EXHIBIT 4.7

                           FIRST MERCHANTS CORPORATION

                                       AND

                  WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION
      (formerly known as First Union Trust Company, National Association),
                              AS INDENTURE TRUSTEE

                          FIRST SUPPLEMENTAL INDENTURE

             8.75% JUNIOR SUBORDINATED DEBENTURES DUE JUNE 30, 2032

                           Dated as of April 17, 2002
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                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----
ARTICLE I DEFINITIONS........................................................2
      1.1      Definitions of Terms..........................................2
ARTICLE II ISSUE, DESCRIPTION,  TERMS, CONDITIONS,
               REGISTRATION AND EXCHANGE OF THE DEBENTURES...................5
      2.1      Designation and Principal Amount..............................5
      2.2      Maturity......................................................5
      2.3      Form and Payment..............................................5
      2.4      Interest......................................................6
ARTICLE III REDEMPTION OF DEBENTURES.........................................7
      3.1      Redemption....................................................7
      3.2      Special Event Redemption......................................7
      3.3      Optional Redemption by Company................................7
      3.4      Notice of Redemption..........................................8
      3.5      Payment Upon Redemption.......................................9
      3.6      No Sinking Fund..............................................10
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD.............................10
      4.1      Extension of Interest Payment Period.........................10
      4.2      Notice of Extension..........................................11
      4.3      Limitation on Transactions...................................11
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY...............................12
      5.1      Covenants as to Purchases....................................12
      5.2      Limitation on Additional Junior Indebtedness.................12
ARTICLE VI EVENT OF DEFAULT.................................................14
      6.1      Additional Event of Default..................................14
ARTICLE VII FORM OF DEBENTURE AND ORIGINAL ISSUE............................14
      7.1      Form of Debenture............................................14
      7.2      Original Issue of Debentures.................................14


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                          FIRST SUPPLEMENTAL INDENTURE

     FIRST  SUPPLEMENTAL  INDENTURE,  dated as of April 17,  2002  (this  "First
Supplemental  Indenture")  between  First  Merchants  Corporation,   an  Indiana
corporation  (the  "Company") and Wachovia Trust Company,  National  Association
(formerly  known  as First  Union  Trust  Company,  National  Association)  (the
"Trustee")  under the  Indenture  dated as of April 17, 2002 between the Company
and the Trustee (the "Indenture").

                                    RECITALS

     WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's  unsecured junior  subordinated
debentures  to be  issued  from  time to time in one or more  series as might be
determined  by the  Company  under  the  Indenture,  in an  unlimited  aggregate
principal  amount which may be  authenticated  and  delivered as provided in the
Indenture;

     WHEREAS,  pursuant to the terms of the  Indenture,  the Company  desires to
provide for the  establishment of a new series of such debentures to be known as
its 8.75% Junior  Subordinated  Debentures due June 30, 2032 (the "Debentures"),
the  form  and  substance  of such  Debentures  and the  terms,  provisions  and
conditions  thereof to be set forth as provided in the  Indenture and this First
Supplemental Indenture;

     WHEREAS,  First Merchants  Capital Trust I, a Delaware  statutory  business
trust (the  "Trust"),  has  offered to the  public up to  $53,187,500  aggregate
liquidation  amount of its 8.75%  Cumulative  Trust  Preferred  Securities  (the
"Preferred  Securities") and proposes to invest the proceeds from such offering,
together  with the proceeds of the issuance and sale by the Trust to the Company
of up to $1,644,975 aggregate  liquidation amount of its 8.75% Common Securities
(the "Common  Securities"),  in up to $54,832,475  aggregate principal amount of
the Debentures;

     WHEREAS,  the Company has  requested  that the Trustee  execute and deliver
this First Supplemental Indenture;

     WHEREAS,  all  requirements  necessary  to  make  this  First  Supplemental
Indenture  a valid  instrument  in  accordance  with its terms,  and to make the
Debentures,  when executed by the Company and authenticated and delivered by the
Trustee,  the valid  obligations of the Company,  have been  performed,  and the
execution  and  delivery  of this First  Supplemental  Indenture  have been duly
authorized in all respects;

     WHEREAS,  to provide the terms and conditions upon which the Debentures are
to be authenticated,  issued and delivered,  the Company has duly authorized the
execution of this First Supplemental Indenture; and

     WHEREAS,  all things necessary to make this First Supplemental  Indenture a
valid agreement of the Company, in accordance with its terms, have been done.

     NOW,  THEREFORE,  in  consideration of the premises and the purchase of the
Debentures  by the  holders  thereof,  it is mutually  covenanted  and agreed as
follows for the equal and ratable benefit of the holders of the Debentures:

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     1.1 Definitions of Terms.

     A term  defined in the  Indenture  has the same  meaning  when used in this
First  Supplemental  Indenture  and  a  term  defined  anywhere  in  this  First
Supplemental  Indenture has the same meaning throughout.  A term defined in both
the Indenture and this First Supplemental Indenture has the meaning herein given
to it in this First Supplemental Indenture.  Terms used herein shall include the
plural as well as the singular.

     "Accelerated  Maturity  Date" means if the Company elects to accelerate the
Maturity  Date in  accordance  with  Section  2.2(b),  the date  selected by the
Company which is prior to the  Scheduled  Maturity  Date,  but is after June 30,
2007.

     "Additional Interest" shall have the meaning set forth in Section 2.4(c).

     "Additional  Junior  Indebtedness"  means,  without  duplication,  (A)  any
indebtedness, liabilities or obligations of the Company, or any Affiliate of the
Company,  under debt  securities (or  guarantees in respect of debt  securities)
initially  issued to any trust,  or a trustee of a trust,  partnership  or other
entity  affiliated with the Company that is,  directly or indirectly,  a finance
subsidiary  (as such term is defined in Rule 3a-5 under the  Investment  Company
Act) or other  financing  vehicle of the Company or any Affiliate of the Company
in connection with the issuance by that entity of preferred  securities or other
securities  that are  intended to qualify for Tier 1 capital  treatment  (or the
then equivalent  thereof) for purposes of the capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company, other than the
Debentures; provided, however, that the inability of the Company to treat all or
any portion of the Additional  Junior  Indebtedness  as Tier 1 capital shall not
disqualify it as Additional  Junior  Indebtedness if such inability results from
the  Company  having   cumulative   preferred  stock,   minority   interests  in
consolidated subsidiaries,  or any other class of security or interest which the
Federal Reserve now or may hereafter accord Tier 1 capital treatment  (including
the  Debentures) in excess of the amount which may qualify for treatment as Tier
1 capital under applicable  capital adequacy  guidelines of the Federal Reserve,
and (B) any  indebtedness,  liabilities or  obligations  of the Company,  or any
Affiliate of the Company,  that is junior or otherwise  subordinate  in right of
payment to Senior  Indebtedness  of the  Company  and that has a maturity  or is
otherwise  due and  payable by the  Company on a date twelve (12) months or more
after its date of original issuance, other than the Debentures.

     "Capital Treatment Event" means the receipt by the Company and the Trust of
an Opinion of Counsel,  rendered by a law firm having a recognized national bank
regulatory  practice,  to the effect that,  as a result of any  amendment to, or
change  (including  any  announced  prospective  change)  in,  the  laws (or any
regulations  thereunder)  of the  United  States  or any  political  subdivision
thereof  or  therein,   or  as  a  result  of  any  official  or  administrative
pronouncement or action or judicial decision  interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement or
decision  is  announced  on or  after  the  date of  issuance  of the  Preferred
Securities under the Trust Agreement,  there is more than an insubstantial  risk
of impairment of the Company's ability to treat the Preferred Securities (or any
substantial portion thereof) as Tier 1


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<PAGE>

capital (or the then equivalent  thereof),  for purposes of the capital adequacy
guidelines  of the  Federal  Reserve,  as then in effect and  applicable  to the
Company;  provided,  however, that the Trust or the Company shall have requested
and received  such an Opinion of Counsel  with regard to such  matters  within a
reasonable period of time after the Trust or the Company shall have become aware
of the  possible  occurrence  of any such  event;  provided,  however,  that the
inability of the Company to treat all or any portion of the  Liquidation  Amount
of the Preferred Securities as Tier 1 Capital shall not constitute the basis for
a Capital  Treatment  Event if such  inability  results from the Company  having
cumulative preferred stock, minority interests in consolidated subsidiaries,  or
any other class of security  or  interest  which the Federal  Reserve now or may
hereafter accord Tier 1 Capital  treatment in excess of the amount which may now
or hereafter  qualify for treatment as Tier 1 Capital under  applicable  capital
adequacy  guidelines  of the  Federal  Reserve  as now or  hereafter  in effect;
provided,   further,  however,  that  the  distribution  of  the  Debentures  in
connection  with  the  dissolution  of the  Trust  shall  not  in and of  itself
constitute a Capital Treatment Event.

     "Change in 1940 Act Law" shall have the meaning set forth in the definition
of "Investment Company Event."

     "Compounded Interest" shall have the meaning set forth in Section 4.1.

     "Coupon Rate" shall have the meaning set forth in Section 2.4(a).

     "Deferred Interest" shall have the meaning set forth in Section 4.1.

     "Dissolution   Event"  means  that  as  a  result  of  the  occurrence  and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Trust  Agreement and the Debentures  held by the Property  Trustee are to be
distributed to the holders of the Trust Securities  issued by the Trust pro rata
in accordance with the Trust Agreement.

     "Extended  Interest  Payment  Period"  shall have the  meaning set forth in
Section 4.1.

     "Interest Payment Date" shall have the meaning set forth in Section 2.4(a).

     "Investment  Company  Act," means the  Investment  Company Act of 1940,  as
amended, as in effect at the date of execution of this Indenture.

     "Investment  Company  Event" means the receipt by the Trust and the Company
of an Opinion of Counsel,  rendered by a law firm having a  recognized  national
tax and  securities  law  practice,  to the  effect  that,  as a  result  of the
occurrence  of a change in law or regulation  or a change in  interpretation  or
application of law or regulation by any legislative  body,  court,  governmental
agency or  regulatory  authority  (a "Change in 1940 Act Law"),  the Trust is or
shall be  considered an  "investment  company" that is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred  Securities under the
Trust  Agreement;  provided,  however,  that the Trust or the Company shall have
requested  and  received  such an Opinion of Counsel with regard to such matters
within a  reasonable  period of time after the Trust or the  Company  shall have
become aware of the possible occurrence of any such event.


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<PAGE>

     "Maturity Date" means the date on which the Debentures  mature and on which
the  principal  shall be due and  payable  together  with all accrued and unpaid
interest thereon, including Compounded Interest and Additional Interest, if any.

     "Ministerial Action" shall have the meaning set forth in Section 3.2.

     "Property Trustee" has the meaning set forth in the Trust Agreement.

     "Redemption Price" shall have the meaning set forth in Section 3.2.

     "Scheduled Maturity Date" means June 30, 2032.

     "Special Event" means a Tax Event, an Investment Company Event or a Capital
Treatment Event.

     "Tax Event" means the receipt by the Company and the Trust of an Opinion of
Counsel,  rendered by a law firm having a recognized national tax and securities
practice,  to the  effect  that,  as a result  of any  amendment  to,  or change
(including any announced  prospective  change) in, the laws (or any  regulations
thereunder)  of  the  United  States  or any  political  subdivision  or  taxing
authority  thereof or  therein,  or as a result of any  official  administrative
pronouncement  or  judicial  decision  interpreting  or  applying  such  laws or
regulations,  which amendment or change is effective or which  pronouncement  or
decision  is  announced  on or  after  the  date of  issuance  of the  Preferred
Securities under the Trust Agreement,  there is more than an insubstantial  risk
that (i) the Trust is, or shall be within 90 days after the date of such Opinion
of Counsel,  subject to United States  federal income tax with respect to income
received or accrued on the Debentures;  (ii) interest  payable by the Company on
the  Debentures  is not,  or within 90 days  after the date of such  Opinion  of
Counsel,  shall not be,  deductible  by the  Company,  in whole or in part,  for
United States  federal  income tax purposes;  or (iii) the Trust is, or shall be
within 90 days after the date of such Opinion of Counsel, subject to more than a
de minimis  amount of other taxes,  duties,  assessments  or other  governmental
charges;  provided,  however, that the Trust or the Company shall have requested
and received  such an Opinion of Counsel  with regard to such  matters  within a
reasonable period of time after the Trust or the Company shall have become aware
of the possible occurrence of any of the events described in clauses (i) through
(iii) above.

     "Trust  Agreement"  means the Amended and Restated Trust Agreement dated as
of  April  17,  2002  among  the  Company,   Wachovia  Trust  Company,  National
Association,  as Property  Trustee and Delaware  Trustee and the  administrative
trustees named therein.

     "Trust   Securities"   means  the  Preferred   Securities  and  the  Common
Securities, collectively.


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<PAGE>

                                   ARTICLE II

       ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF
                                 THE DEBENTURES

     2.1 Designation and Principal Amount.

     There  is  hereby  authorized   Debentures   designated  the  8.75%  Junior
Subordinated  Debentures due June 30, 2032 limited in aggregate principal amount
to  $54,832,475  which amount shall be as set forth in any written  order of the
Company for the  authentication  and delivery of Debentures  pursuant to Section
2.2 of the Indenture.

     2.2 Maturity.

          (a) The Maturity Date shall be either:

               (i) the Scheduled Maturity Date; or

               (ii) if the Company  elects to accelerate the Maturity Date to be
          a date prior to the Scheduled Maturity Date in accordance with Section
          2.2(c), the Accelerated Maturity Date.

          (b) the Company may at any time before the day which is 90 days before
     the  Scheduled  Maturity  Date and after June 30, 2007 elect to shorten the
     Maturity Date only once to the Accelerated Maturity Date, provided that the
     Company has  received  the prior  approval  of the Federal  Reserve if then
     required under applicable  capital  guidelines,  policies or regulations of
     the Federal Reserve.

          (c)  if  the  Company  elects  to  accelerate  the  Maturity  Date  in
     accordance  with  Section  2.2(b),  the  Company  shall give  notice to the
     Trustee  and  the  Trust  (unless  the  Trust  is  not  the  holder  of the
     Debentures,  in which case the  Trustee  will give notice to the holders of
     the  Debentures)  of  the   acceleration  of  the  Maturity  Date  and  the
     Accelerated Maturity Date at least 30 days and no more than 180 days before
     the Accelerated Maturity Date;  provided,  however that nothing provided in
     this Section 2.2 shall limit the Company's  rights,  as provided in Article
     III hereof,  to redeem all or a portion of the  Debentures  at such time or
     times on or after June 30, 2007, as the Company may so determine, or at any
     time upon the occurrence of a Special Event.

     2.3 Form and Payment.

     The  Debentures  shall be  issued  in fully  registered  certificated  form
without  interest  coupons.  Principal and interest on the Debentures  issued in
certificated  form shall be payable,  the transfer of such  Debentures  shall be
registrable and such Debentures  shall be  exchangeable  for Debentures  bearing
identical terms and provisions at the office or agency of the Trustee; provided,
however,  that  payment of interest  may be made at the option of the Company by
check  mailed to the  holder at such  address as shall  appear in the  Debenture
Register or by wire transfer to an account maintained


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<PAGE>

by the holder as specified in the Debenture  Register,  provided that the holder
provides   proper   transfer   instructions   by  the   regular   record   date.
Notwithstanding  the  foregoing,  so long as the holder of any Debentures is the
Property Trustee, the payment of principal of and interest (including Compounded
Interest  and  Additional  Interest,  if  any) on  such  Debentures  held by the
Property  Trustee  shall be made at such  place  and to such  account  as may be
designated by the Property Trustee.

     2.4 Interest.

          (a) Each Debenture  shall bear interest at the rate of 8.75% per annum
     (the "Coupon  Rate") from the original date of issuance until the principal
     thereof becomes due and payable,  and on any overdue  principal and (to the
     extent that payment of such interest is enforceable  under  applicable law)
     on any  overdue  installment  of interest  at the Coupon  Rate,  compounded
     quarterly,  payable quarterly in arrears on March 31, June 30, September 30
     and December 31 of each year (each, an "Interest Payment Date"), commencing
     on June  30,  2002 to the  Person  in  whose  name  such  Debenture  or any
     Predecessor  Debenture  is  registered,  at the  close of  business  on the
     regular  record  date for such  interest  installment,  which  shall be the
     fifteenth day of the last month of the calendar quarter.

          (b) The amount of interest payable for any period shall be computed on
     the basis of a 360-day year of twelve 30-day months. The amount of interest
     payable  for any  period  shorter  than a full  quarterly  period for which
     interest is computed,  shall be computed on the basis of the number of days
     elapsed in a 360-day year of twelve  30-day  months.  In the event that any
     date on which  interest is payable on the Debentures is not a Business Day,
     then  payment  of  interest  payable on such date shall be made on the next
     succeeding  day which is a Business  Day (and without any interest or other
     payment in respect of any such delay) , except that,  if such  Business Day
     is in the next succeeding  calendar year, such payment shall be made on the
     immediately  preceding  Business Day (and without any reduction of interest
     or any other  payment in respect  of any such  acceleration),  in each case
     with the same  force and  effect as is made on the date  such  payment  was
     originally payable.

          (c) If, at any time  while the  Property  Trustee is the holder of any
     Debentures, the Trust or the Property Trustee is required to pay any taxes,
     duties,  assessments or governmental charges of whatever nature (other than
     withholding  taxes)  imposed  by the  United  States,  or any other  taxing
     authority,  then, in any case, the Company shall pay as additional interest
     ("Additional  Interest") on the  Debentures  held by the Property  Trustee,
     such  additional  amounts  as shall  be  required  so that the net  amounts
     received and retained by the Trust and the  Property  Trustee  after paying
     such taxes,  duties,  assessments  or other  governmental  charges shall be
     equal to the amounts the Trust and the Property Trustee would have received
     had no such taxes,  duties,  assessments or other  government  charges been
     imposed.


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<PAGE>

                                  ARTICLE III

                            REDEMPTION OF DEBENTURES

     3.1 Redemption.

     Subject to the  Company  having  received  prior  approval  of the  Federal
Reserve, if then required under the applicable capital  guidelines,  policies or
regulations of the Federal Reserve, the Company may redeem the Debentures issued
hereunder on and after the dates set forth in and in  accordance  with the terms
of this Article III.

     3.2 Special Event Redemption.

     Subject to the Company  having  received the prior  approval of the Federal
Reserve, if then required under the applicable capital  guidelines,  policies or
regulations  of the Federal  Reserve,  if a Special  Event has  occurred  and is
continuing,  then, notwithstanding Section 3.3(a) but subject to Section 3.3(b),
the  Company  shall  have the right upon not less than 30 days' nor more than 60
days' notice to the holders of the Debentures to redeem the Debentures, in whole
but not in part,  for cash  within 180 days  following  the  occurrence  of such
Special Event (the "180-Day  Period") at a redemption price equal to 100% of the
principal  amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the  "Redemption  Price"),  provided that if at the
time there is available to the Company the opportunity to eliminate,  within the
180-Day Period,  a Tax Event by taking some  ministerial  action (a "Ministerial
Action"),  such as filing a form or making an election,  or pursuing  some other
similar reasonable measure which has no adverse effect on the Company, the Trust
or the holders of the Trust  Securities  issued by the Trust,  the Company shall
pursue such Ministerial  Action in lieu of redemption,  and,  provided  further,
that the Company shall have no right to redeem the  Debentures  pursuant to this
Section  3.2  while  it is  pursuing  any  Ministerial  Action  pursuant  to its
obligations hereunder, and, provided further, that, if it is determined that the
taking of a Ministerial  Action would not eliminate the Tax Event within the 180
Day  Period,  the  Company's  right to redeem the  Debentures  pursuant  to this
Section 3.2 shall be restored and it shall have no further obligations to pursue
the Ministerial  Action. The Redemption Price shall be paid prior to 12:00 noon,
New  York  time,  on the date of such  redemption  or such  earlier  time as the
Company determines,  provided that the Company shall deposit with the Trustee an
amount  sufficient to pay the Redemption  Price by 10:00 a.m., New York time, on
the date such Redemption Price is to be paid.

     3.3 Optional Redemption by Company.

          (a) Subject to the provisions of Section  3.3(c),  except as otherwise
     may be specified  in this  Indenture,  the Company  shall have the right to
     redeem the Debentures,  in whole or in part, from time to time, on or after
     June 30, 2007, at a Redemption  Price equal to 100% of the principal amount
     to be redeemed plus any accrued and unpaid interest  thereon to the date of
     such  redemption.  Any redemption  pursuant to this Section 3.3(a) shall be
     made  upon not less  than 30 days'  nor more  than 60 days'  notice  to the
     holder of the  Debentures,  at the Redemption  Price. If the Debentures are
     only partially  redeemed  pursuant to this Section  3.3(a),  the Debentures
     shall be redeemed pro rata or by lot or in such other manner as the Trustee
     shall deem  appropriate  and fair in its discretion.  The Redemption  Price
     shall be paid  prior  to 12:00  noon,  New York  time,  on


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     the  date  of  such  redemption  or at such  earlier  time  as the  Company
     determines  provided  that the Company  shall  deposit  with the Trustee an
     amount sufficient to pay the Redemption Price by 10:00 a.m., New York time,
     on the date such Redemption Price is to be paid.

          (b) Subject to the  provisions  of Section  3.3(c),  the Company shall
     have the right to redeem  Debentures at any time and from time to time in a
     principal  amount equal to the Liquidation  Amount (as defined in the Trust
     Agreement) of any Preferred  Securities purchased and beneficially owned by
     the Company, plus an additional principal amount of Debentures equal to the
     Liquidation  Amount (as defined in the Trust  Agreement)  of that number of
     Common  Securities  that bears the same  proportion  to the total number of
     Common Securities then outstanding as the number of Preferred Securities to
     be  redeemed  bears  to the  total  number  of  Preferred  Securities  then
     outstanding.  Such  Debentures  shall be redeemed  pursuant to this Section
     3.3(b)  only in  exchange  for and upon  surrender  by the  Company  to the
     Property Trustee of the Preferred  Securities and a proportionate amount of
     Common  Securities,   whereupon  the  Property  Trustee  shall  cancel  the
     Preferred Securities and Common Securities so surrendered and a Like Amount
     (as defined in the Trust  Agreement) of Debentures shall be extinguished by
     the Trustee and shall no longer be deemed Outstanding.

          (c) If a partial  redemption  of the  Debentures  would  result in the
     delisting of the Preferred  Securities  issued by the Trust from The Nasdaq
     National Market or any national  securities  exchange or other organization
     on which the Preferred  Securities  are then listed or quoted,  the Company
     shall not be  permitted  to effect  such  partial  redemption  and may only
     redeem the Debentures in whole or in part to such extent as would not cause
     a delisting.

     3.4 Notice of Redemption.

          (a) Except in the case of a redemption  pursuant to Section 3.3(b), in
     case the Company  shall desire to exercise  such right to redeem all or, as
     the case may be, a portion of the  Debentures in accordance  with the right
     reserved  so to do, the Company  shall,  or shall cause the Trustee to upon
     receipt of 45 days' written notice from the Company (which notice shall, in
     the event of a partial  redemption,  include a representation to the effect
     that  such  partial  redemption  will not  result in the  delisting  of the
     Preferred  Securities as described in Section 3.3(c) above), give notice of
     such  redemption  to holders of the  Debentures  to be redeemed by mailing,
     first class postage  prepaid,  a notice of such redemption not less than 30
     days and not more than 60 days before the date fixed for redemption to such
     holders at their last  addresses  as they shall  appear upon the  Debenture
     Register  unless a shorter  period is  specified  in the  Debentures  to be
     redeemed.  Any notice that is mailed in the manner herein provided shall be
     conclusively  presumed  to  have  been  duly  given,  whether  or  not  the
     registered  holder receives the notice.  In any case,  failure duly to give
     such notice to the holder of any  Debenture  designated  for  redemption in
     whole or in part,  or any  defect  in the  notice,  shall  not  affect  the
     validity of the proceedings for the redemption of any other Debentures.  In
     the case of any  redemption  of Debentures  prior to the  expiration of any
     restriction on such redemption  provided in the terms of such Debentures or
     elsewhere herein or in the


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     Indenture,  the  Company  shall  furnish  the  Trustee  with  an  Officers'
     Certificate  evidencing  compliance  with any such  restriction.  Each such
     notice of redemption  shall specify the date fixed for  redemption  and the
     Redemption Price and shall state that payment of the Redemption Price shall
     be made at the Corporate Trust Office,  upon  presentation and surrender of
     such  Debentures,  that interest  accrued to the date fixed for  redemption
     shall be paid as specified in said notice and that from and after said date
     interest  shall cease to accrue.  If less than all the Debentures are to be
     redeemed,  the notice to the holders of the  Debentures  shall  specify the
     particular  Debentures to be redeemed. If the Debentures are to be redeemed
     in part only,  the notice shall state the portion of the  principal  amount
     thereof to be  redeemed  and shall  state that on and after the  redemption
     date,  upon surrender of such  Debenture,  a new Debenture or Debentures in
     principal amount equal to the unredeemed portion thereof shall be issued.

          (b) Except in the case of redemption  pursuant to Section  3.3(b),  if
     less than all the Debentures are to be redeemed, the Company shall give the
     Trustee  at  least  45 days'  notice  in  advance  of the  date  fixed  for
     redemption  as to  the  aggregate  principal  amount  of  Debentures  to be
     redeemed,  and thereupon the Trustee shall select, pro rata or by lot or in
     such other manner as it shall deem  appropriate and fair in its discretion,
     the portion or portions (equal to $25 or any integral  multiple thereof) of
     the  Debentures  to be redeemed and shall  thereafter  promptly  notify the
     Company in writing of the  numbers of the  Debentures  to be  redeemed,  in
     whole  or in part.  The  Company  may,  if and  whenever  it shall so elect
     pursuant to the terms  hereof,  by delivery of  instructions  signed on its
     behalf by its  Chairman,  its  President or any Vice  President,  its Chief
     Financial  Officer,  or its  Treasurer,  instruct the Trustee or any paying
     agent to call all or any part of the  Debentures for redemption and to give
     notice of  redemption  in the manner set forth in this  Section  3.4,  such
     notice to be in the name of the  Company or its own name as the  Trustee or
     such  paying  agent  may deem  advisable.  In any case in which  notice  of
     redemption  is to be given by the  Trustee or any such  paying  agent,  the
     Company  shall  deliver  or cause to be  delivered  to, or permit to remain
     with, the Trustee or such paying agent,  as the case may be, such Debenture
     Register,  transfer books or other records,  or suitable copies or extracts
     therefrom,  sufficient  to enable the Trustee or such paying  agent to give
     any  notice  by mail that may be  required  under  the  provisions  of this
     Section 3.4.

     3.5 Payment Upon Redemption.

          (a) If the giving of notice of redemption shall have been completed as
     above  provided,  the  Debentures  or portions of Debentures to be redeemed
     specified  in such notice  shall  become due and payable on the date and at
     the place stated in such notice at the  applicable  Redemption  Price,  and
     interest on such Debentures or portions of Debentures shall cease to accrue
     on and after the date  fixed  for  redemption,  unless  the  Company  shall
     default in the payment of such  Redemption  Price with  respect to any such
     Debenture  or  portion  thereof.  On  presentation  and  surrender  of such
     Debentures  on or after  the date  fixed  for  redemption  at the  place of
     payment specified in the notice, said Debentures shall be paid and redeemed
     at the  Redemption  Price  (but if the  date  fixed  for  redemption  is an
     Interest Payment Date, the interest  installment payable on such date shall
     be  payable  to the  registered  holder  at the  close of  business  on the
     applicable record date pursuant to Section 3.3).


                                       9
<PAGE>

          (b) Upon  presentation of any Debenture that is to be redeemed in part
     only, the Company shall execute and the Trustee shall  authenticate and the
     office or agency  where the  Debenture is  presented  shall  deliver to the
     holder  thereof,  at  the  expense  of  the  Company,  a new  Debenture  of
     authorized denomination in principal amount equal to the unredeemed portion
     of the Debenture so presented.

     3.6 No Sinking Fund.

     The Debentures are not entitled to the benefit of any sinking fund.

                                   ARTICLE IV

                      EXTENSION OF INTEREST PAYMENT PERIOD

     4.1 Extension of Interest Payment Period.

     The Company shall have the right,  at any time and from time to time during
the term of the  Debentures  so long as no Event of Default has  occurred and is
continuing,  to defer  payments of interest by extending  the  interest  payment
period of such  Debentures  for a period not exceeding 20  consecutive  quarters
(the "Extended Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable;  provided that no Extended Interest
Payment  Period may extend  beyond the Maturity Date or end on a date other than
an Interest Payment Date. To the extent  permitted by applicable law,  interest,
the payment of which has been deferred  because of the extension of the interest
payment period pursuant to this Section 4.1, shall bear interest  thereon at the
Coupon Rate  compounded  quarterly  for each  quarter of the  Extended  Interest
Payment  Period  ("Compounded  Interest").  At the end of the Extended  Interest
Payment Period, the Company shall calculate (and deliver such calculation to the
Trustee) and pay all interest  accrued and unpaid on the  Debentures,  including
any Additional Interest and Compounded Interest (together,  "Deferred Interest")
that shall be  payable  to the  holders  of the  Debentures  in whose  names the
Debentures  are  registered in the  Debenture  Register on the first record date
after the end of the Extended Interest Payment Period. Before the termination of
any Extended Interest Payment Period, the Company may further extend such period
so long as no Event of Default has occurred  and is  continuing,  provided  that
such period together with all such further  extensions  thereof shall not exceed
20 consecutive quarters, or extend beyond the Maturity Date of the Debentures or
end on a date other than an Interest  Payment Date.  Upon the termination of any
Extended  Interest Payment Period and upon the payment of all Deferred  Interest
then due,  the Company may  commence a new  Extended  Interest  Payment  Period,
subject to the  foregoing  requirements.  No  interest  shall be due and payable
during an Extended Interest Payment Period,  except at the end thereof,  but the
Company may prepay at any time all or any portion of the interest accrued during
an Extended Interest Payment Period.


                                       10
<PAGE>

          4.2 Notice of Extension.

          (a) If the  Property  Trustee  is the only  registered  holder  of the
     Debentures  at the time the Company  selects an Extended  Interest  Payment
     Period,  the  Company  shall  give  written  notice  to the  Administrative
     Trustees,  the  Property  Trustee and the Trustee of its  selection of such
     Extended  Interest  Payment  Period two Business Days before the earlier of
     (i) the next succeeding date on which Distributions on the Trust Securities
     issued by the Trust are payable;  or (ii) the date the Trust is required to
     give notice of the record date, or the date such Distributions are payable,
     to  The  Nasdaq  National  Market  or  other   applicable   self-regulatory
     organization or to holders of the Preferred Securities issued by the Trust,
     but in any event at least one Business Day before such record date.

          (b) If the Property  Trustee is not the only holder of the  Debentures
     at the time the Company selects an Extended  Interest  Payment Period,  the
     Company shall give the holders of the  Debentures  and the Trustee  written
     notice of its selection of such Extended  Interest  Payment Period at least
     two Business  Days before the earlier of (i) the next  succeeding  Interest
     Payment  Date;  or (ii) the date the  Company is required to give notice of
     the record or payment date of such interest  payment to The Nasdaq National
     Market or other  applicable  self-regulatory  organization or to holders of
     the Debentures.

          (c) The quarter in which any notice is given  pursuant  to  paragraphs
     (a) or (b) of this  Section  4.2 shall be counted as one of the 20 quarters
     permitted in the maximum  Extended  Interest Payment Period permitted under
     Section 4.1.

     4.3 Limitation on Transactions.

     If (i) the Company shall exercise its right to defer payment of interest as
provided in Section 4.1, or (ii) there shall have occurred and be continuing any
Event of Default,  then (a) the Company  shall not declare or pay, and shall not
allow any of its  Subsidiaries  to declare or pay,  any  dividend  on,  make any
distributions  with  respect  to,  or  redeem,  purchase,   acquire  or  make  a
liquidation  payment with  respect to, any of its capital  stock (other than (A)
dividends or  distributions  in common stock of the Company or any Subsidiary of
the Company,  or any  declaration of a non-cash  dividend in connection with the
implementation of a shareholder  rights plan, or the issuance of stock under any
such plan in the future,  or the  redemption  or  repurchase  of any such rights
pursuant  thereto,  (B) purchases of common stock of the Company  related to the
rights under any benefit plans for its directors,  officers or employees, (C) as
a result of a  reclassification  of its capital  stock for another  class of its
capital stock,  or (D) payments of dividends or  distributions  to the Company);
(b) the Company shall not make, or allow any of its  Subsidiaries  to make,  any
payment of  interest,  principal  or premium,  if any, or repay,  repurchase  or
redeem any debt  securities  issued by the Company which rank pari passu with or
junior to the  Debentures  or make any  guarantee  payment  with  respect to any
guarantee by the Company of the debt securities of any Subsidiary of the Company
if such guarantee ranks pari passu with or junior to the  Debentures;  provided,
however,  that,  notwithstanding  the  foregoing,  the Company may make payments
pursuant to its obligations under the Preferred  Securities  Guarantee;  and (c)
the  Company  shall  not  redeem,  purchase  or  acquire  less  than  all of the
outstanding Debentures or any of the Preferred Securities.


                                       11
<PAGE>

                                   ARTICLE V

                       PARTICULAR COVENANTS OF THE COMPANY

     5.1 Covenants as to Purchases.

     Except  upon  the  exercise  by the  Company  of its  right to  redeem  the
Debentures  pursuant to Section 3.2 upon the  occurrence and  continuation  of a
Special Event or pursuant to Section 3.3(b), prior to June 30, 2032, the Company
shall not purchase any Debentures, in whole or in part, from the Trust.

     5.2 Limitation on Additional Junior Indebtedness.

     Anything in the  Indenture  to the  contrary  notwithstanding,  the Company
shall not,  and it shall not cause or permit any  Affiliate  of the  Company to,
incur,  issue or be  obligated on any  Additional  Junior  Indebtedness,  either
directly or  indirectly,  by way of guarantee,  suretyship  or otherwise,  other
than:

          (a) Additional  Junior  Indebtedness  that, by its terms, is expressly
     stated to be junior and subordinate in all respects to the Debentures; or

          (b) Additional  Junior  Indebtedness  that, by its terms, is expressly
     stated  to be  pari  passu  and  rank  equally  in all  respects  with  the
     Debentures;  provided,  however,  that  neither  the Company nor any of its
     Affiliates  shall  incur,  issue  or  otherwise  become  obligated  on  any
     Additional Junior  Indebtedness  pursuant to this Section 5.2(b) unless the
     quotient  of "X"  divided by "Y" is less than  0.60,  where "X" and "Y" are
     calculated as described in Section 5.2(c) and 5.2(d), respectively.

          (c) As used in Section 5.2(b), "X" means the sum of the following:

               (i) the aggregate  liquidation amount or principal amount, as the
          case may be, of the Debentures Outstanding at the time of the proposed
          issuance of such Additional  Junior  Indebtedness  pursuant to Section
          5.2(b), plus

               (ii) the aggregate liquidation amount or principal amount, as the
          case may be, of any Additional Junior  Indebtedness  previously issued
          and  outstanding  at  the  time  of  the  proposed  issuance  of  such
          Additional Junior Indebtedness  pursuant to Section 5.2(b),  excluding
          any  such  Additional  Junior  Indebtedness  that,  by its  terms,  is
          expressly  stated to be junior and  subordinate in all respects to the
          Debentures, plus

               (iii) the aggregate  liquidation  amount or principal  amount, as
          the case may be, of the Additional Junior Indebtedness  proposed to be
          issued or otherwise incurred pursuant to Section 5.2(b), plus

               (iv) the  principal  amount  of any  Senior  Indebtedness  of the
          Company  outstanding  at the  time of the  proposed  issuance  of such
          Additional Junior Indebtedness pursuant to Section 5.2(b) and that has
          a maturity  or is  otherwise


                                       12
<PAGE>

          due and  payable by the  Company on a date  twelve (12) months or more
          after the time of the  proposed  issuance  of such  Additional  Junior
          Indebtedness pursuant to Section 5.2(b).

          (d) As used in Section 5.2(b), "Y" means the sum of the following:

               (i) the  sum of (y)  the  "common  stockholders'  equity"  of the
          Company, plus (z) the "perpetual preferred stock" of the Company, each
          calculated on a consolidated  basis and in accordance  with Appendix A
          to Part 225 (Capital adequacy  guidelines for bank-holding  companies;
          risk-based  measure) of Federal  Reserve  Regulation Y (12 CFR 225, as
          amended,  as in effect at the date of  execution  of this  Indenture),
          without regard to limitations therein with respect to the inclusion of
          perpetual  preferred stock (whether  cumulative or  noncumulative)  in
          Tier 1 capital, determined as of the last day of the month immediately
          preceding  the  month  during  which  the  proposed  issuance  of  the
          Additional Junior Indebtedness pursuant to Section 5.2(b) is scheduled
          to occur (provided, however, that in no event shall any portion of the
          Debentures,   the  Additional   Junior   Indebtedness  or  the  Senior
          Indebtedness described in Section 5.2(c) also be included in "Y" under
          this Section 5.2(d)), plus

               (ii) any  other  preferred  stock of the  Company  that  does not
          otherwise  qualify as "perpetual  preferred stock" and is not included
          in clause (d)(i) above, plus

               (iii) the aggregate  liquidation  amount or principal  amount, as
          the case may be, of any Additional Junior  Indebtedness,  which by its
          terms is expressly stated to be junior and subordinate in all respects
          to the Debentures and which was previously  issued and  outstanding at
          the  time  of  the  proposed   issuance  of  such  Additional   Junior
          Indebtedness pursuant to Section 5.2(b).

          (e) Notwithstanding the foregoing, the limitations of this Section 5.2
     shall not in any way preclude  the Company  from  merging with or into,  or
     from acquiring or being  acquired by,  another Person  (including by way of
     merger,  stock  purchase or acquisition of assets) that is not an Affiliate
     of the Company in an arm's length  transaction  entered into in good faith,
     even  though  the pro forma  consolidated  balance  sheet of the  surviving
     Person  immediately  following the  consummation of such merger,  or of the
     acquiror   immediately   following  the  completion  of  such   acquisition
     transaction,  may  include  Additional  Junior  Indebtedness  in amounts in
     excess of amounts  that would  otherwise  be permitted by this Section 5.2;
     provided, however, that thereafter the limitations on future incurrences of
     Additional Junior  Indebtedness in this Section 5.2 shall continue to apply
     to the Company (in the event that it is the surviving  corporation  in such
     merger  transaction or the acquiror in such  acquisition  transaction)  and
     shall  apply to the other  Person  (in the event  that it is the  surviving
     corporation in such merger  transaction or the acquiror in such acquisition
     transaction)  whether or not such other  Person is  expressly  made a party
     hereto.


                                       13
<PAGE>

                                   ARTICLE VI

                                EVENT OF DEFAULT

     6.1 Additional Event of Default.

     In addition to the Events of Default events set forth in the Indenture,  an
"Event of Default" with respect to the Debentures will be deemed to occur if the
Trust shall have voluntarily or involuntarily  dissolved,  wound-up its business
or  otherwise  terminated  its  existence  except  in  connection  with  (i) the
distribution  of Debentures to holders of Trust  Securities  in  liquidation  of
their  interests in the Trust;  (ii) the  redemption  of all of the  outstanding
Trust  Securities of the Trust;  or (iii)  certain  mergers,  consolidations  or
amalgamations, each as permitted by the Trust Agreement.

                                  ARTICLE VII

                      FORM OF DEBENTURE AND ORIGINAL ISSUE

     7.1 Form of Debenture.

     The  Debenture  and  the  Trustee's  Certificate  of  Authentication  to be
endorsed  thereon are to be substantially in the forms contained as Exhibit A to
this Indenture, attached hereto and incorporated herein by reference.

     7.2 Original Issue of Debentures.

     Debentures  in the  aggregate  principal  amount of  $47,680,425  may, upon
execution  of this  Indenture,  be executed by the Company and  delivered to the
Trustee for authentication.  If the Underwriters exercise their Option and there
is an  Option  Closing  Date (as such  terms  are  defined  in the  Underwriting
Agreement, dated April 12, 2002, by and among the Company, the Trust and Stifel,
Nicolaus   &   Company,   Incorporated   and   RBC   Dain   Rauscher   Inc.   as
co-representatives  of the several  Underwriters  named  therein)  then, on such
Option Closing Date,  Debentures in the additional aggregate principal amount of
up to $7,152,050 may be executed by the Company and delivered to the Trustee for
authentication.  The Trustee  shall  thereupon  authenticate  and  deliver  said
Debentures to or upon the written order of the Company, signed by its President,
or any Vice  President  and its Chief  Financial  Officer or the Treasurer or an
Assistant Treasurer, without any further action by the Company.

                           [Signatures on next page.]


                                       14
<PAGE>

     IN WITNESS WHEREOF,  the parties hereto have caused this First Supplemental
Indenture to be duly executed, all as of the day and year first above written.

FIRST MERCHANTS CORPORATION

By:    /s/  Larry R. Helms
       -----------------------------------------
Name:  Larry R. Helms, Esq.

Title: Senior Vice President and General Counsel

WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION,

As Trustee

By:    /s/  Edward L. Truitt, Jr.
       -----------------------------------------
Name:  Edward L. Truitt, Jr.

Title: Vice President


                                       15
<PAGE>

                                    EXHIBIT A

                           (FORM OF FACE OF DEBENTURE)

                           FIRST MERCHANTS CORPORATION

                       8.75% JUNIOR SUBORDINATED DEBENTURE

                                DUE JUNE 30, 2032

No. 1                                                                $47,680,425

                                                             CUSIP No. 320817AA7

     First Merchants  Corporation,  an Indiana corporation (the "Company," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value  received,  hereby  promises to pay to, First  Merchants  Capital
Trust I, or registered  assigns,  the principal sum of  Forty-Seven  Million Six
Hundred Eighty Thousand Four Hundred Twenty-Five  Dollars  ($47,680,425) on June
30, 2032 (the "Stated Maturity"), and to pay interest on said principal sum from
April 17, 2002 or from the most recent interest payment date (each such date, an
"Interest  Payment  Date") to which interest has been paid or duly provided for,
quarterly  (subject to deferral as set forth  herein) in arrears on the last day
of March, June, September and December of each year commencing June 30, 2002, at
the rate of 8.75% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and (without duplication and to the extent
that  payment of such  interest  is  enforceable  under  applicable  law) on any
overdue installment of interest at the same rate per annum compounded quarterly.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months.  The amount of interest for
any partial  period shall be computed on the basis of the number of days elapsed
in a 360-day year of twelve 30-day  months.  In the event that any date on which
interest is payable on this  Debenture  is not a business  day,  then payment of
interest payable on such date shall be made on the next succeeding day that is a
business day (and  without any interest or other  payment in respect of any such
delay)  except that,  if such  business day is in the next  succeeding  calendar
year,  payment  of such  interest  will be  made  on the  immediately  preceding
business  day,  in each case,  with the same force and effect as if made on such
date. The interest  installment so payable, and punctually paid or duly provided
for, on any Interest  Payment Date shall, as provided in the Indenture,  be paid
to the  person  in  whose  name  this  Debenture  (or  one or  more  Predecessor
Debentures, as defined in said Indenture) is registered at the close of business
on the regular  record date for such  interest  installment,  which shall be the
close of business on the business day next preceding such Interest  Payment Date
unless otherwise  provided in the Indenture.  Any such interest  installment not
punctually  paid or duly provided for shall forthwith cease to be payable to the
registered  holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor  Debentures) is registered
at the close of business on a special record date to be fixed by the Trustee for
the payment of such  defaulted  interest,  notice  thereof shall be fixed by the
Trustee for the payment of such  defaulted  interest,  notice  thereof  shall be
given to the registered holders of the Debentures not less than 10 days prior to
such special  record date, or may be paid at any time in any other lawful manner
not inconsistent  with the requirements of any securities

<PAGE>

exchange  or  quotation  system on or in which the  Debentures  may be listed or
quoted,  and upon such notice as may be required by such  exchange,  all as more
fully  provided in the  Indenture.  The  principal  of and the  interest on this
Debenture shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of  payment  is legal  tender for  payment  of public  and  private  debts;
provided,  however,  that  payment of interest  may be made at the option of the
Company by check mailed to the registered holder at such address as shall appear
in the Debenture Register.  Notwithstanding the foregoing, so long as the holder
of this Debenture is the Property  Trustee,  the payment of the principal of and
interest on this  Debenture  shall be made at such place and to such  account as
may be designated by the Trustee.

     The Stated Maturity may be shortened at any time by the Company to any date
not earlier than June 30, 2007,  subject to the Company  having  received  prior
approval  of the  Federal  Reserve if then  required  under  applicable  capital
guidelines, policies or regulations of the Federal Reserve.

     The indebtedness  evidenced by this Debenture is, to the extent provided in
the Indenture,  subordinate  and junior in right of payment to the prior payment
in full of all Senior Indebtedness,  and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions;  (b)
authorizes  and  directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate  to acknowledge or effectuate the  subordination
so provided;  and (c) appoints the Trustee his or her  attorney-in-fact  for any
and all such  purposes.  Each holder hereof,  by his or her  acceptance  hereof,
hereby  waives  all notice of the  acceptance  of the  subordination  provisions
contained  herein and in the  Indenture  by each holder of Senior  Indebtedness,
whether now outstanding or hereafter incurred,  and waives reliance by each such
holder upon said provisions.

     This  Debenture  shall not be entitled to any benefit  under the  Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of  Authentication  hereon shall have been signed by or on behalf of
the Trustee.

     The  provisions of this  Debenture are continued on the reverse side hereof
and such  continued  provisions  shall for all purposes  have the same effect as
though fully set forth at this place.

                           [Signatures on next page.]


                                      A-2
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

Dated: April 17, 2002

FIRST MERCHANTS CORPORATION

By:_______________________________

Name:_____________________________

Title:____________________________

Attest:

By:_______________________________

Name:_____________________________

Title:____________________________


                                      A-3
<PAGE>

                     [FORM OF CERTIFICATE OF AUTHENTICATION]

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Debentures described in the within-mentioned Indenture.

Dated: April 17, 2002

WACHOVIA TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee or Authentication Agent

By:_______________________________

Name:_____________________________

Title:____________________________


                                      A-4
<PAGE>

                         [FORM OF REVERSE OF DEBENTURE]

              8.75% JUNIOR SUBORDINATED DEBENTURE DUE JUNE 30, 2032

                                   (CONTINUED)

     This Debenture is one of the subordinated debentures of the Company (herein
sometimes referred to as the "Debentures"), all issued or to be issued under and
pursuant to an Indenture  dated as of April 17, 2002 (the "Original  Indenture")
duly  executed and  delivered  between the Company and Wachovia  Trust  Company,
National  Association,  as Trustee (the  "Trustee"),  as supplemented by a First
Supplemental Indenture dated as of April 17, 2002 (the "Supplemental  Indenture"
and,  together with the Original  Indenture,  the "Indenture") duly executed and
delivered between the Company and Wachovia Trust Company,  National Association,
as Trustee, to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations,  duties and immunities thereunder of
the Trustee,  the Company and the holders of the Debentures.  The Debentures are
limited in aggregate principal amount as specified in the Indenture.

     Because of the occurrence and  continuation  of a Special Event (as defined
in the Indenture),  in certain circumstances,  this Debenture may become due and
payable at the principal  amount together with any interest accrued thereon (the
"Redemption  Price").  The  Redemption  Price shall be paid prior to 12:00 noon,
Eastern Standard Time, on the date of such redemption or at such earlier time as
the Company  determines.  The  Company  shall have the right as set forth in the
Indenture to redeem this Debenture at the option of the Company, without premium
or  penalty,  in  whole or in part at any  time on or  after  June 30,  2007 (an
"Optional  Redemption"),  or at any  time  in  certain  circumstances  upon  the
occurrence  of a  Special  Event,  at a  Redemption  Price  equal to 100% of the
principal amount hereof plus any accrued but unpaid interest hereon, to the date
of such redemption. Any redemption pursuant to this paragraph shall be made upon
not less than 30 days nor more than 60 days notice, at the Redemption Price. The
Redemption  Price shall be paid at the time and in the manner provided  therefor
in the Indenture.  If the Debentures are only partially  redeemed by the Company
pursuant to an Optional Redemption, the Debentures shall be redeemed pro rata or
by lot or by any other  method  utilized  by the  Trustee  as  described  in the
Indenture.

     In the event of redemption of this  Debenture in part only, a new Debenture
or Debentures for the  unredeemed  portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof.

     In case an Event of  Default  (as  defined  in the  Indenture)  shall  have
occurred  and be  continuing,  the  principal  of all of the  Debentures  may be
declared,  and upon such  declaration  shall  become,  due and  payable,  in the
manner, with the effect and subject to the conditions provided in the Indenture.

     The Indenture contains  provisions  permitting the Company and the Trustee,
with the  consent  of the  holders  of not less  than a  majority  in  aggregate
principal  amount of the Debentures at the time  Outstanding  (as defined in the
Indenture)  to execute  supplemental  indentures  for the  purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights  of the


                                      A-5
<PAGE>

holders  of  the  Debentures;  provided,  however,  that  no  such  supplemental
indenture  shall (i)  extend  the fixed  maturity  of the  Debentures  except as
provided in the Indenture, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest  thereon,  without the consent of
the  holder  of each  Debenture  so  affected;  or  (ii)  reduce  the  aforesaid
percentage  of  Debentures,  the holders of which are required to consent to any
such  supplemental  indenture,  without  the  consent  of the  holders  of  each
Debenture then  Outstanding  and affected  thereby.  The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount of
the Debentures at the time  Outstanding,  on behalf of all of the holders of the
Debentures, to waive any past default in the performance of any of the covenants
contained in the Indenture,  or established  pursuant to the Indenture,  and its
consequences, except a default in the payment of the principal of or interest on
any of the  Debentures.  Any such consent or waiver by the registered  holder of
this Debenture (unless revoked as provided in the Indenture) shall be conclusive
and  binding  upon such  holder and upon all future  holders  and owners of this
Debenture  and of any  Debenture  issued in exchange  herefor or in place hereof
(whether by registration  of transfer or otherwise),  irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.

     No reference  herein to the Indenture and no provision of this Debenture or
of the Indenture  shall alter or impair the obligation of the Company,  which is
absolute and unconditional,  to pay the principal and interest on this Debenture
at the time and place and at the rate and in the money herein prescribed.

     Provided  certain  conditions  are met, the Company shall have the right at
any time during the term of the  Debentures  and from time to time to extend the
interest  payment period of such  Debentures  for up to 20 consecutive  quarters
(each, an "Extended  Interest Payment  Period"),  at the end of which period the
Company shall pay all interest then accrued and unpaid  (together  with interest
thereon at the rate  specified for the  Debentures to the extent that payment of
such interest is enforceable  under applicable  law).  Before the termination of
any such Extended  Interest Payment Period, so long as no Event of Default shall
have occurred and be  continuing,  the Company may further  extend such Extended
Interest  Payment Period,  provided that such Extended  Interest  Payment Period
together  with  all  such  further   extensions  thereof  shall  not  exceed  20
consecutive  quarters,  extend beyond the Stated Maturity or end on a date other
than an Interest Payment Date. At the termination of any such Extended  Interest
Payment  Period and upon the payment of all accrued and unpaid  interest and any
additional amounts then due and subject to the foregoing conditions, the Company
may commence a new Extended Interest Payment Period.

     As provided in the Indenture and subject to certain limitations therein set
forth,  this Debenture is  transferable  by the registered  holder hereof on the
Debenture  Register  of the  Company,  upon  surrender  of  this  Debenture  for
registration of transfer at the office or agency of the Trustee accompanied by a
written  instrument  or  instruments  of  transfer in form  satisfactory  to the
Company or the Trustee  duly  executed by the  registered  holder  hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized  denominations  and for the same aggregate  principal amount shall be
issued to the designated  transferee or transferees.  No service charge shall be
made for any  such  transfer,  but the  Company  may  require  payment  of a sum
sufficient  to cover any tax or other  governmental  charge  payable in relation
thereto.


                                      A-6
<PAGE>

     Prior to due  presentment  for  registration of transfer of this Debenture,
the Company,  the Trustee, any paying agent and the Debenture Registrar may deem
and treat the registered  holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and  notwithstanding any notice of ownership
or writing  hereon made by anyone other than the  Debenture  Registrar)  for the
purpose  of  receiving  payment of or on  account  of the  principal  hereof and
interest due hereon and for all other purposes,  and neither the Company nor the
Trustee nor any paying agent nor any  Debenture  Registrar  shall be affected by
any notice to the contrary.

     No  recourse  shall  be had  for the  payment  of the  principal  of or the
interest on this  Debenture,  or for any claim based  hereon,  or  otherwise  in
respect  hereof,  or  based  on or in  respect  of the  Indenture,  against  any
incorporator,  stockholder,  officer or director,  past,  present or future,  as
such, of the Company or of any predecessor or successor corporation,  whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise,  all such liability being, by the acceptance
hereof  and as part of the  consideration  for the  issuance  hereof,  expressly
waived and released.

     The  Debentures  are issuable  only in registered  form without  coupons in
denominations of $25 and any integral multiple thereof.

     All terms used in this  Debenture  that are defined in the Indenture  shall
have the meanings assigned to them in the Indenture.


                                      A-7