citizens Bank.

F&M Bancorporation, Inc.

F&M Bank - Wisconsin

                                       C-1

<PAGE>

                                    EXHIBIT D

                            FORM OF QUARTERLY REPORT

The Bank of New York
Collateralized Debt Obligation Group
101 Barclay Street, 8E
New York, New York  10286
Attention:  Franco B. Talavera
CDO Relationship Manager

<TABLE>
<S>                                                            <C>
BANK HOLDING COMPANY
As of [March 31, June 30, September 30 or December 31], 20__

Tier 1 to Risk Weighted Assets                                  _________%

Ratio of Double Leverage                                        _________%

Non-Performing Assets to Loans and OREO                         _________%

Ratio of Reserves to Non-Performing Loans                       _________%

Ratio of Net Charge-Offs to Loans                               _________%

Return on Average Assets (annualized)**                         _________%

Net Interest Margin (annualized)**                              _________%

Efficiency Ratio                                                _________%

Ratio of Loans to Assets                                        _________%

Ratio of Loans to Deposits                                      _________%

Total Assets                                                   $__________

Year to Date Income                                            $__________

</TABLE>

---------------
*A table describing the quarterly report calculation procedures is provided on
page D-2

** To annualize Return on Average Assets and Net Interest Margin do the
following:
1st Quarter-multiply income statement item by 4, then divide by balance sheet
item(s)
2nd Quarter-multiply income statement item by 2,then divide by balance sheet
item(s)
3rd Quarter-divide income statement item by 3, then multiply by 4, then divide
by balance sheet item(s)
4th Quarter-should already be an annual number
NO ADJUSTMENT SHOULD BE MADE TO BALANCE SHEET ITEMS

                                       D-1
<PAGE>

                              Financial Definitions

<TABLE>
<CAPTION>

REPORT ITEM              CORRESPONDING  FRY-9C OR LP LINE  ITEMS WITH LINE
                         ITEM CORRESPONDING SCHEDULES                          DESCRIPTION OF CALCULATION
-----------------------  --------------------------------------------------    ---------------------------------------------------
<S>                      <C>                                                   <C>
"Tier 1 Capital" to      BHCK7206                                              Tier 1 Risk Ratio: Core Capital (Tier  1)/
Risk Weighted Assets     Schedule HC-R                                         Risk-Adjusted Assets

Ratio of Double          (BHCP0365)/(BHCP3210)                                 Total equity investments in subsidiaries divided
Leverage                 Schedule PC  in the LP                                by the total equity capital. This field is
                                                                               calculated at the parent company level.
                                                                               "Subsidiaries" include bank, bank holding company,
                                                                               and nonbank subsidiaries.

Non-Performing Assets    (BHCK5525-BHCK3506+BHCK5526-                          Total Nonperforming Assets (NPLs+Foreclosed Real
to Loans and OREO        BHCK3507+BHCK2744)/(BHCK2122+BHCK2774)                Estate Other Nonaccrual & Repossessed Assets)/
                         Schedules HC-C, HC-M & HC-N                           Total Loans + Foreclosed Real Estate

Ratio of Reserves to     (BHCK3123+BHCK3128)/(BHCK5525-                        Total Loan Loss and Allocated Transfer Risk
Non-Performing Loans     BHCK3506+BHCK5526-BHCK3507)                           Reserves/ Total Nonperforming Loans (Nonaccrual +
                         Schedules HC & HC-N                                   Restructured)

Ratio of Net             (BHCK4635-BHCK4605)/(BHCK3516)                        Net charge offs for the period as a percentage of
Charge-Offs to Loans     Schedules HI-B & HC-K                                 average loans.

Return on Assets         (BHCK4340/BHCK3368)                                   Net Income as a percentage of Assets.
                         Schedules HI & HC-K

Net Interest Margin      (BHCK4519)/(BHCK3515+BHCK3365+BHCK                    (Net Interest Income Fully Taxable Equivalent, if
                         3516+BHCK3401+BHCKB985)                               available / Average Earning Assets)
                         Schedules HI Memorandum and HC-K

Efficiency Ratio         (BHCK4093)/(BHCK4519+BHCK4079)                        (Noninterest Expense)/ (Net Interest Income
                         Schedule HI                                           Fully Taxable Equivalent, if available, plus
                                                                               Noninterest Income)

Ratio of Loans to        (BHCKB528+BHCK5369)/(BHCK2170)                        Total Loans & Leases (Net of Unearned Income &
Assets                   Schedule HC                                           Gross of Reserve)/ Total Assets

Ratio of Loans to        (BHCKB528+BHCK5369)/(BHDM6631+BHD                     Total Loans & Leases (Net of Unearned Income &
Deposits                 M6636+BHFN6631+BHFN6636)                              Gross of Reserve)/ Total Deposits (Includes
                         Schedule HC                                           Domestic and Foreign Deposits)

Total Assets             (BHCK2170)                                            The sum of total assets. Includes cash and
                         Schedule HC                                           balances due from depository institutions;
                                                                               securities; federal funds sold and securities
                                                                               purchased under agreements to resell; loans and lease
                                                                               financing receivables; trading assets; premises and
                                                                               fixed assets; other real estate owned; investments in
                                                                               unconsolidated subsidiaries and associated companies;
                                                                               customer's liability on acceptances outstanding;
                                                                               intangible assets; and other assets.

Net Income               (BHCK4300)                                            The sum of income (loss) before extraordinary items
                         Schedule HI                                           and other adjustments and extraordinary items; and
                                                                               other adjustments, net of income taxes.

</TABLE>

                                       D-2<PAGE>

                                                                    EXHIBIT 10.3

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

                               GUARANTEE AGREEMENT

                                 BY AND BETWEEN

                          CITIZENS BANKING CORPORATION

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION

                            DATED AS OF JUNE 26, 2003

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

<PAGE>

                               GUARANTEE AGREEMENT

         This GUARANTEE AGREEMENT (this "Guarantee"), dated as of June 26, 2003,
is executed and delivered by Citizens Banking Corporation, a Michigan
corporation (the "Guarantor"), and U.S. Bank National Association, a national
banking association, organized under the laws of the United States of America,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of
Citizens Michigan Statutory Trust I, a Connecticut statutory trust (the
"Issuer").

         WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of the date hereof among U.S. Bank National
Association, not in its individual capacity but solely as institutional trustee,
the administrators of the Issuer named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer is issuing on the date hereof those undivided beneficial
interests, having an aggregate liquidation amount of $25,000,000.00 (the
"Capital Securities"); and

         WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of Capital
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.

                                   ARTICLE I

                         DEFINITIONS AND INTERPRETATION

         SECTION 1.1. DEFINITIONS AND INTERPRETATION. In this Guarantee, unless
the context otherwise requires:

         (a) capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;

         (b) a term defined anywhere in this Guarantee has the same meaning
throughout;

         (c) all references to "the Guarantee" or "this Guarantee" are to this
Guarantee as modified, supplemented or amended from time to time;

         (d) all references in this Guarantee to "Articles" or "Sections" are to
Articles or Sections of this Guarantee, unless otherwise specified;

         (e) terms defined in the Declaration as at the date of execution of
this Guarantee have the same meanings when used in this Guarantee, unless
otherwise defined in this Guarantee or unless the context otherwise requires;
and

         (f) a reference to the singular includes the plural and vice versa.

         "Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

<PAGE>

         "Beneficiaries" means any Person to whom the Issuer is or hereafter
becomes indebted or liable.

         "Capital Securities" has the meaning set forth in the recitals to this
Guarantee.

         "Common Securities" means the common securities issued by the Issuer to
the Guarantor pursuant to the Declaration.

         "Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee is located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103.

         "Covered Person" means any Holder of Capital Securities.

         "Debentures" means the debt securities of the Guarantor designated the
Floating Rate Junior Subordinated Deferrable Interest Debentures due 2033 held
by the Institutional Trustee (as defined in the Declaration) of the Issuer.

         "Declaration Event of Default" means an "Event of Default" as defined
in the Declaration.

         "Event of Default" has the meaning set forth in Section 2.4(a).

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) which are required to be paid on such Capital Securities to
the extent the Issuer shall have funds available therefor, (ii) the Redemption
Price to the extent the Issuer has funds available therefor, with respect to any
Capital Securities called for redemption by the Issuer, (iii) the Special
Redemption Price to the extent the Issuer has funds available therefor, with
respect to Capital Securities redeemed upon the occurrence of a Special Event,
and (iv) upon a voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders of the Capital Securities in exchange therefor as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital Securities to the
date of payment, to the extent the Issuer shall have funds available therefor,
and (b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").

         "Guarantee Trustee" means U.S. Bank National Association, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

         "Guarantor" means Citizens Banking Corporation and each of its
successors and assigns.

         "Holder" means any holder, as registered on the books and records of
the Issuer, of any Capital Securities; provided, however, that, in determining
whether the Holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.

         "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

                                       2
<PAGE>

         "Indenture" means the Indenture dated as of the date hereof between the
Guarantor and U.S. Bank National Association, not in its individual capacity but
solely as trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the institutional trustee of the Issuer.

         "Issuer" has the meaning set forth in the opening paragraph to this
Guarantee.

         "Liquidation Distribution" has the meaning set forth in the definition
of "Guarantee Payments" herein.

         "Majority in liquidation amount of the Capital Securities" means
Holder(s) of outstanding Capital Securities, voting together as a class, but
separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.

         "Obligations" means any costs, expenses or liabilities (but not
including liabilities related to taxes) of the Issuer other than obligations of
the Issuer to pay to holders of any Trust Securities the amounts due such
holders pursuant to the terms of the Trust Securities.

         "Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:

                  (a) a statement that the officer signing the Officer's
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b) a brief statement of the nature and scope of the
         examination or investigation undertaken by the officer in rendering the
         Officer's Certificate;

                  (c) a statement that the officer has made such examination or
         investigation as, in such officer's opinion, is necessary to enable
         such officer to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

                  (d) a statement as to whether, in the opinion of the officer,
         such condition or covenant has been complied with.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "Redemption Price" has the meaning set forth in the Indenture.

         "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee including any
Vice President, Assistant Vice President, Secretary, Assistant Secretary or any
other officer of the Guarantee Trustee customarily performing functions similar
to those performed by any of the above designated officers and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

         "Special Event" has the meaning set forth in the Indenture.

                                       3
<PAGE>

         "Special Redemption Price" has the meaning set forth in the Indenture.

         "Subsidiary" has the meaning set forth in the Indenture.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.

         "Trust Securities" means the Common Securities and the Capital
Securities.

                                   ARTICLE II

                          POWERS, DUTIES AND RIGHTS OF
                                GUARANTEE TRUSTEE

         SECTION 2.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

         (a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Capital Securities, and the Guarantee Trustee
shall not transfer this Guarantee to any Person except a Holder of Capital
Securities exercising his or her rights pursuant to Section 4.4(b) or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of
its appointment to act as Successor Guarantee Trustee. The right, title and
interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Guarantee Trustee.

         (b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Capital
Securities.

         (c) The Guarantee Trustee, before the occurrence of any Event of
Default and after curing all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee. In case an Event of Default has occurred (that has not
been waived pursuant to Section 2.4) and is actually known to a Responsible
Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.

         (d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee, and the Guarantee Trustee shall not be
                  liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee,
                  and no implied covenants or obligations shall be read into
                  this Guarantee against the Guarantee Trustee; and

                                       4
<PAGE>

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee; but in the case of any
                  such certificates or opinions that by any provision hereof are
                  specifically required to be furnished to the Guarantee
                  Trustee, the Guarantee Trustee shall be under a duty to
                  examine the same to determine whether or not they conform to
                  the requirements of this Guarantee;

                  (ii) the Guarantee Trustee shall not be liable for any error
         of judgment made in good faith by a Responsible Officer of the
         Guarantee Trustee, unless it shall be proved that such Responsible
         Officer of the Guarantee Trustee or the Guarantee Trustee was negligent
         in ascertaining the pertinent facts upon which such judgment was made;

                  (iii) the Guarantee Trustee shall not be liable with respect
         to any action taken or omitted to be taken by it in good faith in
         accordance with the written direction of the Holders of not less than a
         Majority in liquidation amount of the Capital Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Guarantee Trustee, or relating to the exercise of any
         trust or power conferred upon the Guarantee Trustee under this
         Guarantee; and

                  (iv) no provision of this Guarantee shall require the
         Guarantee Trustee to expend or risk its own funds or otherwise incur
         personal financial liability in the performance of any of its duties or
         in the exercise of any of its rights or powers, if the Guarantee
         Trustee shall have reasonable grounds for believing that the repayment
         of such funds is not reasonably assured to it under the terms of this
         Guarantee or security and indemnity, reasonably satisfactory to the
         Guarantee Trustee, against such risk or liability is not reasonably
         assured to it.

         SECTION 2.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.

         (a) Subject to the provisions of Section 2.1:

                  (i) The Guarantee Trustee may conclusively rely, and shall be
         fully protected in acting or refraining from acting upon, any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document believed by
         it to be genuine and to have been signed, sent or presented by the
         proper party or parties.

                  (ii) Any direction or act of the Guarantor contemplated by
         this Guarantee shall be sufficiently evidenced by an Officer's
         Certificate.

                  (iii) Whenever, in the administration of this Guarantee, the
         Guarantee Trustee shall deem it desirable that a matter be proved or
         established before taking, suffering or omitting any action hereunder,
         the Guarantee Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         conclusively rely upon an Officer's Certificate of the Guarantor which,
         upon receipt of such request, shall be promptly delivered by the
         Guarantor.

                  (iv) The Guarantee Trustee shall have no duty to see to any
         recording, filing or registration of any instrument (or any
         re-recording, refiling or re-registration thereof).

                                       5
<PAGE>

                  (v) The Guarantee Trustee may consult with counsel of its
         selection, and the advice or opinion of such counsel with respect to
         legal matters shall be full and complete authorization and protection
         in respect of any action taken, suffered or omitted by it hereunder in
         good faith and in accordance with such advice or opinion. Such counsel
         may be counsel to the Guarantor or any of its Affiliates and may
         include any of its employees. The Guarantee Trustee shall have the
         right at any time to seek instructions concerning the administration of
         this Guarantee from any court of competent jurisdiction.

                  (vi) The Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee at
         the request or direction of any Holder, unless such Holder shall have
         provided to the Guarantee Trustee such security and indemnity,
         reasonably satisfactory to the Guarantee Trustee, against the costs,
         expenses (including attorneys' fees and expenses and the expenses of
         the Guarantee Trustee's agents, nominees or custodians) and liabilities
         that might be incurred by it in complying with such request or
         direction, including such reasonable advances as may be requested by
         the Guarantee Trustee; provided, however, that nothing contained in
         this Section 2.2(a)(vi) shall relieve the Guarantee Trustee, upon the
         occurrence of an Event of Default, of its obligation to exercise the
         rights and powers vested in it by this Guarantee.

                  (vii) The Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit.

                  (viii) The Guarantee Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through agents, nominees, custodians or attorneys, and the Guarantee
         Trustee shall not be responsible for any misconduct or negligence on
         the part of any agent or attorney appointed with due care by it
         hereunder.

                  (ix) Any action taken by the Guarantee Trustee or its agents
         hereunder shall bind the Holders of the Capital Securities, and the
         signature of the Guarantee Trustee or its agents alone shall be
         sufficient and effective to perform any such action. No third party
         shall be required to inquire as to the authority of the Guarantee
         Trustee to so act or as to its compliance with any of the terms and
         provisions of this Guarantee, both of which shall be conclusively
         evidenced by the Guarantee Trustee's or its agent's taking such action.

                  (x) Whenever in the administration of this Guarantee the
         Guarantee Trustee shall deem it desirable to receive instructions with
         respect to enforcing any remedy or right or taking any other action
         hereunder, the Guarantee Trustee (i) may request instructions from the
         Holders of a Majority in liquidation amount of the Capital Securities,
         (ii) may refrain from enforcing such remedy or right or taking such
         other action until such instructions are received, and (iii) shall be
         protected in conclusively relying on or acting in accordance with such
         instructions.

                  (xi) The Guarantee Trustee shall not be liable for any action
         taken, suffered, or omitted to be taken by it in good faith, without
         negligence, and reasonably believed by it to be authorized or within
         the discretion or rights or powers conferred upon it by this Guarantee.

         (b) No provision of this Guarantee shall be deemed to impose any duty
or obligation on the Guarantee Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal or in which the Guarantee Trustee
shall be

                                       6
<PAGE>

unqualified or incompetent in accordance with applicable law to perform any such
act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty.

         SECTION 2.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee.

         SECTION 2.4. EVENTS OF DEFAULT; WAIVER.

         (a) An Event of Default under this Guarantee will occur upon the
failure of the Guarantor to perform any of its payment or other obligations
hereunder.

         (b) The Holders of a Majority in liquidation amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

         SECTION 2.5. EVENTS OF DEFAULT; NOTICE.

         (a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Capital Securities and the Guarantor, notices of all Events of
Default actually known to a Responsible Officer of the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided,
however, that the Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Capital Securities.

         (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written notice
from the Guarantor or a Holder of the Capital Securities (except in the case of
a payment default), or a Responsible Officer of the Guarantee Trustee charged
with the administration of this Guarantee shall have obtained actual knowledge
thereof.

                                  ARTICLE III

                                GUARANTEE TRUSTEE

         SECTION 3.1. GUARANTEE TRUSTEE; ELIGIBILITY.

         (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor, and

                  (ii) be a corporation organized and doing business under the
         laws of the United States of America or any State or Territory thereof
         or of the District of Columbia, or Person authorized under such laws to
         exercise corporate trust powers, having a combined capital and surplus
         of at least 50 million U.S. dollars ($50,000,000), and subject to
         supervision or examination by Federal, State, Territorial or District
         of Columbia authority. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         the supervising or examining authority referred to above, then, for the
         purposes of this Section

                                       7
<PAGE>

         3.1(a)(ii), the combined capital and surplus of such corporation shall
         be deemed to be its combined capital and surplus as set forth in its
         most recent report of condition so published.

         (b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 3.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 3.2(c).

         (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign to the extent
and in the manner provided by, and subject to this Guarantee.

         SECTION 3.2. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.

         (a) Subject to Section 3.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor except during an Event of
Default.

         (b) The Guarantee Trustee shall not be removed in accordance with
Section 3.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.

         (c) The Guarantee Trustee appointed to office shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

         (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee.

         (e) No Guarantee Trustee shall be liable for the acts or omissions to
act of any Successor Guarantee Trustee.

         (f) Upon termination of this Guarantee or removal or resignation of the
Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay to the
Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2
and 7.3 accrued to the date of such termination, removal or resignation.

                                   ARTICLE IV

                                    GUARANTEE

         SECTION 4.1. GUARANTEE.

         (a) The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense
(except the defense of payment by the Issuer), right of set-off or counterclaim
that the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be

                                       8
<PAGE>

satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.

         (b) The Guarantor hereby also agrees to assume any and all Obligations
of the Issuer and in the event any such Obligation is not so assumed, subject to
the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the full payment, when and as
due, of any and all Obligations to such Beneficiaries. This Guarantee is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.

         SECTION 4.2. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of this Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

         SECTION 4.3. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:

         (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Capital Securities to be performed
or observed by the Issuer;

         (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Special Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of or in connection with, the Capital Securities
(other than an extension of time for payment of Distributions, Redemption Price,
Special Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by the
Indenture);

         (c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;

         (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

         (e) any invalidity of, or defect or deficiency in, the Capital
Securities;

         (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

         (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

                                       9
<PAGE>

         SECTION 4.4. RIGHTS OF HOLDERS.

         (a) The Holders of a Majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under this Guarantee; provided, however, that (subject to
Section 2.1) the Guarantee Trustee shall have the right to decline to follow any
such direction if the Guarantee Trustee being advised by counsel determines that
the action or proceeding so directed may not lawfully be taken or if the
Guarantee Trustee in good faith by its board of directors or trustees, executive
committees or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Guarantee Trustee in personal liability.

         (b) Any Holder of Capital Securities may institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee, without first instituting a legal proceeding against the Issuer,
the Guarantee Trustee or any other Person. The Guarantor waives any right or
remedy to require that any such action be brought first against the Issuer, the
Guarantee Trustee or any other Person before so proceeding directly against the
Guarantor.

         SECTION 4.5. GUARANTEE OF PAYMENT. This Guarantee creates a guarantee
of payment and not of collection.

         SECTION 4.6. SUBROGATION. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Capital Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee, if,
after giving effect to any such payment, any amounts are due and unpaid under
this Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.

         SECTION 4.7. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Capital Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 4.3 hereof.

         SECTION 4.8. ENFORCEMENT BY A BENEFICIARY. A Beneficiary may enforce
the obligations of the Guarantor contained in Section 4.1(b) directly against
the Guarantor and the Guarantor waives any right or remedy to require that any
action be brought against the Issuer or any other person or entity before
proceeding against the Guarantor. The Guarantor shall be subrogated to all
rights (if any) of any Beneficiary against the Issuer in respect of any amounts
paid to the Beneficiaries by the Guarantor under this Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if at the
time of any such payment, and after giving effect to such payment, any amounts
are due and unpaid under this Guarantee.

                                       10
<PAGE>

                                   ARTICLE V

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 5.1. LIMITATION OF TRANSACTIONS. So long as any Capital
Securities remain outstanding, if (a) there shall have occurred and be
continuing an Event of Default or a Declaration Event of Default or (b) the
Guarantor shall have selected an Extension Period as provided in the Declaration
and such period, or any extension thereof, shall have commenced and be
continuing, then the Guarantor shall not and shall not permit any Affiliate of
the Guarantor controlled by the Guarantor to (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's or such Affiliate's capital stock (other
than payments of dividends or distributions to the Guarantor or a wholly-owned
Subsidiary of the Guarantor) or make any guarantee payments with respect to the
foregoing or (y) make any payment of principal of or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Guarantor or
any Affiliate of the Guarantor controlled by the Guarantor that rank pari passu
in all respects with or junior in interest to the Debentures (other than, with
respect to clauses (x) and (y) above, (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor or any wholly-owned
Subsidiary of the Guarantor in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Guarantor or of such Subsidiary (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(ii) as a result of any exchange or conversion of any class or series of the
Guarantor's capital stock (or any capital stock of a Subsidiary of the
Guarantor) for any class or series of the Guarantor's or a Subsidiary's capital
stock or of any class or series of the Guarantor's indebtedness for any class or
series of the Guarantor's capital stock or of any class or series of a
Subsidiary's indebtedness for any class or series of such Subsidiary's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration of a
dividend in connection with any stockholders' rights plan, or the issuance of
rights, stock or other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant thereto, (v) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (vi) payments under this Guarantee).

         SECTION 5.2. RANKING. This Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined in the
Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital
Securities agrees to the foregoing provisions of this Guarantee and the other
terms set forth herein.

         The right of the Guarantor to participate in any distribution of assets
of any of its subsidiaries upon any such Subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
Subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that Subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments hereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.

                                       11
<PAGE>

                                   ARTICLE VI

                                   TERMINATION

         SECTION 6.1. TERMINATION. This Guarantee shall terminate as to the
Capital Securities (i) upon full payment of the Redemption Price or Special
Redemption Price of all Capital Securities then outstanding, (ii) upon the
distribution of all of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.

                                  ARTICLE VII

                                 INDEMNIFICATION

         SECTION 7.1. EXCULPATION.

         (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee and
in a manner that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.

         (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Issuer or the Guarantor and upon such information,
opinions, reports or statements presented to the Issuer or the Guarantor by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.

         SECTION 7.2. INDEMNIFICATION.

         (a) The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or willful misconduct on
the part of the Indemnified Person, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including, but
not limited to, the costs and expenses (including reasonable legal fees and
expenses) of the Indemnified Person defending itself against, or investigating,
any claim or liability in connection with the exercise or performance of any of
the Indemnified Person's powers or duties hereunder. The obligation to indemnify
as set forth in this Section 7.2 shall survive the resignation or removal of the
Guarantee Trustee and the termination of this Guarantee.

         (b) Promptly after receipt by an Indemnified Person under this Section
7.2 of notice of the commencement of any action, such Indemnified Person will,
if a claim in respect thereof is to be made against the Guarantor under this
Section 7.2, notify the Guarantor in writing of the commencement thereof; but
the failure so to notify the Guarantor (i) will not relieve the Guarantor from
liability under

                                       12
<PAGE>

paragraph (a) above unless and to the extent that the Guarantor did not
otherwise learn of such action and such failure results in the forfeiture by the
Guarantor of substantial rights and defenses and (ii) will not, in any event,
relieve the Guarantor from any obligations to any Indemnified Person other than
the indemnification obligation provided in paragraph (a) above. The Guarantor
shall be entitled to appoint counsel of the Guarantor's choice at the
Guarantor's expense to represent the Indemnified Person in any action for which
indemnification is sought (in which case the Guarantor shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person or Persons except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the Indemnified Person.
Notwithstanding the Guarantor's election to appoint counsel to represent the
Guarantor in an action, the Indemnified Person shall have the right to employ
separate counsel (including local counsel), and the Guarantor shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Person(s) which are different from or additional to those available
to the Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of the institution of such action or (iv)
the Guarantor shall authorize the Indemnified Person to employ separate counsel
at the expense of the Guarantor. The Guarantor will not, without the prior
written consent of the Indemnified Persons, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the Indemnified Persons are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each Indemnified Person from all
liability arising out of such claim, action, suit or proceeding.

         SECTION 7.3. COMPENSATION; REIMBURSEMENT OF EXPENSES. The Guarantor
agrees:

         (a) to pay to the Guarantee Trustee from time to time such compensation
for all services rendered by it hereunder as the parties shall agree to from
time to time (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and

         (b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by it in accordance with any provision of this
Guarantee (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or willful misconduct.

         For purposes of clarification, this Section 7.3 does not contemplate
the payment by the Guarantor of acceptance or annual administration fees owing
to the Guarantee Trustee for services to be provided by the Guarantee Trustee
under this Guarantee or the fees and expenses of the Guarantee Trustee's counsel
in connection with the closing of the transactions contemplated by this
Guarantee. The provisions of this Section 7.3 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this Guarantee.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.1. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and

                                       13
<PAGE>

shall inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor's assets to another entity, in each case, to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of at
least a Majority in liquidation amount of the Capital Securities.

         SECTION 8.2. AMENDMENTS. Except with respect to any changes that do not
adversely affect the rights of Holders of the Capital Securities in any material
respect (in which case no consent of Holders will be required), this Guarantee
may be amended only with the prior approval of the Holders of not less than a
Majority in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

         SECTION 8.3. NOTICES. All notices provided for in this Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:

         (a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee Trustee
may give notice of to the Holders of the Capital Securities and the Guarantor):

         U.S. Bank National Association
         225 Asylum Street, Goodwin Square
         Hartford, Connecticut  06103
         Attention:  Corporate Trust Services Division
         Telecopy:  860-241-6889

         With a copy to:

         U.S. Bank National Association
         1 Federal Street - 3rd Floor
         Boston, Massachusetts  02110
         Attention:  Paul D. Allen, Corporate Trust Services Division
         Telecopy:  617-603-6665

         (b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Capital Securities and to the Guarantee Trustee):

         Citizens Banking Corporation
         328 South Saginaw Street
         Flint, Michigan  48502
         Attention:  Stephen C. Schlott
         Telecopy:  810-342-7076

         (c) If given to any Holder of the Capital Securities, at the address
set forth on the books and records of the Issuer.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given,

                                       14
<PAGE>

such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

         SECTION 8.4. BENEFIT. This Guarantee is solely for the benefit of the
Beneficiaries and, subject to Section 2.1(a), is not separately transferable
from the Capital Securities.

         SECTION 8.5. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW).

         SECTION 8.6. COUNTERPARTS. This Guarantee may be executed in one or
more counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same instrument.

         SECTION 8.7 SEPARABILITY. In case one or more of the provisions
contained in this Guarantee shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Guarantee, but this Guarantee
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein.

                     Signatures appear on the following page

                                       15
<PAGE>

         THIS GUARANTEE is executed as of the day and year first above written.

                                      CITIZENS BANKING CORPORATION, as
                                      Guarantor

                                      By: /s/ Charles D. Christy
                                         ---------------------------------------
                                          Name: Charles D. Christy
                                          Title: Executive Vice President, CFO
                                                 and Treasurer

                                      U.S. BANK NATIONAL ASSOCIATION, as
                                      Guarantee Trustee

                                      By: /s/ Paul D. Allen
                                         ---------------------------------------
                                          Name: Paul D. Allen
                                          Title: Vice President

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]