Document:

BLUEROCK
RESIDENTIAL GROWTH REIT, INC.

 

2014 EQUITY INCENTIVE PLAN
FOR ENTITIES

 

Article
I

DEFINITIONS

 

1.01.       Affiliate

 

“Affiliate”
means, with respect to any entity, any other entity, whether now or hereafter existing, which controls, is controlled by, or is
under common control with, the first entity (including, but not limited to, joint ventures, limited liability companies and partnerships).
For this purpose, the term “control” (including the correlative meanings of the terms “controlled by” and
“under common control with”) shall mean ownership, directly or indirectly, of 50% or more of the total combined voting
power of all classes of voting securities issued by such entity, or the possession, directly or indirectly, of the power to direct
the management and policies of such entity, by contract or otherwise.

 

1.02.       Agreement

 

“Agreement”
means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the
terms and conditions of a Stock Award, an award of Performance Units, an Incentive Award, an Option, SAR or Other Equity-Based
Award (including an LTIP Unit) granted to such Participant.

 

1.03.       Board

 

“Board”
means the Board of Directors of the Company.

 

1.04.       Change
in Control

 

“Change in
Control” means and includes each of the following:

 

(a)          The
acquisition, either directly or indirectly, by any individual, entity or group (within the meaning of Sections 13(d) and 14(d)(2)
of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act), of more than 50% of either
(i) the then outstanding shares of Common Stock, taking into account as outstanding for this purpose such shares of Common Stock
issuable upon the exercise of options or warrants, the conversion of convertible shares or debt, and the exercise of any similar
right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control
(i) any acquisition by the Company or any of its subsidiaries or by the Manager or any of its Affiliates, (ii) any acquisition
by a trustee or other fiduciary holding the Company’s securities under an employee benefit plan sponsored or maintained by
the Company or any of its Affiliates, (iii) any acquisition by an underwriter, initial purchaser or placement agent temporarily
holding the Company’s securities pursuant to an offering of such securities or (iv) any acquisition by an entity owned, directly
or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the then Outstanding
Company Common Stock.

 

    	 

    	 

    

 

(b)          Individuals
who constitute Incumbent Directors at the beginning of any two-consecutive-year period, together with any new Incumbent Directors
who become members of the Board during such two-year period, cease to be a majority of the Board at the end of such two-year period.

 

(c)          The
consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving
the Company that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities
in the transaction (a “Business Combination”), in each case, unless following such Business Combination:

 

(i)          the
individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such
Business Combination, beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of members of the board of directors (or the analogous governing body)
of the entity resulting from such Business Combination (the “Successor Entity”) (or, if applicable, the ultimate parent
entity that directly or indirectly has beneficial ownership of sufficient voting securities to elect a majority of the members
of the board of directors (or the analogous governing body) of the Successor Entity (the “Parent Company”));

 

(ii)         no
Person (other than any employee benefit plan sponsored or maintained by the Successor Entity or the Parent Company) beneficially
owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, more than 50% of the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or the
analogous governing body) of the Parent Company (or, if there is no Parent Company, the Successor Entity); and

 

(iii)        at
least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there
is no Parent Company, the Successor Entity) following the consummation of the Business Combination were Incumbent Directors at
the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination;

 

(d)          The
direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries, taken
as a whole, to any Person that is not a subsidiary of the Company.

 

In addition, if a Change
in Control (as defined in clauses (a) through (d) above) constitutes a payment event with respect to any Option, SAR, Stock Award,
Performance Unit, Incentive Award or Other Equity-Based Award that provides for the deferral of compensation and is subject to
Section 409A of the Code, no payment will be made under that award on account of a Change in Control unless the event described
in subsection (a), (b), (c) or (d) above, as applicable, constitutes a “change in control event” as defined in Treasury
Regulation Section 1.409A-3(i)(5).

 

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1.05.       Code

 

“Code”
means the Internal Revenue Code of 1986, and any amendments thereto.

 

1.06.       Committee

 

“Committee”
means the Compensation Committee of the Board. Unless otherwise determined by the Board, the Committee shall consist solely of
two or more non-employee members of the Board, each of whom is intended to qualify as a “non-employee director” as
defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m)
of the Code (if awards under this Plan are subject to the deduction limitation of Section 162(m) of the Code) and an “independent
director” under the rules of any exchange or automated quotation system on which the Common Stock is listed, traded or quoted;
provided, however, that any action taken by the Committee shall be valid and effective, whether or not the members of the
Committee at the time of such action are later determined not to have satisfied the foregoing requirements or otherwise provided
in any charter of the Committee. If there is no Compensation Committee, then “Committee” means the Board.

 

1.07.       Common
Stock

 

“Common Stock”
means the Class A common stock of the Company.

 

1.08.       Company

 

“Company”
means Bluerock Residential Growth REIT, Inc., a Maryland corporation.

 

1.09.       Control
Change Date

 

“Control Change
Date” means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions,
the “Control Change Date” is the date of the last of such transactions on which the Change in Control occurs.

 

1.10.       Corresponding
SAR

 

“Corresponding
SAR” means an SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender
to the Company, unexercised, of that portion of the Option to which the SAR relates.

 

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1.11.       Dividend
Equivalent Right

 

“Dividend
Equivalent Right” means the right, subject to the terms and conditions prescribed by the Committee, of a Participant
to receive (or have credited) cash, securities or other property in amounts equivalent to the cash, securities or other property
dividends declared on shares of Common Stock with respect to specified Performance Units, an Other Equity-Based Award or Incentive
Award of units denominated in shares of Common Stock or other Company securities, as determined by the Committee, in its sole discretion.
The Committee may provide that such Dividend Equivalent Rights (if any) shall be distributed only when, and to the extent that,
the underlying award is vested or earned and also may provide that Dividend Equivalent Rights (if any) shall be deemed to have
been reinvested in additional shares of Common Stock or otherwise reinvested.

 

1.12.       Effective
Date

 

Subject to the approval
of the Plan by the Company’s stockholders in accordance with Article XVIII, “Effective Date” means the
date this Plan is adopted by the Board.

 

1.13.       Exchange
Act

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

1.14.       Fair
Market Value

 

“Fair Market
Value” means, on any given date, the reported “closing” price of a share of Common Stock on the New York
Stock Exchange for such date or, if there is no closing price for a share of Common Stock on the date in question, the closing
price for a share of Common Stock on the last preceding date for which a quotation exists. If, on any given date, the Common Stock
is not listed for trading on the New York Stock Exchange, then Fair Market Value shall be the “closing” price of a
share of Common Stock on such other exchange on which the Common Stock is listed for trading for such date (or, if there is no
closing price for a share of Common Stock on the date in question, the closing price for a share of Common Stock on the last preceding
date for which such quotation exists) or, if the Common Stock is not listed on any exchange, the amount determined by the Committee
using any reasonable method in good faith and in accordance with the regulations under Section 409A of the Code.

 

1.15.       Incumbent
Directors

 

“Incumbent
Directors” means individuals elected to the Board (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for Director without objection to such nomination) and whose election or
nomination for election to the Board was approved by a vote of at least two-thirds of the directors serving on the Board at the
time of the election or nomination, as applicable, shall be an Incumbent Director. No individual designated to serve as a director
by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 1.04(a) or
Section 1.04(c) and no individual initially elected or nominated as a director of the Company as a result of an actual or threatened
election contest with respect to directors shall be an Incumbent Director.

 

1.16.       Incentive
Award

 

“Incentive
Award” means an award awarded under Article XI which, subject to the terms and conditions prescribed by the Committee,
entitles the Participant to receive a payment from the Company or an Affiliate of the Company.

 

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1.17.       Individuals
Plan

 

“Individuals
Plan” means the Bluerock Residential Growth, Inc. 2014 Equity Incentive Plan for Individuals, as amended from time to
time.

 

1.18.       Initial
Value

 

“Initial Value”
means, with respect to a Corresponding SAR, the option price per share of the related Option and, with respect to an SAR granted
independently of an Option, the price per share of Common Stock as determined by the Committee on the date of grant; provided,
however, that the price shall not be less than the Fair Market Value on the date of grant. Except as provided in Article XII,
the Initial Value of an outstanding SAR may not be reduced (by amendment, cancellation and new grant or otherwise) without the
approval of stockholders. In addition, no payment shall be made in cancellation of an SAR without the approval of stockholders
if, on the date of cancellation, the Initial Value exceeds Fair Market Value.

 

1.19.       LTIP
Unit

 

“LTIP Unit”
means an “LTIP Unit” as defined in the Operating Partnership’s partnership agreement. An LTIP Unit granted under
this Plan represents the right to receive the benefits, payments or other rights in respect of an LTIP Unit set forth in that partnership
agreement, subject to the terms and conditions of the applicable Agreement and that partnership agreement.

 

1.20.       Manager

 

“Manager”
means BRG Manager, LLC, a Delaware limited liability company and the Company’s external manager.

 

1.21.       Offering

 

“Offering”
means the initial public offering of Common Stock registered under the Securities Act of 1933, as amended.

 

1.22.       OP
Units

 

“OP Units”
means units of limited partnership interest of the Operating Partnership.

 

1.23.       Operating
Partnership

 

“Operating
Partnership” means Bluerock Residential Holdings, L.P., a Delaware limited partnership and the Company’s operating
partnership.

 

1.24.       Option

 

“Option”
means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price
set forth in an Agreement.

 

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1.25.       Other
Equity-Based Award

 

“Other Equity-Based
Award” means any award other than an Incentive Award, an Option, SAR, a Performance Unit award or a Stock Award which,
subject to such terms and conditions as may be prescribed by the Committee, entitles a Participant to receive shares of Common
Stock or rights or units valued in whole or in part by reference to, or otherwise based on, shares of Common Stock (including securities
convertible into Common Stock) or other equity interests, including LTIP Units.

 

1.26.       Participant

 

“Participant”
means the Manager and any other entity that provides services to the Company or an Affiliate of the Company (including an entity
that provides services to the Company or an Affiliate of the Company by virtue of its providing services to the Manager or an Affiliate
of the Manager), and that satisfies the requirements of Article IV and is selected by the Committee to receive an award of Performance
Units or a Stock Award, an Incentive Award, Option, SAR, Other Equity-Based Award or a combination thereof.

 

1.27.       Performance
Units

 

“Performance
Units” means an award, in the amount determined by the Committee, stated with reference to a specified or determinable
number of shares of Common Stock, that in accordance with the terms of an Agreement entitles the holder to receive a payment for
each specified unit equal to the value of an equal number of shares of Common Stock on the date of payment.

 

1.28.       Plan

 

“Plan”
means this Bluerock Residential Growth REIT, Inc. 2014 Equity Incentive Plan for Entities, as amended from time to time.

 

1.29.       REIT

 

“REIT”
means a real estate investment trust within the meaning of Sections 856 through 860 of the Code.

 

1.30.       SAR

 

“SAR”
means a stock appreciation right that in accordance with the terms of an Agreement entitles the holder to receive, with respect
to each share of Common Stock encompassed by the exercise of the SAR, the excess, if any, of the Fair Market Value at the time
of exercise over the Initial Value. References to “SARs” include both Corresponding SARs and SARs granted independently
of Options, unless the context requires otherwise.

 

1.31.       Stock
Award

 

“Stock Award”
means shares of Common Stock awarded to a Participant under Article VIII.

 

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Article
II

PURPOSES

 

This Plan is intended
to assist the Company and its Affiliates in securing and retaining the services of entities that provide services to the Company
or an Affiliate of the Company with ability and initiative by enabling such entities to participate in the future success of the
Company and its Affiliates and to associate their interests with those of the Company and its stockholders. This Plan is intended
to permit the grant of Options, SARs, Stock Awards, Performance Units, Incentive Awards and Other Equity-Based Awards in accordance
with this Plan and any procedures that may be established by the Committee.

 

Article
III

ADMINISTRATION

 

This Plan shall be
administered by the Committee. The Committee shall have authority to grant SARs, Stock Awards, Performance Units, Incentive Awards,
Options and Other Equity-Based Awards upon such terms (not inconsistent with the provisions of this Plan), as the Committee may
consider appropriate. Such terms may include conditions (in addition to those contained in this Plan), on the exercisability of
all or any part of an Option or SAR or on the transferability or forfeitability of a Stock Award, an award of Performance Units,
an Incentive Award or an Other Equity-Based Award. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate
the time at which any Option or SAR may be exercised, or the time at which a Stock Award or Other Equity-Based Award may become
transferable or nonforfeitable or the time at which an Other Equity-Based Award, an Incentive Award or an award of Performance
Units may be settled. In addition, the Committee shall have complete authority to interpret all provisions of this Plan; to prescribe
the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of this Plan (including
rules and regulations that require or allow Participants to defer the payment of benefits under this Plan); and to make all other
determinations necessary or advisable for the administration of this Plan.

 

The Committee’s
determinations under this Plan (including without limitation, determinations of the entities to receive awards under this Plan,
the form, amount and timing of such awards, the terms and provisions of such awards and the Agreements) need not be uniform and
may be made by the Committee selectively among entities who receive, or are eligible to receive, awards under this Plan, whether
or not such entities are similarly situated. The express grant in this Plan of any specific power to the Committee with respect
to the administration or interpretation of this Plan shall not be construed as limiting any power or authority of the Committee
with respect to the administration or interpretation of this Plan. Any decision made, or action taken, by the Committee in connection
with the administration of this Plan shall be final and conclusive. The members of the Committee shall not be liable for any act
done in good faith with respect to this Plan or any Agreement, Option, SAR, Incentive Award, Stock Award, Other Equity-Based Award
or award of Performance Units. All expenses of administering this Plan shall be borne by the Company.

 

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Article
IV

ELIGIBILITY

 

The Manager and any
entity that provides significant services to the Company or an Affiliate of the Company (including an entity that provides services
to the Company or an Affiliate of the Company by virtue of its providing services to the Manager or an Affiliate of the Manager)
is eligible to participate in this Plan if the Committee, in its sole reasonable discretion, determines that the participation
of such entity is in the best interest of the Company.

 

Article
V

COMMON SHARES SUBJECT TO PLAN

 

5.01.       Common
Shares Issued

 

Upon the award of Common
Stock pursuant to a Stock Award, an Other Equity-Based Award or in settlement of an Incentive Award or an award of Performance
Units, the Company may deliver (and shall deliver if required under an Agreement) to the Participant shares of Common Stock from
its authorized but unissued Common Shares. Upon the exercise of any Option or SAR, the Company may deliver, to the Participant
(or the Participant’s broker if the Participant so directs), shares of Common Stock from its authorized but unissued Common
Shares.

 

5.02.       Aggregate
Limit

 

(a)          The
maximum aggregate number of shares of Common Stock that may be issued under this Plan (pursuant to the exercise of Options
and SARs, the grant of Stock Awards or Other Equity-Based Awards and the settlement of Incentive Awards and Performance
Units) together with the number of shares of Common Stock issued under the Individuals Plan (pursuant to the exercise of
Options and SARs, the grant of Stock Awards or Other Equity-Based Awards and the settlement of Incentive Awards and
Performance Units granted under the Individuals Plan) is equal to 1.6 million shares; provided, however, that if an Offering
is completed before December 31, 2014, and 8% of the number of shares of Common Stock sold by the Company in the Offering
(including any shares of Common Stock sold by the Company to an underwriter pursuant to the underwriter’s exercise of
its additional allotment option) is less than  1.6 million shares, then the maximum aggregate number of shares of
Common Stock that may be issued under this Plan and the Individuals Plan shall be reduced to that number of shares equal to
8% of the number of shares of Common Stock sold by the Company in the Offering (including any shares of Common Stock sold by
the Company to an underwriter pursuant to the underwriter’s exercise of its additional allotment option).
Other Equity-Based Awards that are LTIP Units shall reduce the maximum aggregate number of Common Shares that may be issued
under this Plan and the Individuals Plan on a one-for-one basis, i.e., the grant of each LTIP Unit shall be treated as an
award of a share of Common Stock.

 

(b)          The
maximum number of shares of Common Stock that may be issued under this Plan and the Individuals Plan in accordance with Section
5.02(a) shall be subject to adjustment as provided in Article XII.

 

    	-8-

    	 

    

 

5.03.       Reallocation
of Shares

 

If any award or grant
under this Plan or the Individuals Plan (including LTIP Units) expires, is forfeited or is terminated without having been exercised
or is paid in cash without a requirement for the delivery of Common Stock, then any shares of Common Stock covered by such lapsed,
cancelled, expired, unexercised or cash-settled portion of such award or grant and any forfeited, lapsed, cancelled or expired
LTIP Units shall be available for the grant of other Options, SARs, Stock Awards, Other Equity-Based Awards and settlement of Incentive
Awards and Performance Units under this Plan or the Individuals Plan. Any shares of Common Stock tendered or withheld to satisfy
the grant or exercise price or tax withholding obligation pursuant to any award under this Plan or the Individuals Plan shall be
available for future grants or awards. If shares of Common Stock are issued in settlement of an SAR granted under this Plan or
the Individuals Plan, the number of shares of Common Stock available under this Plan and the Individuals Plan shall be reduced
by the number of shares of Common Stock for which the SAR was exercised rather than the number of shares of Common Stock issued
in settlement of the SAR. To the extent permitted by applicable law or the rules of any exchange on which the Common Stock is listed
for trading, shares of Common Stock issued in assumption of, or in substitution for, any outstanding awards of any entity acquired
in any form of combination by the Company or any Affiliate of the Company shall not reduce the number of shares of Common Stock
available for issuance under this Plan and the Individuals Plan.

 

Article
VI

OPTIONS

 

6.01.       Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom an Option is to be granted and will specify
the number of shares of Common Stock covered by such awards and the terms and conditions of such awards.

 

6.02.       Option
Price

 

The price per share
of Common Stock purchased on the exercise of an Option shall be determined by the Committee on the date of grant, but shall not
be less than the Fair Market Value on the date the Option is granted. Except as provided in Article XII, the price per share of
Common Stock of an outstanding Option may not be reduced (by amendment, cancellation and new grant or otherwise) without the approval
of stockholders. In addition, no payment shall be made in cancellation of an Option without the approval of stockholders if, on
the date of cancellation, the Option Price exceeds Fair Market Value.

 

6.03.       Maximum
Option Period

 

The maximum period
in which an Option may be exercised shall be determined by the Committee on the date of grant except that no Option shall be exercisable
after the expiration of ten years from the date such Option was granted. The terms of any Option may provide that it is exercisable
for a period less than such maximum period.

 

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6.04.       Transferability

 

Any rights or restrictions
with respect to the ability of the holder of any Option granted under this Plan to transfer such Option shall be set forth in the
Agreement relating to such grant.

 

6.05.       Service
Provider Status

 

In the event that the
terms of any Option provide that it may be exercised only during continued service or within a specified period of time after termination
of continued service, the Committee may decide to what extent temporary interruptions of continuous service shall affect the Option.

 

6.06.       Exercise

 

Subject to the provisions
of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Committee shall determine. An Option granted under this Plan may be exercised
with respect to any number of whole shares of Common Stock less than the full number for which the Option could be exercised. A
partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan
and the applicable Agreement with respect to the remaining shares of Common Stock subject to the Option. The exercise of an Option
shall result in the termination of any Corresponding SAR to the extent of the number of shares of Common Stock with respect to
which the Option is exercised.

 

6.07.       Payment

 

Subject to rules established
by the Committee and unless otherwise provided in an Agreement, payment of all or part of the Option price may be made in cash,
certified check, by tendering shares of Common Stock, by attestation of ownership of shares of Common Stock, by a broker-assisted
cashless exercise or in such other form or manner acceptable to the Committee. If shares of Common Stock are used to pay all or
part of the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined on the date of exercise)
of the Common Stock so surrendered or other consideration paid must not be less than the Option price of the shares for which the
Option is being exercised.

 

6.08.       Stockholder
Rights

 

No Participant shall
have any rights as a stockholder with respect to shares of Common Stock subject to an Option until the date of exercise of such
Option.

 

    	-10-

    	 

    

 

Article
VII

SARS

 

7.01.       Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom SARs are to be granted and will specify
the number of shares of Common Stock covered by such awards and the terms and conditions of such awards.

 

7.02.       Maximum
SAR Period

 

The term of each SAR
shall be determined by the Committee on the date of grant, except that no SAR shall have a term of more than ten years from the
date of grant. The terms of any SAR may provide that it has a term that is less than such maximum period.

 

7.03.       Transferability

 

Any rights or restrictions
with respect to the ability of the holder of any SAR granted under this Plan to transfer such SAR shall be set forth in the Agreement
relating to such grant.

 

7.04.       Exercise

 

Subject to the provisions
of this Plan and the applicable Agreement, an SAR may be exercised in whole at any time or in part from time to time at such times
and in compliance with such requirements as the Committee shall determine; provided, however, that a Corresponding SAR that
is related to an incentive stock option may be exercised only to the extent that the related Option is exercisable and only when
the Fair Market Value exceeds the option price of the related Option. An SAR granted under this Plan may be exercised with respect
to any number of whole shares less than the full number for which the SAR could be exercised. A partial exercise of an SAR shall
not affect the right to exercise the SAR from time to time in accordance with this Plan and the applicable Agreement with respect
to the remaining shares of Common Stock subject to the SAR. The exercise of a Corresponding SAR shall result in the termination
of the related Option to the extent of the number of shares of Common Stock with respect to which the SAR is exercised.

 

7.05.       Service
Provider Status

 

If the terms of any
SAR provide that it may be exercised only during continued service or within a specified period of time after termination of continued
service, the Committee may decide to what extent temporary interruptions of continuous service shall affect the SAR.

 

7.06.       Settlement

 

At the Committee’s
discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, shares of Common Stock, or a combination
of cash and Common Stock. No fractional share of Common Stock will be deliverable upon the exercise of an SAR but a cash payment
will be made in lieu thereof.

 

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7.07.       Stockholder
Rights

 

No Participant shall,
as a result of receiving an SAR, have any rights as a stockholder of the Company or any Affiliate of the Company until the date
that the SAR is exercised and then only to the extent that the SAR is settled by the issuance of Common Stock.

 

Article
VIII

STOCK AWARDS

 

8.01.       Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom a Stock Award is to be made and will specify
the number of shares of Common Stock covered by such awards and the terms and conditions of such awards.

 

8.02.       Vesting

 

The Committee, on the
date of the award, may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or otherwise restricted
for a period of time or subject to such conditions as may be set forth in the Agreement. By way of example and not of limitation,
the Committee may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or otherwise restricted subject
to the attainment of objectives stated with reference to the business of the Company or an Affiliate of the Company or a business
unit’s attainment of objectives stated with respect to performance criteria established by the Committee.

 

8.03.       Service
Provider Status

 

In the event that the
terms of any Stock Award provide that shares may become transferable and nonforfeitable thereunder only after completion of a specified
period of employment or continuous service, the Committee may decide in each case to what extent temporary interruptions of continuous
service shall affect the Stock Award.

 

8.04.       Stockholder
Rights

 

Unless otherwise specified
in accordance with the applicable Agreement, while the shares of Common Stock granted pursuant to the Stock Award may be forfeited
or are nontransferable, a Participant will have all rights of a stockholder with respect to a Stock Award, including the right
to receive dividends and vote the shares of Common Stock; provided, however, that during such period (i) a Participant may
not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of Common Stock granted pursuant to a Stock Award,
(ii) the Company shall retain custody of any certificates representing shares of Common Stock granted pursuant to a Stock Award,
and (iii) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations
set forth in the preceding sentence shall not apply after the shares of Common Stock granted under the Stock Award are transferable
and are no longer forfeitable.

 

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Article
IX

PERFORMANCE UNIT AWARDS

 

9.01.       Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom an award of Performance Units is to be
made and will specify the number of shares of Common Stock or other securities or property covered by such awards and the terms
and conditions of such awards. The Committee also will specify whether Dividend Equivalent Rights are granted in conjunction with
the Performance Units.

 

9.02.       Earning
the Award

 

The Committee, on the
date of the grant of an award, shall prescribe that the Performance Units will be earned, and the Participant will be entitled
to receive payment pursuant to the award of Performance Units, only upon the satisfaction of performance objectives or such other
criteria as may be prescribed by the Committee.

 

9.03.       Payment

 

In the discretion of
the Committee, the amount payable when an award of Performance Units is earned may be settled in cash, by the issuance of shares
of Common Stock, by the delivery of other securities or property or a combination thereof. A fractional share of Common Stock shall
not be deliverable when an award of Performance Units is earned, but a cash payment will be made in lieu thereof. The amount payable
when an award of Performance Units is earned shall be paid in a lump sum.

 

9.04.       Stockholder
Rights

 

A Participant, as a
result of receiving an award of Performance Units, shall not have any rights as a stockholder until, and then only to the extent
that, the award of Performance Units is earned and settled in shares of Common Stock. After an award of Performance Units is earned
and settled in Common Stock, a Participant will have all the rights of a stockholder of the Company.

 

9.05.       Transferability

 

Any rights or restrictions
with respect to the ability of the holder of any Performance Unit granted under this Plan to transfer such Performance Unit shall
be set forth in the Agreement relating to such grant.

 

9.06.       Service
Provider Status

 

In the event that the
terms of any Performance Unit award provide that no payment will be made unless the Participant completes a stated period of continued
service, the Committee may decide to what extent temporary interruptions of continuous service shall effect the Performance Unit
award.

 

    	-13-

    	 

    

 

Article
X

OTHER EQUITY–BASED AWARDS

 

10.01.     Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom an Other Equity-Based Award is to be made
and will specify the number of shares of Common Stock or other equity interests (including LTIP Units) covered by such awards and
the terms and conditions of such awards; provided, however, that the grant of LTIP Units must satisfy the requirements of
the partnership agreement of the Operating Partnership as in effect on the date of grant. The Committee also will specify whether
Dividend Equivalent Rights are granted in conjunction with the Other Equity-Based Award.

 

10.02.     Terms
and Conditions

 

The Committee, at the
time an Other Equity-Based Award is made, shall specify the terms and conditions which govern the award. The terms and conditions
of an Other Equity-Based Award may prescribe that a Participant’s rights in the Other Equity-Based Award shall be forfeitable,
nontransferable or otherwise restricted for a period of time or subject to such other conditions as may be determined by the Committee,
in its discretion and set forth in the Agreement. Other Equity-Based Awards may be granted to Participants, either alone or in
addition to other awards granted under this Plan, and Other Equity-Based Awards may be granted in the settlement of other Awards
granted under this Plan.

 

10.03.     Payment
or Settlement

 

Other Equity-Based
Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, shall be payable or settled in shares of
Common Stock, cash or a combination of Common Stock and cash, as determined by the Committee in its discretion; provided, however,
that any shares of Common Stock that are issued on account of the conversion of LTIP Units into shares of Common Stock shall not
be issued under this Plan, i.e., the conversion shall not reduce the number of shares of Common Stock available for issuance
under the Plan or the Entities Plan. Other Equity-Based Awards denominated as equity interests other than shares of Common Stock
may be paid or settled in shares or units of such equity interests or cash or a combination of both as determined by the Committee
in its discretion.

 

10.04.     Service
Provider Status

 

If the terms of any
Other Equity-Based Award provides that it may be earned or exercised only during continued service or within a specified period
of time after termination of continued service, the Committee may decide to what extent temporary interruptions of continuous service
shall affect the Other Equity-Based Award.

 

    	-14-

    	 

    

 

10.05.     Stockholder
Rights

 

A Participant, as a
result of receiving an Other Equity-Based Award, shall not have any rights as a stockholder until, and then only to the extent
that, the Other Equity-Based Award is earned and settled in shares of Common Stock.

 

Article
XI

INCENTIVE AWARDS

 

11.01.     Award

 

In accordance with
the provisions of Articles III and IV, the Committee will designate each entity to whom an Incentive Award is to be made and will
specify the terms and conditions of such award. The Committee also will specify whether Dividend Equivalent Rights are granted
in conjunction with the Incentive Award.

 

11.02.     Terms
and Conditions

 

The Committee, at the
time an Incentive Award is made, shall specify the terms and conditions that govern the award.  Such terms and conditions
may prescribe that the Incentive Award shall be earned only to the extent that the Participant, the Company or an Affiliate of
the Company, during a performance period of at least one year, achieves objectives stated
with reference to one or more performance measures or criteria prescribed by the Committee. A goal or objective may be expressed
on an absolute basis or relative to the performance of one or more similarly situated companies or a published index. When establishing
goals and objectives, the Committee may exclude any or all special, unusual, or extraordinary items as determined under U.S. generally
accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company,
discontinued operations, other unusual or non-recurring items, and the cumulative effects of accounting changes. The Committee
may also adjust the performance goals for any Incentive Award as it deems equitable in recognition of unusual or non-recurring
events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Committee may
determine. Such terms and conditions also may include other limitations on the payment of Incentive Awards including, by
way of example and not of limitation, requirements that the Participant complete a specified period of service with the Company
or an Affiliate of the Company or that the Company, an Affiliate of the Company, or the Participant attain stated objectives or
goals (in addition to those prescribed in accordance with the preceding sentence) as a prerequisite to payment under an Incentive
Award.  

 

    	-15-

    	 

    

 

11.03.     Nontransferability

 

Except to the extent
otherwise provided in the applicable Agreement, Incentive Awards granted under this Plan shall, so long as such Incentive Awards
are subject to vesting or forfeiture restrictions, be nontransferable except by will or by the laws of descent and distribution.  No
right or interest of a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability
of such Participant.

 

11.04.     Service
Provider Status

 

If the terms of an
Incentive Award provide that a payment will be made thereunder only if the Participant completes a stated period of continued service,
the Committee may decide to what extent temporary interruptions of continuous service shall affect the Incentive Award.

 

11.05.     Settlement

 

An Incentive Award
that is earned shall be settled with a single lump sum payment which may be in cash, shares of Common Stock or a combination of
cash and Common Stock, as determined by the Committee.

 

11.06.     Stockholder
Rights

 

No Participant shall,
as a result of receiving an Incentive Award, have any rights as a stockholder of the Company or an Affiliate of the Company until
the date that the Incentive Award is settled and then only to the extent that the Incentive Award is settled by the issuance of
shares of Common Stock.

 

Article
XII

ADJUSTMENT UPON CHANGE IN COMMON SHARES

 

The maximum number
of shares of Common Stock as to which Options, SARs, Performance Units, Incentive Awards, Stock Awards and Other Equity-Based Awards
may be granted under this Plan and the Entities Plan, and the terms of outstanding Stock Awards, Options, SARs, Incentive Awards,
Performance Units and Other Equity-Based Awards granted under this Plan and the Entities Plan, shall be adjusted as the Board determines
is equitably required in the event that (i) the Company (a) effects one or more nonreciprocal transactions between the Company
and its shareholders such as a share dividend, extra-ordinary cash dividend, share split-up, subdivision or consolidation of Common
Stock that affects the number or kind of shares of Common Stock (or other securities of the Company) or the Fair Market Value (or
the value of other Company securities) and causes a change in the Fair Market Value of the shares of Common Stock subject to outstanding
awards or (b) engages in a transaction to which Section 424 of the Code applies or (ii) there occurs any other event which, in
the judgment of the Board necessitates such action. Any determination made under this Article XII by the Board shall be nondiscretionary,
final and conclusive.

 

    	-16-

    	 

    

 

The issuance by the
Company of any class of Common Stock, or securities convertible into any class of Common Stock, for cash or property, or for labor
or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of Common
Stock or obligations of the Company convertible into such Common Stock or other securities, shall not affect, and no adjustment
by reason thereof shall be made with respect to, the maximum number of shares of Common Stock as to which Options, SARs, Performance
Units, Incentive Awards, Stock Awards and Other Equity-Based Awards may be granted under this Plan and the Entities Plan, or the
terms of outstanding Stock Awards, Incentive Awards, Options, SARs, Performance Units or Other Equity-Based Awards under this Plan
and the Entities Plan.

 

The Committee may make
Stock Awards and may grant Options, SARs, Performance Units, Incentive Awards or Other Equity-Based Awards under this Plan and
under the Entities Plan in substitution for performance shares, phantom shares, share awards, stock options, share appreciation
rights, or similar awards held by an individual who becomes an employee of the Company or an Affiliate of the Company in connection
with a transaction described in the first paragraph of this Article XII. Notwithstanding any provision of this Plan and the
Entities Plan, the terms of such substituted Stock Awards, SARs, Other Equity-Based Awards, Options or Performance Units granted
under this Plan or the Entities Plan shall be as the Committee, in its discretion, determines is appropriate.

 

Article
XIII

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

 

No Option or SAR shall
be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all applicable federal, state and foreign laws and regulations (including,
without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all
stock exchanges on which the Common Stock may be listed. The Company shall have the right to rely on an opinion of its counsel
as to such compliance. Any certificate issued to represent Common Stock when a Stock Award is granted, a Performance Unit, Incentive
Award or Other Equity-Based Award is settled or for which an Option or SAR is exercised may bear such legends and statements as
the Committee may deem advisable to assure compliance with federal, state and foreign laws and regulations. No Option or SAR shall
be exercisable, no Stock Award or Performance Unit shall be granted, no Common Stock shall be issued, no certificate for Common
Stock shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval
as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.

 

Article
XIV

GENERAL PROVISIONS

 

14.01.     Effect
on Service

 

Neither the adoption
of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof), shall confer upon any
entity any right to continue in the service of the Company or an Affiliate of the Company or in any way affect any right and power
of the Company or an Affiliate of the Company to terminate the service of any entity at any time with or without assigning a reason
therefor.

 

    	-17-

    	 

    

 

14.02.     Unfunded
Plan

 

This Plan, insofar
as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time
be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan
shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company
shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.

 

14.03.     Rules
of Construction

 

Headings are given
to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.

 

All awards made under
this Plan are intended to comply with, or otherwise be exempt from, Section 409A of the Code (“Section 409A”), after
giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12). This Plan and all Agreements shall
be administered, interpreted and construed in a manner consistent with Section 409A. Nevertheless, the tax treatment of the benefits
provided under this Plan or any Agreement is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective
directors or trustees, officers, employees or advisors shall be held liable for any taxes, interest, penalties or other monetary
amounts owed by any Participant or any other taxpayer as a result of the Plan or any Agreement. If any provision of this Plan or
any Agreement is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified
and given effect, in the sole discretion of the Committee and without requiring the Participant’s consent, in such manner
as the Committee determines to be necessary or appropriate to comply with, or effectuate an exemption from, Section 409A. Each
payment under an award granted under this Plan shall be treated as a separate identified payment for purposes of Section 409A.

 

If a payment obligation
under an award or an Agreement arises on account of the Participant’s termination of service and such payment obligation
constitutes “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect
to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b))12)), it shall be payable only after the Participant’s
“separation from service” (as defined under Treasury Regulation section 1.409A-1(h)).

 

    	-18-

    	 

    

 

14.04.     Withholding
Taxes

 

Each Participant shall
be responsible for satisfying any income, employment and other tax withholding obligations attributable to participation in this
Plan. Unless otherwise provided by the Agreement, any such withholding tax obligations may be satisfied in cash (including from
any cash payable in settlement of an award of Performance Units, SARs or Other Equity-Based Award) or a cash equivalent acceptable
to the Committee. Except to the extent prohibited by Treasury Regulation Section 1.409A-3(j), any minimum statutory federal, state,
district, city or foreign withholding tax obligations also may be satisfied (a) by surrendering to the Company shares of Common
Stock previously acquired by the Participant; (b) by authorizing the Company to withhold or reduce the number of shares of Common
Stock otherwise issuable to the Participant upon the exercise of an Option or SAR, the settlement of a Performance Unit award,
Incentive Award or an Other Equity-Based Award (if applicable) or the grant or vesting of a Stock Award; or (c) by any other method
as may be approved by the Committee. If shares of Common Stock are used to pay all or part of such withholding tax obligation,
the Fair Market Value of the Common Stock surrendered, withheld or reduced shall be determined as of the date of surrender, withholding
or reduction and the number of shares of Common Stock which may be withheld, surrendered or reduced shall be limited to the number
of shares of Common Stock which have a Fair Market Value on the date of withholding, surrender or reduction equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for tax purposes that are applicable to such supplemental
taxable income.

 

14.05.     REIT
Status

 

This Plan shall be
interpreted and construed in a manner consistent with the Company’s status as a REIT. No award shall be granted or awarded,
and with respect to any award granted under this Plan, such award shall not vest, be exercisable or be settled (i) to the extent
that the grant, vesting, exercise or settlement could cause the Participant or any other person to be in violation of the share
ownership limit or any other limitation on ownership or transfer prescribed by the Company’s charter, or (ii) if, in the
discretion of the Committee, the grant, vesting, exercise or settlement of the award could impair the Company’s status as
a REIT.

 

14.06.     Elections
Under Section 83(b)

 

No Participant may
make an election under Section 83(b) of the Code with respect to the grant of any award, the vesting of any award, the settlement
of any award or the issuance of Common Stock under the Plan without the consent of the Company, which the Company may grant or
withhold in its sole discretion.

 

Article
XV

CHANGE IN CONTROL

 

15.01.     Impact
of Change in Control.

 

Upon a Change in Control,
(i) all outstanding Options and SARs shall be fully vested and exercisable, (ii) outstanding Stock Awards shall be transferable
and nonforfeitable and (iii) outstanding Performance Units, Incentive Awards and Other Equity-Based Awards shall be earned and
nonforfeitable in their entirety.

 

    	-19-

    	 

    

 

15.02.     Assumption
Upon Change in Control.

 

In addition to the
vesting of awards under Section 15.01, in the event of a Change in Control, the Committee, in its discretion and without the need
for a Participant’s consent, may provide that an outstanding Option, SAR, Stock Award, Incentive Award, Performance Unit
or Other Equity-Based Award shall be assumed by, or a substitute award granted by, the Successor Entity (or, if applicable, the
Parent Company) in the Change in Control; provided however, (a) such assumed or substituted award shall be of the same type
of award as the original Option, SAR, Stock Award, Performance Unit, Incentive Award or Other Equity-Based Award being assumed
or substituted, and (b) the assumed or substituted award shall be immediately vested and shall have a value (or the difference
between the Fair Market Value and the option price or Initial Value in the case of Options and SARs), as of the Control Change
Date, that is substantially equal to the value of the original award (or the difference between the Fair Market Value and the option
price or Initial Value in the case of Options and SARs) as the Committee determines is equitably required and such other terms
and conditions as may be prescribed by the Committee.

 

15.03.     Cash-Out
Upon Change in Control.

 

In addition to the
vesting of awards under Section 15.01, in the event of a Change in Control, the Committee, in its discretion and without the need
of a Participant’s consent, may provide that each Option, SAR, Stock Award and Performance Unit, Incentive Award and Other
Equity-Based Award shall be cancelled in exchange for a payment. The payment may be in cash, Common Stock or other securities or
consideration received by stockholders in the Change in Control transaction or, in the case of an Incentive Award, the entire amount
that can be paid under the Incentive Award. Except as provided in the preceding sentence with respect to the Incentive Awards,
the amount of the payment shall be an amount that is substantially equal to (i) the amount by which the price per share received
by stockholders in the Change in Control for each share of Common Stock exceeds the option price or Initial Value in the case of
an Option and SAR, or (ii) for each share of Common Stock subject to a Stock Award, Performance Unit or Other Equity-Based Award,
the same price per share received by stockholders in the Change in Control for each share of Common Stock or (iii) the value of
the other securities or property in which the Performance Unit or Other Equity-Based award is denominated. If the option price
or Initial Value exceeds the price per share received by stockholders in the Change in Control transaction, the Option or SAR may
be cancelled under this Section 15.03 without any payment to the Participant.

 

15.04.     Limitation
of Benefits

 

The benefits that a
Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other
plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”),
may constitute Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section 15.04, the Parachute
Payments will be reduced pursuant to this Section 15.04 if, and only to the extent that, a reduction will allow a Participant to
receive a greater Net After Tax Amount than a Participant would receive absent a reduction.

 

The Accounting Firm
will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine
the Net After Tax Amount attributable to the Participant’s total Parachute Payments.

 

The Accounting Firm
will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax
under Code Section 4999 (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount
attributable to the Capped Payments.

 

    	-20-

    	 

    

 

The Participant will
receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount.
If the Participant will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount
of any benefits under this Plan or any other plan, agreement or arrangement that are not subject to Section 409A of the Code (with
the source of the reduction to be directed by the Participant) and then by reducing the amount of any benefits under this Plan
or any other plan, agreement or arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant) in a manner that results in the best economic benefit to the Participant (or, to the extent economically
equivalent, in a pro rata manner). The Accounting Firm will notify the Participant and the Company if it determines that the Parachute
Payments must be reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed calculations
supporting that determination.

 

As a result of the
uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under
this Article XV, it is possible that amounts will have been paid or distributed to the Participant that should not have been paid
or distributed under this Section 15.04 (“Overpayments”), or that additional amounts should be paid or distributed
to the Participant under this Section 15.04 (“Underpayments”). If the Accounting Firm determines, based on either the
assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting
Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been
made, the Participant must repay the Overpayment to the Company, without interest; provided, however, that no amount will
be payable by the Participant to the Company unless, and then only to the extent that, the repayment would either reduce the amount
on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999.
If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred,
the Accounting Firm will notify the Participant and the Company of that determination and the amount of that Underpayment will
be paid, without interest, to the Participant promptly by the Company.

 

For purposes of this
Section 15.04, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately
before the Control Change Date. For purposes of this Article XV, the term “Net After Tax Amount” means the amount of
any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any
State or local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax Amount
shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute
Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 15.04, the term “Parachute
Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and
the regulations promulgated or proposed thereunder.

 

Notwithstanding any
other provision of this Section 15.04, the limitations and provisions of this Section 15.04 shall not apply to any Participant
who, pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is entitled to indemnification
or other payment for any liability that the Participant may incur under Code Section 4999. This Section 15.04 shall not limit or
otherwise supersede the provisions of any other agreement or plan which provides that a Participant cannot receive Payments in
excess of the Capped Payments.

 

    	-21-

    	 

    

 

Article
XVI

AMENDMENT

 

The Board may amend
or terminate this Plan at any time; provided, however, that no amendment may adversely impair the rights of Participants
with respect to outstanding awards. In addition, an amendment will be contingent on approval of the Company’s stockholders
if such approval is required by law or the rules of any exchange on which the Common Stock is listed or if the amendment would
materially increase the benefits accruing to Participants under this Plan, materially increase the aggregate number of shares of
Common Stock that may be issued under this Plan and the Entities Plan (except as provided in Article XII) or materially modify
the requirements as to eligibility for participation in this Plan.

 

Article
XVII

DURATION OF PLAN

 

No Stock Award, Performance
Unit Award, Incentive Award, Option, SAR or Other Equity-Based Award may be granted under this Plan after the day before the tenth
anniversary of the Effective Date. Stock Awards, Performance Unit awards, Options, SARs and Other Equity-Based Awards granted before
such date shall remain valid in accordance with their terms.

 

Article
XVIII

EFFECTIVENESS OF PLAN

 

Options, SARs, Stock
Awards, Performance Unit Awards, Incentive Awards and Other Equity-Based Awards may be granted under this Plan on and after the
Effective Date, subject to the approval of the stockholders of the Company within twelve months before or after the date that this
Plan is adopted by the Board, provided that no award shall be exercisable, vested or settled until such stockholder approval
is obtained.

 

    	-22-EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

 

By and Between

 

FIRST FEDERAL OF NORTHERN MICHIGAN BANCORP,
INC.

 

And

 

ALPENA BANKING CORPORATION

 

Dated as of January 23, 2014

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	ARTICLE I CERTAIN DEFINITIONS	2
	Section 1.01	Definitions	2
	 	 	 
	ARTICLE II THE MERGERS AND RELATED
    MATTERS	8
	Section 2.01	Effects of Merger; Surviving Entities	8
	Section 2.02	Effect on Outstanding Shares of First Federal Bancorp Common Stock	8
	Section 2.03.	Closing; Effective Time	9
	Section 2.04.	Conversion of Alpena Banking Corporation Common Stock	9
	Section 2.05	Procedures for Exchange of Alpena Banking Corporation Common Stock	9
	Section 2.06	The Bank Merger	11
	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
    OF ALPENA BANKING CORPORATION	11
	Section 3.01	Standard	11
	Section 3.02	Organization	12
	Section 3.03	Capitalization	12
	Section 3.04	Authority; No Violation	13
	Section 3.05	Consents	14
	Section 3.06	Financial Statements	14
	Section 3.07	Taxes	15
	Section 3.08	No Material Adverse Effect	16
	Section 3.09	Material Contracts; Leases; Defaults	16
	Section 3.10	Ownership of Property; Insurance Coverage	17
	Section 3.11	Legal Proceedings	18
	Section 3.12	Compliance With Applicable Law	18
	Section 3.13	Employee Benefit Plans	19
	Section 3.14	Brokers, Finders and Financial Advisors	22
	Section 3.15	Environmental Matters	22
	Section 3.16	Loan Portfolio	23
	Section 3.17	Related Party Transactions	24
	Section 3.18	Registration Obligations	24
	Section 3.19	Risk Management Instruments	24
	Section 3.20	Fairness Opinion	25
	Section 3.21	Fiduciary Accounts	25
	Section 3.22	Intellectual Property	25
	Section 3.23	Labor Matters	25
	Section 3.24	Alpena Banking Corporation Information Supplied	26
	Section 3.25	No Dissenters Rights	26
	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
    OF FIRST FEDERAL BANCORP	26
	Section 4.01	Standard	26
	Section 4.02	Organization	26
	Section 4.03	Capitalization	27
	Section 4.04	Authority; No Violation	27

 

    	 

    	 

    

 

	Section 4.05	Consents	28
	Section 4.06	Financial Statements and Securities Documents	29
	Section 4.07	Taxes	30
	Section 4.08	No Material Adverse Effect	31
	Section 4.09	Material Contracts; Leases; Defaults	31
	Section 4.10	Ownership of Property; Insurance Coverage	32
	Section 4.11	Legal Proceedings	33
	Section 4.12	Compliance With Applicable Law	33
	Section 4.13	Employee Benefit Plans	34
	Section 4.14	Brokers, Finders and Financial Advisors	36
	Section 4.15	Loan Portfolio	36
	Section 4.16	First Federal Bancorp Common Stock	37
	Section 4.17	First Federal Bancorp Information	38
	Section 4.18	Environmental Matters	38
	Section 4.19	Risk Management Instruments	39
	Section 4.20	Fiduciary Accounts	39
	Section 4.21	Intellectual Property	39
	Section 4.22	Labor Matters	40
	 	 	 
	ARTICLE V COVENANTS OF ALPENA BANKING
    CORPORATION	40
	Section 5.01	Conduct of Business	40
	Section 5.02	Current Information	43
	Section 5.03	Access to Properties and Records	44
	Section 5.04	Financial and Other Statements	45
	Section 5.05	Maintenance of Insurance	45
	Section 5.06	Disclosure Supplements	46
	Section 5.07	Consents and Approvals of Third Parties	46
	Section 5.08	Reasonable Best Efforts	46
	Section 5.09	Failure to Fulfill Conditions	46
	Section 5.10	No Solicitation	46
	Section 5.11	Reserves and Merger-Related Costs	48
	Section 5.12	Board of Directors Meetings	49
	 	 	 
	ARTICLE VI COVENANTS OF FIRST FEDERAL
    BANCORP	49
	Section 6.01	Conduct of Business	49
	Section 6.02	Current Information	50
	Section 6.03	Access to Properties and Records	51
	Section 6.04	Financial and Other Statements	52
	Section 6.05	Maintenance of Insurance	52
	Section 6.06	Disclosure Supplements	52
	Section 6.07	Consents and Approvals of Third Parties; Reasonable Best Efforts	53
	Section 6.08	Failure to Fulfill Conditions	53
	Section 6.09	Employee Benefits	53
	Section 6.10	Directors and Officers Indemnification and Insurance	54
	Section 6.11	Stock Listing	55
	Section 6.12	Board of Directors Meetings	55
	Section 6.13	Board of Directors	55
	Section 6.14	First Federal Bancorp Recommendation	56

 

    	ii

    	 

    

 

	ARTICLE VII REGULATORY AND OTHER MATTERS	56
	Section 7.01	Meetings of Shareholders	56
	Section 7.02	Proxy Statement-Prospectus; Merger Registration Statement	57
	Section 7.03	Regulatory Approvals	58
	 	 	 
	ARTICLE VIII CLOSING CONDITIONS	58
	Section 8.01	Conditions to Each Party’s Obligations under this Agreement	58
	Section 8.02	Conditions to the Obligations of First Federal Bancorp under this Agreement	59
	Section 8.03	Conditions to the Obligations of Alpena Banking Corporation under this Agreement	59
	 	 	 
	ARTICLE IX THE CLOSING	60
	Section 9.01	Time and Place	60
	Section 9.02	Deliveries at the Pre-Closing and the Closing	60
	 	 	 
	ARTICLE X TERMINATION, AMENDMENT AND
    WAIVER	60
	Section 10.01	Termination	60
	Section 10.02	Effect of Termination	62
	Section 10.03	Amendment, Extension and Waiver	63
	 	 	 
	ARTICLE XI MISCELLANEOUS	64
	Section 11.01	Confidentiality	64
	Section 11.02	Public Announcements	64
	Section 11.03	Survival	64
	Section 11.04	Notices	64
	Section 11.05	Parties in Interest	65
	Section 11.06	Complete Agreement	65
	Section 11.07	Counterparts	66
	Section 11.08	Severability	66
	Section 11.09	Governing Law	66
	Section 11.10	Interpretation	66
	Section 11.11	Specific Performance; Jurisdiction	66

 

	Exhibit A	Form of Voting Agreement
	Exhibit B	Form of Non-Competition Agreement

  

    	iii

    	 

    

  

AGREEMENT
AND PLAN OF MERGER

 

THIS AGREEMENT AND
PLAN OF MERGER (this “Agreement”), dated as of January 23, 2014 is by and between First Federal of Northern Michigan
Bancorp, Inc., a Maryland corporation (“First Federal Bancorp”) and Alpena Banking Corporation, a Michigan corporation.
First Federal Bancorp and Alpena Banking Corporation are sometimes collectively referred to as the “Parties.”

 

RECITALS

 

1.          First
Federal Bancorp owns all of the issued and outstanding capital stock of First Federal of Northern Michigan (“First Federal
Bank”). The principal offices of First Federal Bancorp and First Federal Bank are located in Alpena, Michigan.

 

2.          Alpena
Banking Corporation owns all of the issued and outstanding capital stock of Bank of Alpena. The principal offices of Alpena Banking
Corporation and Bank of Alpena are located in Alpena, Michigan.

 

3.          The
Board of Directors of First Federal Bancorp and the Board of Directors of Alpena Banking Corporation each deem it in the best
interests of its respective shareholders for Alpena Banking Corporation to merge with and into First Federal Bancorp, with First
Federal Bancorp as the surviving entity, and for Bank of Alpena to merge with and into First Federal Bank with First Federal Bank
as the surviving entity, all pursuant to the terms, conditions and procedures set forth in this Agreement.

 

4.          As
a condition to the willingness of First Federal Bancorp to enter into this Agreement, each of the directors of Alpena Banking
Corporation has entered into a Voting Agreement with First Federal Bancorp dated as of the date hereof, substantially in the form
of Exhibit A hereto, pursuant to which each director of Alpena Banking Corporation has agreed, among other things, to vote all
shares of Alpena Banking Corporation Common Stock owned by such person in favor of the approval of this Agreement and the transactions
contemplated hereby, upon the terms and subject to the conditions set forth in the Voting Agreement. In addition, as a condition
to the willingness of First Federal Bancorp to enter into this Agreement, each of the directors of Alpena Banking Corporation
and Bank of Alpena has entered into a Non-Competition Agreement with First Federal Bancorp dated as of the date hereof, substantially
in the form of Exhibit B hereto, pursuant to which each director of Alpena Banking Corporation and Bank of Alpena has agreed,
among other things, not to compete with First Federal Bancorp or First Federal Bank for two years following the Effective Time
of the Merger in a specified geographic area, and not to solicit the customers or employees of First Federal Bancorp or First
Federal Bank during the term of the Non-Competition Agreement.

 

5.          The
Parties intend the Merger to qualify as reorganizations within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the “IRC”), and that this Agreement be and is hereby adopted as a “plan of reorganization”
within the meaning of Sections 354 and 361 of the IRC.

 

6.          The
Parties desire to provide for certain undertakings, conditions, representations, warranties and covenants in connection with the
transactions contemplated by this Agreement.

 

7.          In
consideration of the premises and of the mutual representations, warranties and covenants herein contained and intending to be
legally bound hereby, the Parties hereby agree as follows:

 

    	 

    	 

    

  

ARTICLE I

CERTAIN DEFINITIONS

 

Section 1.01         Definitions

 

Except as otherwise
provided herein, as used in this Agreement, the following terms shall have the indicated meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

 

“Acquisition
Proposal” has the meaning given to such term in Section 5.10 of this Agreement.

 

“Acquisition
Transaction” has the meaning given to such term in Section 5.10 of this Agreement.

 

“Affiliate”
means, with respect to any Person, any Person who directly, or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person and, without limiting the generality of the foregoing, includes any
executive officer or director of such Person and any Affiliate of such executive officer or director.

 

“Agreement”
means this agreement, and any amendment or supplement hereto, which constitutes a “plan of merger” between First Federal
Bancorp and Alpena Banking Corporation.

 

“Alpena Banking
Corporation Common Stock” means the common stock of Alpena Banking Corporation described in Section 3.03(a).

 

“Alpena Banking
Corporation Compensation and Benefit Plans” has the meaning given to such term in Section 3.13 of this Agreement.

 

“Alpena Banking
Corporation Defined Benefit Plan” has the meaning given to such term in Section 3.13(c) of this Agreement.

 

“Alpena Banking
Corporation ERISA Affiliate” has the meaning given to such term in Section 3.13(c) of this Agreement.

 

“Alpena Banking
Corporation Regulatory Agreement” has the meaning given to such term in Section 3.12(c) of this Agreement.

 

“Alpena Banking
Corporation Shareholders Meeting” has the meaning given to such term in Section 7.01(a) of this Agreement.

 

“Alpena Banking
Corporation Subsequent Determination” has the meaning given to such term in Section 5.10 of this Agreement.

 

“Alpena Banking
Financials” means (i) the audited consolidated financial statements of Alpena Banking Corporation and its Subsidiaries as
of December 31, 2012 and 2011 and for the two years ended December 31, 2012, including the notes thereto, and (ii) the unaudited
interim consolidated financial statements of Alpena Banking Corporation as of each calendar quarter following December 31, 2012.

 

“Alpena Banking
Subsidiary” means any direct or indirect Subsidiary of Alpena Banking Corporation, and includes Bank of Alpena, except that
it does not include any corporation the stock of which is held in the ordinary course of the lending activities of Bank of Alpena.

 

    	2

    	 

    

  

“Applications”
means the applications to be filed with the appropriate Regulatory Authorities requesting approval of or nonobjection to the transactions
described in this Agreement.

 

“Bank Merger”
means the merger of Bank of Alpena with and into First Federal Bank with First Federal Bank as the surviving entity. The Bank
Merger shall follow the Merger.

 

“Bank Merger
Act” means the Bank Merger Act, within the FDIA and applicable regulations thereunder.

 

“Bank Merger
Effective Date” means the date that the Articles of Combination evidencing shareholder approval of the Bank Merger is filed
with the OCC or such other date as set forth in the Articles of Combination or as determined in accordance with applicable law.

 

“BHCA”
means the Bank Holding Company Act, as amended.

 

“Certificate”
means the certificate or certificates evidencing shares of Alpena Banking Corporation Common Stock.

 

“Claim”
has the meaning given to such term in Section 6.08(a) of this Agreement.

 

“Closing”
has the meaning given to such term in Section 2.03 of this Agreement.

 

“Closing Date”
has the meaning given to such term in Section 2.03 of this Agreement.

 

“Confidentiality
Agreement” has the meaning given to such term in Section 11.01 of this Agreement.

 

“Continuing
Employees” has the meaning given to such term in Section 6.07(d) of this Agreement.

 

“CRA”
means the Community Reinvestment Act.

 

“COBRA”
has the meaning given to such term in Section 3.13(b) of this Agreement.

 

“DIFS”
means the Michigan Department of Insurance and Financial Services.

 

“Disclosure
Schedule” means the schedules delivered, before the execution of this Agreement, by one party to the other party which sets
forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure
requirement contained in a provision of this Agreement or as an exception to one or more of the representations or warranties
made by the party in Article III or IV hereof, as the case may be, or to one or more of the covenants of the party included in
Article V or VI hereof, as the case may be. The inclusion of an item in a Disclosure Schedule as an exception to a representation
or warranty will not by itself be deemed an admission by a party that such item is material or that such item is reasonably likely
to result in a Material Adverse Effect with respect to such party or was required to be disclosed therein.

 

“Dodd-Frank Act” means the
Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

“Effective Time”
has the meaning given to such term in Section 2.03 of this Agreement.

 

    	3

    	 

    

 

“Environmental
Laws” means any applicable Federal, state or local law, statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with any governmental entity relating to (1) the protection,
preservation or restoration of the environment (including, without limitation, air, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (2) the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Materials of Environmental
Concern. The term Environmental Laws includes without limitation (a) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. §9601, et seq. (“CERCLA”); the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. §6901, et seq.; the Clean Air Act, as amended, 42 U.S.C. §7401, et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. §1251, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. §2601, et
seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001, et seq.; the Safe Drinking Water Act, 42
U.S.C. §300f, et seq.; and all comparable state and local laws, and (b) any common law (including without limitation common
law that may impose strict liability) that may impose liability or obligations for injuries or damages due to the presence of
or exposure to any Materials of Environmental Concern.

 

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

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated from time to time thereunder.

 

“Exchange Agent”
means the bank or trust company or other agent designated by First Federal Bancorp, and reasonably acceptable to Alpena Banking
Corporation, which shall act as agent for First Federal Bancorp in connection with the exchange procedures for converting Certificates
into the Merger Consideration.

 

“Exchange Fund”
has the meaning given to such term in Section 2.05 of this Agreement.

 

“Exchange Ratio”
has the meaning given to such term in Section 2.04 of this Agreement.

 

“FDIA”
means the Federal Deposit Insurance Act, as amended.

 

“FDIC”
means the Federal Deposit Insurance Corporation.

 

“FHLB”
means the Federal Home Loan Bank of Indianapolis.

 

“First Federal
Bancorp” means First Federal of Northern Michigan Bancorp, Inc., a Federal corporation having its principal place of business
located at 100 South Second Avenue, Alpena, Michigan 49707.

 

“First Federal
Bancorp Common Stock” means the common stock of First Federal Bancorp described in Section 4.03(a).

 

“First Federal
Bancorp Option” means an option to purchase First Federal Bancorp Common Stock granted pursuant to the First Federal Bancorp
Stock Benefit Plan.

 

“First Federal
Bancorp Preferred Stock” has the meaning given to such term in Section 4.03(a) of this Agreement.

 

“First Federal
Bancorp Regulatory Agreement” has the meaning given to such term in Section 4.10(c) of this Agreement.

 

    	4

    	 

    

 

“First Federal
Bancorp Securities Documents” has the meaning given to such term in Section 4.06(a) of this Agreement.

 

“First Federal
Bancorp Shareholders Meeting” has the meaning given to such term in Section 7.01(b) of this Agreement.

 

“First Federal
Bancorp Stock Benefit Plan” means the First Federal of Northern Michigan Bancorp, Inc. 2006 Stock-Based Incentive Plan.

 

“First Federal
Bank” means First Federal of Northern Michigan, a federally chartered stock savings bank, having its home office located
at 100 South Second Avenue, Alpena, Michigan 49707.

 

“First Federal
Financials” means (i) the audited consolidated financial statements of First Federal Bancorp and Subsidiaries as of December 31,
2012 and 2011, and for the two years ended December 31, 2012, including the notes thereto; and (ii) the unaudited interim
consolidated financial statements of First Federal Bancorp as of each calendar quarter following December 31, 2012 included in
First Federal Bancorp Securities Documents.

 

“First Federal
Subsidiary” means any direct or indirect Subsidiary of First Federal Bancorp, and includes First Federal Bank, except that
it does not include any corporation the stock of which is held in the ordinary course of the lending activities of First Federal
Bank.

 

“Former Alpena Banking Corporation
Health Plan Participant” has the meaning given to such term in Section 6.07(d) of this Agreement.

 

“FRB”
means the Board of Governors of the Federal Reserve System, including as successor to the Office of Thrift Supervision, and, where
appropriate, the Federal Reserve Bank of Chicago.

 

“GAAP”
means accounting principles generally accepted in the United States of America as in effect at the relevant date and consistently
applied.

 

“Governmental
Entity” means any Federal or state court, administrative agency or commission or other governmental authority or instrumentality.

 

“HIPAA”
has the meaning given to such term in Section 3.13(b) of this Agreement.

 

“HOLA”
means the Home Owners’ Loan Act, as amended.

 

“Indemnified
Parties” has the meaning given to such term in Section 6.08(a) of this Agreement.

 

“IRC”
has the meaning given to such term in the Recitals.

 

“IRS”
means the Internal Revenue Service.

 

“Knowledge”
as used with respect to a Party (including references to such Party being aware of a particular matter) means those facts that
are actually known or would have been known following a reasonable investigation by the chief executive officer, chief financial
officer or chief lending officer of such Party, and includes any facts, matters or circumstances set forth in any written notice
from any Regulatory Authority or Governmental Entity or any other material written notice received by that Party.

 

“Maryland Department”
means the Maryland State Department of Assessments and Taxation.

 

    	5

    	 

    

 

“Material Adverse
Effect” means, with respect to First Federal Bancorp or Alpena Banking Corporation, any effect, circumstance or occurrence
that (i) is material and adverse to the financial condition, results of operations, assets or business of First Federal Bancorp
and the First Federal Subsidiaries taken as a whole, or Alpena Banking Corporation and the Alpena Banking Subsidiaries taken as
a whole, respectively, or (ii) does or would materially impair the ability of Alpena Banking Corporation, on the one hand, or
First Federal Bancorp, on the other hand, to perform its obligations under this Agreement or otherwise materially threaten or
materially impede the consummation of the transactions contemplated by this Agreement; provided that “Material Adverse Effect”
shall not be deemed to include the impact of (a) changes in laws, rules or regulations affecting banks or thrift institutions
or their holding companies generally, or interpretations thereof by courts or governmental agencies, (b) changes in GAAP or regulatory
accounting principles or interpretations thereof generally applicable to financial institutions and/or their holding companies,
(c) actions and omissions of a party hereto (or any of its Subsidiaries) taken in accordance with the terms of this Agreement
or with the prior written consent of the other party, (d) the announcement of this Agreement and the transactions contemplated
hereby, and compliance with this Agreement on the business, financial condition or results of operations of the Parties and their
respective Subsidiaries, including the expenses incurred by the Parties hereto in consummating the transactions contemplated by
this Agreement, and (e) changes in economic conditions generally, including changes in the general level of market interest rates,
or in national or international political or social conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack
upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, unless it uniquely affects either or both of the Parties or any of
their Subsidiaries.

 

“Material Contracts”
has the meaning given to such term in Section 3.09(c) of this Agreement.

 

“Materials of
Environmental Concern” means pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, and any
other hazardous or toxic materials regulated under Environmental Laws.

 

“Maximum Amount”
has the meaning given to such term in Section 6.08(c) of this Agreement.

 

“MBCA”
means the Michigan Business Corporation Act.

 

“Merger Consideration”
has the meaning given to such term in Section 2.04 of this Agreement.

 

“Merger Registration
Statement” means the registration statement, together with all amendments, filed by First Federal Bancorp with the SEC under
the Securities Act to register shares of First Federal Bancorp Common Stock to be offered to holders of Alpena Banking Corporation
Common Stock in connection with the Merger, and shall include the Proxy Statement-Prospectus.

 

“Merger”
means the merger of Alpena Banking Corporation with and into First Federal Bancorp with First Federal Bancorp as the surviving
entity.

 

“MGCL”
means the Maryland General Corporation Law.

 

“Michigan Director”
means the Director of the Michigan Department of Licensing and Regulatory Affairs.

 

“Nasdaq”
means the Nasdaq Capital Market.

 

    	6

    	 

    

 

“Notice of Superior
Proposal” has the meaning given to such term in Section 5.10 of this Agreement.

 

“OCC”
means the Office of the Comptroller of the Currency, including as successor to the Office of Thrift Supervision.

 

“Participation
Facility” has the meaning given to such term in Section 3.15(b) of this Agreement.

 

“PBGC”
has the meaning given to such term in Section 3.13(c) of this Agreement.

 

“Person”
means any individual, corporation, partnership, joint venture, association, trust or “group” (as that term is defined
under the Exchange Act).

 

“Previously
Disclosed” means, with respect to any specific section or subsection of this Agreement, the information set forth by a party
in (i) the corresponding section or subsection of its Disclosure Schedule, and (ii) any other section or subsection of its Disclosure
Schedule to the extent it is reasonably clear from the context that the disclosure in such other section or subsection of its
Disclosure Schedule is applicable to such specific section or subsection of this Agreement.

 

“Proxy Statement-Prospectus”
has the meaning given to such term in Section 7.02(a) of this Agreement.

 

“Regulations”
means applicable regulations promulgated by the FRB, the FDIC, the DIFS or the OCC with respect to the operations of Alpena Banking
Corporation or First Federal Bancorp or any of their Subsidiaries.

 

“Regulatory
Approvals” means the approval or required consent or waiver of any Regulatory Authority that is necessary in connection
with the consummation of the Merger or the Bank Merger and the related transactions contemplated by this Agreement.

 

“Regulatory
Authority” or “Regulatory Authorities” means any agency or department of any Federal or state government having
supervisory jurisdiction over the Parties and the transactions contemplated by this Agreement, including without limitation the
FRB, the FDIC, the DIFS and the OCC.

 

“Release”
means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, dumping, disposing or depositing.

 

“Representative”
has the meaning given to such term in Section 5.10(a) of this Agreement.

 

“Right”
means any warrant, option, right, convertible security or other capital stock equivalent that obligates an entity to issue its
securities.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated from time to time thereunder.

 

“Securities
Laws” means the Securities Act and the Exchange Act and the rules and regulations promulgated from time to time thereunder.

 

    	7

    	 

    

 

“Subsidiary”
means any corporation, 50% or more of the capital stock of which is owned, either directly or indirectly, by another entity, except
any corporation the stock of which is held as security by either First Federal Bank or Bank of Alpena as the case may be, in the
ordinary course of their lending activities.

 

“Superior Proposal”
has the meaning given to such term in Section 5.10 of this Agreement.

 

“Termination
Date” means December 31, 2014.

 

“Treasury Stock”
has the meaning given to such term in Section 2.04(a) of this Agreement.

 

ARTICLE II

THE MERGERS AND RELATED MATTERS

 

Section 2.01         Effects
of Merger; Surviving Entities.

 

(a)         Structure.
Alpena Banking Corporation shall merge with and into First Federal Bancorp with First Federal Bancorp as the surviving entity
pursuant to this Agreement. The separate existence of Alpena Banking Corporation shall cease, and all of the property (real, personal
and mixed), rights, powers and duties and obligations of Alpena Banking Corporation shall be transferred to and assumed by First
Federal Bancorp (or its wholly-owned subsidiary) as the surviving entity in the Merger, without further act or deed, all in accordance
with the HOLA and applicable Regulations. The Articles of Incorporation and Bylaws of First Federal Bancorp as in effect immediately
prior to the Effective Time shall be the Articles of Incorporation and Bylaws of the surviving entity, until thereafter amended
as provided therein and by applicable law. The directors and officers of First Federal Bancorp immediately prior to the Effective
Time shall be the directors and officers of surviving entity, in each case until their respective successors are duly elected
or appointed and qualified.

 

(b)         Modification
of Structure. Notwithstanding any provision of this Agreement to the contrary, First Federal Bancorp may, subject to the filing
of all necessary applications and the receipt of all required Regulatory Approvals, modify the structure of the transactions described
in this Section 2.01, and the Parties shall enter into such alternative transactions, so long as (i) there are no adverse tax
consequences to any of the shareholders of Alpena Banking Corporation as a result of such modification, (ii) such modification
will not materially delay or jeopardize receipt of any required Regulatory Approvals required under Section 7.03, and (iii) the
consideration to be paid to the holders of Alpena Banking Corporation Common Stock under this Agreement is not thereby changed
in kind or value or reduced in amount.

 

Section 2.02         Effect
on Outstanding Shares of First Federal Bancorp Common Stock.

 

At and after the Effective
Time, each share of First Federal Bancorp Common Stock issued and outstanding immediately prior to the Effective Time shall remain
an issued and outstanding share of common stock of First Federal Bancorp at the Effective Time and shall not be affected by the
Merger. 

 

    	8

    	 

    

 

Section 2.03.         Closing;
Effective Time. 

 

The closing of the
Merger (“Closing”) shall occur on the date determined by First Federal Bancorp, in consultation with and upon no less
than three (3) business days prior written notice to Alpena Banking Corporation, but in no event later than the close of business
on the twentieth (20th) business day following the satisfaction or (to the extent permitted by applicable law) waiver
of the conditions set forth in Article VIII (other than those conditions that by their terms are to be satisfied at the Closing,
but subject to the satisfaction or (to the extent permitted by applicable law) waiver of those conditions), or such other date
that may be agreed to in writing by the Parties (the date on which the Closing occurs being the “Closing Date”). The
Merger shall be effected by the filing of Articles of Merger with the Maryland Department and a Certificate of Merger with the
Michigan Director in accordance with the MGCL and the MBCA, respectively. The Merger shall become effective at such time the Articles
of Merger are filed with the Maryland Department and the Certificate of Merger is filed with the Michigan Director, or at such
later time as the Parties agree and specify in the Articles of Merger and the Certificate of Merger, in accordance with the MGCL
and the MBCA, respectively (the date and time the Merger becomes effective being the “Effective Time”).

 

Section 2.04.         Conversion
of Alpena Banking Corporation Common Stock.

 

At the Effective Time,
by virtue of the Merger and without any action on the part of First Federal Bancorp, Alpena Banking Corporation or the holders
of any of the shares of Alpena Banking Corporation Common Stock:

 

(a)
     All shares of Alpena Banking Corporation Common Stock held in the treasury of Alpena Banking
Corporation (“Treasury Stock”) and each share of Alpena Banking Corporation Common Stock owned by First Federal Bancorp
immediately prior to the Effective Time (other than shares held in a fiduciary capacity or in connection with debts previously
contracted) shall, at the Effective Time, cease to exist, and the Certificates for such shares shall be canceled as promptly as
practicable thereafter, and no payment or distribution shall be made in consideration therefor. 

 

(b)
     Subject to Section 2.04(a), each share of Alpena Banking Corporation Common Stock issued and
outstanding immediately prior to the Effective Time shall become and be converted into, as provided in and subject to the terms
set forth in this Agreement, the right to receive 1.549 shares (the “Exchange Ratio”) of First Federal Bancorp Common
Stock (the “Merger Consideration”).

 

(c)        After
the Effective Time, shares of Alpena Banking Corporation Common Stock shall be no longer outstanding and shall be canceled automatically
and shall cease to exist, and shall thereafter by operation of this section represent the right to receive the Merger Consideration.

 

(d)        In
the event First Federal Bancorp changes (or establishes a record date for changing) the number of, or provides for the exchange
of, shares of First Federal Bancorp Common Stock issued and outstanding prior to the Effective Time as a result of a stock split,
stock dividend, recapitalization, reclassification, reorganization or similar transaction with respect to the outstanding First
Federal Bancorp Common Stock and the record date therefor shall be prior to the Effective Time, the Exchange Ratio shall be proportionately
and appropriately adjusted.

 

Section
2.05         Procedures for Exchange of Alpena Banking Corporation Common
Stock.

 

(a)        At
or prior to the Effective Time, First Federal Bancorp shall reserve sufficient shares of First Federal Bancorp Common Stock equal
to the aggregate amount of the Merger Consideration payable pursuant to Section 2.04 of this Article II (such shares of First
Federal Bancorp Common Stock together with the cash in lieu of fractional shares to be paid in accordance with Section 2.05(i)
herein being hereinafter referred to as the “Exchange Fund”). 

 

    	9

    	 

    

 

(b)       First
Federal Bancorp shall cause the Exchange Agent, within five (5) business days after the Effective Time, to mail to each holder
of a Certificate or Certificates, a form letter of transmittal for return to the Exchange Agent and instructions for use in effecting
the surrender of the Certificates for the Merger Consideration into which the Alpena Banking Corporation Common Stock represented
by such Certificates shall have been converted as a result of the Merger. The letter of transmittal shall be subject to the approval
of Alpena Banking Corporation (which shall not be unreasonably withheld, conditioned or delayed) and specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent. Upon proper surrender of a Certificate for exchange and cancellation to the Exchange Agent, together with a properly completed
letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor, the Merger
Consideration and a check representing any cash payment in lieu of fractional shares which such former holder has the right to
receive in respect of the Certificate(s) surrendered pursuant to the provisions of this Section 2.05, and the Certificate(s) so
surrendered shall forthwith be cancelled. No interest will be paid or accrued on the Merger Consideration. 

 

(c)
      The holder of a Certificate shall have no rights, after the Effective Time, with respect
to such Alpena Banking Corporation Common Stock except to surrender the Certificate(s) in exchange for the Merger Consideration
(and any cash in lieu of fractional shares) as provided in this Agreement. 

 

(d)      
If the Person surrendering a Certificate and signing the accompanying letter of transmittal is not the record holder thereof,
then it shall be a condition of the payment of the Merger Consideration that: (i) such Certificate is properly endorsed to
such Person or is accompanied by appropriate stock powers, in either case signed exactly as the name of the record holder appears
on such Certificate, and is otherwise in proper form for transfer, or is accompanied by appropriate evidence of the authority
of the Person surrendering such Certificate and signing the letter of transmittal to do so on behalf of the record holder; and
(ii) the Person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes required by reason
of the payment to a Person other than the registered holder of the Certificate surrendered, or required for any other reason,
or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

 

(e)        From
and after the Effective Time, there shall be no transfers on the stock transfer books of Alpena Banking Corporation of the Alpena
Banking Corporation Common Stock that was issued and outstanding immediately prior to the Effective Time other than to settle
transfers of Alpena Banking Corporation Common Stock that occurred prior to the Effective Time. If, after the Effective Time,
Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be exchanged for the Merger
Consideration (and any cash in lieu of fractional shares) and canceled as provided in this Article II.

 

(f)
      Neither First Federal Bancorp nor the Exchange Agent shall be liable to any holder
of a Certificate for any Merger Consideration delivered in respect of such Certificate to a public official pursuant to applicable
abandoned property, escheat or other similar law.

 

(g)
     In the event any Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Exchange
Agent or First Federal Bancorp, the posting by such person of a bond in such amount as the Exchange Agent may reasonably direct
as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof.

 

(h)     
First Federal Bancorp or the Exchange Agent will be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement or the transactions contemplated hereby to any holder of Alpena Banking Corporation Common Stock such
amounts as First Federal Bancorp (or any Affiliate thereof) or the Exchange Agent are required to deduct and withhold with respect
to the making of such payment under the IRC, or any applicable provision of U.S. Federal, state, local or non-U.S. tax law. To
the extent that such amounts are properly withheld by First Federal Bancorp or the Exchange Agent, such withheld amounts will
be treated for all purposes of this Agreement as having been paid to the holder of the Alpena Banking Corporation Common Stock
in respect of whom such deduction and withholding were made by First Federal Bancorp or the Exchange Agent.

 

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(i)          Notwithstanding
anything to the contrary contained herein, no certificates or scrip representing fractional shares of First Federal Bancorp Common
Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to First Federal
Bancorp Common Stock shall be payable on or with respect to any fractional share interest, and such fractional share interests
shall not entitle the owner thereof to vote or to any other rights of a shareholder of First Federal Bancorp. In lieu of the issuance
of any such fractional share, First Federal Bancorp shall pay to each former holder of Alpena Banking Corporation Common Stock
who otherwise would be entitled to receive a fractional share of First Federal Bancorp Common Stock, an amount in cash, rounded
to the nearest cent and without interest, equal to the product of (i) the fraction of a share to which such holder would otherwise
have been entitled and (ii) the average of the daily closing sales prices of a share of First Federal Bancorp Common Stock as
reported on the Nasdaq for the five consecutive trading days immediately preceding the Closing Date. For purposes of determining
any fractional share interest, all shares of Alpena Banking Corporation Common Stock owned by an Alpena Banking Corporation shareholder
shall be combined so as to calculate the maximum number of whole shares of First Federal Bancorp Common Stock issuable to such
Alpena Banking Corporation shareholder.

 

Section 2.06         The
Bank Merger.

 

Concurrently with
or as soon as practicable after the execution and delivery of this Agreement, First Federal Bancorp will cause First Federal Bank,
and Alpena Banking Corporation will cause Alpena Bank, to execute and deliver an agreement and plan of merger in respect of the
Bank Merger. The parties intend that the Bank Merger will become effective simultaneously with or immediately following the Effective
Time.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF ALPENA BANKING CORPORATION

 

Except as Previously
Disclosed, Alpena Banking Corporation represents and warrants to First Federal Bancorp as follows:

 

Section 3.01        Standard.

 

Except as set forth
in the following sentence, no representation or warranty of Alpena Banking Corporation contained in this Article III (other
than the representation and warranty contained in Section 3.08, which shall be true in all respects) shall be deemed untrue or
incorrect, and Alpena Banking Corporation shall not be deemed to have breached a representation or warranty, as a consequence
of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with
all other facts, circumstances or events inconsistent with any paragraph of this Article III, has had or reasonably would
be expected to have a Material Adverse Effect, disregarding for these purposes (x) any qualification or exception for, or reference
to, materiality in any such representation or warranty and (y) any use of the terms “material,” “materially,”
“in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation
or warranty. The foregoing standard shall not apply to representations and warranties contained in Section 3.02 (other than
Sections 3.02(d) and 3.02(e) and the last sentence of Section 3.02(b)), Section 3.03, Section 3.04 (other than Section 3.04(b)(iii))
and Section 3.14, which shall be true and correct in all material respects.

 

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Section 3.02       
Organization.

 

(a)          Alpena
Banking Corporation is a corporation organized and validly existing under the laws of the State of Michigan, and is duly registered
as a bank holding company under the BHCA. Alpena Banking Corporation has the full corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the
failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect on Alpena Banking Corporation.
Other than shares of capital stock of Bank of Alpena, and the Subsidiaries of Bank of Alpena as Previously Disclosed, Alpena Banking
Corporation does not own or control, directly or indirectly, or have the right to acquire directly or indirectly, an equity interest
in any corporation, limited liability company, association, partnership, joint venture or other entity.

 

(b)          Bank
of Alpena is a commercial bank organized and validly existing under the laws of the State of Michigan. Except for its Subsidiaries
that are identified as Alpena Banking Subsidiaries, Bank of Alpena does not possess, directly or indirectly, any material equity
interest in any corporation, limited liability company, association, partnership, joint venture or other entity, except for equity
interests held in its investment portfolio, equity interests held by Bank of Alpena in a fiduciary capacity, and equity interests
held in connection with its lending activities, including stock in the FHLB. Bank of Alpena owns all of the outstanding shares
of capital stock of each of its Subsidiaries free and clear of all liens, security interests, pledges, charges, encumbrances,
agreements and restrictions of any kind or nature. The deposits of Bank of Alpena are insured by the FDIC to the fullest extent
permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid when due.

 

(c)          Bank
of Alpena is a member in good standing of the FHLB and owns the requisite amount of stock therein.

 

(d)          The
respective minute books of Alpena Banking Corporation and Bank of Alpena accurately record, in all material respects, all material
corporate actions of their respective shareholders and boards of directors (including committees) through the date of this Agreement.

 

(e)          Prior
to the date of this Agreement, Alpena Banking Corporation has made available to First Federal Bancorp true and correct copies
of the Articles of Incorporation and bylaws of Bank of Alpena and Alpena Banking Corporation.

 

Section 3.03         Capitalization.

 

(a)          The
authorized capital stock of Alpena Banking Corporation consists of two-million (2,000,000) shares of common stock, $10.00 par
value. As of the date of this Agreement, there are 533,700 shares of Alpena Banking Corporation Common Stock outstanding, all
of which are validly issued, fully paid and nonassessable and none of which were issued in violation of any preemptive rights.
There are no shares of Alpena Banking Corporation Common Stock held by Alpena Banking Corporation as Treasury Stock. Neither Alpena
Banking Corporation nor any Alpena Banking Subsidiary has or is bound by any Right of any character relating to the purchase,
sale, issuance or voting of, or right to receive dividends or other distributions on, any shares of Alpena Banking Corporation
Common Stock, or any other security of Alpena Banking Corporation or any Alpena Banking Subsidiary, or any securities representing
the right to vote, purchase or otherwise receive any shares of Alpena Banking Corporation Common Stock or any other security of
Alpena Banking Corporation.

 

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(b)       
The authorized capital stock of Bank of Alpena consists of four-hundred and fifty thousand (450,000) shares of common stock,
$5.00 par value. There are four-hundred and fifty thousand (450,000) shares of Bank of Alpena common stock outstanding, all of
which are validly issued, fully paid and nonassessable and none of which were issued in violation of any preemptive rights, and
all of which are owned by Alpena Banking Corporation free and clear of any liens, encumbrances, charges, restrictions or rights
of third parties of any kind whatsoever.

 

Section 3.04         Authority;
No Violation.

 

(a)          Alpena
Banking Corporation has full power and authority to execute and deliver this Agreement, perform its obligations hereunder, and
to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Alpena Banking Corporation
and the completion by Alpena Banking Corporation of the transactions contemplated hereby have been duly and validly approved by
the requisite vote of the Board of Directors of Alpena Banking Corporation and, except for approval from the shareholders of Alpena
Banking Corporation and approval by Alpena Banking Corporation as the sole shareholder of Bank of Alpena, no other corporate proceedings
on the part of Alpena Banking Corporation are necessary to complete the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Alpena Banking Corporation and constitutes the valid and binding obligations of Alpena
Banking Corporation, enforceable against Alpena Banking Corporation in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, and as to Bank of Alpena the conservatorship or receivership
provisions of the FDIA, and subject, as to enforceability, to general principles of equity.

 

(b)          Subject
to the receipt of approvals from the Regulatory Authorities and the compliance by Alpena Banking Corporation and First Federal
Bancorp with any conditions contained therein (including the expiration of any applicable waiting period),

 

(A)         the
execution and delivery of this Agreement by Alpena Banking Corporation,

 

(B)         the
consummation of the transactions contemplated hereby, and

 

			(C)         compliance
                                         by Alpena Banking Corporation with any of the terms or provisions hereof,

 

will not: (i) conflict
with or result in a material breach of any provision of the Articles of Incorporation or bylaws of Alpena Banking Corporation
or the articles of incorporation or bylaws of any Alpena Banking Subsidiary; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Alpena Banking Corporation or any Alpena Banking Subsidiary
or any of the properties or assets of Alpena Banking Corporation or any Alpena Banking Subsidiary; or (iii) except as Previously
Disclosed, violate, conflict with, result in a breach of any provisions of, constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required
by, or result in a right of termination or acceleration or the creation of any lien, security interest, charge or other encumbrance
upon any of the properties or assets of Alpena Banking Corporation or any Alpena Banking Subsidiary under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other investment or obligation
to which Alpena Banking Corporation or any Alpena Banking Subsidiary is a party, or by which they or any of their respective properties
or assets may be bound or affected, except in the case of clause (iii) above, for violations which, individually or in the aggregate,
would not have a Material Adverse Effect on Alpena Banking Corporation.

 

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(c)          The
affirmative vote of the holders of a majority of the outstanding shares of Alpena Banking Corporation Common Stock is the only
vote of holders of any class of Alpena Banking Corporation’s capital stock necessary to adopt and approve this Agreement
and the transactions contemplated hereby.

 

(d)          The
board of directors of Alpena Banking Corporation, by resolution duly adopted by the requisite vote of the board of directors at
a meeting duly called and held, has (x) determined that this Agreement, the Merger and the other transactions contemplated hereby
are fair to and in the best interests of Alpena Banking Corporation and its shareholders, and (y) recommended that the shareholders
of Alpena Banking Corporation approve this Agreement and directed that such matter be submitted for consideration by the Alpena
Banking Corporation shareholders at the Alpena Banking Corporation Shareholders Meeting.

 

Section 3.05         Consents.

 

Except
as Previously Disclosed and for (a) filings with Regulatory Authorities, the receipt of the Regulatory Approvals, the expiration
of any waiting periods, and compliance with any conditions contained therein, (b) the filing of the Articles of Merger with
the Maryland Department and the Certificate of Merger with the Michigan Director, (c) the filing with the SEC of (i) the
Merger Registration Statement and (ii) such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated hereby and the obtaining from the SEC of such orders
as may be required in connection therewith, (d) the filing with the Nasdaq Stock Market of a notification of the listing of the
shares of First Federal Bancorp Common Stock to be issued in the Merger, (e) such filings and approvals as are required to be
made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares
of First Federal Bancorp Common Stock pursuant to this Agreement and (f) the approval of this Agreement by the requisite votes
of the shareholders of Alpena Banking Corporation and First Federal Bancorp, no consents, waivers or approvals of, or filings
or registrations with, any Governmental Entity are necessary, and, to the Knowledge of Alpena Banking Corporation, no consents,
waivers or approvals of, or filings or registrations with, any other third parties are necessary, in connection with (x) the execution
and delivery of this Agreement by Alpena Banking Corporation, and (y) the completion of the Merger by Alpena Banking Corporation.
Alpena Banking Corporation has no Knowledge of any reason pertaining to Alpena Banking Corporation why any Regulatory Approvals
or other required consents or approvals should not be received. 

 

Section 3.06         Financial
Statements.

 

(a)          Alpena
Banking Corporation has previously provided First Federal Bancorp copies of the Alpena Banking Financials. Such financial statements
were prepared from the books and records of Alpena Banking Corporation and its Subsidiaries, fairly present the consolidated financial
position of Alpena Banking Corporation and its Subsidiaries in each case at and as of the dates indicated and the consolidated
results of operations of Alpena Banking Corporation and its Subsidiaries for the periods indicated, and were prepared in accordance
with GAAP consistently applied throughout the periods covered thereby.

  

(b)          The
books and records of Alpena Banking Corporation and its Subsidiaries have been, and are being, maintained in all material respects
in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.

 

(c)          Alpena
Banking Corporation and each of its Subsidiaries have timely filed all reports, forms, schedules, registrations, statements and
other documents, together with any amendments required to be made with respect thereto, that they were required to file since
December 31, 2010 with any Governmental Entity and have paid all fees and assessments due and payable in connection therewith,
except where the failure to make such filings or pay such fees would not have a Material Adverse Effect on Alpena Banking Corporation. 

 

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(d)          Alpena
Banking Corporation and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide
reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP and to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability for assets, and (iii) access to assets is
permitted only in accordance with management’s general or specific authorization. Alpena Banking Corporation’s Disclosure
Schedule discloses (x) any significant deficiencies in and material weaknesses in the design or operation of internal controls
over financial reporting which are reasonably likely to adversely affect in any material respect the Company’s ability to
record, process, summarize and report financial information and (y) any fraud, whether or not material, that involves management
or other employees who have a significant role in Alpena Banking Corporation’s internal controls over financial reporting.

  

(e)          Since
December 31, 2010, (A) neither Alpena Banking Corporation nor any of its Subsidiaries nor, to its Knowledge, any director, officer,
employee, auditor, accountant or representative of it or any of its Subsidiaries has received or otherwise had or obtained knowledge
of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of it or any of its Subsidiaries or their respective internal accounting controls, including
any material complaint, allegation, assertion or claim that it or any of its Subsidiaries has engaged in questionable accounting
or auditing practices, and (B) no attorney representing it or any of its Subsidiaries, whether or not employed by it or any of
its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation
by it or any of its officers, directors, employees or agents to its board of directors or any committee thereof or to any of its
directors or officers.

 

(f)          Since
December 31, 2012, Alpena Banking Corporation and its Subsidiaries have not incurred any liability other than as reflected in
the Alpena Banking Financials or in the ordinary course of business consistent with past practice. 

 

Section 3.07         Taxes.

 

Alpena Banking Corporation
and the Alpena Banking Subsidiaries are members of the same affiliated group within the meaning of IRC Section 1504(a). Alpena
Banking Corporation and each Alpena Banking Subsidiary has duly filed all Federal, state and material local tax returns required
to be filed by or with respect to it on or prior to the Closing Date, taking into account any extensions (all such returns, to
the Knowledge of Alpena Banking Corporation, being accurate and correct in all material respects) and has duly paid or made provisions
for the payment of all material Federal, state and local taxes that have been incurred by or are due or claimed to be due from
it by any taxing authority or pursuant to any written tax sharing agreement on or prior to the Closing Date other than taxes or
other charges which (i) are not delinquent, (ii) are being contested in good faith, or (iii) have not yet been fully determined.
As of the date of this Agreement, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary has received written notice
of, and to the Knowledge of Alpena Banking Corporation, there is no audit examination, deficiency assessment, tax investigation
or refund litigation with respect to any taxes of Alpena Banking Corporation or any Alpena Banking Subsidiary, and no written
claim has been made by any authority in a jurisdiction where Alpena Banking Corporation or any Alpena Banking Subsidiary does
not file tax returns that Alpena Banking Corporation or any Alpena Banking Subsidiary is subject to taxation in that jurisdiction.
Alpena Banking Corporation and no Alpena Banking Subsidiary has executed an extension or waiver of any statute of limitations
on the assessment or collection of any material tax due that is currently in effect. Alpena Banking Corporation and each Alpena
Banking Subsidiary has withheld and paid all taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder or other third party, and Alpena Banking Corporation and
each Alpena Banking Subsidiary, to the Knowledge of Alpena Banking Corporation, has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC and similar applicable state and local information
reporting requirements.

 

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Section 3.08         No
Material Adverse Effect.

 

Other than as Previously
Disclosed, Alpena Banking Corporation has not suffered any Material Adverse Effect since December 31, 2012, and no event has occurred
or circumstance arisen since that date which, in the aggregate, has had or is reasonably likely to have a Material Adverse Effect
on Alpena Banking Corporation.

 

Section 3.09         Material
Contracts; Leases; Defaults.

 

(a)          Except
as Previously Disclosed, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary is a party to or subject to: (i)
any employment, consulting or severance contract or material arrangement with any past or present officer, director or employee,
except for “at will” arrangements; (ii) any plan, material arrangement or contract providing for bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar material arrangements for or with any past or present
officers, directors or employees; (iii) any collective bargaining agreement with any labor union relating to employees; (iv) any
agreement which by its terms limits the payment of dividends by Alpena Banking Corporation or any Alpena Banking Subsidiary; (v)
any instrument evidencing or related to material indebtedness for borrowed money whether directly or indirectly, by way of purchase
money obligation, conditional sale, lease purchase, guaranty or otherwise, in respect of which Alpena Banking Corporation or any
Alpena Banking Subsidiary is an obligor to any person, which instrument evidences or relates to indebtedness other than deposits,
repurchase agreements, FHLB advances, bankers’ acceptances, and “treasury tax and loan” accounts and transactions
in “federal funds” in each case established in the ordinary course of business consistent with past practice, or which
contains financial covenants or other restrictions (other than those relating to the payment of principal and interest when due)
which would be applicable on or after the Closing Date to First Federal Bancorp or any First Federal Bancorp Subsidiary; (vi)
any other agreement, written or oral, that obligates Alpena Banking Corporation or any Alpena Banking Subsidiary for the payment
of more than $50,000 annually or for the payment of more than $100,000 over its remaining term, which is not terminable without
cause on 60 days’ or less notice without penalty or payment (other than agreements for commercially available “off-the-shelf”
software), or (vii) any agreement (other than this Agreement), contract, arrangement, commitment or understanding (whether written
or oral) that restricts or limits in any material way the conduct of business by Alpena Banking Corporation or any Alpena Banking
Subsidiary (it being understood that any non-compete or similar provision shall be deemed material, but any limitation on the
scope of any license granted under any such agreement shall not be deemed material).

 

(b)          Alpena
Banking Corporation has Previously Disclosed each real estate lease to which it or any Alpena Banking Subsidiary is a party that
requires the consent of the lessor or its agent resulting from the Merger or the Bank Merger by virtue of the terms of any such
lease. Subject to any consents that may be required as a result of the transactions contemplated by this Agreement, to its Knowledge,
neither Alpena Banking Corporation nor any Alpena Banking Subsidiary is in default in any material respect under any material
contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which it is a party, by which its
assets, business, or operations may be bound or affected, or under which it or its assets, business, or operations receive benefits,
and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default.

 

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(c)          True
and correct copies of agreements, contracts, arrangements and instruments referred to in Section 3.09(a) and (b) (“Material
Contracts”) have been made available to First Federal Bancorp on or before the date hereof, and are in full force and effect
on the date hereof. Except as Previously Disclosed, no party to any Material Contract will have the right to terminate any or
all of the provisions of any such Material Contract as a result of the execution of, and the consummation of the transactions
contemplated by, this Agreement. 

 

(d)          Since
December 31, 2012, through and including the date of this Agreement, and except as Previously Disclosed, neither Alpena Banking
Corporation nor any Alpena Banking Subsidiary has (i) except for (A) normal increases for employees made in the ordinary
course of business consistent with past practice, or (B) as required by applicable law, increased the wages, salaries, compensation,
pension, or other fringe benefits or perquisites payable to any executive officer, employee, or director, granted any severance
or termination pay, entered into any contract to make or grant any severance or termination pay (except as required under the
terms of agreements or severance plans and as Previously Disclosed by Alpena Banking Corporation), or paid any bonus other than
the customary year-end bonuses in amounts consistent with past practice, (ii) granted any options to purchase shares of Alpena
Banking Corporation Common Stock, or any right to acquire any shares of its capital stock to any officer, director or employee,
(iii) increased or established any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or
restricted stock awards), stock purchase or other employee benefit plan, (iv) made any material election for Federal or state
income tax purposes, (v) made any material change in the credit policies or procedures of Alpena Banking Corporation or any
of the Alpena Banking Subsidiaries, the effect of which was or is to make any such policy or procedure less restrictive in any
material respect, (vi) made any material acquisition or disposition of any assets or properties, or any contract for any such
acquisition or disposition entered into other than loans and loan commitments, (vii) entered into any lease of real or personal
property requiring annual payments in excess of $50,000 other than in connection with foreclosed property or in the ordinary course
of business consistent with past practice, (viii) changed any accounting methods, principles or practices of Alpena Banking Corporation
or its Subsidiaries affecting its assets, liabilities or businesses, including any reserving, renewal or residual method, practice
or policy or (ix) suffered any strike, work stoppage, slow-down, or other labor disturbance.

 

Section 3.10         Ownership
of Property; Insurance Coverage.

 

(a)          Alpena
Banking Corporation and each Alpena Banking Subsidiary has good and, as to real property, marketable title to all material assets
and properties owned by it or each Alpena Banking Subsidiary in the conduct of its businesses, whether such assets and properties
are real or personal, tangible or intangible, including assets and property reflected in the balance sheets contained in the Alpena
Banking Financials or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of
in the ordinary course of business, since the date of such balance sheets), subject to no material encumbrances, liens, mortgages,
security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or any
discount with, borrowing from or other obligations to FHLB, inter-bank credit facilities, or any transaction by an Alpena Banking
Subsidiary acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or that are being contested in
good faith, (iii) non-monetary liens affecting real property that do not adversely affect the value or use of such real property,
and (iv) those described and reflected in the Alpena Banking Financials. Alpena Banking Corporation and the Alpena Banking Corporation
Subsidiaries, as lessee, have the right under valid and existing leases of real and personal properties used by Alpena Banking
Corporation and its Subsidiaries in the conduct of their businesses to occupy or use all such properties as presently occupied
and used by each of them. 

 

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(b)          With
respect to all material agreements pursuant to which Alpena Banking Corporation or any Alpena Banking Subsidiary has purchased
securities subject to an agreement to resell, if any, Alpena Banking Corporation or such Alpena Banking Subsidiary, as the case
may be, has a lien or security interest (which to Alpena Banking Corporation’s Knowledge is a valid, perfected first lien)
in the securities or other collateral securing the repurchase agreement, and the value of such collateral equals or exceeds the
amount of the debt secured thereby.

 

(c)          Alpena
Banking Corporation and each Alpena Banking Subsidiary currently maintain insurance considered by each of them to be reasonable
for their respective operations. Except as Previously Disclosed, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary,
has received notice from any insurance carrier since December 31, 2010 that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs (other than with respect to health or disability insurance) with
respect to such policies of insurance will be substantially increased. Except as Previously Disclosed, there are presently no
material claims pending under such policies of insurance and no notices have been given by Alpena Banking Corporation or any Alpena
Banking Subsidiary under such policies (other than with respect to health or disability insurance). All such insurance is valid
and enforceable and in full force and effect, and since December 31, 2010, Alpena Banking Corporation and each Alpena Banking
Subsidiary has received each type of insurance coverage for which it has applied and during such periods has not been denied indemnification
for any material claims submitted under any of its insurance policies.

 

Section 3.11         Legal
Proceedings.

 

Except as Previously
Disclosed, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary is a party to any, and there are no pending
or, to the Knowledge of Alpena Banking Corporation, threatened legal, administrative, arbitration or other proceedings, claims
(whether asserted or unasserted), actions or governmental investigations or inquiries of any nature (i) against Alpena Banking
Corporation or any Alpena Banking Subsidiary, (ii) to which Alpena Banking Corporation or any Alpena Banking Subsidiary’s
assets are or may be subject, (iii) challenging the validity or propriety of any of the transactions contemplated by this Agreement,
or (iv) which would reasonably be expected to adversely affect the ability of Alpena Banking Corporation to perform under this
Agreement, except as to (i) and (ii) above, for any proceeding, claim, action, investigation or inquiry which, if adversely determined,
individually or in the aggregate, would not be reasonably expected to have a Material Adverse Effect on Alpena Banking Corporation.

 

Section 3.12         Compliance
With Applicable Law.

 

(a)          Except
as Previously Disclosed and where noncompliance
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Alpena Banking Corporation,
to Alpena Banking Corporation’s Knowledge each of Alpena Banking Corporation and each Alpena Banking Subsidiary is in compliance
in all material respects with all applicable Federal, state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable to it, its properties, assets and deposits, its business, and its conduct of business
and its relationship with its employees, including, without limitation, the Bank Secrecy Act, the USA PATRIOT Act, the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, the Fair Housing Act and all other
applicable fair lending laws and other laws relating to discriminatory business practices, and neither Alpena Banking Corporation
nor any Alpena Banking Subsidiary has received any written notice to the contrary. The Board of Directors of Bank of Alpena has
adopted, and Bank of Alpena has implemented, an anti-money laundering program that contains adequate and appropriate customer
identification verification procedures that has not been deemed ineffective by any Governmental Entity and that meets the requirements
of Sections 352 and 326 of the USA PATRIOT Act and the regulations thereunder.

 

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(b)          Each
of Alpena Banking Corporation and each Alpena Banking Subsidiary has all material permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all Governmental Entities and Regulatory Authorities
that are required to allow it to own or lease its properties and to conduct its business as presently conducted except where the
failure to hold such permits, licensees, authorizations, orders or approvals, or the failure to make such filings, applications
or registrations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Alpena
Banking Corporation; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect
in all material respects and, to the Knowledge of Alpena Banking Corporation, no suspension or cancellation of any such permit,
license, certificate, order or approval is threatened or will result from the consummation of the transactions contemplated by
this Agreement, subject to obtaining Regulatory Approvals.

 

(c)          Except
as Previously Disclosed, since December 31, 2010, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary has received
any written notification or, to Alpena Banking Corporation’s Knowledge, any other communication from any Regulatory Authority
(i) asserting that Alpena Banking Corporation or any Alpena Banking Subsidiary is not in material compliance with any of the statutes,
regulations or ordinances that such Regulatory Authority enforces; (ii) requiring or threatening to require, Alpena Banking
Corporation or any Alpena Banking Subsidiary, or indicating that Alpena Banking Corporation or any Alpena Banking Subsidiary may
be required, to enter into a cease and desist order, agreement or memorandum of understanding or any other agreement with any
Federal or state governmental agency or authority that is charged with the supervision or regulation of banks or engages in the
insurance of bank deposits; or (iii) directing, restricting or limiting, or purporting to direct, restrict or limit, in any manner
the operations of Alpena Banking Corporation or any Alpena Banking Subsidiary, including without limitation any restriction on
the payment of dividends (any such notice, communication, memorandum, agreement or order described in this sentence is hereinafter
referred to as an “Alpena Banking Corporation Regulatory Agreement”). Neither Alpena Banking Corporation nor any Alpena
Banking Subsidiary has consented to or entered into any Alpena Banking Corporation Regulatory Agreement that is currently in effect.
The most recent regulatory rating given to Bank of Alpena as to compliance with the Community Reinvestment Act (“CRA”)
is satisfactory or better.

 

Section 3.13         Employee
Benefit Plans.

 

(a)          Alpena
Banking Corporation has Previously Disclosed a list of all existing bonus, incentive,
deferred compensation, supplemental executive retirement plans, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock, stock option, stock appreciation, phantom stock, severance, welfare
benefit plans (including paid time off policies and other material benefit policies and procedures), fringe benefit plans, employment,
consulting, settlement and change in control agreements and all other material benefit practices, policies and arrangements maintained
by Alpena Banking Corporation or any Alpena Banking Subsidiary in which any employee or former employee, consultant or former
consultant or director or former director participates or to which any such employee, consultant or director is a party or is
otherwise entitled to receive benefits (the “Alpena Banking Corporation Compensation and Benefit Plans”). Neither
Alpena Banking Corporation nor any Alpena Banking Subsidiary has any commitment to create any additional Alpena Banking Corporation
Compensation and Benefit Plan or to materially modify, change or renew any existing Alpena Banking Corporation Compensation and
Benefit Plan (any modification or change that increases the cost of such plans would be deemed material), except as required to
maintain the qualified status thereof. Alpena Banking Corporation has made available to First Federal Bancorp true and correct
copies of the Alpena Banking Corporation Compensation and Benefit Plans.

 

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(b)          To
the Knowledge of Alpena Banking Corporation, each Alpena Banking Corporation Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with applicable law, including, but not limited to, ERISA,
the IRC, the Age Discrimination in Employment Act, Part G of Subtitle I of ERISA and Section 4980B of the IRC (collectively, “COBRA”),
the Health Insurance Portability and Accountability Act (“HIPAA”) and any regulations or rules promulgated thereunder,
and all material filings, disclosures and notices required by ERISA, the IRC, the Securities Act, the Exchange Act, the Age Discrimination
in Employment Act, COBRA and HIPAA and any other applicable law have been timely made or any interest, fines, penalties or other
impositions for late filings have been paid in full. Each Alpena Banking Corporation Compensation and Benefit Plan that is an
“employee pension benefit plan” within the meaning of Section 3(2) of ERISA and that is intended to be qualified under
Section 401(a) of the IRC has received a favorable determination letter from the IRS or is entitled to rely on a determination
letter issued to the sponsor of a master or prototype plan, and Alpena Banking Corporation is not aware of any circumstances that
are reasonably likely to result in revocation of any such favorable determination letter. There is no material pending or, to
the Knowledge of Alpena Banking Corporation, threatened action, suit or claim relating to any of the Alpena Banking Corporation
Compensation and Benefit Plans (other than routine claims for benefits). Neither Alpena Banking Corporation nor any Alpena Banking
Subsidiary has engaged in a transaction, or omitted to take any action, with respect to any Alpena Banking Corporation Compensation
and Benefit Plan that would reasonably be expected to subject Alpena Banking Corporation or any Alpena Banking Subsidiary to a
material unpaid tax or penalty imposed by either Chapter 43 of the IRC or Sections 409 or 502 of ERISA.

 

(c)          No
liability under Title IV of ERISA has been incurred by Alpena Banking Corporation or any Alpena Banking Subsidiary with respect
to any Alpena Banking Corporation Compensation and Benefit Plan that is subject to Title IV of ERISA (“Alpena Banking Corporation
Defined Benefit Plan”) currently or formerly maintained by Alpena Banking Corporation or any entity that is considered one
employer with Alpena Banking Corporation under Section 4001(b)(1) of ERISA or Section 414 of the IRC (an “Alpena Banking
Corporation ERISA Affiliate”) since the effective date of ERISA that has not been satisfied in full, and no condition exists
that presents a material risk to Alpena Banking Corporation or any Alpena Banking Corporation ERISA Affiliate of incurring a liability
under such Title. No Alpena Banking Corporation Defined Benefit Plan had an “accumulated funding deficiency” (as defined
in Section 302 of ERISA), whether or not waived, as of the last day of the end of the most recent plan year ending prior to the
date hereof. Except as Previously Disclosed, the fair market value of the assets of each Alpena Banking Corporation Defined Benefit
Plan exceeds the present value of the “benefit liabilities” (as defined in Section 4001(a)(16) of ERISA) under such
Alpena Banking Corporation Defined Benefit Plan as of the end of the most recent plan year with respect to the respective Alpena
Banking Corporation Defined Benefit Plan ending prior to the date hereof, calculated on the basis of the actuarial assumptions
used in the most recent actuarial valuation for such Alpena Banking Corporation Defined Benefit Plan as of the date hereof; there
is not currently pending with the Pension Benefits Guarantee Corporation (“PBGC”) any filing with respect to any reportable
event under Section 4043 of ERISA nor has any reportable event occurred as to which a filing is required and has not been made
(other than as might be required with respect to this Agreement and the transactions contemplated thereby). Neither Alpena Banking
Corporation nor any Alpena Banking Corporation ERISA Affiliate has contributed to any “multiemployer plan,” as defined
in Section 3(37) of ERISA. Neither Alpena Banking Corporation, nor any Alpena Banking Corporation ERISA Affiliate, nor any Alpena
Banking Corporation Compensation and Benefit Plan, including any Alpena Banking Corporation Defined Benefit Plan, nor any trust
created thereunder, nor any trustee or administrator thereof, has engaged in a transaction in connection with which Alpena Banking
Corporation, any Alpena Banking Corporation ERISA Affiliate, and any Alpena Banking Corporation Compensation and Benefit Plan,
including any Alpena Banking Corporation Defined Benefit Plan or any such trust or any trustee or administrator thereof, could
reasonably be expected to be subject to either a civil liability or penalty pursuant to Section 409, 502(i) or 502(l) of ERISA
or a tax imposed pursuant to Chapter 43 of the IRC.

 

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(d)          All
material contributions required to be made under the terms of any Alpena Banking Corporation Compensation and Benefit Plan have
been timely made, and all anticipated contributions and funding obligations are accrued on Alpena Banking Corporation’s
consolidated financial statements to the extent required by GAAP. Alpena Banking Corporation and each Alpena Banking Subsidiary
has expensed and accrued as a liability the present value of future benefits under each applicable Alpena Banking Corporation
Compensation and Benefit Plan for financial reporting purposes to the extent required by GAAP. 

 

(e)          Except
as Previously Disclosed, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary
has any obligations to provide retiree health, life insurance, or disability insurance, or any retiree death benefits under any
Alpena Banking Corporation Compensation and Benefit Plan, other than benefits mandated by COBRA. There has been no communication
to employees by Alpena Banking Corporation or any Alpena Banking Subsidiary that would reasonably be expected to promise or guarantee
such employees retiree health, life insurance, or disability insurance, or any retiree death benefits.

 

(f)           Alpena
Banking Corporation and its Subsidiaries do not maintain any Alpena Banking Corporation Compensation and Benefit Plans covering
employees who are not United States residents. 

 

(g)          With
respect to each Alpena Banking Corporation Compensation and Benefit Plan, if applicable, Alpena Banking Corporation has provided
or made available to First Federal Bancorp copies of the: (A) plan documents, trust instruments and insurance contracts; (B) three
most recent IRS Forms 5500; (C) three most recent actuarial reports and financial statements; (D) most recent summary plan
description; (E) most recent determination letter issued by the IRS; (F) any Form 5310 or Form 5330 filed with the IRS within
the last three years; (G) most recent nondiscrimination tests performed under ERISA and the IRC (including 401(k) and 401(m) tests);
and (H) PBGC Form 500 and 501 filings, along with the Notice of Intent to Terminate, ERISA Section 204(h) Notice, Notice of Plan
Benefits, and all other documentation related to the termination of an Alpena Banking Corporation Pension Plan.

 

(h)          Except
as Previously Disclosed, the consummation of the Merger or the Bank Merger will not, directly or indirectly (including, without
limitation, as a result of any termination of employment or service at any time prior to or following the Effective Time) (A)
entitle any employee, consultant or director to any payment or benefit (including severance pay, change in control benefit, or
similar compensation) or any increase in compensation, (B) entitle any employee or independent contractor to terminate any plan,
agreement or arrangement without cause and continue to accrue future benefits thereunder, or result in the vesting or acceleration
of any benefits under any Alpena Banking Corporation Compensation and Benefit Plan, (C) result in any material increase in benefits
payable under any Alpena Banking Corporation Compensation and Benefit Plan, or (D) entitle any current or former employee, director
or independent contractor of Alpena Banking Corporation or any Alpena Banking Subsidiary to any actual or deemed payment (or benefit)
which could constitute a “parachute payment” (as such term is defined in Section 280G of the IRC). No payments to
any employee or director have been made or will be made (or will be required to be made) as the result of the transactions contemplated
hereby that would result in a violation of Section 18(k) of the FDIA (12 U.S.C. 1828(k)) and the regulations promulgated thereunder
by the FDIC (12 C.F.R. Part 359), or any successor statute or regulation. 

 

(i)          Neither
Alpena Banking Corporation nor any Alpena Banking Subsidiary maintains any compensation plans, programs or arrangements under
which any payment is reasonably likely to become non-deductible, in whole or in part, for tax reporting purposes as a result of
the limitations under Section 162(m) of the IRC and the regulations thereunder.

 

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(j)          
Except as Previously Disclosed, there are no stock options, stock appreciation
or similar rights, earned dividends or dividend equivalents, or shares of restricted stock, outstanding under any of the Alpena
Banking Corporation Compensation and Benefit Plans or otherwise as of the date hereof and none will be granted, awarded, or credited
after the date hereof.

 

Section 3.14         Brokers,
Finders and Financial Advisors.

 

Neither Alpena Banking
Corporation nor any Alpena Banking Subsidiary, nor any of their respective officers, directors, employees or agents, has employed
any broker, finder or financial advisor in connection with the transactions contemplated by this Agreement, or incurred any liability
or commitment for any fees or commissions to any such person in connection with the transactions contemplated by this Agreement
except for the retention of RP Financial, LC. by Alpena Banking Corporation and the fee payable pursuant thereto. Alpena Banking
Corporation has Previously Disclosed a true and correct copy of the engagement agreement with RP Financial, LC. for its services
rendered to Alpena Banking Corporation in connection with the Merger and transactions contemplated by this Agreement.

 

Section 3.15         Environmental
Matters.

 

(a)          With
respect to Alpena Banking Corporation and each Alpena Banking Subsidiary:

 

(i)          To
the Knowledge of Alpena Banking Corporation and each Alpena Banking Subsidiary, neither the conduct nor operation of its business
nor any condition of any property currently or previously owned or operated by it, results or resulted in a violation of any Environmental
Laws that is reasonably likely to impose a material liability (including a material remediation obligation) upon Alpena Banking
Corporation or any Alpena Banking Subsidiary. Except as Previously Disclosed, to the Knowledge of Alpena Banking Corporation,
no condition exists or event has occurred with respect to Alpena Banking Corporation or any Alpena Banking Subsidiary or any owned
or operated property that is reasonably likely to result in any material liability to Alpena Banking Corporation or any Alpena
Banking Subsidiary by reason of any Environmental Laws. Neither Alpena Banking Corporation nor any Alpena Banking Subsidiary during
the past five years has received any written notice from any Person or Governmental Entity that Alpena Banking Corporation or
any Alpena Banking Subsidiary or the operation or condition of any property ever owned or operated by Alpena Banking Corporation
or any Alpena Banking Subsidiary (including Participation Facilities) is currently in violation of or otherwise is alleged to
have liability under any Environmental Laws or relating to Materials of Environmental Concern (including, but not limited to,
responsibility (or potential responsibility) for the cleanup or other remediation of any Materials of Environmental Concern at,
on, beneath, or originating from any such property) for which a material liability is reasonably likely to be imposed upon Alpena
Banking Corporation or any Alpena Banking Subsidiary;

 

(ii)         There
is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the
Knowledge of Alpena Banking Corporation, threatened, before any court, governmental agency or other forum against Alpena Banking
Corporation or any Alpena Banking Subsidiary (x) for alleged noncompliance (including by any predecessor) with, or liability under,
any Environmental Law or (y) relating to the presence of or Release into the environment of any Materials of Environmental Concern
whether or not occurring at or on a site owned, leased or operated by Alpena Banking Corporation or any Alpena Banking Subsidiary;

 

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(iii)          To
Alpena Banking Corporation’s Knowledge, there are no underground storage tanks on, in or under any properties owned or operated
by Alpena Banking Corporation or any of the Alpena Banking Corporation Subsidiaries, and to Alpena Banking Corporation’s
Knowledge, no underground storage tanks have been closed or removed from any properties owned or operated by Alpena Banking Corporation
or any of the Alpena Banking Corporation Subsidiaries or any Participation Facility except in compliance with Environmental Laws
in all material respects; and

 

(iv)
       To the Knowledge of Alpena Banking Corporation, no condition exists on any property for which Alpena Banking Corporation holds
a lien, that results or resulted in a material violation of Environmental Laws or creates a material liability under Environmental
Law that is reasonably likely to impose a material liability (including a material remediation obligation) upon Alpena Banking
Corporation or any Alpena Banking Subsidiary.

 

(b)
       “Participation Facility” means any facility in which Alpena Banking Corporation or its Subsidiaries participates
in the management (as that term is defined under CERCLA), whether as a fiduciary, lender in control of the facility, owner or
operator.

 

Section 3.16         Loan
Portfolio.

 

(a)          The
allowance for loan losses reflected in Alpena Banking Corporation’s audited consolidated balance sheet at December 31, 2012
was, and the allowance for loan losses shown on the balance sheets in filings made by Alpena Banking Corporation of any Alpena
Banking Subsidiary with any Governmental Entity or Regulatory Authority for periods ending after December 31, 2012 was or will
be, adequate, as of the date thereof, under GAAP.

 

(b)          Alpena
Banking Corporation has Previously Disclosed a list setting forth, as of December 31, 2013, by account, of: (A) all loans
(including loan participations) of Alpena Banking Corporation or any other Alpena Banking Subsidiary that have been accelerated
during the past twelve months; (B) all loan commitments or lines of credit of Alpena Banking Corporation or any other Alpena Banking
Subsidiary which have been terminated by Alpena Banking Corporation or any other Alpena Banking Subsidiary during the past twelve
months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances affecting
the credit of the borrower; (C) each borrower, customer or other party which has notified Alpena Banking Corporation or any other
Alpena Banking Subsidiary during the three years preceding the date of this Agreement, or has asserted against Alpena Banking
Corporation or any other Alpena Banking Subsidiary, in each case in writing, any “lender liability” or similar claim,
and, to the Knowledge of Alpena Banking Corporation, each borrower, customer or other party which has given Alpena Banking Corporation
or any other Alpena Banking Subsidiary any oral notification of, or orally asserted to or against Alpena Banking Corporation or
any other Alpena Banking Subsidiary, any such claim; (D) all loans (1) that are contractually past due 90 days or more in the
payment of principal and/or interest, (2) that are on non-accrual status, (3) that are as of the date of this Agreement classified
as “substandard,” “doubtful,” “loss,” “classified,” “criticized,”
“credit risk assets,” “concerned loans,” “watch list” or “special mention” (or
words of similar import) by Alpena Banking Corporation and any Alpena Banking Subsidiary, or any applicable Regulatory Authority,
(4) as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not
interest is still accruing or the loans are less than 90 days past due, (5) where, during the past three years, the interest rate
terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally
created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (6) where a specific
reserve allocation exists in connection therewith or (7) that are required to be accounted for as a troubled debt restructuring
in accordance with Accounting Standards Codification 310-40; and (E) all assets classified by Bank of Alpena or any Alpena Banking
Subsidiary as real estate acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all
other assets currently held that were acquired through foreclosure or in lieu of foreclosure. The foregoing excludes any individual
loan with a principal balance of less than $50,000.

 

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(c)          All
loans receivable (including discounts) and accrued interest entered on the books of Alpena Banking Corporation and the Alpena
Banking Subsidiaries arose out of bona fide arm’s-length transactions and were made for good and valuable consideration
in the ordinary course of Alpena Banking Corporation’s or the appropriate Alpena Banking Subsidiary’s respective business.
To the Knowledge of Alpena Banking Corporation, the loans, discounts and the accrued interest reflected on the books of Alpena
Banking Corporation and the Alpena Banking Subsidiaries are subject to no defenses, set-offs or counterclaims (including, without
limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar
laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by Alpena Banking
Corporation or the appropriate Alpena Banking Subsidiary free and clear of any liens. 

 

(d)          The
notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and
other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and
what they purport to be.

 

Section 3.17         Related
Party Transactions.

 

Except as Previously
Disclosed, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary is a party to any transaction (including any loan
or other credit accommodation) with any Affiliate of Alpena Banking Corporation or any Alpena Banking Subsidiary. All such transactions
(a) were made in the ordinary course of business, (b) were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with other Persons, and (c) did not involve substantially
more than the normal risk of collectability or present other unfavorable features (as such terms are used under Item 404 of SEC
Regulation S-K promulgated under the Securities Act and the Exchange Act). No loan or credit accommodation to any Affiliate of
Alpena Banking Corporation or any Alpena Banking Subsidiary is presently in default or, during the three-year period prior to
the date of this Agreement, has been in default or has been restructured, modified or extended. To the Knowledge of Alpena Banking
Corporation, neither Alpena Banking Corporation nor any Alpena Banking Subsidiary has been notified that principal and interest
with respect to any such loan or other credit accommodation will not be paid when due or that the loan grade classification accorded
such loan or credit accommodation by Alpena Banking Corporation is inappropriate.

 

Section 3.18         Registration
Obligations.

 

Neither Alpena Banking
Corporation nor any Alpena Banking Subsidiary is under any obligation, contingent or otherwise, which will survive the Effective
Time by reason of any agreement to register any transaction involving any of its securities under the Securities Act.

 

Section 3.19         Risk
Management Instruments.

 

Except as may be included
in its loan documents with its customers, Alpena Banking Corporation and Alpena Bank have not entered into and do not maintain
any material interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management
arrangements, whether entered into for Alpena Banking Corporation’s own account, or for the account of one or more of Alpena
Banking Corporation’s Subsidiaries or their customers.

 

    	24

    	 

    

  

Section 3.20         Fairness
Opinion.

 

Alpena Banking Corporation
has received a written opinion from RP Financial, LC. to the effect that, subject to the terms, conditions and qualifications
set forth therein, as of the date hereof, the Merger Consideration to be received by the shareholders of Alpena Banking Corporation
pursuant to this Agreement is fair to such shareholders from a financial point of view.

 

Section 3.21         Fiduciary
Accounts.

 

Bank of Alpena and
each of its Subsidiaries has properly administered all accounts for which it acts as a fiduciary, including but not limited to
accounts for which it serves as trustee, agent, custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents and applicable laws and regulations. Neither Alpena Banking Corporation
nor any other Alpena Banking Subsidiary, and to the Knowledge of Alpena Banking Corporation, nor has any of their respective directors,
officers or employees, committed any breach of trust with respect to any such fiduciary account and the records for each such
fiduciary account.

 

Section 3.22         Intellectual
Property.

 

Alpena Banking Corporation
and each Alpena Banking Subsidiary owns or, to Alpena Banking Corporation’s Knowledge, possesses valid and binding licenses
and other rights (subject to expirations in accordance with their terms) to use all patents, copyrights, trade secrets, trade
names, service marks and trademarks, which are material to the conduct of their business as currently conducted, each without
payment, except for all license agreements under which license fees or other payments are due in the ordinary course of Alpena
Banking Corporation’s or each of Alpena Banking Corporation’s Subsidiaries’ business, and neither Alpena Banking
Corporation nor any Alpena Banking Subsidiary has received any notice of conflict with respect thereto that asserts the rights
of others. Alpena Banking Corporation and each Alpena Banking Subsidiary has performed all the material obligations required to
be performed, and are not in default in any respect, under any contract, agreement, arrangement or commitment relating to any
of the foregoing. To the Knowledge of Alpena Banking Corporation, the conduct of the business of Alpena Banking Corporation and
each Alpena Banking Subsidiary as currently conducted or proposed to be conducted does not, in any material respect, infringe
upon, dilute, misappropriate or otherwise violate any intellectual property owned or controlled by any third party.

 

Section 3.23         Labor
Matters.

 

There are no labor
or collective bargaining agreements to which Alpena Banking Corporation or any Alpena Banking Subsidiary is a party. To the Knowledge
of Alpena Banking Corporation, there is no union organizing effort pending or threatened against Alpena Banking Corporation or
any Alpena Banking Subsidiary. There is no labor strike, labor dispute (other than routine employee grievances that are not related
to union employees), work slowdown, stoppage or lockout pending or, to the Knowledge of Alpena Banking Corporation, threatened
against Alpena Banking Corporation or any Alpena Banking Subsidiary. There is no unfair labor practice or labor arbitration proceeding
pending or, to the Knowledge of Alpena Banking Corporation, threatened against Alpena Banking Corporation or any Alpena Banking
Subsidiary (other than routine employee grievances that are not related to union employees). Alpena Banking Corporation and each
Alpena Banking Subsidiary is in compliance in all material respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not engaged in any unfair labor practice.

 

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Section 3.24         Alpena
Banking Corporation Information Supplied.

 

The information relating
to Alpena Banking Corporation and any Alpena Banking Subsidiary to be contained in the Proxy Statement-Prospectus, or furnished
to First Federal Bancorp for inclusion in any other document filed with any Regulatory Authority or other Governmental Entity
in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which they are made, not misleading.

 

Section 3.25         No
Dissenters Rights.

 

Stockholders of Alpena
Banking Corporation do not have dissenters’ rights of appraisal or other similar rights under the MBCA in connection with
the transactions contemplated by this Agreement.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF FIRST FEDERAL BANCORP

 

Except as Previously
Disclosed, First Federal Bancorp represents and warrants to Alpena Banking Corporation as follows:

 

Section 4.01         Standard.

 

Except as set forth
in the following sentence, no representation or warranty of First Federal Bancorp contained in this Article IV (other than
the representation and warranty contained in Section 4.08, which shall be true in all respects) shall be deemed untrue or incorrect,
and First Federal Bancorp shall not be deemed to have breached a representation or warranty, as a consequence of the existence
of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of this Article IV, has had or reasonably would be expected to have
a Material Adverse Effect, disregarding for these purposes (x) any qualification or exception for, or reference to, materiality
in any such representation or warranty and (y) any use of the terms “material,” “materially,” “in
all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or
warranty. The foregoing standard shall not apply to representations and warranties contained in Sections 4.02 (other than
Sections 4.02(d) and 4.02(e) and the last sentence of Section 4.02(b)), Section 4.03, and Section 4.04 (other than Section
4.04(b)(iii)), which shall be true and correct in all material respects.

 

Section 4.02         Organization.

 

(a)          First
Federal Bancorp is a corporation organized and validly existing under the laws of the State of Maryland, and is duly registered
as a savings and loan holding company under the HOLA. First Federal Bancorp has full corporate power and authority to carry on
its business as now conducted and is duly licensed or qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in
good standing would not have a Material Adverse Effect on First Federal Bancorp. Except
as Previously Disclosed or pursuant to this Agreement, First Federal Bancorp does not own, or control, directly or indirectly,
or have the right to acquire directly or indirectly, any equity interest in any corporation, limited liability company, association,
partnership, joint venture or other entity.

 

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(b)          Except
as Previously Disclosed and except for its Subsidiaries that are identified as First Federal Bank Subsidiaries, First Federal
Bank does not possess, directly or indirectly, any material equity interest in any corporation, limited liability company, association,
partnership, joint venture or other entity, except for the equity interests held in its investment portfolio, equity interests
held be First Federal Bank in a fiduciary capacity, and equity interests held in connection with its lending activities. First
Federal Bank owns all of the outstanding shares of capital stock of each First Federal Bank Subsidiary free and clear of all liens,
security interests, pledges, charges, encumbrances, agreements and restrictions of any kind or nature. First Federal Bank is a
savings bank duly organized and validly existing under the laws of the United States. The deposits of First Federal Bank are insured
by the FDIC to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection therewith
have been paid when due. First Federal Bank is a member in good standing of the FHLB and owns the requisite amount of stock therein.

 

(c)          The
respective minute books of First Federal Bancorp and each First Federal Bancorp Subsidiary accurately record, in all material
respects, all material corporate actions of their respective shareholders and boards of directors (including committees) through
the date of this Agreement.

 

(d)          Prior
to the date of this Agreement, First Federal Bancorp has made available to Alpena Banking Corporation true and correct copies
of the articles of incorporation/charters and bylaws of First Federal Bancorp and First Federal Bank.

 

Section 4.03         Capitalization.

 

(a)         The authorized
capital stock of First Federal Bancorp consists of twenty million (20,000,000) shares of common stock, $0.01 par value (“First
Federal Bancorp Common Stock”), and ten million (10,000,000) shares of Preferred Stock, $0.01 par value (the “First
Federal Bancorp Preferred Stock”). There are 2,884,049 shares of First Federal Bancorp Common Stock outstanding, all of
which are validly issued, fully paid and nonassessable and none of which were issued in violation of any preemptive rights. There
are no shares of First Federal Bancorp Preferred Stock issued and outstanding. There are 307,750 shares of First Federal Bancorp
Common Stock held by First Federal Bancorp as treasury stock. Except for First Federal Bancorp Options, neither First Federal
Bancorp nor any First Federal Bancorp Subsidiary has or is bound by any Right of any character relating to the purchase, sale,
issuance or voting of, or right to receive dividends or other distributions on, any shares of First Federal Bancorp Common Stock,
or any other security of First Federal Bancorp or any First Federal Bancorp Subsidiary, or any securities representing the right
to vote, purchase or otherwise receive any shares of First Federal Bancorp Common Stock or any other security of First Federal
Bancorp.

 

(b)        There are
one thousand (1,000) shares of First Federal Bank common stock outstanding, all of which are validly issued, fully paid and nonassessable
and none of which were issued in violation of any preemptive rights, and all of which are owned by First Federal Bancorp free
and clear of any liens, encumbrances, charges, restrictions or rights of third parties of any kind whatsoever.

 

Section 4.04         Authority;
No Violation.

 

(a)          First
Federal Bancorp has full power and authority to execute and deliver this Agreement, perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this Agreement by First Federal Bancorp and the completion
by First Federal Bancorp of the transactions contemplated hereby have been duly and validly approved by the requisite vote of
the Board of Directors of First Federal Bancorp and, except for approval from the shareholders of First Federal Bancorp and approval
by First Federal Bancorp as the sole shareholder of First Federal Bank, no other corporate proceedings on the part of First Federal
Bancorp are necessary to complete the transactions contemplated hereby. This Agreement has been duly and validly executed and
delivered by First Federal Bancorp and constitutes the valid and binding obligations of First Federal Bancorp, enforceable against
First Federal Bancorp in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, and subject, as to enforceability, to general principles of equity.

 

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(b)          Subject
to the receipt of approvals from the Regulatory Authorities and the compliance by First Federal Bancorp and Alpena Banking Corporation
with any conditions contained therein (including the expiration of any applicable waiting period),

 

(A)         the
execution and delivery of this Agreement by First Federal Bancorp,

 

(B)         the
consummation of the transactions contemplated hereby, and

 

(C)         compliance
by First Federal Bancorp with any of the terms or provisions hereof,

 

will not: (i) conflict
with or result in a material breach of any provision of the articles of incorporation or bylaws of First Federal Bancorp or the
articles of incorporation/charter of any First Federal Subsidiary; (ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to First Federal Bancorp or any of the properties or assets of First Federal
Bancorp or any First Federal Subsidiary; or (iii) violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination
of, accelerate the performance required by, or result in a right of termination or acceleration or the creation of any lien, security
interest, charge or other encumbrance upon any of the properties or assets of First Federal Bancorp or any First Federal Subsidiary
under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or other investment or obligation to which First Federal Bancorp or any First Federal Subsidiary is a party, or by which they
or any of their respective properties or assets may be bound or affected, except in the case of clause (iii) above, for violations
which, individually or in the aggregate, would not have a Material Adverse Effect on First Federal Bancorp.

 

(c)          The
board of directors of First Federal Bancorp, by resolution duly adopted by the requisite vote of the board of directors at a meeting
duly called and held, has (x) determined that this Agreement, the Merger and the other transactions contemplated hereby are fair
to and in the best interests of First Federal Bancorp and its shareholders, and (y) recommended that the shareholders of First
Federal Bancorp approve this Agreement and directed that such matter be submitted for consideration by the First Federal Bancorp
shareholders at the First Federal Bancorp Shareholders Meeting.

 

(d)          The
affirmative vote of the majority of the votes cast at a meeting of the shareholders of First Federal Bancorp Common Stock is the
only vote of holders of any class of First Federal Bancorp’s capital stock necessary to adopt and approve this Agreement
and the transactions contemplated hereby.

 

Section 4.05         Consents.

 

Except as Previously
Disclosed and for (a) filings with Regulatory Authorities, the receipt of the Regulatory Approvals, the expiration of any
waiting periods, and compliance with any conditions contained therein, (b) the filing of the Articles of Merger with the
Maryland Department and the Certificate of Merger with the Michigan Director, (c) the filing with the SEC of (i) the Merger
Registration Statement and (ii) such reports under Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act as may be required
in connection with this Agreement and the transactions contemplated hereby and the obtaining from the SEC of such orders as may
be required in connection therewith, (d) the filing with the Nasdaq Stock Market of a notification of the listing of the shares
of First Federal Bancorp Common Stock to be issued in the Merger, (e) such filings and approvals as are required to be made or
obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of shares of First
Federal Bancorp Common Stock pursuant to this Agreement and (f) the approval of this Agreement by the requisite votes of the shareholders
of Alpena Banking Corporation and First Federal Bancorp, no consents, waivers or approvals of, or filings or registrations with,
any Governmental Entity are necessary, and, to the Knowledge of First Federal Bancorp, no consents, waivers or approvals of, or
filings or registrations with, any other third parties are necessary, in connection with (x) the execution and delivery of this
Agreement by First Federal Bancorp, and (y) the completion of the Merger by First Federal Bancorp. First Federal Bancorp has no
Knowledge of any reason pertaining to First Federal Bancorp why any Regulatory Approvals or other required consents or approvals
will not be received.

 

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Section 4.06         Financial
Statements and Securities Documents.

 

(a)          The
Annual Reports on Form 10-K for the years ended December 31, 2012 and December 31, 2011 filed with the SEC by First Federal
Bancorp, and all other reports, registration statements, definitive proxy statements or information statements filed by First
Federal Bancorp subsequent to December 31, 2010 under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act or under the securities regulations of the SEC (the “First Federal Bancorp Securities Documents”), in
the form filed with the SEC as of the date filed or, if amended or supplemented as of the date amended or supplemented, (A) complied
in all material respects as to form with the applicable requirements under the Securities Act or the Exchange Act, as the case
may be, and (B) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The
First Federal Financials included or incorporated by reference into any such filing (including the related notes and schedules
thereto) fairly present in each case in all material respects (subject in the case of the unaudited interim statements to normal
year-end adjustments) the consolidated financial position, results of operations and cash flows of First Federal Bancorp and the
First Federal Subsidiaries on a consolidated basis as of and for the respective periods ending on the dates thereof, in accordance
with GAAP during the periods involved, except as indicated in the notes thereto, or in the case of unaudited statements, as permitted
by Form 10-Q.

 

(b)          First
Federal Bancorp has made available to Alpena Banking Corporation true, correct and complete copies of all written correspondence
between the SEC and any of its subsidiaries occurring since December 31, 2011 and prior to the date hereof. There are no
unresolved written comments received from the SEC Staff with respect to any of First Federal Bancorp Securities Documents. The
books and records of First Federal Bancorp and its Subsidiaries have been, and are being, maintained in all material respects
in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.

 

(c)          First
Federal Bancorp and each of its Subsidiaries have timely filed all reports, forms, schedules, registrations, statements and other
documents, together with any amendments required to be made with respect thereto, that they were required to file since December
31, 2010 with any Governmental Entity (other than the SEC) and have paid all fees and assessments due and payable in connection
therewith. 

 

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(d)          First
Federal Bancorp (x) has implemented and maintains a system of internal control over financial reporting (as required by Rule
13a-15(a) of the Exchange Act) that is designed to provide reasonable assurances regarding the reliability of financial reporting
and the preparation of its financial statements for external purposes in accordance with GAAP and to provide reasonable assurances
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain accountability
for assets and (iii) access to assets is permitted only in accordance with management’s general or specific authorization,
(y) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to
ensure that material information relating to First Federal Bancorp, including its consolidated Subsidiaries, is made known to
the chief executive officer and the chief financial officer of First Federal Bancorp by others within those entities, and (z) has
disclosed, based on its most recent evaluation prior to the date hereof, to First Federal Bancorp’s outside auditors and
the audit committee of First Federal Bancorp’s Board of Directors (i) any significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which
are reasonably likely to adversely affect First Federal Bancorp’s ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant
role in First Federal Bancorp’s internal control over financial reporting. These disclosures (if any) were made in writing
by management to First Federal Bancorp’s auditors and audit committee and a copy has previously been made available to Alpena
Banking Corporation. First Federal Bancorp’s management has completed an assessment of the effectiveness of its internal
control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for the
year ended December 31, 2011, and such assessment concluded that such controls were effective. 

  

(e)          Since
December 31, 2010, (A) neither First Federal Bancorp nor any of its Subsidiaries nor, to its Knowledge, any director, officer,
employee, auditor, accountant or representative of it or any of its Subsidiaries has received or otherwise had or obtained knowledge
of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of it or any of its Subsidiaries or their respective internal accounting controls, including
any material complaint, allegation, assertion or claim that it or any of its Subsidiaries has engaged in questionable accounting
or auditing practices, and (B) no attorney representing it or any of its Subsidiaries, whether or not employed by it or any of
its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation
by it or any of its officers, directors, employees or agents to its board of directors or any committee thereof or to any of its
directors or officers.

 

(f)          Since
December 31, 2012, First Federal Bancorp and its Subsidiaries have not incurred any liability other than in the ordinary course
of business consistent with past practice. 

 

(g)          The
allowance for loan losses reflected in First Federal Bancorp’s audited statement of condition at December 31, 2012 was,
and the allowance for loan losses shown on the balance sheets in the First Federal Bancorp Securities Documents for periods ending
after December 31, 2012 was or will be, adequate, as of the date thereof, under GAAP.

 

Section 4.07         Taxes.

 

First Federal Bancorp
and each First Federal Subsidiary has duly filed all Federal, state and material local tax returns required to be filed by or
with respect to it on or prior to the Closing Date, taking into account any extensions (all such returns, to the Knowledge of
First Federal Bancorp, being accurate and correct in all material respects) and has duly paid or made provisions for the payment
of all material Federal, state and local taxes that have been incurred by or are due or claimed to be due from it by any taxing
authority or pursuant to any written tax sharing agreement on or prior to the Closing Date other than taxes or other charges which
(i) are not delinquent, (ii) are being contested in good faith, or (iii) have not yet been fully determined. Except as Previously
Disclosed, as of the date of this Agreement, First Federal Bancorp has not received written notice of, and to the Knowledge of
First Federal Bancorp, there is no audit examination, deficiency assessment, tax investigation or refund litigation with respect
to any taxes of First Federal Bancorp or any First Federal Subsidiary, and no written claim has been made by any authority in
a jurisdiction where First Federal Bancorp or any First Federal Subsidiary does not file tax returns that First Federal Bancorp
or any First Federal Subsidiary is subject to taxation in that jurisdiction. Neither First Federal Bancorp nor any First Federal
Subsidiary has executed an extension or waiver of any statute of limitations on the assessment or collection of any material tax
due that is currently in effect. First Federal Bancorp and each First Federal Subsidiary has withheld and paid all taxes required
to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder
or other third party, and First Federal Bancorp and each First Federal Subsidiary, to the Knowledge of First Federal Bancorp,
has timely complied with all applicable information reporting requirements under Part III, Subchapter A of Chapter 61 of the IRC
and similar applicable state and local information reporting requirements.

 

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Section 4.08         No
Material Adverse Effect.

 

First Federal Bancorp
has not suffered any Material Adverse Effect since December 31, 2012 and no event has occurred or circumstance arisen since that
date which, in the aggregate, has had or is reasonably likely to have a Material Adverse Effect on First Federal Bancorp.

 

Section 4.09         Material
Contracts; Leases; Defaults.

 

(a)          Except
as Previously Disclosed, neither First Federal Bancorp nor any First Federal Subsidiary is a party to or subject to: (i) any employment,
consulting or severance contract or material arrangement with any past or present officer, director or employee, except for “at
will” arrangements; (ii) any plan, material arrangement or contract providing for bonuses, pensions, options, deferred compensation,
retirement payments, profit sharing or similar material arrangements for or with any past or present officers, directors or employees;
(iii) any collective bargaining agreement with any labor union relating to employees; (iv) any agreement which by its terms limits
the payment of dividends by First Federal Bancorp or any First Federal Subsidiary; (v) any instrument evidencing or related to
material indebtedness for borrowed money whether directly or indirectly, by way of purchase money obligation, conditional sale,
lease purchase, guaranty or otherwise, in respect of which First Federal Bancorp or any First Federal Subsidiary is an obligor
to any person, which instrument evidences or relates to indebtedness other than deposits, repurchase agreements, bankers’
acceptances, and “treasury tax and loan” accounts and transactions in “federal funds” in each case established
in the ordinary course of business consistent with past practice, or which contains financial covenants or other restrictions
(other than those relating to the payment of principal and interest when due) which would be applicable on or after the Closing
Date to First Federal Bancorp or any First Federal Bancorp Subsidiary; (vi) any other agreement, written or oral, that obligates
First Federal Bancorp or any First Federal Subsidiary for the payment of more than $50,000 annually or for the payment of more
than $100,000 over its remaining term, which is not terminable without cause on 60 days’ or less notice without penalty
or payment (other than agreements for commercially available “off-the-shelf” software), or (vii) any agreement (other
than this Agreement), contract, arrangement, commitment or understanding (whether written or oral) that restricts or limits in
any material way the conduct of business by First Federal Bancorp or any First Federal Subsidiary (it being understood that any
non-compete or similar provision shall be deemed material, but any limitation on the scope of any license granted under any such
agreement shall not be deemed material).

 

(b)          Subject
to any consents that may be required as a result of the transactions contemplated by this Agreement, to its Knowledge, neither
First Federal Bancorp nor any First Federal Subsidiary is in default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it is a party, by which its assets, business, or
operations may be bound or affected, or under which it or its assets, business, or operations receive benefits, and there has
not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default.

 

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(c)          Except
as Previously Disclosed, no party to any Material Contract will have the right to terminate any or all of the provisions of any
such Material Contract as a result of the execution of, and the consummation of the transactions contemplated by, this Agreement.

 

(d)          Since
December 31, 2012, through and including the date of this Agreement, and except as Previously Disclosed, neither First Federal
Bancorp nor any First Federal Subsidiary has (i) except for (A) normal increases for employees made in the ordinary course of
business consistent with past practice, or (B) as required by applicable law, increased the wages, salaries, compensation, pension,
or other fringe benefits or perquisites payable to any executive officer, employee, or director, granted any severance or termination
pay, entered into any contract to make or grant any severance or termination pay (except as required under the terms of agreements
or severance plans and as Previously Disclosed by First Federal Bancorp), or paid any bonus other than the customary year-end
bonuses in amounts consistent with past practice, (ii) granted any options to purchase shares of First Federal Bancorp Common
Stock or Preferred Stock, or any right to acquire any shares of its capital stock to any officer, director or employee, (iii)
increased or established any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock
awards), stock purchase or other employee benefit plan, (iv) made any material election for Federal or state income tax purposes,
(v) made any material change in the credit policies or procedures of First Federal Bancorp or any of the First Federal Subsidiaries,
the effect of which was or is to make any such policy or procedure less restrictive in any material respect, (vi) made any material
acquisition or disposition of any assets or properties, or any contract for any such acquisition or disposition entered into other
than loans and loan commitments, (vii) entered into any lease of real or personal property requiring annual payments in excess
of $50,000 other than in connection with foreclosed property or in the ordinary course of business consistent with past practice,
(viii) changed any accounting methods, principles or practices of First Federal Bancorp or its Subsidiaries affecting its assets,
liabilities or businesses, including any reserving, renewal or residual method, practice or policy or (ix) suffered any strike,
work stoppage, slow-down, or other labor disturbance.

 

Section
4.10         Ownership of Property; Insurance Coverage.

 

(a)          First
Federal Bancorp and each First Federal Subsidiary has good and, as to real property, marketable title to all material assets and
properties owned by it or each First Federal Subsidiary in the conduct of its businesses, whether such assets and properties are
real or personal, tangible or intangible, including assets and property reflected in the balance sheets contained in the First
Federal Financials or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of
in the ordinary course of business, since the date of such balance sheets), subject to no material encumbrances, liens, mortgages,
security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or any discount
with, inter-bank credit facilities, or any transaction by a First Federal Subsidiary acting in a fiduciary capacity, (ii) statutory
liens for amounts not yet delinquent or that are being contested in good faith, (iii) non-monetary liens affecting real property
that do not adversely affect the value or use of such real property, and (iv) those described and reflected in the First Federal
Financials. First Federal Bancorp and the First Federal Subsidiaries, as lessee, have the right under valid and existing leases
of real and personal properties used by First Federal Bancorp and its Subsidiaries in the conduct of their businesses to occupy
or use all such properties as presently occupied and used by each of them. 

 

(b)          With
respect to all material agreements pursuant to which First Federal Bancorp or any First Federal Subsidiary has purchased securities
subject to an agreement to resell, if any, First Federal Bancorp or such First Federal Subsidiary, as the case may be, has a lien
or security interest (which to First Federal Bancorp’s Knowledge is a valid, perfected first lien) in the securities or
other collateral securing the repurchase agreement, and the value of such collateral equals or exceeds the amount of the debt
secured thereby.

 

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(c)          First
Federal Bancorp and each First Federal Subsidiary currently maintain insurance considered by each of them to be reasonable for
their respective operations. Except as Previously Disclosed, neither First Federal Bancorp nor any First Federal Subsidiary, has
received notice from any insurance carrier since December 31, 2010 that (i) such insurance will be canceled or that coverage thereunder
will be reduced or eliminated, or (ii) premium costs (other than with respect to health or disability insurance) with respect
to such policies of insurance will be substantially increased. Except as Previously Disclosed, there are presently no material
claims pending under such policies of insurance and no notices have been given by First Federal Bancorp or any First Federal Subsidiary
under such policies (other than with respect to health or disability insurance). All such insurance is valid and enforceable and
in full force and effect, and since December 31, 2010, First Federal Bancorp and each First Federal Subsidiary has received each
type of insurance coverage for which it has applied and during such periods has not been denied indemnification for any material
claims submitted under any of its insurance policies.

 

Section 4.11         Legal
Proceedings.

 

Neither First Federal
Bancorp nor any First Federal Bancorp Subsidiary is a party to any, and there are no pending or, to the Knowledge of First Federal
Bancorp, threatened legal, administrative, arbitration or other proceedings, claims (whether asserted or unasserted), actions
or governmental investigations or inquiries of any nature (i) against First Federal Bancorp or any First Federal Bancorp
Subsidiary, (ii) to which First Federal Bancorp or any First Federal Bancorp Subsidiary’s assets are or may be subject,
(iii) challenging the validity or propriety of any of the transactions contemplated by this Agreement, or (iv) which would
reasonably be expected to adversely affect the ability of First Federal Bancorp to perform under this Agreement, except as to
(i) and (ii) above, for any proceeding, claim, action, investigation or inquiry which, if adversely determined, individually or
in the aggregate, would not be reasonably expected to have a Material Adverse Effect on First Federal Bancorp.

 

Section 4.12         Compliance
With Applicable Law.

 

(a)          Except
where noncompliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on First
Federal Bancorp, to First Federal Bancorp’s knowledge, each of First Federal Bancorp and each First Federal Bancorp Subsidiary
is in compliance in all material respects with all applicable Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to it, its properties, assets and deposits, its business, and its conduct of business
and its relationship with its employees, including, without limitation, the Bank Secrecy Act, the USA PATRIOT Act, the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act, the Equal Credit Opportunity Act, the Fair Housing Act and all other
applicable fair lending laws and other laws relating to discriminatory business practices, and neither First Federal Bancorp nor
any First Federal Bancorp Subsidiary has received any written notice to the contrary. The Board of Directors of First Federal
Bank has adopted and First Federal Bank has implemented an anti-money laundering program that contains adequate and appropriate
customer identification verification procedures that has not been deemed ineffective by any Governmental Entity and that meets
the requirements of Sections 352 and 326 of the USA PATRIOT Act and the regulations thereunder.

 

(b)          Each
of First Federal Bancorp and each First Federal Bancorp Subsidiary has all material permits, licenses, authorizations, orders
and approvals of, and has made all filings, applications and registrations with, all Governmental Entities and Regulatory Authorities
that are required to allow it to own or lease its properties and to conduct its business as presently conducted except where the
failure to hold such permits, licensees, authorizations, orders or approvals, or the failure to make such filings, applications
or registrations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on First
Federal Bancorp; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect and,
to the Knowledge of First Federal Bancorp, no suspension or cancellation of any such permit, license, certificate, order or approval
is threatened or will result from the consummation of the transactions contemplated by this Agreement, subject to obtaining the
Regulatory Approvals.

 

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(c)          Except
as Previously Disclosed, since December 31, 2010, neither First Federal Bancorp nor any First Federal Bancorp Subsidiary has received
any written notification or, to First Federal Bancorp’s Knowledge, any other communication from any Regulatory Authority
(i) asserting that First Federal Bancorp or any First Federal Bancorp Subsidiary is not in material compliance with any of the
statutes, regulations or ordinances which that Regulatory Authority enforces; (ii) requiring or threatening to require First Federal
Bancorp or any First Federal Bancorp Subsidiary, or indicating that First Federal Bancorp or any First Federal Bancorp Subsidiary
may be required, to enter into a cease and desist order, agreement or memorandum of understanding or any other agreement with
any Federal or state governmental agency or authority that is charged with the supervision or regulation of banks or engages in
the insurance of bank deposits; or (iii) directing, restricting or limiting, or purporting to direct, restrict or limit, in any
manner the operations of First Federal Bancorp or any First Federal Bancorp Subsidiary, including without limitation any restriction
on the payment of dividends (any such notice, communication, memorandum, agreement or order described in this sentence is hereinafter
referred to as an “First Federal Bancorp Regulatory Agreement”). Neither First Federal Bancorp nor any First Federal
Bancorp Subsidiary has consented to or entered into any First Federal Bancorp Regulatory Agreement that is currently in effect.
The most recent regulatory rating given to First Federal Bank as to compliance with the CRA is satisfactory or better.

 

(d)          First
Federal Bancorp is in compliance in all material respects with the applicable listing and corporate governance rules and regulations
of the Nasdaq. 

 

Section
4.13         Employee Benefit Plans.

 

(a)          Neither
First Federal Bancorp nor any Neither First Federal Subsidiary has any commitment to create any additional bonus, incentive, deferred
compensation, supplemental executive retirement plans, pension, retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock, stock option, stock appreciation, phantom stock, severance, welfare benefit plans
(including paid time off policies and other material benefit policies and procedures), fringe benefit plans, employment, consulting,
settlement and change in control agreements or any other material benefit practice, policy and arrangement (the “First Federal
Bancorp Compensation and Benefit Plans”) or to materially modify, change or renew any existing First Federal Bancorp Compensation
and Benefit Plan (any modification or change that increases the cost of such plans would be deemed material), except as required
to maintain the qualified status thereof. First Federal Bancorp has made available to Alpena Banking Corporation true and correct
copies of the First Federal Bancorp Compensation and Benefit Plans.

 

(b)          To
the Knowledge of First Federal Bancorp, each First Federal Bancorp Compensation and Benefit Plan has been operated and administered
in all material respects in accordance with its terms and with applicable law, including, but not limited to, COBRA, HIPAA and
any regulations or rules promulgated thereunder, and all material filings, disclosures and notices required by ERISA, the IRC,
the Securities Act, the Exchange Act, the Age Discrimination in Employment Act, COBRA and HIPAA and any other applicable law have
been timely made or any interest, fines, penalties or other impositions for late filings have been paid in full. Each First Federal
Bancorp Compensation and Benefit Plan that is an “employee pension benefit plan” within the meaning of Section 3(2)
of ERISA and that is intended to be qualified under Section 401(a) of the IRC has received a favorable determination letter from
the IRS or is entitled to rely on a determination letter issued to the sponsor of a master or prototype plan, and First Federal
Bancorp is not aware of any circumstances that are reasonably likely to result in revocation of any such favorable determination
letter. There is no material pending or, to the Knowledge of First Federal Bancorp, threatened action, suit or claim relating
to any of the First Federal Bancorp Compensation and Benefit Plans (other than routine claims for benefits). Neither First Federal
Bancorp nor any First Federal Subsidiary has engaged in a transaction, or omitted to take any action, with respect to any First
Federal Bancorp Compensation and Benefit Plan that would reasonably be expected to subject First Federal Bancorp or any First
Federal Subsidiary to a material unpaid tax or penalty imposed by either Chapter 43 of the IRC or Sections 409 or 502 of ERISA.

 

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(c)          No
liability under Title IV of ERISA has been incurred by First Federal Bancorp or any First Federal Subsidiary with respect to any
First Federal Bancorp Compensation and Benefit Plan that is subject to Title IV of ERISA (“First Federal Bancorp Defined
Benefit Plan”) currently or formerly maintained by First Federal Bancorp or any entity that is considered one employer with
First Federal Bancorp under Section 4001(b)(1) of ERISA or Section 414 of the IRC (a “First Federal Bancorp ERISA Affiliate”)
since the effective date of ERISA that has not been satisfied in full, and no condition exists that presents a material risk to
First Federal Bancorp or any First Federal Bancorp ERISA Affiliate of incurring a liability under such Title. No First Federal
Bancorp Defined Benefit Plan had an “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, as of the last day of the end of the most recent plan year ending prior to the date hereof. Except as Previously
Disclosed, the fair market value of the assets of each First Federal Bancorp Defined Benefit Plan exceeds the present value of
the “benefit liabilities” (as defined in Section 4001(a)(16) of ERISA) under such First Federal Bancorp Defined Benefit
Plan as of the end of the most recent plan year with respect to the respective First Federal Bancorp Defined Benefit Plan ending
prior to the date hereof, calculated on the basis of the actuarial assumptions used in the most recent actuarial valuation for
such First Federal Bancorp Defined Benefit Plan as of the date hereof; there is not currently pending with the PBGC any filing
with respect to any reportable event under Section 4043 of ERISA nor has any reportable event occurred as to which a filing is
required and has not been made (other than as might be required with respect to this Agreement and the transactions contemplated
thereby). Neither First Federal Bancorp nor any First Federal Bancorp ERISA Affiliate has contributed to any “multiemployer
plan,” as defined in Section 3(37) of ERISA. Neither First Federal Bancorp, nor any First Federal Bancorp ERISA Affiliate,
nor any First Federal Bancorp Compensation and Benefit Plan, including any First Federal Bancorp Defined Benefit Plan, nor any
trust created thereunder, nor any trustee or administrator thereof, has engaged in a transaction in connection with which First
Federal Bancorp, any First Federal Bancorp ERISA Affiliate, and any First Federal Bancorp Compensation and Benefit Plan, including
any First Federal Bancorp Defined Benefit Plan or any such trust or any trustee or administrator thereof, could reasonably be
expected to be subject to either a civil liability or penalty pursuant to Section 409, 502(i) or 502(l) of ERISA or a tax imposed
pursuant to Chapter 43 of the IRC.

 

(d)          All
material contributions required to be made under the terms of any First Federal Bancorp Compensation and Benefit Plan have been
timely made, and all anticipated contributions and funding obligations are accrued on First Federal Bancorp’s consolidated
financial statements to the extent required by GAAP. First Federal Bancorp and each First Federal Subsidiary has expensed and
accrued as a liability the present value of future benefits under each applicable First Federal Bancorp Compensation and Benefit
Plan for financial reporting purposes to the extent required by GAAP. 

 

(e)          Except
as Previously Disclosed, neither First Federal Bancorp nor any First Federal Subsidiary has any obligations to provide
retiree health, life insurance, or disability insurance, or any retiree death benefits under any First Federal Bancorp Compensation
and Benefit Plan, other than benefits mandated by COBRA. There has been no communication to employees by First Federal Bancorp
or any First Federal Subsidiary that would reasonably be expected to promise or guarantee such employees retiree health, life
insurance, or disability insurance, or any retiree death benefits.

 

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(f)           First
Federal Bancorp and its Subsidiaries do not maintain any First Federal Bancorp Corporation Compensation and Benefit Plans covering
employees who are not United States residents. 

 

(g)          With
respect to each First Federal Bancorp Compensation and Benefit Plan, if applicable, First Federal Bancorp has provided or made
available to Alpena Banking Corporation copies of the: (A) plan documents, trust instruments and insurance contracts; (B) three
most recent IRS Forms 5500; (C) three most recent actuarial reports and financial statements; (D) most recent summary plan description;
(E) most recent determination letter issued by the IRS; (F) any Form 5310 or Form 5330 filed with the IRS within the last three
years; (G) most recent nondiscrimination tests performed under ERISA and the IRC (including 401(k) and 401(m) tests); and (H)
PBGC Form 500 and 501 filings, along with the Notice of Intent to Terminate, ERISA Section 204(h) Notice, Notice of Plan Benefits,
and all other documentation related to the termination of a First Federal Bancorp Pension Plan.

 

(h)          The
consummation of the Merger or the Bank Merger will not, directly or indirectly (including, without limitation, as a result of
any termination of employment or service at any time prior to or following the Effective Time) (A) entitle any employee, consultant
or director to any payment or benefit (including severance pay, change in control benefit, or similar compensation) or any increase
in compensation, (B) entitle any employee or independent contractor to terminate any plan, agreement or arrangement without cause
and continue to accrue future benefits thereunder, or result in the vesting or acceleration of any benefits under any First Federal
Bancorp Compensation and Benefit Plan, (C) result in any material increase in benefits payable under any First Federal Bancorp
Compensation and Benefit Plan, or (D) entitle any current or former employee, director or independent contractor of First Federal
Bancorp or any First Federal Subsidiary to any actual or deemed payment (or benefit) which could constitute a “parachute
payment” (as such term is defined in Section 280G of the IRC).

 

(i)           Neither
First Federal Bancorp nor any First Federal Subsidiary maintains any compensation plans, programs or arrangements under which
any payment is reasonably likely to become non-deductible, in whole or in part, for tax reporting purposes as a result of the
limitations under Section 162(m) of the IRC and the regulations thereunder.

 

(j)           Except
as Previously Disclosed, there are no stock options, stock appreciation or similar rights, earned dividends or dividend equivalents,
or shares of restricted stock, outstanding under any of the First Federal Bancorp Compensation and Benefit Plans or otherwise
as of the date hereof.

 

Section
4.14         Brokers, Finders and Financial Advisors.

 

Neither
First Federal Bancorp nor any First Federal Subsidiary, nor any of their respective officers, directors, employees or agents,
has employed any broker, finder or financial advisor in connection with the transactions contemplated by this Agreement, or incurred
any liability or commitment for any fees or commissions to any such person in connection with the transactions contemplated by
this Agreement except for the retention of Austin Associates LLC by First Federal Bancorp and the fee payable pursuant thereto.
First Federal Bancorp has Previously Disclosed a true and correct copy of the engagement agreement with Austin Associates LLC
for its services rendered to First Federal Bancorp in connection with the Merger and transactions contemplated by this Agreement.

 

Section
4.15         Loan Portfolio.         

 

(a)          The
allowance for loan losses reflected in First Federal Bancorp’s audited consolidated balance sheet at December 31, 2012 was,
and the allowance for loan losses shown on the balance sheets in filings made by First Federal Bancorp of any First Federal Subsidiary
with any Governmental Entity or Regulatory Authority for periods ending after December 31, 2012 was or will be, adequate, as of
the date thereof, under GAAP.

 

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(b)          First
Federal Bancorp has Previously Disclosed a list setting forth, as of December 31, 2013, by account, of: (A) all
loans (including loan participations) of First Federal Bancorp or any other First Federal Subsidiary that have been accelerated
during the past twelve months; (B) all loan commitments or lines of credit of First Federal Bancorp or any other First
Federal Subsidiary which have been terminated by First Federal Bancorp or any other First Federal Subsidiary during the
past twelve months by reason of a default or adverse developments in the condition of the borrower or other events or circumstances
affecting the credit of the borrower; (C) each borrower, customer or other party which has notified First Federal Bancorp or
any other First Federal Subsidiary during the three years preceding the date of this Agreement, or has asserted against First
Federal Bancorp or any other First Federal Subsidiary, in each case in writing, any “lender liability” or similar
claim, and, to the Knowledge of First Federal Bancorp, each borrower, customer or other party which has given First Federal Bancorp
or any other First Federal Subsidiary any oral notification of, or orally asserted to or against First Federal Bancorp or any
other First Federal Subsidiary, any such claim; (D) all loans (1) that are contractually past due 90 days or more in the payment
of principal and/or interest, (2) that are on non-accrual status, (3) that are as of the date of this Agreement classified as
“substandard,” “doubtful,” “loss,” “classified,” “criticized,” “credit
risk assets,” “concerned loans,” “watch list” or “special mention” (or words of similar
import) by First Federal Bancorp and any First Federal Subsidiary, or any applicable Regulatory Authority, (4) as to which a reasonable
doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or
the loans are less than 90 days past due, (5) where, during the past three years, the interest rate terms have been reduced and/or
the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns
regarding the borrower’s ability to pay in accordance with such initial terms, (6) where a specific reserve allocation exists
in connection therewith or (7) that are required to be accounted for as a troubled debt restructuring in accordance with Accounting
Standards Codification 310-40; and (E) all assets classified by First Federal Bank or any First Federal Subsidiary as real estate
acquired through foreclosure or in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held
that were acquired through foreclosure or in lieu of foreclosure. The foregoing excludes any individual loan with a principal
balance of less than $50,000.

 

(c)          All
loans receivable (including discounts) and accrued interest entered on the books of First Federal Bancorp and the First Federal
Subsidiaries arose out of bona fide arm’s-length transactions and were made for good and valuable consideration in the ordinary
course of First Federal Bancorp’s or the appropriate First Federal Subsidiary’s respective business. To the Knowledge
of First Federal Bancorp, the loans, discounts and the accrued interest reflected on the books of First Federal Bancorp and the
First Federal Subsidiaries are subject to no defenses, set-offs or counterclaims (including, without limitation, those afforded
by usury or truth-in-lending laws), except as may be provided by bankruptcy, insolvency or similar laws affecting creditors’
rights generally or by general principles of equity. All such loans are owned by First Federal Bancorp or the appropriate First
Federal Subsidiary free and clear of any liens. 

 

(d)          The
notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and
other collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and
what they purport to be.

 

Section 4.16         First
Federal Bancorp Common Stock.

 

The shares of First
Federal Bancorp Common Stock to be issued as Merger Consideration pursuant to this Agreement, when issued in accordance with the
terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable and subject to no preemptive rights.

 

    	37

    	 

    

  

Section 4.17         First
Federal Bancorp Information.

 

The information relating
to First Federal Bancorp and any First Federal Bancorp Subsidiary to be contained in the Proxy Statement-Prospectus, or in any
other document filed with any Regulatory Authority or other Governmental Entity in connection herewith, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances
in which they are made, not misleading. The Proxy Statement-Prospectus will comply with the provisions of the Exchange Act and
the rules and regulations thereunder and the provisions of the Securities Act and the rules and regulations thereunder, except
that no representation or warranty is made by First Federal Bancorp with respect to statements made or incorporated by reference
therein based on information supplied by Alpena Banking Corporation specifically for inclusion or incorporation by reference in
the Proxy Statement-Prospectus.

 

Section 4.18         Environmental
Matters.

 

(a)          With
respect to First Federal Bancorp and each First Federal Subsidiary:

 

(i)          To
the Knowledge of First Federal Bancorp, neither the conduct nor operation of its business nor any condition of any property currently
or previously owned or operated by it, results or resulted in a violation of any Environmental Laws that is reasonably likely
to impose a material liability (including a material remediation obligation) upon First Federal Bancorp or any First Federal Subsidiary.
Except as Previously Disclosed, to the Knowledge of First Federal Bancorp, no condition exists or event has occurred with respect
to First Federal Bancorp or any First Federal Subsidiary or any owned or operated property that is reasonably likely to result
in any material liability to First Federal Bancorp or any First Federal Subsidiary by reason of any Environmental Laws. Neither
First Federal Bancorp nor any First Federal Subsidiary during the past five years has received any written notice from any Person
or Governmental Entity that First Federal Bancorp or any First Federal Subsidiary or the operation or condition of any property
ever owned or operated by First Federal Bancorp or any First Federal Bancorp Subsidiary (including Participation Facilities) is
currently in violation of or otherwise is alleged to have liability under any Environmental Laws or relating to Materials of Environmental
Concern (including, but not limited to, responsibility (or potential responsibility) for the cleanup or other remediation of any
Materials of Environmental Concern at, on, beneath, or originating from any such property) for which a material liability is reasonably
likely to be imposed upon First Federal Bancorp or any First Federal Subsidiary;

 

(ii)         There
is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the
First Federal Bancorp’s Knowledge, threatened, before any court, governmental agency or other forum against First Federal
Bancorp or any First Federal Subsidiary (x) for alleged noncompliance (including by any predecessor) with, or liability under,
any Environmental Law or (y) relating to the presence of or Release into the environment of any Materials of Environmental Concern,
whether or not occurring at or on a site owned, leased or operated by any of the First Federal Bancorp or any First Federal Subsidiary.

 

(iii)        Except
as Previously Disclosed, to First Federal Bancorp’s Knowledge, there are no underground storage tanks on, in or under any
properties owned or operated by First Federal Bancorp or any of the First Federal Bancorp Subsidiaries, and to First Federal Bancorp’s
Knowledge, no underground storage tanks have been closed or removed from any properties owned or operated by First Federal Bancorp
or any of the First Federal Bancorp Subsidiaries or any Participation Facility except in compliance with Environmental Laws in
all material respects; and

 

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(iv)      
Except as Previously Disclosed, to the Knowledge of First Federal Bancorp, no condition exists on any property for which First
Federal Bancorp holds a lien, that results or resulted in a material violation of Environmental Laws or creates a material liability
under Environmental Law that is reasonably likely to impose a material liability (including a material remediation obligation)
upon First Federal Bancorp or any First Federal Subsidiary.

 

(b)       
“Participation Facility” means any facility in which First Federal Bancorp or its Subsidiaries participates in
the management (as that term is defined under CERCLA), whether as a fiduciary, lender in control of the facility, owner or operator.

 

Section
4.19         Risk Management Instruments.

 

Except
as may be included in its loan documents with its customers, First Federal Bancorp and First Federal Bank have not entered into
and do not maintain any material interest rate swaps, caps, floors, option agreements, futures and forward contracts and other
similar risk management arrangements, whether entered into for First Federal Bancorp’s own account, or for the account of
one or more of First Federal Bancorp’s Subsidiaries or their customers.

 

Section
4.20         Fiduciary Accounts.

 

First
Federal Bank and each of its Subsidiaries has properly administered all accounts for which it acts as a fiduciary, including but
not limited to accounts for which it serves as trustee, agent, custodian, personal representative, guardian, conservator or investment
advisor, in accordance with the terms of the governing documents and applicable laws and regulations. Neither First Federal Bancorp
nor any First Federal Subsidiary, and to the Knowledge of First Federal Bancorp, nor has any of their respective directors, officers
or employees, committed any breach of trust with respect to any such fiduciary account and the records for each such fiduciary
account.

 

Section
4.21         Intellectual Property.

 

First
Federal Bancorp and each First Federal Subsidiary owns or, to First Federal Bancorp’s Knowledge, possesses valid and binding
licenses and other rights (subject to expirations in accordance with their terms) to use all patents, copyrights, trade secrets,
trade names, service marks and trademarks, which are material to the conduct of their business as currently conducted, each without
payment, except for all license agreements under which license fees or other payments are due in the ordinary course of Federal
Bancorp’s or each of First Federal Bancorp’s Subsidiaries’ business, and neither First Federal Bancorp nor any
Federal Subsidiary has received any notice of conflict with respect thereto that asserts the rights of others. First Federal Bancorp
and each First Federal Subsidiary has performed all the material obligations required to be performed, and are not in default
in any respect, under any contract, agreement, arrangement or commitment relating to any of the foregoing. To the Knowledge of
First Federal Bancorp, the conduct of the business of First Federal Bancorp and each First Federal Subsidiary as currently conducted
or proposed to be conducted does not, in any material respect, infringe upon, dilute, misappropriate or otherwise violate any
intellectual property owned or controlled by any third party.

 

    	39

    	 

    

 

Section
4.22         Labor Matters.

 

There
are no labor or collective bargaining agreements to which First Federal Bancorp or any First Federal Subsidiary is a party. To
the Knowledge of First Federal Bancorp, there is no union organizing effort pending or threatened against First Federal Bancorp
or any First Federal Subsidiary. There is no labor strike, labor dispute (other than routine employee grievances that are not
related to union employees), work slowdown, stoppage or lockout pending or, to the Knowledge of First Federal Bancorp, threatened
against First Federal Bancorp or any First Federal Subsidiary. There is no unfair labor practice or labor arbitration proceeding
pending or, to the Knowledge of First Federal Bancorp, threatened against First Federal Bancorp or any First Federal Subsidiary
(other than routine employee grievances that are not related to union employees). First Federal Bancorp and each First Federal
Subsidiary is in compliance in all material respects with all applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and are not engaged in any unfair labor practice.

 

ARTICLE
V

COVENANTS OF ALPENA BANKING CORPORATION

 

Section 5.01         Conduct
of Business.

 

(a)          Affirmative
Covenants. During the period from the date of this Agreement to the Effective Time, except with the written consent of First
Federal Bancorp, which consent will not be unreasonably withheld, conditioned or delayed, Alpena Banking Corporation will, and
it will cause each Alpena Banking Subsidiary to: operate its business in the usual, regular and ordinary course of business; use
reasonable efforts to preserve intact its business organization and assets and maintain its rights and franchises; and voluntarily
take no action which would, or would be reasonably likely to, (i) materially adversely affect the ability of the Parties
to obtain any Regulatory Approvals or other approvals of Governmental Entities required for the transactions contemplated hereby
or materially increase the period of time necessary to obtain such approvals, or (ii) materially adversely affect its ability
to perform its covenants and agreements under this Agreement. 

 

(b)          Negative
Covenants. Alpena Banking Corporation agrees that from the date of this Agreement to the Effective Time, except as otherwise
specifically permitted or required by this Agreement or as Previously Disclosed, without the written consent of First Federal
Bancorp (which consent shall not be unreasonably withheld, conditioned or delayed), it will not, and it will cause each Alpena
Banking Subsidiary not to:

 

(i)          change
or waive any provision of its Articles of Incorporation or Bylaws, or appoint a new director to its board of directors;

 

(ii)         change
the number of authorized or issued shares of its capital stock, issue any shares of Alpena Banking Corporation Common Stock, including
any shares that are held as “treasury shares” as of the date of this Agreement, or issue or grant any Right or agreement
of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock, make
any grant or award under any equity compensation plan or arrangement, or split, combine or reclassify any shares of capital stock,
or declare, set aside or pay any dividend or other distribution in respect of capital stock, or redeem or otherwise acquire any
shares of capital stock.

 

(iii)        except
as Previously Disclosed, enter into, amend in any material respect or terminate any contract or agreement except for any such
contract or agreement that is for a term of twelve months or less or terminable at will without penalty, involves a cost in the
aggregate of less than $50,000, and is otherwise in the ordinary course of business;

 

(iv)        make
application for the opening or closing of any, or, open or close any, branch or automated banking facility;

 

    	40

    	 

    

  

(v)         grant
or agree to pay any bonus, severance or termination to, or enter into, renew or amend any employment agreement, severance agreement
and/or supplemental executive agreement with, or increase in any manner the compensation or fringe benefits of, any of its directors,
officers or employees, except (i) as may be required pursuant to commitments existing on the date hereof and as Previously
Disclosed, and (ii) pay increases in the ordinary course of business consistent with past practice to non-executive officer
employees. Neither Alpena Banking Corporation nor any Alpena Banking Subsidiary shall hire or promote any employee to a rank having
a title of vice president or other more senior rank or hire any new employee at an annual rate of compensation in excess of $50,000,
provided that Alpena Banking Corporation or an Alpena Banking Subsidiary may hire at-will, non-officer employees to fill vacancies
that may from time to time arise in the ordinary course of business; 

 

(vi)        enter
into or, except as may be required by law, materially modify any pension, retirement, stock option, stock purchase, stock appreciation
right, stock grant, savings, profit sharing, deferred compensation, supplemental retirement, consulting, bonus, group insurance
or other employee benefit, incentive or welfare contract, plan or arrangement, or any trust agreement related thereto, in respect
of any of its directors, officers or employees; or make any contributions to any defined contribution plan not in the ordinary
course of business consistent with past practice;

 

(vii)       merge
or consolidate Alpena Banking Corporation or any Alpena Banking Subsidiary with any other corporation; sell or lease all or any
substantial portion of the assets or business of Alpena Banking Corporation or any Alpena Banking Subsidiary; make any acquisition
of all or any substantial portion of the business or assets of any other person, firm, association, corporation or business organization
other than in connection with foreclosures, settlements in lieu of foreclosure, troubled loan or debt restructuring, or the collection
of any loan or credit arrangement between Alpena Banking Corporation, or any Alpena Banking Subsidiary, and any other person;
or enter into a purchase and assumption transaction with respect to deposits and liabilities;

 

(viii)      sell
or otherwise dispose of any asset of Alpena Banking Corporation or of any Alpena Banking Subsidiary other than in the ordinary
course of business consistent with past practice; except for transactions with the FHLB, subject any asset of Alpena Banking Corporation
or of any Alpena Banking Subsidiary to a lien, pledge, security interest or other encumbrance other than in the ordinary course
of business consistent with past practice; incur any indebtedness for borrowed money (or guarantee any indebtedness for borrowed
money), except in the ordinary course of business consistent with past practice;

 

(ix)         voluntarily
take any action which would result in any of the representations and warranties of Alpena Banking Corporation set forth in this
Agreement becoming untrue as of any date after the date hereof or in any of the conditions set forth in Article VIII hereof not
being satisfied, except in each case as may be required by applicable law;

 

(x)          change
any method, practice or principle of accounting, except as may be required from time to time by GAAP (without regard to any optional
early adoption date) or any Regulatory Authority responsible for regulating Alpena Banking Corporation or Bank of Alpena;

 

(xi)         waive,
release, grant or transfer any material rights of value or modify or change in any material respect any existing material agreement
or indebtedness to which Alpena Banking Corporation or any Alpena Banking Subsidiary is a party;

 

    	41

    	 

    

  

(xii)        purchase
any securities other than in accordance with Alpena Banking Corporation’s investment policy and in the ordinary course of
business consistent with past practice;

 

(xiii)       except
for commitments issued prior to the date of this Agreement that have not yet expired and that have been Previously Disclosed,
and the renewal of existing lines of credit, make any new loan or other credit facility commitment (including without limitation,
lines of credit and letters of credit) other than in accordance with Bank of Alpena’s existing lending policies and in the
ordinary course of business consistent with past practice. In addition, the prior approval of First Federal Bancorp is required
with respect to the following: (i) any new loan or credit facility commitment to any borrower or group of affiliated borrowers
in an amount in excess of $200,000 for a commercial real estate loan, $200,000 for a construction loan, $200,000 for a residential
loan or whose credit exposure with Bank of Alpena, Alpena Banking Corporation, or any Alpena Banking Subsidiary in the aggregate,
exceeds $400,000 prior to thereto or as a result thereof; and (ii) any new loan or credit facility commitment secured by any property
located outside of the State of Michigan; 

 

(xiv)      enter
into, renew, extend or modify any transaction (other than a deposit transaction) with any Affiliate;

 

(xv)       enter
into any futures contract, option, interest rate caps, interest rate floors, interest rate exchange agreement or other agreement
or take any other action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities
to changes in market rates of interest other than in the ordinary course of business consistent with past practice;

 

(xvi)      except
for the execution of this Agreement, and actions taken or which will be taken in accordance with this Agreement and performance
hereunder, take any action that would give rise to a right of payment to any individual under any employment agreement;

 

(xvii)     make
any material change in policies in existence on the date of this Agreement with regard to: the extension of credit, or the establishment
of reserves with respect to the possible loss thereon or the charge off of losses incurred thereon; investments; asset/liability
management; deposit pricing or gathering; or other material banking policies except as may be required by changes in applicable
law or regulations, GAAP or by a Regulatory Authority; 

 

(xviii)    except
for the execution of this Agreement, and the transactions contemplated herein, take any action that would give rise to an acceleration
of the right to payment to any individual under any Alpena Banking Corporation Compensation and Benefit Plan; 

 

(xix)       other
than as Previously Disclosed make any capital expenditures in excess of $25,000 individually or $50,000 in the aggregate, other
than pursuant to binding commitments existing on the date hereof and as Previously Disclosed, and other than expenditures necessary
to maintain existing assets in good repair;

 

(xx)        pay,
discharge, settle or compromise any claim, action, litigation, arbitration or proceeding, except, in consultation with First Federal
Bancorp, with respect to any such payment, discharge, settlement or compromise made in the ordinary course of business consistent
with past practice that involves solely money damages in the amount not in excess of $25,000 individually or $50,000 in
the aggregate, and that does not create negative precedent for other pending or potential claims, actions, litigation, arbitration
or proceedings, or waive or release any material rights or claims, or agree to consent to the issuance of any injunction, decree,
order or judgment restricting or otherwise affecting its business or operations;

 

    	42

    	 

    

 

(xxi)        except
where it is a participant and not the lead lender, foreclose upon or take a deed or title to any commercial real estate without
first conducting a Phase I environmental assessment of the property or foreclose upon any commercial real estate if such environmental
assessment indicates the presence of Materials of Environmental Concern; 

 

(xxii)       purchase
or sell any mortgage loan servicing rights; 

 

(xxiii)      issue
any broadly distributed communication relating to the Merger or the Bank Merger to employees (including general communications
relating to benefits and compensation) without prior consultation with First Federal Bancorp and, to the extent relating to post-Closing
employment, benefit or compensation information without the prior consent of First Federal Bancorp (which shall not be unreasonably
withheld, delayed or conditioned) or issue any broadly distributed communication to customers relating to the Merger or the Bank
Merger without the prior approval of First Federal Bancorp (which shall not be unreasonably withheld, delayed or conditioned),
except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate
to the Merger or other transactions contemplated hereby; 

 

(xxiv)    
(1) take any action or knowingly fail to take any reasonable action that would, or would be reasonably likely to, prevent, impede
or delay the Merger or the Bank Merger from qualifying as reorganizations within the meaning of Section 368(a) of the IRC,
or (2) take any action that is reasonably likely to result in a material violation of any provision of this Agreement except,
in each case, as may be required by applicable law or regulation; or 

 

(xxv)
    agree to do any of the foregoing.

 

Section 5.02         Current
Information.

 

(a)          During
the period from the date of this Agreement to the Effective Time, Alpena Banking Corporation will cause one or more of its representatives
to confer with representatives of First Federal Bancorp and report on the general status of its ongoing operations at such times
as First Federal Bancorp may reasonably request, provided that such representatives shall be subject to the Confidentiality Agreement.
Alpena Banking Corporation will promptly notify First Federal Bancorp of any material change in the normal course of its business
or in the operation of its properties and, to the extent permitted by applicable law, of any governmental complaints, investigations
or hearings (or communications indicating that the same may be contemplated), or the institution or the threat of material litigation
involving Alpena Banking Corporation or any Alpena Banking Subsidiary. Without limiting the foregoing, senior officers of First
Federal Bancorp and Alpena Banking Corporation shall meet on a reasonably regular basis (expected to be at least monthly) to review
the financial and operational affairs of Alpena Banking Corporation and its Subsidiaries, in accordance with applicable law, and
Alpena Banking Corporation shall give due consideration to First Federal Bancorp’s input on such matters, with the understanding
that, notwithstanding any other provision contained in this Agreement, neither First Federal Bancorp nor any First Federal Bancorp
Subsidiary shall under any circumstance be permitted to exercise control of Alpena Banking Corporation or any Alpena Banking Subsidiary
prior to the Effective Time. 

 

    	43

    	 

    

 

(b)          Representatives
of Bank of Alpena and First Federal Bank shall meet on a regular basis to discuss and plan for the conversion of Bank of Alpena’s
data processing and related electronic informational systems to those used by First Federal Bank, which planning shall include,
but not be limited to, discussion of the possible termination by Bank of Alpena of third-party service provider arrangements effective
at the Effective Time or at a date thereafter, non-renewal of personal property leases and software licenses used by Bank of Alpena
in connection with its systems operations, retention of outside consultants and additional employees to assist with the conversion,
and outsourcing, as appropriate, of proprietary or self-provided system services, it being understood that Bank of Alpena shall
not be obligated to take any such action prior to the Effective Time and no conversion shall take place prior to the Effective
Time. In the event that Bank of Alpena takes, at the request of First Federal Bank, any action relative to third parties to facilitate
the conversion that results in the imposition of any termination fees or charges, First Federal Bank shall indemnify Bank of Alpena
for any such fees and charges, and the costs of reversing the conversion process, if for any reason the Merger is not consummated
for any reason other than a willful breach of this Agreement by Alpena Banking Corporation, or a termination of this Agreement
under Section 10.01(g) or 10.01(i).

 

(c)          Bank
of Alpena shall provide First Federal Bank, within fifteen (15) business days after the end of each calendar month, a written
list of nonperforming assets (the term “nonperforming assets,” for purposes of this subsection, means (i) loans that
are “troubled debt restructuring” as defined in Accounting Standards Codification 310-40, “Troubled Debt Restructuring
by Creditors,” (ii) loans on nonaccrual, (iii) real estate owned, (iv) all loans ninety (90) days or more past due as of
the end of such month, and (iv) impaired loans). On a monthly basis, Bank of Alpena shall provide First Federal Bank with a schedule
of all loan approvals, which schedule shall indicate the loan amount, loan type and other material features of the loan. 

 

(d)          Alpena
Banking Corporation shall promptly inform First Federal Bancorp upon receiving notice of any legal, administrative, arbitration
or other proceedings, demands, notices, audits or investigations (by any Federal, state or local commission, agency or board)
relating to the alleged liability of Alpena Banking Corporation or any Alpena Banking Subsidiary under any labor or employment
law. 

 

Section 5.03         Access
to Properties and Records.

 

(a)          Alpena
Banking Corporation agrees that upon reasonable notice and subject to applicable laws relating to the exchange of information,
it will (and will cause its Subsidiaries to) afford First Federal Bancorp, and First Federal Bancorp’s officers, employees,
counsel, accountants and other authorized Representatives, such reasonable access during normal business hours throughout the
period before the Effective Time to the books, records (including tax returns and work papers of independent auditors), properties,
personnel and to such other information as First Federal Bancorp may reasonably request and, during such period, it will furnish
promptly to First Federal Bancorp (1) a copy of each report, schedule and other document filed by it pursuant to the requirements
of Federal or state securities or banking laws, and (2) all other information concerning its business, properties and personnel
as First Federal Bancorp may reasonably request. Alpena Banking Corporation or any of its Subsidiaries will not be required to
afford access or disclose information that would violate or prejudice the rights of its customers, jeopardize attorney-client
privilege or contravene any provisions of applicable law, rule or regulation or any binding agreement with any third party. The
Parties will make appropriate substitute arrangements in circumstances where the previous sentence applies. Each party will hold
any information that is nonpublic and confidential in accordance with the confidentiality provisions of the Confidentiality Agreement.
 No investigation by any party of the business and affairs of the other party, pursuant to this Section of the Agreement
or otherwise, will affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement,
or the conditions to any party’s obligation to consummate the transactions contemplated by this Agreement.

 

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(b)          First
Federal Bancorp may elect, at its own expense, to conduct a “phase I environmental audit” and a “phase II environmental
audit” at each Bank of Alpena branch at a time or times mutual agreeable to the Parties prior to the Closing Date; provided,
however, that First Federal Bancorp may elect to conduct a “phase II environmental audit” prior to the Closing
only to the extent that a “phase II environmental audit” is recommended by the “phase I environmental audit”
as a result of a “Recognized Environmental Condition” (as such term is defined by The American Society for Testing
Materials) identified in the “phase I environmental audit,” and provided that as to any “phase II environmental
audits” performed at a branch which Bank of Alpena leases, the landlord pursuant to the applicable lease has consented to
such “phase II environmental audit” if such consent is necessary pursuant to the lease. Bank of Alpena will use its
commercially reasonable efforts (at no cost to Alpena Banking Corporation or Bank of Alpena) to obtain such landlord consent.
Prior to performing any “phase II environmental audits,” First Federal Bancorp will provide Bank of Alpena with a
copy of its proposed work plan and First Federal Bancorp will cooperate in good faith with Bank of Alpena to address any comments
or suggestions made by Bank of Alpena regarding the work plan. First Federal Bancorp and its environmental consultant shall conduct
all environmental assessments pursuant to this Section at mutually agreeable times and so as to eliminate or minimize to the greatest
extent possible interference with Bank of Alpena’s operation of its business, and First Federal Bancorp shall maintain or
cause to be maintained reasonably adequate insurance with respect to any assessment conducted hereunder. First Federal Bancorp
shall be required to restore each property upon which environmental testing has been performed to substantially its pre-assessment
condition. All costs and expenses incurred in connection with any “phase I environmental audit” and any “phase
II environmental audit,” and any restoration and clean up, shall be borne solely by First Federal Bancorp. Any access to
the Bank of Alpena branches hereunder shall be at the sole risk of First Federal Bancorp and, in connection therewith, First Federal
Bancorp agrees to indemnify and hold harmless Alpena Banking Corporation and Bank of Alpena with respect to any damages or losses
resulting from or arising out of such access. A full and complete copy of all phase I environmental audits and phase II environmental
audits prepared under this Section shall be provided to Alpena Banking Corporation within five (5) days of receipt thereof by
First Federal Bancorp.

 

Section 5.04         Financial
and Other Statements.

 

(a)          Promptly
upon receipt thereof, Alpena Banking Corporation will furnish to First Federal Bancorp copies of each annual, interim or special
audit of the financial statements of Alpena Banking Corporation and the Alpena Banking Corporation Subsidiaries made by its independent
auditors and copies of all internal control reports submitted to Alpena Banking Corporation by such auditors in connection with
each annual, interim or special audit of the financial statements of Alpena Banking Corporation and the Alpena Banking Corporation
Subsidiaries made by such auditors.

 

(b)          Alpena
Banking Corporation will furnish to First Federal Bancorp copies of all documents, statements and reports as it or any Alpena
Banking Subsidiary shall send to its shareholders, the FDIC, the FRB, the DIFS or any other Regulatory Authority, except as legally
prohibited thereby. Within 25 days after the end of each month, Alpena Banking Corporation will deliver to First Federal Bancorp
a consolidated balance sheet and a consolidated statement of income, without related notes, for such month prepared in accordance
with current financial reporting practices. 

 

Section 5.05         Maintenance
of Insurance.

 

Alpena Banking Corporation
shall maintain, and cause each Alpena Banking Subsidiary to maintain, insurance in such amounts as are reasonable to cover such
risks as are customary in relation to the character and location of their properties and the nature of their business.

 

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Section 5.06         Disclosure
Supplements.

 

From time to time
prior to the Effective Time, Alpena Banking Corporation will promptly supplement or amend the Alpena Banking Corporation Disclosure
Schedule delivered in connection herewith with respect to any matter hereafter arising which, if existing, occurring or known
at the date of this Agreement, would have been required to be set forth or described in such Alpena Banking Corporation Disclosure
Schedule or that is necessary to correct any information in such Alpena Banking Corporation Disclosure Schedule which has been
rendered materially inaccurate thereby. No supplement or amendment to such Alpena Banking Corporation Disclosure Schedule shall
have any effect for the purpose of determining satisfaction of the conditions set forth in Article VIII.

 

Section 5.07         Consents
and Approvals of Third Parties.

 

Alpena Banking Corporation
shall use all commercially reasonable efforts to obtain as soon as practicable all consents and approvals necessary or desirable
for the consummation of the transactions contemplated by this Agreement.

 

Section 5.08         Reasonable
Best Efforts.

 

Subject to the terms
and conditions herein provided, Alpena Banking Corporation agrees to use reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.

 

Section 5.09         Failure
to Fulfill Conditions.

 

If Alpena Banking
Corporation determines that a condition to its obligation to complete the Merger cannot be fulfilled and that it will not waive
that condition, it will promptly notify First Federal Bancorp.

 

Section 5.10         No
Solicitation.

 

(a)          Alpena
Banking Corporation shall not, and shall not authorize or permit the Alpena Banking Subsidiaries and the respective officers,
directors, employees, investment bankers, financial advisors, attorneys, accountants, consultants, affiliates and other agents
(collectively, the “Representatives”) to, directly or indirectly, (i) initiate, solicit, induce or knowingly
encourage, or take any action to facilitate the making of, any inquiry, offer or proposal which constitutes, or could reasonably
be expected to lead to, an Acquisition Proposal; (ii) participate in any discussions or negotiations regarding any Acquisition
Proposal or furnish, or otherwise afford access, to any Person (other than First Federal Bancorp) any information or data with
respect to Alpena Banking Corporation or any of its Subsidiaries or otherwise relating to an Acquisition Proposal; (iii) release
any Person from, waive any provisions of, or fail to enforce any confidentiality agreement or standstill agreement to which Alpena
Banking Corporation is a party; or (iv) enter into any agreement, agreement in principle or letter of intent with respect
to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal or any agreement, agreement in principle
or letter of intent relating to an Acquisition Proposal. Alpena Banking Corporation and its Subsidiaries shall, and shall cause
each of Alpena Banking Corporation Representatives to, immediately cease and cause to be terminated any and all existing discussions,
negotiations, and communications with any Persons with respect to any existing or potential Acquisition Proposal.

 

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For purposes of this
Agreement, “Acquisition Proposal” shall mean any offer or proposal (other than an offer or proposal from First Federal
Bancorp), whether or not in writing, contemplating, relating to, or that could reasonably be expected to lead to, an Acquisition
Transaction. For purposes of this Agreement, “Acquisition Transaction” shall mean (A) any transaction or series
of transactions involving any merger, consolidation, recapitalization, share exchange, liquidation, dissolution or similar transaction
involving Alpena Banking Corporation or any of its Subsidiaries; (B) any transaction pursuant to which any third party or
group acquires or would acquire (whether through sale, lease or other disposition), directly or indirectly, any assets of Alpena
Banking Corporation or any of its Subsidiaries representing, in the aggregate, twenty-five percent (25%) or more of the assets
of Alpena Banking Corporation and its Subsidiaries on a consolidated basis; (C) any issuance, sale or other disposition of
(including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants
to purchase or securities convertible into, such securities) representing twenty-five percent (25%) or more of the votes
attached to the outstanding securities of Alpena Banking Corporation or any of its Subsidiaries; (D) any tender offer or
exchange offer that, if consummated, would result in any third party or group beneficially owning twenty-five percent (25%) or
more of any class of equity securities of Alpena Banking Corporation or any of its Subsidiaries; or (E) any transaction which
is similar in form, substance or purpose to any of the foregoing transactions, or any combination of the foregoing.

 

(b)          Notwithstanding
Section 5.10(a), Alpena Banking Corporation may take any of the actions described in clause (ii) of Section 5.10(a)
if, but only if, prior to the date of the Alpena Banking Corporation Shareholders Meeting: (i) Alpena Banking Corporation
has received a bona fide unsolicited written Acquisition Proposal that did not result from a breach of this Section 5.10;
(ii) the Alpena Banking Corporation Board determines in good faith, after consultation with and having considered the advice
of its outside legal counsel and its independent financial advisor, that there is a reasonable likelihood that such Acquisition
Proposal constitutes or is reasonably likely to lead to a Superior Proposal; and (iii) prior to furnishing or affording access
to any information or data with respect to Alpena Banking Corporation or any of its Subsidiaries or otherwise relating to an Acquisition
Proposal, Alpena Banking Corporation receives from such Person a confidentiality agreement with terms no less favorable to Alpena
Banking Corporation than those contained in the Confidentiality Agreement between Alpena Banking Corporation and First Federal
Bancorp. Alpena Banking Corporation shall promptly provide to First Federal Bancorp any material, non-public information regarding
Alpena Banking Corporation or its Subsidiaries provided to any other Person that was not previously provided to First Federal
Bancorp, such additional information to be provided no later than the date of provision of such information to such other party.

 

For purposes of this
Agreement, “Superior Proposal” shall mean any bona fide written proposal (on its most recently amended or modified
terms, if amended or modified) made by a third party to enter into an Acquisition Transaction on terms that the Alpena Banking
Corporation Board determines in its good faith judgment, after consultation with and having considered the advice of outside legal
counsel and a financial advisor: (i) would, if consummated, result in the acquisition of all, but not less than all, of the
issued and outstanding shares of Alpena Banking Corporation Common Stock or all, or substantially all, of the assets of Alpena
Banking Corporation and its Subsidiaries on a consolidated basis; (ii) would result in a transaction that involves consideration
to the holders of the shares of Alpena Banking Corporation Common Stock that is more favorable, from a financial point of view,
than the consideration to be paid to Alpena Banking Corporation’s shareholders pursuant to this Agreement, considering,
among other things, the nature of the consideration being offered, and which proposal is not conditioned upon obtaining additional
financing; and (iii) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal,
financial, regulatory and other aspects of the proposal, including any material regulatory approvals or other risks associated
with the timing of the proposed transaction beyond or in addition to those specifically contemplated hereby.

 

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(c)          Alpena
Banking Corporation shall promptly (and in any event within twenty-four (24) hours) notify First Federal Bancorp in writing
if any proposals or offers are received by, any information is requested from, or any negotiations or discussions are sought to
be initiated or continued with, Alpena Banking Corporation or any Alpena Banking Corporation Representatives, in each case in
connection with any Acquisition Proposal, and such notice shall indicate the name of the Person initiating such discussions or
negotiations or making such proposal, offer or information request and the material terms and conditions of any proposals or offers
unless: (i) such materials constitute confidential information of the party making such offer or proposal under an effective
confidentiality agreement, (ii) disclosure of such materials jeopardizes the attorney-client privilege or (iii) disclosure
of such materials contravenes any law, rule, regulation, order, judgment or decree. Alpena Banking Corporation agrees that it
shall keep First Federal Bancorp reasonably informed, on a current basis, of the status and terms of any such proposal, offer,
information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or request).

 

(d)          Neither
the Alpena Banking Corporation Board nor any committee thereof shall withdraw, qualify or modify, or propose to withdraw, qualify
or modify, in a manner adverse to First Federal Bancorp in connection with the transactions contemplated by this Agreement (including
the Merger), the Alpena Banking Corporation Recommendation (as defined in Section 7.01(a)), or make any statement, filing or release,
in connection with the Alpena Banking Corporation Shareholders Meeting or otherwise, inconsistent with the Alpena Banking Corporation
Recommendation (it being understood that taking a neutral position or no position with respect to an Acquisition Proposal shall
be considered an adverse modification of the Alpena Banking Corporation Recommendation).

 

(e)          Notwithstanding
Section 5.10(d), prior to the date of Alpena Banking Corporation Shareholders Meeting, the Board of Directors of Alpena Banking
Corporation may approve or recommend to the shareholders of Alpena Banking Corporation a Superior Proposal and withdraw, qualify
or modify the Alpena Banking Corporation Recommendation in connection therewith (a “Alpena Banking Corporation Subsequent
Determination”) after the third (3rd) Business Day following First Federal Bancorp’s receipt of a
notice (the “Notice of Superior Proposal”) from Alpena Banking Corporation advising First Federal Bancorp that the
Alpena Banking Corporation Board has decided that a bona fide unsolicited written Acquisition Proposal that it received (that
did not result from a breach of this Section 5.10) constitutes a Superior Proposal (it being understood that Alpena Banking
Corporation shall be required to deliver a new Notice of Superior Proposal in respect of any revised Superior Proposal from such
third party or its affiliates that Alpena Banking Corporation proposes to accept and the subsequent notice period shall be two
(2) business days) if, but only if, (i) the Alpena Banking Corporation Board has reasonably determined in good faith, after
consultation with and having considered the advice of outside legal counsel and a financial advisor, that the failure to take
such actions would be reasonably likely to be inconsistent with its fiduciary duties to Alpena Banking Corporation’s shareholders
under applicable law, and (ii) at the end of such three (3) Business Day period or the two (2) Business Day Period (as
the case may be), after taking into account any such adjusted, modified or amended terms as may have been committed to in writing
by First Federal Bancorp since its receipt of such Notice of Superior Proposal (provided, however, that First Federal
Bancorp shall not have any obligation to propose any adjustments, modifications or amendments to the terms and conditions of this
Agreement), the Alpena Banking Corporation Board has again in good faith made the determination (A) in clause (i) of
this Section 5.10(e) and (B) that such Acquisition Proposal constitutes a Superior Proposal.

 

Section 5.11         Reserves
and Merger-Related Costs.

 

Alpena Banking Corporation
agrees to consult with First Federal Bancorp with respect to its loan, litigation and real estate valuation policies and practices
(including loan classifications and levels of reserves). First Federal Bancorp and Alpena Banking Corporation shall also consult
with respect to the character, amount and timing of restructuring charges to be taken by each of them in connection with the transactions
contemplated hereby and shall take such charges as First Federal Bancorp shall reasonably request and which are not inconsistent
with GAAP, provided that no such actions need be effected until First Federal Bancorp shall have irrevocably certified to Alpena
Banking Corporation that all conditions set forth in Article VIII to the obligation of First Federal Bancorp to consummate the
transactions contemplated hereby (other than the delivery of certificates or opinions) have been satisfied or, where legally permissible,
waived.

 

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Section 5.12         Board
of Directors Meetings.

 

Alpena Banking Corporation
and Bank of Alpena shall permit up to two (2) representatives of First Federal Bancorp to attend in person any meetings of the
Board of Directors of Alpena Banking Corporation and/or Bank of Alpena as observers, subject to the Confidentiality Agreement;
provided, that neither Alpena Banking Corporation nor Bank of Alpena shall be required to permit the First Federal Bancorp representatives
to remain present during any confidential discussion of this Agreement and the transactions contemplated hereby or any third party
proposal to acquire control of Alpena Banking Corporation or Bank of Alpena or during any other matter that the respective Board
of Directors has reasonably determined to be confidential with respect to First Federal Bancorp’s participation. First Federal
Bancorp shall bear all legal and financial responsibility for ensuring that observer rights shall not constitute control of Alpena
Banking Corporation or Bank of Alpena under applicable laws.

 

ARTICLE
VI

COVENANTS OF FIRST FEDERAL BANCORP

 

Section 6.01         Conduct
of Business.

 

(a)         Affirmative
Covenants. During the period from the date of this Agreement to the Effective Time, except with the written consent of Alpena
Banking Corporation, which consent will not be unreasonably withheld, First Federal Bancorp will, and will cause each First Federal
Subsidiary to operate its business in the usual, regular and ordinary course of business and use reasonable efforts to preserve
intact its business organization and assets and maintain its rights and franchises.

 

(b)      Negative
Covenants. First Federal Bancorp agrees that from the date of this Agreement until the Effective Time, except as otherwise
specifically permitted or required by this Agreement or as Previously Disclosed, without the written consent of Alpena Banking
Corporation (which consent shall not be unreasonably withheld, conditioned or delayed), it will not, and it will cause each First
Federal Subsidiary not to:

  

(i)          change
or waive any provision of its Articles of Incorporation or Bylaws in a manner that would materially and adversely affect the benefits
of the Merger to the holders of Alpena Banking Corporation Common Stock; 

 

(ii)         change
the number of authorized or issued shares of its capital stock, issue any shares of First Federal Bancorp Common Stock, including
any shares that are held as “treasury shares” as of the date of this Agreement, or issue or grant any Right or agreement
of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock, make
any grant or award under any equity compensation plan or arrangement, or split, combine or reclassify any shares of capital stock,
provided that First Federal Bancorp may issue shares of capital stock or Rights, or make grants or awards, under equity compensation
plans or arrangements that are existing as of the date of this Agreement; 

 

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(iii)        declare
or pay any dividend or make any other distribution to First Federal Bancorp shareholders, whether in cash, stock or other property,
except at such times and in such amounts as consistent with past practice, it being understood that the payment of dividends in
amounts of up to $0.02 per share per quarter shall be considered consistent with past practice;

 

(iv)        merge
or consolidate First Federal Bancorp with any other corporation in any transaction in which First Federal Bancorp is not the surviving
company (a “Sale Transaction”), unless the acquirer in such transaction expressly agrees to be bound by this Agreement
and, if such transaction is closed prior to the Effective Time of the Merger, any appropriate adjustment is made to the Exchange
Ratio so that the Alpena Banking Corporation Shareholders receive the same benefits of the Sale Transaction as if they were shareholders
of First Federal Bancorp at the time of the closing of the Sale Transaction; 

 

(v)         voluntarily
take any action which would result in any of the representations and warranties of First Federal Bancorp set forth in this Agreement
becoming untrue as of any date after the date hereof or in any of the conditions set forth in Article VIII hereof not being satisfied,
except in each case as may be required by applicable law;

 

(vi)        take
any action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of First Federal
Bancorp or Alpena Banking Corporation to obtain any Regulatory Approvals or approvals of Governmental Entities required for the
transactions contemplated hereby or to perform its covenants under the Agreement.

 

(vii)       (1)
take any action or knowingly fail to take any reasonable action that would, or would be reasonably likely to, prevent, impede
or delay the Merger or the Bank Merger from qualifying as reorganizations within the meaning of Section 368(a) of the IRC, or
(2) take any action that is reasonably likely to result in a material violation of any provision of this Agreement except, in
each case, as may be required by applicable law or regulation; or

 

(viii)      agree
to do any of the foregoing.

 

Section 6.02         Current
Information.

 

(a)          During the
period from the date of this Agreement to the Effective Time, First Federal Bancorp will cause one or more of its representatives
to confer with representatives of Alpena Banking Corporation and report on the general status of matters relating to the completion
of the transactions contemplated hereby and on its ongoing operations, at such times as Alpena Banking Corporation may reasonably
request, provided that such representatives shall be subject to the Confidentiality Agreement. First Federal Bancorp will promptly
notify Alpena Banking Corporation of any material change in the normal course of its business or in the operation of its properties
and, to the extent permitted by applicable law, of any governmental complaints, investigations or hearings,
or the institution or the threat of material litigation involving First Federal Bancorp and its Subsidiaries. Without limiting
the foregoing, senior officers of First Federal Bancorp and Alpena Banking Corporation shall meet on a reasonably regular basis
(expected to be at least monthly) to review the financial and operational affairs of First Federal Bancorp and its Subsidiaries,
in accordance with applicable law, and First Federal Bancorp shall give due consideration to Alpena Banking Corporation’s
input on such matters.

 

(b)          First
Federal Bank shall provide Bank of Alpena, within fifteen (15) business days after the end of each calendar month, a written list
of nonperforming assets (the term “nonperforming assets,” for purposes of this subsection, means (i) loans that are
“troubled debt restructuring” as defined in Accounting Standards Codification 310-40, “Troubled Debt Restructuring
by Creditors,” (ii) loans on nonaccrual, (iii) real estate owned, (iv) all loans ninety (90) days or more past due as of
the end of such month, and (iv) impaired loans). On a monthly basis, First Federal Bank shall provide Bank of Alpena with a schedule
of all loan approvals, which schedule shall indicate the loan amount, loan type and other material features of the loan.

 

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(c)          First
Federal Bancorp shall promptly inform Alpena Banking Corporation upon receiving notice of any legal, administrative, arbitration
or other proceedings, demands, notices, audits or investigations (by any Federal, state or local commission, agency or board)
relating to the alleged liability of First Federal Bancorp or any First Federal Banking Subsidiary under any labor or employment
law.

 

Section 6.03         Access
to Properties and Records.

 

(a)          First
Federal Bancorp agrees that upon reasonable notice and subject to applicable laws relating to the exchange of information, it
will (and will cause its Subsidiaries to) afford Alpena Banking Corporation, and Alpena Banking Corporation’s officers,
employees, counsel, accountants and other authorized Representatives, such reasonable access during normal business hours throughout
the period before the Effective Time to the books, records (including tax returns and work papers of independent auditors), properties,
personnel and to such other information as Alpena Banking Corporation may reasonably request and, during such period, it will
furnish promptly to Alpena Banking Corporation (1) a copy of each report, schedule and other document filed by it pursuant to
the requirements of Federal or state securities or banking laws, and (2) all other information concerning its business, properties
and personnel as Alpena Banking Corporation may reasonably request. First Federal Bancorp or any of its Subsidiaries will not
be required to afford access or disclose information that would violate or prejudice the rights of its customers, jeopardize attorney-client
privilege or contravene any provisions of applicable law, rule or regulation or any binding agreement with any third party. The
Parties will make appropriate substitute arrangements in circumstances where the previous sentence applies. Each party will hold
any information that is nonpublic and confidential in accordance with the confidentiality provisions of the Confidentiality Agreement.
No investigation by any party of the business and affairs of the other party, pursuant to this Section of the Agreement or otherwise,
will affect or be deemed to modify or waive any representation, warranty, covenant or agreement in this Agreement, or the conditions
to any party’s obligation to consummate the transactions contemplated by this Agreement.

 

(b)          Alpena
Banking Corporation may elect, at its expense, to conduct a “phase I environmental audit” and a “phase II environmental
audit” at each First Federal Bank branch at a time or times mutually agreeable to the Parties prior to the Closing Date;
provided, however, that Alpena Banking Corporation may elect to conduct a “phase II environmental audit”
prior to the Closing only to the extent that a “phase II environmental audit” is recommended by the “phase I
environmental audit” as a result of a “Recognized Environmental Condition” (as such term is defined by The American
Society for Testing Materials) identified in the “phase I environmental audit,” and provided that as to any “phase
II environmental audits” performed at a branch which First Federal Bank leases, the landlord pursuant to the applicable
lease has consented to such “phase II environmental audit” if such consent is necessary pursuant to the lease. First
Federal Bank will use its commercially reasonable efforts (at no cost to First Federal Bancorp or First Federal Bank) to obtain
such landlord consent. Prior to performing any “phase II environmental audits,” Alpena Banking Corporation will provide
First Federal Bank with a copy of its proposed work plan and Alpena Banking Corporation will cooperate in good faith with First
Federal Bank to address any comments or suggestions made by First Federal Bank regarding the work plan. Alpena Banking Corporation
and its environmental consultant shall conduct all environmental assessments pursuant to this Section at mutually agreeable times
and so as to eliminate or minimize to the greatest extent possible interference with First Federal Bank’s operation of its
business, and Alpena Banking Corporation shall maintain or cause to be maintained reasonably adequate insurance with respect to
any assessment conducted hereunder. Alpena Banking Corporation shall be required to restore each property upon which environmental
testing has been performed to substantially its pre-assessment condition. All costs and expenses incurred in connection with any
“phase I environmental audit” and any “phase II environmental audit,” and any restoration and clean up,
shall be borne solely by Alpena Banking Corporation. Any access to the First Federal Bank branches hereunder shall be at the sole
risk of Alpena Banking Corporation and, in connection therewith, Alpena Banking Corporation agrees to indemnify and hold harmless
First Federal Bancorp and First Federal Bank with respect to any damages or losses resulting from or arising out of such access.
A full and complete copy of all phase I environmental audits and phase II environmental audits prepared under this Section shall
be provided to First Federal Bancorp within five (5) days of receipt thereof by Alpena Banking Corporation. 

 

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Section
6.04         Financial and Other Statements.

 

(a)          First
Federal Bancorp will make available to Alpena Banking Corporation (i) copies of all documents, statements and reports as it or
any First Federal Subsidiary shall send to the OCC, the FRB, or any other Regulatory Authority, with respect to the Merger and
the Bank Merger, and (ii) the First Federal Bancorp Securities Documents filed by it with the SEC.

 

(b)          Promptly
upon receipt thereof, First Federal Bancorp will furnish to Alpena Banking Corporation copies of each annual, interim or special
audit of the financial statements of First Federal Bancorp and the First Federal Bancorp Subsidiaries made by its independent
auditors and copies of all internal control reports submitted to First Federal Bancorp by such auditors in connection with each
annual, interim or special audit of the financial statements of First Federal Bancorp and the First Federal Bancorp Subsidiaries
made by such auditors.

 

(c)          First
Federal Bancorp will furnish to Alpena Banking Corporation copies of all documents, statements and reports as it or any Alpena
Banking Subsidiary shall send to its shareholders, the FDIC, the FRB, the OCC or any other Regulatory Authority, except as legally
prohibited thereby. Within 25 days after the end of each month, First Federal Bancorp will deliver to Alpena Banking Corporation
a consolidated balance sheet and a consolidated statement of income, without related notes, for such month prepared in accordance
with current financial reporting practices.

 

Section
6.05         Maintenance of Insurance.

 

First
Federal Bancorp shall maintain, and cause each First Federal Bancorp Subsidiary to maintain, insurance in such amounts as are
reasonable to cover such risks as are customary in relation to the character and location of their properties and the nature of
their business.

 

Section 6.06         Disclosure
Supplements.

 

From time to time
prior to the Effective Time, First Federal Bancorp will promptly supplement or amend the First Federal Bancorp Disclosure Schedule
delivered in connection herewith with respect to any matter hereafter arising which, if existing, occurring or known at the date
of this Agreement, would have been required to be set forth or described in such First Federal Bancorp Disclosure Schedule or
which is necessary to correct any information in such First Federal Bancorp Disclosure Schedule which has been rendered inaccurate
thereby. No supplement or amendment to such First Federal Bancorp Disclosure Schedule shall have any effect for the purpose of
determining satisfaction of the conditions set forth in Article VIII.

 

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Section 6.07         Consents
and Approvals of Third Parties; Reasonable Best Efforts.

 

First Federal Bancorp
shall use all commercially reasonable efforts to obtain as soon as practicable all consents and approvals necessary or desirable
for the consummation of the transactions contemplated by this Agreement, including assistance with Regulatory Authorities concerning
the termination of any written agreement then in effect between Alpena Banking Corporation or any Alpena Banking Subsidiary and
any Regulatory Authority. Subject to the terms and conditions herein provided, First Federal Bancorp agrees to use reasonable
best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement.

 

Section 6.08         Failure
to Fulfill Conditions.

 

If First Federal Bancorp
determines that a condition to its obligation to complete the Merger cannot be fulfilled and that it will not waive that condition,
it will promptly notify Alpena Banking Corporation.

 

Section 6.09         Employee
Benefits. 

 

(a)          First
Federal Bancorp will review all Alpena Banking Corporation Compensation and Benefit Plans to determine whether to terminate or
continue such plans. In the event employee compensation and/or benefits as currently provided by Alpena Banking Corporation or
any Alpena Banking Subsidiary are changed or terminated by First Federal Bancorp, in whole or in part, First Federal Bancorp shall
provide Continuing Employees (as defined below) with compensation and benefits that are, in the aggregate, substantially similar
to the compensation and benefits provided to similarly situated employees of First Federal Bancorp or applicable First Federal
Bancorp Subsidiary (as of the date any such compensation or benefit is provided). Employees of Alpena Banking Corporation or any
Alpena Banking Subsidiary who become participants in any First Federal Bancorp Compensation and Benefit Plan shall, for purposes
of determining eligibility for and for any applicable vesting periods of such employee benefits only (and not for benefit accrual
purposes unless specifically set forth herein) be given credit for service as an employee of Alpena Banking Corporation or any
Alpena Banking Subsidiary or any predecessor thereto prior to the Effective Time, and provided further, that credit for benefit
accrual purposes will be given only for purposes of First Federal Bancorp vacation policies or programs and for purposes of the
calculation of severance benefits under any severance compensation plan of First Federal Bancorp. This Agreement shall not be
construed to limit the ability of First Federal Bancorp or First Federal Bank to terminate the employment of any employee or to
review employee benefits programs from time to time and to make such changes (including terminating any program) as they deem
appropriate.

 

(b)          First
Federal Bancorp shall honor the terms of all employment, consulting and change in control agreements, if any, Previously Disclosed
by Alpena Banking Corporation. Alpena Banking Corporation has Previously Disclosed the payments and benefits that would be required
to be made/provided under the Alpena Banking Corporation Employment Agreements.

 

(c)          Nothing
contained in this Agreement shall be construed to grant a contract of employment to any employee of Alpena Banking Corporation
or any Alpena Banking Subsidiary who becomes an employee of First Federal Bancorp or First Federal Bank. Any employee of Bank
of Alpena, other than an employee who is a party to an employment agreement, change in control agreement or other separation agreement
that provides a benefit on a termination of employment, whose employment is terminated involuntarily (other than for cause) at
the Bank Merger Effective Date or within one year following the Bank Merger Effective Date shall receive a lump sum severance
payment from First Federal Bank equal to one week’s pay at the rate then in effect, for each full year of employment with
Bank of Alpena, subject to a minimum of four weeks and a maximum of 26 weeks, provided that such employee enters into a release
of claims against Bank of Alpena and First Federal Bank, their Subsidiaries and affiliates in a form satisfactory to First Federal
Bank. Such Bank of Alpena employees will have the right to continued health coverage under group health plans of First Federal
Bank in accordance with IRC Section 4980B(f) and ERISA Sections 601-609. 

 

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(d)          In
the event of any termination or consolidation of any Alpena Banking Corporation health plan with any First Federal Bancorp health
plan, First Federal Bancorp shall make available to those employees of Alpena Banking Corporation or any of the Alpena Banking
Subsidiaries who become employees of First Federal Bancorp or any of the First Federal Subsidiaries following the Merger and the
Bank Merger (“Continuing Employees”) and their dependents employer-provided health coverage on the same basis as it
provides such coverage to First Federal Bancorp employees. Unless a Continuing Employee affirmatively terminates coverage under
an Alpena Banking Corporation health plan before the time that such Continuing Employee becomes eligible to participate in the
First Federal Bancorp health plan, no coverage of any of the Continuing Employees or their dependents shall terminate under any
of the Alpena Banking Corporation health plans before the time such Continuing Employees and their dependents become eligible
to participate in the health plans, programs and benefits common to all employees of First Federal Bancorp and their dependents.
In the event of a termination or consolidation of any Alpena Banking Corporation health plan, terminated Alpena Banking Corporation
employees and qualified beneficiaries will have the right to continued coverage under group health plans of First Federal Bancorp
in accordance with COBRA, consistent with the provisions below. All Alpena Banking Corporation employees who cease participating
in an Alpena Banking Corporation health plan and become participants in a comparable First Federal Bancorp health plan (each a
“Former Alpena Banking Corporation Health Plan Participant”) shall receive credit for any co-payment and deductibles
paid under Alpena Banking Corporation’s health plan for purposes of satisfying any applicable deductible or out-of-pocket
requirements under the First Federal Bancorp health plan, upon substantiation, in a form satisfactory to First Federal Bancorp
that such co-payment and/or deductible has been satisfied. With respect to any Former Alpena Banking Corporation Health Plan Participant,
any coverage limitation under the First Federal Bancorp health plan due to any pre-existing condition shall be waived by the First
Federal Bancorp health plan to the degree that such condition was covered by the Alpena Banking Corporation health plan and such
condition would otherwise have been covered by the First Federal Bancorp health plan in the absence of such coverage limitation.

 

Section 6.10         Directors
and Officers Indemnification and Insurance.

 

(a)          For
a period of six years from and after the Effective Time, First Federal Bancorp shall indemnify, defend and hold harmless each
person who is now, or who has been at any time before the date hereof or who becomes before the Effective Time, an officer or
director of Alpena Banking Corporation or an Alpena Banking Subsidiary (the “Indemnified Parties”) against all losses,
claims, damages, costs, expenses (including attorney’s fees), liabilities or judgments or amounts that are paid in settlement
of or in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, or administrative (each
a “Claim”), in which an Indemnified Party is, or is threatened to be made, a party or witness in whole or in part
or arising in whole or in part out of the fact that such person is or was a director, officer or employee of Alpena Banking Corporation
or an Alpena Banking Subsidiary if such Claim pertains to any matter of fact arising, existing or occurring at or before the Effective
Time (including, without limitation, the Merger and the other transactions contemplated hereby), regardless of whether such Claim
is asserted or claimed before or after the Effective Time. The obligation of First Federal Bancorp to the Indemnified Parties
shall be to the fullest extent as would have been permitted by Alpena Banking Corporation under Alpena Banking Corporation’s
Articles of Incorporation and Bylaws. First Federal Bancorp shall also pay all of an Indemnified Party’s expenses in advance
of the final disposition of any such action or proceeding to the fullest extent, and in accordance with the required procedures,
of Alpena Banking Corporation’s Articles of Incorporation and Bylaws.

 

(b)          If
either First Federal Bancorp or any of its successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving bank or entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors
and assigns of First Federal Bancorp shall assume the obligations set forth in this Section 6.08.

 

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(c)          First
Federal Bancorp shall use its best efforts to maintain, or shall cause First Federal Bank to maintain, in effect for three years
following the Effective Time, the current directors’ and officers’ liability insurance policies covering the officers
and directors of Alpena Banking Corporation (provided, that First Federal Bancorp may substitute therefor policies of at least
the same coverage containing terms and conditions which are not materially less favorable) with respect to matters occurring at
or prior to the Effective Time; provided, however, that in no event shall First Federal Bancorp be required to expend pursuant
to this Section 6.08(c) an amount that in the aggregate is more than 100% of the annual premiums (the “Maximum Amount”)
currently paid by Alpena Banking Corporation for such insurance and, if First Federal Bancorp is unable to maintain such policy
as a result of this proviso, First Federal Bancorp shall obtain as much comparable insurance as is available for such Maximum
Amount; provided further, that First Federal Bancorp may (i) request Alpena Banking Corporation to obtain an extended reporting
period endorsement under Alpena Banking Corporation’s existing directors’ and officers’ liability insurance
policy or (ii) substitute therefor “tail” policies the material terms of which, including coverage and amount, are
no less favorable to such persons in any material respect than Alpena Banking Corporation’s existing insurance policies
as of the date hereof. In connection with the foregoing, Alpena Banking Corporation agrees in order for First Federal Bancorp
to fulfill its agreement to provide directors’ and officers’ liability insurance policies for three years to provide
such insurer or substitute insurer with such reasonable and customary representations as such insurer may request with respect
to the reporting of any prior claims.

 

(d)          The
obligations of First Federal Bancorp provided under this Section 6.08 are intended to be enforceable against First Federal Bancorp
directly by the Indemnified Parties and shall be binding on all respective successors and permitted assigns of First Federal Bancorp.

 

Section 6.11         Stock
Listing.

 

Prior to the Effective
Time, First Federal Bancorp shall notify Nasdaq of the additional shares of First Federal Bancorp Common Stock to be issued by
First Federal Bancorp in exchange for the shares of Alpena Banking Corporation Common Stock.

 

Section
6.12         Board of Directors
Meetings.

 

First Federal Bancorp
and First Federal Bank shall permit up to two representatives of Alpena Banking
Corporation to attend in person any meetings of the Board of Directors of First
Federal Bancorp and/or First Federal Bank as
observers, subject to the Confidentiality Agreement; provided, that neither First Federal Bancorp nor First Federal Bank shall
be required to permit the Alpena Banking Corporation representatives to remain present during any confidential discussion of this
Agreement and the transactions contemplated hereby. Alpena Banking Corporation shall bear all legal and financial responsibility
for ensuring that observer rights shall not constitute control of First Federal Bancorp or First Federal Bank under applicable
laws.

 

Section 6.13 Board of Directors.

 

At the Effective Time,
First Federal Bancorp and First Federal Bank shall each expand the size of their respective Boards of Directors to consist of
nine (9) members, and shall cause four (4) individuals serving on Alpena Banking Corporation’s Board of Directors immediately
prior to the Effective Time to be added to the Boards of Directors of First Federal Bancorp and First Federal Bank. Such individuals
shall be selected by the board of directors of First Federal Bancorp, subject to the approval of Alpena Banking Corporation (which
shall not be unreasonably withheld). First Federal Bancorp and First Federal Bank covenant and agree to take such actions as may
be required to carry out the forgoing, including the securing of resignations of a sufficient number of incumbent members of the
respective boards of directors of First Federal Bancorp and First Federal Bank and the appointment of the designated former directors
of Alpena Banking Corporation and Bank of Alpena to the respective boards.

 

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Section 6.14         First
Federal Bancorp Recommendation.

 

(a)          Except
as provided otherwise below, neither the First Federal Bancorp Board nor any committee thereof shall withdraw, qualify or modify,
or propose to withdraw, qualify or modify, in a manner adverse to Alpena Banking Corporation in connection with the transactions
contemplated by this Agreement (including the Merger), the First Federal Bancorp Recommendation (as defined in Section 7.01(b)),
or make any statement, filing or release, in connection with the First Federal Bancorp Shareholders Meeting or otherwise, inconsistent
with the First Federal Bancorp Recommendation (it being understood that taking a neutral position or no position with respect
to an Acquisition Proposal shall be considered an adverse modification of the First Federal Bancorp Recommendation).

 

(b)          Notwithstanding
Section 6.14(a), prior to the date of the First Federal Bancorp Shareholders Meeting, the Board of Directors of First Federal
Bancorp may withdraw, qualify or modify, or propose to withdraw, qualify or modify the First Federal Bancorp Recommendation if
the First Federal Bancorp Board determines in good faith (after consultation with outside counsel) that the failure to do so would
be reasonably likely to violate its fiduciary duties under applicable law.

 

ARTICLE
VII

REGULATORY AND OTHER MATTERS

 

Section 7.01         Meetings
of Shareholders.

 

(a)          Alpena Banking Corporation
will (i) except as otherwise provided in Section 5.10, take all steps necessary to duly call, give notice of, convene and
hold a meeting of its shareholders as promptly as practicable after the Merger Registration Statement is declared effective by
the SEC, to consider this Agreement and the Merger (the “Alpena Banking Corporation Shareholders Meeting”), (ii) subject
to Section 5.10, through its Board of Directors, in connection with the solicitation of proxies with respect to the Alpena
Banking Corporation Shareholders Meeting, recommend approval of this Agreement to the Alpena Banking Corporation shareholders
(the “Alpena Banking Corporation Recommendation”); and (iii) cooperate and consult with First Federal Bancorp
with respect to each of the foregoing matters.  Subject to the foregoing, Alpena Banking Corporation and the Alpena Banking
Corporation Board of Directors will use their reasonable best efforts to obtain from its shareholders the votes necessary to approve
the adoption of this Agreement.

 

(b)          First Federal
Bancorp will (i) except as otherwise provided in Section 6.14(b), take all steps necessary to duly call, give notice of,
convene and hold a meeting of its shareholders as promptly as practicable after the Merger Registration Statement is declared
effective by the SEC, to consider this Agreement and the Merger (the “First Federal Bancorp Shareholders Meeting”),
(ii) subject to Section 6.14(b), through its Board of Directors, in connection with the solicitation of proxies with respect
to the First Federal Bancorp Shareholders Meeting, recommend approval of this Agreement to the First Federal Bancorp shareholders
(the “First Federal Bancorp Recommendation”); and (iii) cooperate and consult with Alpena Banking Corporation
with respect to each of the foregoing matters.  Subject to the foregoing, First Federal Bancorp and the Board of Directors
will use their reasonable best efforts to obtain shareholder approval of this Agreement.

 

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Section 7.02         Proxy
Statement-Prospectus; Merger Registration Statement.

 

(a)          For
the purposes of (i) registering with the SEC under the Securities Act the First Federal Bancorp Common Stock to be offered to
holders of Alpena Banking Corporation Common Stock in connection with the Merger, and (ii)  holding the Alpena Banking Corporation
Shareholders Meeting and the First Federal Bancorp Shareholders Meeting, First Federal Bancorp shall draft and prepare, and Alpena
Banking Corporation shall cooperate in the preparation of, the Merger Registration Statement, including a proxy statement and
prospectus satisfying all applicable requirements of applicable state securities and banking laws, and of the Securities Act and
the Exchange Act, and the rules and regulations thereunder (such proxy statement/prospectus in the form mailed by Alpena Banking
Corporation to the Alpena Banking Corporation shareholders and mailed by First Federal Bancorp to the First Federal Bancorp shareholders
together with any and all amendments or supplements thereto, being herein referred to as the “Proxy Statement-Prospectus”).
First Federal Bancorp shall provide Alpena Banking Corporation and its counsel with appropriate opportunity to review and comment
on the Proxy Statement-Prospectus, and shall incorporate all appropriate comments thereto, prior to the time it is initially filed
with the SEC or any amendments are filed with the SEC. First Federal Bancorp shall file the Merger Registration Statement, including
the Proxy Statement-Prospectus, with the SEC as soon as practicable following execution of this Agreement. Each of First Federal
Bancorp and Alpena Banking Corporation shall use its reasonable best efforts to have the Merger Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing, and Alpena Banking Corporation and First Federal
Bancorp shall each thereafter promptly mail the Proxy Statement-Prospectus to their respective shareholders. First Federal Bancorp
shall also use its reasonable best efforts to obtain all necessary state securities law or “blue sky” permits and
approvals required to carry out the transactions contemplated by this Agreement, and Alpena Banking Corporation shall furnish
all information concerning Alpena Banking Corporation and the holders of Alpena Banking Corporation Common Stock as may be reasonably
requested in connection with any such action.

 

(b)          First
Federal Bancorp will advise Alpena Banking Corporation promptly after First Federal Bancorp receives notice of the time when the
Merger Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop
order or the suspension of the registration of the shares of First Federal Bancorp Common Stock issuable pursuant to the Merger
Registration Statement, or the initiation or threat of any proceeding for any such purpose, or of any request by the SEC for the
amendment or supplement of the Merger Registration Statement, or for additional information, and First Federal Bancorp will provide
Alpena Banking Corporation with as many copies of such Merger Registration Statement and all amendments thereto promptly upon
the filing thereof as Alpena Banking Corporation may reasonably request.

 

(c)          Alpena
Banking Corporation and First Federal Bancorp shall promptly notify the other party if at any time it becomes aware that the Proxy
Statement-Prospectus or the Merger Registration Statement contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances
under which they were made, not misleading. In such event, Alpena Banking Corporation shall cooperate with First Federal Bancorp
in the preparation of a supplement or amendment to such Proxy Statement-Prospectus that corrects such misstatement or omission,
and First Federal Bancorp shall file an amended Merger Registration Statement with the SEC, and each of Alpena Banking Corporation
and First Federal Bancorp shall mail an amended Proxy Statement-Prospectus to their respective shareholders.

 

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Section 7.03         Regulatory
Approvals.

 

The Parties will cooperate
with each other and use all reasonable efforts to promptly prepare all necessary documentation, to effect all necessary filings
and to obtain all necessary permits, consents, waivers, approvals and authorizations of the SEC, the Regulatory Authorities and
any other third parties and governmental bodies necessary to consummate the transactions contemplated by this Agreement. The Parties
will furnish each other and each other’s counsel with all information concerning themselves, their Subsidiaries, directors,
officers and shareholders and such other matters as may be necessary or advisable in connection with the Proxy Statement-Prospectus
and any application, petition or any other statement or application made to any Regulatory Authority or Governmental Entity in
connection with the Merger and the Bank Merger, and the other transactions contemplated by this Agreement. Alpena Banking Corporation
shall have the right to review the information relating to Alpena Banking Corporation and any of its Subsidiaries, which appears
in any filing made in connection with the transactions contemplated by this Agreement with any Regulatory Authority or any Governmental
Entity. First Federal Bancorp shall give Alpena Banking Corporation and its counsel the opportunity to review each filing prior
to its being filed with a Regulatory Authority and shall give Alpena Banking Corporation and its counsel the opportunity to review
all regulatory filings, amendments and supplements to such filings and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, a Regulatory Authority.

 

ARTICLE
VIII

CLOSING CONDITIONS

 

Section 8.01         Conditions
to Each Party’s Obligations under this Agreement.

 

The respective obligations
of each party under this Agreement shall be subject to the fulfillment at or prior to the Closing Date of the following conditions,
none of which may be waived:

 

(a)          Shareholder
Approval. This Agreement and the transactions contemplated hereby shall have been approved by the requisite vote of the shareholders
of each of Alpena Banking Corporation and First Federal Bancorp. 

 

(b)          Injunctions.
None of the Parties hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction
that enjoins or prohibits the consummation of the transactions contemplated by this Agreement, and no statute, rule or regulation
shall have been enacted, entered, promulgated, interpreted, applied or enforced by any Governmental Entity or Regulatory Authority
that enjoins or prohibits the consummation of the transactions contemplated by this Agreement.

 

(c)          Regulatory
Approvals. All Regulatory Approvals required to consummate the transactions contemplated by this Agreement shall have been
obtained and shall remain in full force and effect and all waiting periods relating to such approvals shall have expired; all
written agreements then in effect between Alpena Banking Corporation or any Alpena Banking Subsidiary and any Regulatory Authority
will have been terminated or the Regulatory Authority has agreed to terminate such written agreement contemporaneously with the
Closing; all other necessary approvals, authorizations and consents of any Governmental Entities required to consummate the transactions
contemplated by this Agreement, the failure of which to obtain would reasonably be expected to have a Material Adverse Effect,
shall have been obtained and shall remain in full force and effect and all waiting periods relating to such approvals, authorizations
or consents shall have expired. No such approval, authorization or consent shall include any condition or requirement, excluding
standard conditions that are normally imposed by the Regulatory Authorities in bank merger transactions, that would, in the good
faith reasonable judgment of the Board of Directors of First Federal Bancorp, materially and adversely affect the business, operations,
financial condition, property or assets of the combined enterprise of the Parties.

 

(d)          Third
Party Consents. The Parties shall have obtained the consent or approval of each person (other than the Regulatory Approvals
and other approvals, authorizations and consents of Governmental Entities referred to in Section 8.01(c)) whose consent or approval
shall be required to consummate the transactions contemplated by this Agreement, except for those for which failure to obtain
such consent or approval would not, individually or in the aggregate, have a Material Adverse Effect on First Federal Bancorp
(after giving effect to the consummation of the transactions contemplated hereby).

 

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(e)          Merger
Registration Statement. The Merger Registration Statement shall have been declared effective by the SEC and no stop order
suspending the effectiveness of the Merger Registration Statement shall have been issued and be in effect and no proceedings for
that purpose shall have been initiated by the SEC and not withdrawn. 

 

(f)          Nasdaq
Listing. The shares of First Federal Bancorp Common Stock to be issued in the Merger shall have been authorized for listing
on Nasdaq, subject to official notice of issuance. 

 

Section 8.02         Conditions
to the Obligations of First Federal Bancorp under this Agreement.

 

The obligations of
First Federal Bancorp under this Agreement shall be further subject to the satisfaction of the conditions set forth in this Section
8.02 at or prior to the Closing Date:

 

(a)          Representations
and Warranties. Subject to the standard set forth in Section 3.01, each of the representations and warranties of Alpena Banking
Corporation set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date
with the same effect as though all such representations and warranties had been made as of the Closing Date (except to the extent
such representations and warranties speak as of an earlier date, which only need be true and correct as of such earlier date),
and Alpena Banking Corporation shall have delivered to First Federal Bancorp a certificate to such effect signed by the Chief
Executive Officer and the Chief Financial Officer of Alpena Banking Corporation as of the Closing Date. 

 

(b)          Agreements
and Covenants. Alpena Banking Corporation shall have performed in all material respects all obligations, and complied in all
material respects with all agreements or covenants, to be performed or complied with by it at or prior to the Effective Time.
First Federal Bancorp shall have received a certificate signed on behalf of Alpena Banking Corporation by the Chief Executive
Officer and Chief Financial Officer of Alpena Banking Corporation to such effects dated as of the Effective Time.

 

(c)          Tax
Opinion. On the basis of facts, representations and assumptions which shall be consistent with the state of facts existing
at the Closing Date, First Federal Bancorp shall have received an opinion of counsel to First Federal Bancorp, reasonably acceptable
in form and substance to First Federal Bancorp, dated as of the Closing Date, substantially to the effect that for Federal income
tax purposes, the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. In rendering
the tax opinion described herein, such counsel may require and rely upon customary representations contained in certificates of
officers of First Federal Bancorp and Alpena Banking Corporation and their respective Subsidiaries.

 

Section
8.03         Conditions to the Obligations of Alpena Banking Corporation under this
Agreement.

 

The obligations of
Alpena Banking Corporation under this Agreement shall be further subject to the satisfaction of the conditions set forth in this
Section 8.03 at or prior to the Closing Date:

 

(a)          Representations
and Warranties. Subject to the standard set forth in Section 4.01, each of the representations and warranties of First Federal
Bancorp set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date with
the same effect as though all such representations and warranties had been made as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date, which only need be true and correct as of such earlier date); and
First Federal Bancorp shall have delivered to Alpena Banking Corporation a certificate to such effect signed by the Chief Executive
Officer and the Chief Financial Officer of First Federal Bancorp as of the Effective Time.

 

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(b)          Agreements
and Covenants. First Federal Bancorp shall have performed in all material respects all obligations and complied in all material
respects with all agreements or covenants to be performed or complied with by it at or prior to the Effective Time, and Alpena
Banking Corporation shall have received a certificate signed on behalf of First Federal Bancorp by the Chief Executive Officer
and Chief Financial Officer to such effects dated as of the Effective Time.

 

(c)          Tax
Opinion. On the basis of facts, representations and assumptions which shall be consistent with the state of facts existing
at the Closing Date, Alpena Banking Corporation shall have received an opinion of counsel to First Federal Bancorp, reasonably
acceptable in form and substance to Alpena Banking Corporation, dated as of the Closing Date, substantially to the effect that
for Federal income tax purposes, the Merger will qualify as a reorganization within the meaning of Section 368(a) of the
Code. In rendering the tax opinion described herein, such counsel may require and rely upon customary representations contained
in certificates of officers of First Federal Bancorp and Alpena Banking Corporation and their respective Subsidiaries.

 

ARTICLE
IX

THE CLOSING

 

Section 9.01         Time
and Place.

 

Subject to the provisions
of Articles VIII and X hereof, the Closing of the transactions contemplated hereby shall occur at such place and time upon which
First Federal Bancorp and Alpena Banking Corporation mutually agree. A pre-closing of the transactions contemplated hereby (the
“Pre-Closing”) shall take place on the day prior to the Closing Date.

 

Section 9.02         Deliveries
at the Pre-Closing and the Closing.

 

At the Pre-Closing
there shall be delivered to First Federal Bancorp and Alpena Banking Corporation drafts of the opinions, certificates, and other
documents and instruments required to be delivered at the Closing under Article IX hereof.

 

ARTICLE
X

TERMINATION, AMENDMENT AND WAIVER

 

Section 10.01         Termination.

 

This Agreement may
be terminated at any time prior to the Closing Date, whether before or after approval of the Merger by the shareholders of Alpena
Banking Corporation:

 

(a)          At
any time by the mutual written agreement of First Federal Bancorp and Alpena Banking Corporation;

 

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(b)          By
the Board of Directors of either First Federal Bancorp or Alpena Banking Corporation (provided, that the terminating party is
not then in material breach of any representation, warranty, covenant or other agreement contained herein) if there shall have
been any breach of any of the representations or warranties set forth in this Agreement on the part of one of the other Parties,
which breach (i) if occurring or continuing on the date on which the Closing would otherwise occur would result in the failure
of the conditions set forth in Sections 8.02(a) or 8.03(a), as the case may be and (ii) by its nature cannot be cured prior to
the Termination Date or shall not have been cured within 30 days after written notice of such breach by the terminating party
to the other party; 

 

(c)          By
the Board of Directors of either First Federal Bancorp or Alpena Banking Corporation (provided, that the terminating party is
not then in material breach of any representation, warranty, covenant or other agreement contained herein) if there shall have
been a material failure to perform or comply with any of the covenants or agreements set forth in this Agreement on the part of
one of the other Parties, which failure by its nature cannot be cured prior to the Termination Date or shall not have been cured
within 30 days after written notice of such failure by the terminating party to the other party;

 

(d)          By
the Board of Directors of either First Federal Bancorp or Alpena Banking Corporation if the Closing shall not have occurred by
the Termination Date, or such later date as shall have been agreed to in writing by First Federal Bancorp and Alpena Banking Corporation;
provided, that no party may terminate this Agreement pursuant to this Section 10.01(d) if the failure of the Closing to have occurred
on or before said date was due to such party’s material breach of any representation, warranty, covenant or other agreement
contained in this Agreement; 

 

(e)          By
the Board of Directors of either First Federal Bancorp or Alpena Banking Corporation if (x) the shareholders of Alpena Banking
Corporation shall have voted at the Alpena Banking Corporation Shareholders Meeting on the transactions contemplated by this Agreement
and such vote shall not have been sufficient to approve such transactions, or (y) the shareholders of First Federal Bancorp shall
have voted at the First Federal Bancorp Shareholders Meeting on the transactions contemplated by this Agreement and such vote
shall not have been sufficient to approve such transactions; 

 

(f)          By
the Board of Directors of either First Federal Bancorp or Alpena Banking Corporation if (i) final action has been taken by a Regulatory
Authority whose approval is required in connection with this Agreement and the transactions contemplated hereby, which final action
(x) has become unappealable and (y) does not approve this Agreement or the transactions contemplated hereby, or (ii) any
court of competent jurisdiction or other governmental authority shall have issued an order, decree, ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger or the Bank Merger and such order, decree, ruling or other action
shall have become final and nonappealable;

 

(g)          By
the Board of Directors of First Federal Bancorp if the Board of Directors of Alpena Banking Corporation does not publicly recommend
in the Proxy Statement-Prospectus that shareholders approve this Agreement or if, after recommending in the Proxy Statement-Prospectus
that shareholders approve this Agreement, the Board of Directors withdraws its recommendation or modifies or qualifies its recommendation
in a manner adverse to First Federal Bancorp; 

 

(h)          By
the Board of Directors of Alpena Banking Corporation if the Board of Directors of First Federal Bancorp does not publicly recommend
in the Proxy Statement-Prospectus that shareholders approve this Agreement or if, after recommending in the Proxy Statement-Prospectus
that shareholders approve this Agreement, the Board of Directors withdraws its recommendation or modifies or qualifies its recommendation
in a manner adverse to Alpena Banking Corporation; 

 

(i)          By
the Board of Directors of Alpena Banking Corporation: (i) at any time before the approval of this Agreement by Alpena Banking
Corporation’s shareholders, if Alpena Banking Corporation has received a Superior Proposal, and in accordance with Section
5.10 of this Agreement, the Board of Directors of Alpena Banking Corporation has made a determination to terminate this Agreement
in order to accept such Superior Proposal; and (ii) Alpena Banking Corporation has paid the termination fee set forth below in
Section 10.02(b)(iii). 

 

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(j)          By
the Board of Directors of Alpena Banking Corporation if total shareholders’
equity of First Federal Bancorp, on the last day of the month prior to the month of Closing, computed in accordance with
GAAP, is less than $22,060,000, adjusted to eliminate the effect of (x) transaction costs
associated with Merger and the Bank Merger and (y) changes in accumulated other comprehensive income (loss).

 

(k)         By
the Board of Directors of First Federal Bancorp if total shareholders’
equity of Alpena Banking Corporation, on the last day of the month prior to the month of Closing, computed in accordance
with GAAP, is less than $6,307,000, adjusted to eliminate the effect of (x) transaction costs
associated with Merger and the Bank Merger and (y) changes in accumulated other comprehensive income.

 

(l)
        By Alpena Banking Corporation in the event First Federal Bancorp shall, prior to the Effective Time, enter into any agreement,
whether or not binding, to merge or consolidate First Federal Bancorp with any other corporation in any transaction in
which First Federal Bancorp is not the surviving entity.

 

Section 10.02         Effect
of Termination.

 

(a)          In
the event of termination of this Agreement pursuant to any provision of Section 10.01, this Agreement shall forthwith become void
and have no further force, except that (i) the provisions of Sections 10.02, 11.01, 11.02, 11.06, 11.09, 11.10, and any other
Section which, by its terms, relates to post-termination rights or obligations, shall survive such termination of this Agreement
and remain in full force and effect.

 

(b)          If
this Agreement is terminated, expenses and damages of the Parties hereto shall be determined as follows:

 

(i)          Except
as provided below, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses.

 

(ii)         In
the event of a termination of this Agreement because of a willful breach of any representation, warranty, covenant or agreement
contained in this Agreement, the breaching party shall remain liable for any and all liabilities and damages sustained or incurred
by the non-breaching party as a result thereof or in connection therewith or with respect to the enforcement of its rights hereunder.

 

(iii)        As
a condition of First Federal Bancorp’s willingness, and to induce First Federal Bancorp to enter into this Agreement, and/or
to reimburse First Federal Bancorp for incurring the costs and expenses related to entering into this Agreement and consummating
the transactions contemplated by this Agreement, Alpena Banking Corporation hereby agrees to pay First Federal Bancorp, and First
Federal Bancorp shall be entitled to payment of, a fee equal to $200,000 or, if greater, reimbursement up to $400,000 for actual
costs and expenses incurred by First Federal Bancorp and First Federal Bank related to entering into this Agreement and consummating
the transactions contemplated by this Agreement (including out-of-pocket legal, financial advisory, due diligence, printing, postage
and consulting expenses), following the occurrence of any of the events set forth below:

 

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(A)         Alpena
Banking Corporation terminates this Agreement pursuant to Section 10.01(i); or

 

(B)         The
entering into a definitive agreement by Alpena Banking Corporation relating to an Acquisition Proposal or the consummation of
an Acquisition Proposal involving Alpena Banking Corporation within twelve (12) months after the occurrence of any of the following:
(i) the termination of this Agreement by First Federal Bancorp pursuant to Section 10.01(b) or 10.01(c) because of, in either
case, a willful breach by Alpena Banking Corporation; or (ii) the termination of this Agreement by First Federal Bancorp pursuant
to Section 10.01(g); or (iii) the failure of the shareholders of Alpena Banking Corporation to approve this Agreement after the
public disclosure or public awareness of an Acquisition Proposal.

 

(iv)        As
a condition of Alpena Banking Corporation’s willingness, and to induce Alpena Banking Corporation to enter into this Agreement,
and/or to reimburse Alpena Banking Corporation for incurring the costs and expenses related to entering into this Agreement and
consummating the transactions contemplated by this Agreement, First Federal Bancorp hereby agrees to reimburse Alpena Banking
Corporation, and Alpena Banking Corporation shall be entitled to reimbursement of, out-of-pocket legal, financial advisory, due
diligence, printing, postage and consulting expenses incurred by Alpena Banking Corporation and Bank of Alpena in connection with
the transactions contemplated by this Agreement up to a maximum of $200,000, if Alpena Banking Corporation terminates this Agreement
pursuant to Section 10.01(h). 

 

(c)          Any
fee payable pursuant to Section 10.02(b)(iii)(A) or Section 10.02(b)(iv) shall be made by wire transfer of immediately available
funds at the time of termination. Any fee payable pursuant to Section 10.02(b)(iii)(B) shall be made by wire transfer of immediately
available funds within two (2) business days after written demand for payment. The right to receive payment of the fee under Section 10.02(b)(iii)
will constitute the sole and exclusive remedy of First Federal Bancorp against Alpena Banking Corporation and their respective
officers and directors with respect to a termination on the bases specified in paragraphs (A) or (B) of Section 10.02(b)(iii).
The right to receive payment of the fee under Section 10.02(b)(iv) will constitute the sole and exclusive remedy of Alpena
Banking Corporation against First Federal Bancorp and their respective officers and directors with respect to a termination on
the basis specified in Section 10.02(b)(iv).

 

Section 10.03         Amendment,
Extension and Waiver.

 

Subject to applicable
law, at any time prior to the Effective Time (whether before or after approval thereof by the shareholders of Alpena Banking Corporation),
the Parties hereto by action of their respective Boards of Directors, may (a) amend this Agreement, (b) extend the time for the
performance of any of the obligations or other acts of any other party hereto, (c) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto, or (d) waive compliance with any of the agreements
or conditions contained herein; provided, however, that after any approval of this Agreement and the transactions contemplated
hereby by the shareholders of Alpena Banking Corporation, there may not be, without further approval of such shareholders, any
amendment of this Agreement which reduces the amount, value or changes the form of consideration to be delivered to Alpena Banking
Corporation’s shareholders pursuant to this Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the Parties hereto. Any agreement on the part of a party hereto to any extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such party, but such waiver or failure to insist on strict
compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure.

 

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ARTICLE
XI

MISCELLANEOUS

 

Section 11.01         Confidentiality.

 

Except as specifically
set forth herein, First Federal Bancorp and Alpena Banking Corporation mutually agree to be bound by the terms of the confidentiality
agreement dated August 9, 2013 (the “Confidentiality Agreement”) previously executed by the Parties hereto, which
Confidentiality Agreement is hereby incorporated herein by reference. The Parties hereto agree that such Confidentiality Agreement
shall continue in accordance with its respective terms, notwithstanding the termination of this Agreement.

 

Section 11.02         Public
Announcements.

 

Alpena Banking Corporation
and First Federal Bancorp shall cooperate with each other in the development and distribution of all news releases and other public
disclosures with respect to this Agreement, and except as may be otherwise required by law, neither Alpena Banking Corporation
nor First Federal Bancorp shall issue any news release, or other public announcement or communication with respect to this Agreement
unless such news release, public announcement or communication has been mutually agreed upon by the Parties hereto. Notwithstanding
the foregoing, a party may, without the prior consent of the other party (but after prior consultation with the other party),
issue such press release or public disclosure as may upon the advice of counsel be required by law or the rules and regulations
of the applicable securities exchange, as the case may be.

 

Section 11.03         Survival.

 

All representations,
warranties and covenants in this Agreement or in any instrument delivered pursuant hereto or thereto shall expire on and be terminated
and extinguished at the Effective Time, except for those covenants and agreements contained herein which by their terms apply
in whole or in part after the Effective Time.

 

Section 11.04         Notices.

 

All notices or other
communications hereunder shall be in writing and shall be deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized overnight courier addressed as follows:

 

(a)   If to First Federal
Bancorp to:

 

First Federal of Northern Michigan
Bancorp, Inc. 

100 South Second Avenue 

Alpena,  Michigan 49707 

Attn: Michael
W. Mahler 

President
and Chief Executive Officer 

Fax: (989)
356-0909

 

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with a copy to:

 

Luse Gorman Pomerenk & Schick, P.C. 

5335 Wisconsin Ave., NW 

Suite 780 

Washington, DC 20015 

Attn:     Eric Luse, Esq. 

      Steven T. Lanter, Esq. 

Fax: (202) 362-2902 

  

(b)   If to Alpena Banking Corporation
to:

 

Alpena Banking Corporation 

468 North Ripley Boulevard 

Alpena,  Michigan 49707 

Attn: Craig
A. Kus 

President
and Chief Executive Officer 

Fax: (989)
358-9909

 

with a copy to:

 

Shumaker, Loop & Kendrick, LLP 

1000 Jackson St. 

Toledo, Ohio 43604 

Attn:      Martin D. Werner, Esq. 

Fax:       (419) 241-3108

 

or such other address
as shall be furnished in writing by any party, and any such notice or communication shall be deemed to have been given: (a) as
of the date delivered by hand; (b) three (3) business days after being delivered to the U.S. mail, postage prepaid;
or (c) one (1) business day after being delivered to the overnight courier.

 

Section 11.05         Parties
in Interest.

 

This Agreement shall
be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns; provided, however,
that neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other party. Except for the provisions of Article II and Sections 6.08 and 6.10, following the
Effective Time, nothing in this Agreement, express or implied, is intended to confer upon any person, other than the Parties hereto
and their respective successors, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 11.06         Complete
Agreement.

 

This Agreement, including
the Exhibits and Disclosure Schedules hereto and the documents and other writings referred to herein or therein or delivered pursuant
hereto, and the Confidentiality Agreement, referred to in Section 11.01, contains the entire agreement and understanding of the
Parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings
between the Parties other than those expressly set forth herein or therein. This Agreement supersedes all prior agreements and
understandings (other than the Confidentiality Agreement referred to in Section 11.01 hereof) between the Parties, both written
and oral, with respect to its subject matter.

 

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Section 11.07         Counterparts.

 

This Agreement may
be executed in one or more counterparts all of which shall be considered one and the same agreement and each of which shall be
deemed an original. A facsimile copy or electronic transmission of a signature page shall be deemed to be an original signature
page.

 

Section 11.08         Severability.

 

In the event that
any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, by
any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of
this Agreement and the Parties shall use their reasonable efforts to substitute a valid, legal and enforceable provision which,
insofar as practical, implements the purposes and intents of this Agreement.

 

Section 11.09         Governing
Law.

 

This
Agreement shall be governed by the laws of the State of Michigan, without regard to conflicts of laws principles.

 

Section 11.10         Interpretation.

 

When a reference is
made in this Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. The recitals hereto constitute an integral part of this Agreement. References to Sections include subsections, which
are part of the related Section. The table of contents, index and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The phrases “the date of this Agreement,” “the date hereof” and terms
of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the Recitals to this
Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions
of this Agreement.

 

Section 11.11         Specific
Performance; Jurisdiction.

 

The Parties hereto
agree that irreparable damage would occur if the provisions contained in this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions thereof in the United
States District Court for the Michigan Eastern District or in any state court in the State of Michigan, this being in addition
to any other remedy to which they are entitled at law or in equity. Each party agrees that it will not seek and will agree to
waive any requirement for the securing or posting of a bond in connection with the other party’s seeking or obtaining such
injunctive relief. In addition, each of the Parties hereto (a) consents to submit itself to the personal jurisdiction of the United
States District Court for the Michigan Eastern District or of any state court located in the State of Michigan if any dispute
arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring
any action relating to this Agreement or the transactions contemplated by this Agreement in any court other United States District
Court for the Michigan Eastern District or a state court located in the State of Michigan.

 

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

 

	 	FIRST FEDERAL OF NORTHERN MICHIGAN BANCORP, INC.
	 	 
	 	/s/ Michael W. Mahler
	 	By: 	Michael W. Mahler, President and Chief Executive
    Officer
	 	 	 
	 	ALPENA BANKING CORPORATION
	 	 
	 	/s/ Craig A. Kus
	 	By: 	Craig A. Kus, President and Chief Executive Officer

  

    	67

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