EXHIBIT 1.1

                         1,850,000 Preferred Securities
                         First Merchants Capital Trust I

                   8.75% Cumulative Trust Preferred Securities
               (Liquidation Amount of $25 per Preferred Security)

                             UNDERWRITING AGREEMENT

                                                                  April 12, 2002

STIFEL, NICOLAUS & COMPANY, INCORPORATED
RBC Dain Rauscher Inc.
as Co-representatives of the Several Underwriters
  named in Schedule I hereto
c/o Stifel Nicolaus & Company, Incorporated
501 North Broadway, 9th Floor
St. Louis, Missouri 63102

Dear Sirs:

     First Merchants Corporation, an Indiana corporation (the "Company") and its
financing subsidiary, First Merchants Capital Trust I, a Delaware business trust
(the  "Trust,"  and  hereinafter  together  with the Company,  the  "Offerors"),
propose  that the Trust  issue and sell to the  several  underwriters  listed on
Schedule I hereto (the "Underwriters"), pursuant to the terms of this Agreement,
1,850,000 of the Trust's 8.75%  Cumulative  Trust Preferred  Securities,  with a
liquidation amount of $25 per preferred  security (the "Preferred  Securities"),
to be issued under the Trust  Agreement (as hereinafter  defined),  the terms of
which are more fully described in the Prospectus (as hereinafter  defined).  The
aforementioned 1,850,000 Preferred Securities to be sold to the Underwriters are
herein  called  the "Firm  Preferred  Securities."  Solely  for the  purpose  of
covering  over-allotments  in the sale of the  Firm  Preferred  Securities,  the
Offerors further propose that the Trust issue and sell to the  Underwriters,  at
their option,  up to an additional  277,500  Preferred  Securities  (the "Option
Preferred  Securities")  upon exercise of the  over-allotment  option granted in
Section  1  hereof.  The Firm  Preferred  Securities  and any  Option  Preferred
Securities  are herein  collectively  referred to as the  "Designated  Preferred
Securities." Stifel, Nicolaus & Company, Incorporated and RBC Dain Rauscher Inc.
are acting as  co-representatives  of the  Underwriters and in such capacity are
sometimes herein referred to as the "Representatives."

     The Offerors  hereby  confirm as follows their  agreement  with each of the
Underwriters  in  connection  with  the  proposed  purchase  of  the  Designated
Preferred Securities.

      1.  Sale,  Purchase  and  Delivery  of  Designated  Preferred  Securities,
Description of Designated Preferred Securities.

          On the basis of the representations,  warranties and agreements herein
contained,  and  subject  to the terms and  conditions  herein  set  forth,  the
Offerors  hereby  agree  that  the  Trust  shall  issue  and sell to each of the
Underwriters and each of the Underwriters agrees,  severally and not jointly, to
purchase from the Trust, at a purchase price of $25 per Preferred  Security (the
"Purchase Price"),  the respective number of Firm Preferred Securities set forth
opposite the name of such Underwriter in Schedule I hereto. Because the proceeds
from the sale of the Firm Preferred Securities will be used to purchase from the
Company  its  Debentures  (as  hereinafter  defined  and  as  described  in  the
Prospectus),

<PAGE>

the  Company  shall pay to each  Underwriter  a  commission  of $0.9375 per Firm
Preferred Security purchased (the "Firm Preferred Securities  Commission").  The
Representatives  may by notice to the Company amend Schedule I to add, eliminate
or substitute  names set forth therein (other than to eliminate the names of the
Representatives)  and to amend the  number of Firm  Preferred  Securities  to be
purchased by any firm or  corporation  listed  thereon,  provided that the total
number of Firm Preferred Securities listed on Schedule I shall equal 1,850,000.

     In addition, on the basis of the representations, warranties and agreements
herein  contained and subject to the terms and conditions  herein set forth, the
Trust hereby grants to the Underwriters, severally and not jointly, an option to
purchase all or any portion of the 277,500 Option Preferred Securities, and upon
the  exercise of such option in  accordance  with this  Section 1, the  Offerors
hereby agree that the Trust shall issue and sell to the Underwriters,  severally
and not jointly,  all or any portion of the Option  Preferred  Securities at the
same Purchase  Price per share paid for the Firm  Preferred  Securities.  If any
Option Preferred Securities are to be purchased, each Underwriter, severally and
not  jointly,  agrees to  purchase  from the Trust that  proportion  (subject to
adjustment  as you may  determine to avoid  fractional  shares) of the number of
Option  Preferred  Securities to be purchased  that the number of Firm Preferred
Securities set forth opposite the name of such  Underwriter in Schedule I hereto
(or such number  increased as set forth in Section 9 hereof) bears to 1,850,000.
Because the proceeds from the sale of the Option  Preferred  Securities  will be
used to purchase from the Company its  Debentures,  the Company shall pay to the
Underwriters  a  commission  of $0.9375 per Option  Preferred  Security for each
Option  Preferred   Security   purchased  (the  "Option   Preferred   Securities
Commission").  The option  hereby  granted (the  "Option")  shall expire 30 days
after the date upon which the  Registration  Statement (as hereinafter  defined)
becomes  effective  and may be  exercised  only  for  the  purpose  of  covering
over-allotments   which  may  be  made  in  connection  with  the  offering  and
distribution  of the Firm Preferred  Securities.  The Option may be exercised in
whole or in part at any  time  (but not more  than  once) by you  giving  notice
(confirmed in writing) to the Trust setting forth the number of Option Preferred
Securities as to which the  Underwriters are exercising the Option and the time,
date and place for payment and delivery of the Global  Securities  (as hereafter
defined) for such Option Preferred Securities. Such time and date of payment and
delivery for the Option  Preferred  Securities (the "Option Closing Date") shall
be determined by you, but shall not be earlier than two nor later than five full
business  days after the exercise of such Option,  nor in any event prior to the
Closing Date (as hereinafter  defined).  The Option Closing Date may be the same
as the Closing Date.

     Payment of the Purchase Price and the Firm Preferred Securities  Commission
and  delivery of the Global  Securities  (as  hereinafter  defined) for the Firm
Preferred Securities shall be made at the offices of Stifel, Nicolaus & Company,
Incorporated,  501 North Broadway, 9th Floor, St. Louis, Missouri 63102, or such
other place as shall be agreed to by you and the  Offerors,  at 10:00 a.m.,  St.
Louis time, on the third (or, if permitted by Rule  15c6-1(c) of the  Securities
Exchange Act of 1934, as amended (the "1934 Act"),  not later than 12:00 p.m. on
the fourth) full business day following the date of this Agreement (the "Closing
Date"),  or unless postponed in accordance with the provisions of Section 9. The
Trust  shall  deliver  or cause to be  delivered  to you for the  account of the
Underwriters  against  payment to or upon the order of the Trust of the Purchase
Price in  federal  or other  immediately  available  funds,  the Firm  Preferred
Securities in the form of one or more permanent global  securities in definitive
form  (the  "Global  Securities")   deposited  with  the  Property  Trustee  (as
identified  below) as custodian for the  Depository  Trust  Company  ("DTC") and
registered  in the name of Cede & Co.,  as  nominee  for DTC.  Interests  in any
permanent  Global  Securities  will be  held  only in  book-entry  form.  If the
Underwriters  exercise the option to purchase any or all of the Option Preferred
Securities,  payment  of the  Purchase  Price and  Option  Preferred  Securities
Commission  for such  Option  Preferred  Securities  shall be made on the Option
Closing Date at Stifel,  Nicolaus & Company,  Incorporated's offices, or at such
other place as the Offerors and you shall determine.  Upon delivery,  the Option
Preferred  Securities  shall  be in the  form of one or more  Global  Securities
registered  in the  name  of  Cede & Co.,  as  nominee  of DTC  and  the  Global


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<PAGE>

Securities for such Option Securities shall be delivered to the Property Trustee
as custodian for DTC. Such  payments  shall be made to an account  designated by
the Trust by wire  transfer  of same day funds,  in the  amount of the  Purchase
Price  therefor,  against  delivery  by or on behalf of the Trust to you for the
respective  accounts  of  the  several   Underwriters  of  one  or  more  Global
Certificates  for the  Designated  Preferred  Securities  to be purchased by the
Underwriters.

     Time shall be of the essence, and delivery of the Global Securities for the
Designated Preferred Securities at the time and place specified pursuant to this
Agreement  is a  further  condition  of  the  obligations  of  each  Underwriter
hereunder.

          (b) The Offerors propose that the Trust issue the Designated Preferred
Securities  pursuant to an Amended and Restated Trust  Agreement  among Wachovia
Trust Company,  National Association,  as Delaware Trustee and Property Trustee,
the Administrative  Trustees named therein (collectively,  the "Trustees"),  and
the Company, in substantially the form heretofore delivered to the Underwriters,
said  Agreement  being  hereinafter  referred  to as the "Trust  Agreement."  In
connection with the issuance of the Designated Preferred Securities, the Company
proposes  (i)  to  issue  its  8.75%  Subordinated   Debentures  due  2032  (the
"Debentures")  pursuant  to an  Indenture,  to be dated as of  April  17,  2002,
between  the  Company and  Wachovia  Trust  Company,  National  Association,  as
indenture trustee (the "Base Indenture"),  and a supplement thereto, to be dated
as of April 17, 2002 (the  "Supplemental  Indenture," and together with the Base
Indenture and any other amendments or supplements thereto, the "Indenture"), and
(ii) to  guarantee  certain  payments  on the  Designated  Preferred  Securities
pursuant to a Preferred  Securities  Guarantee Agreement between the Company and
Wachovia  Trust  Company,  National  Association,   as  guarantee  trustee  (the
"Guarantee"), to the extent described therein.

          (c) The Company entered into an Agreement of Reorganization and Merger
dated October 14, 2001 (the "Merger  Agreement") with Lafayette  Bancorporation,
an Indiana corporation  ("Lafayette"),  pursuant to which, on April 1, 2002 (the
"Merger  Effective  Date"),  Lafayette merged with and into the Company with the
Company  continuing  as the  surviving  entity (the  "Merger").  As used herein,
unless the context clearly requires otherwise,  the term "Company" shall include
Lafayette.  The entire  proceeds from the sale of the Debentures will be used by
the  Company  to pay for a portion of the cash  consideration  to be paid in the
Merger and related  costs and  expenses.  In  connection  with the  Merger,  the
Company filed with the Securities and Exchange  Commission (the  "Commission") a
registration  statement on Form S-4 (File No.  333-75750)  which  constitutes  a
proxy  statement for each of the Company and Lafayette  relating to the approval
of the Merger by the shareholders of each of the Company and Lafayette and which
constitutes a prospectus of the Company relating to the issuance to shareholders
of Lafayette of shares of capital stock of the Company as consideration  for the
Merger for those shareholders of Lafayette who are entitled to receive shares of
the  Company  pursuant to the Merger  Agreement.  Such  registration  statement,
including the exhibits, appendices and schedules thereto, if any, at the time it
became  effective  is in this  Agreement  called the "Merger  Proxy/Registration
Statement."  For  purposes  of this  Agreement,  all  references  to the  Merger
Proxy/Registration  Statement or any  amendment or  supplement  thereto shall be
deemed to include the copy filed with the Commission  pursuant to its Electronic
Data Gathering Analysis and Retrieval ("EDGAR") system.

          (d) As used  herein,  the  following  terms  shall have the  following
meanings:

     "Base  Prospectus"  shall mean the base  prospectus  referred to in Section
2(ii) hereof contained in the Registration Statement.


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<PAGE>

     "Effective  Date"  shall  mean  each  date and time  that the  Registration
Statement,  any  post-effective  amendment  or  amendments  thereto and any Rule
462(b) Registration Statement became or becomes effective.

     "Preliminary  Prospectus" shall mean any preliminary  prospectus supplement
to the Base Prospectus which describes the Designated  Preferred  Securities and
the  offering  thereof and is used prior to filing of the  Prospectus,  together
with the Base Prospectus.

     "Prospectus"  shall  mean  the  prospectus   supplement   relating  to  the
Designated  Preferred  Securities  that was first filed  pursuant to Rule 424(b)
after the date hereof, together with the Base Prospectus.

     "Registration  Statement" shall mean the registration statement referred to
in Section 2(ii) hereof, including exhibits and financial statements, as amended
at the date hereof  (or, if not  effective  at the date  hereof,  in the form in
which it shall become effective) and, in the event any post-effective  amendment
thereto or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration  statement as so amended or such
Rule 462(b) Registration  Statement, as the case may be. Such term shall include
any Rule 430A Information deemed to be included therein at the Effective Date as
provided by Rule 430A.

     "Rule  415",  "Rule  424",  "Rule  430A" and "Rule 462" refer to such rules
under the 1933 Act.

     "Rule  430A  Information"  shall  mean  information  with  respect  to  the
Designated Preferred Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule 430A.

     "Rule 462(b)  Registration  Statement" shall mean a registration  statement
and any  amendments  thereto  filed  pursuant  to Rule  462(b)  relating  to the
offering  covered by the  registration  statement  referred to in Section  2(ii)
hereof.

     Any reference  herein to the Registration  Statement,  the Base Prospectus,
any  Preliminary  Prospectus or the  Prospectus  shall be deemed to refer to and
include the documents  incorporated by reference  therein which were filed under
the 1934 Act or the 1934 Act Regulations (as hereafter defined) on or before the
Effective  Date of the  Registration  Statement  or the  issue  date of the Base
Prospectus,  any Preliminary  Prospectus or the Prospectus,  as the case may be;
and any reference herein to the terms "amend",  "amendment" or "supplement" with
respect to the  Registration  Statement,  the Base  Prospectus,  any Preliminary
Prospectus or the Prospectus  shall be deemed to refer to and include the filing
of any  document  under  the  1934 Act or the 1934  Act  Regulations  after  the
Effective  Date of the  Registration  Statement  or the  issue  date of the Base
Prospectus,  any Preliminary Final Prospectus or the Prospectus, as the case may
be, deemed to be incorporated therein by reference.

     2. Representations and Warranties.

     The  Offerors  jointly and  severally  represent  and warrant to, and agree
with, each of the Underwriters that:

               (i) The reports  filed with the  Commission  by the Company under
     the 1934 Act and the  rules  and  regulations  thereunder  (the  "1934  Act
     Regulations")  at the time they were filed with the Commission  complied as
     to form in all material  respects with the requirements of the 1934 Act and
     the 1934 Act  Regulations  and did not  contain  an untrue  statement  of a
     material  fact or omit to  state a  material  fact  required  to be  stated
     therein or necessary to make the


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<PAGE>

     statements  therein, in light of the circumstances in which they were made,
     not  misleading.  The reports filed with the Commission by Lafayette  under
     the 1934 Act and the 1934 Act  Regulations at the time they were filed with
     the  Commission  complied  as to form in all  material  respects  with  the
     requirements  of the  1934 Act and the  1934  Act  Regulations  and did not
     contain an untrue  statement of a material fact or omit to state a material
     fact  required to be stated  therein or  necessary  to make the  statements
     therein,  in light  of the  circumstances  in which  they  were  made,  not
     misleading.

               (ii) The Offerors meet the  requirements  for the use of Form S-3
     under  the 1933 Act and have  prepared  and  filed  with the  Commission  a
     registration  statement on Form S-3 (File Numbers 333-75748,  333-75748-01,
     333-75748-02 and  333-75748-03),  including a related base prospectus,  for
     registration  under the 1933 Act of the offering and sale of the Designated
     Preferred  Securities,  the  Guarantee  and  up  to  $70,000,000  aggregate
     principal  amount of  Debentures  under the 1933 Act. The Offerors may have
     filed one or more amendments to such  registration  statement,  including a
     Preliminary Prospectus, each of which has previously been furnished to you,
     in each case in conformity in all material  respects with the  requirements
     of the 1933 Act,  the rules and  regulations  promulgated  thereunder  (the
     "1933 Act  Regulations")  and the Trust  Indenture  Act of 1939, as amended
     (the "Trust Indenture Act") and the rules and regulations  thereunder.  The
     Offerors  shall next file with the  Commission  one of the  following:  (1)
     after the Effective Date of such registration statement, a final prospectus
     supplement  relating to the Designated  Preferred  Securities in accordance
     with  Rules  430A  and  424(b),  (2)  prior to the  Effective  Date of such
     registration   statement,  an  amendment  to  such  registration  statement
     (including  the  form  of  final  prospectus  supplement)  or  (3) a  final
     prospectus in accordance  with Rules 415 and 424(b).  In the case of clause
     (1), the Offerors have included in such registration  statement, as amended
     at the Effective Date, all information  (other than Rule 430A  Information)
     required  by the 1933 Act and the 1933 Act  Regulations  to be  included in
     such  registration  statement  and the  Prospectus.  As filed,  such  final
     prospectus  supplement  or such  amendment  and  form of  final  prospectus
     supplement shall contain all Rule 430A Information, together with all other
     such required  information,  and, except to the extent the  Representatives
     shall  agree in  writing  to a  modification,  shall be in all  substantive
     respects in the form  furnished  to you prior to the date hereof or, to the
     extent not  completed at the date hereof,  shall contain only such specific
     additional information and other changes (beyond that contained in the Base
     Prospectus and any Preliminary  Prospectus) as the Company has advised you,
     prior  to  the  date  hereof,  shall  be  included  or  made  therein.  The
     Registration  Statement,  at the date hereof,  meets the  requirements  set
     forth  in  Rule  415(a)(1)(x).   Copies  of  such  registration  statement,
     including  any  amendments  thereto  and  any  documents   incorporated  by
     reference  therein,  the Base  Prospectus and each  Preliminary  Prospectus
     contained therein and the exhibits,  financial  statements and schedules to
     such  registration   statement,   as  finally  amended  and  revised,  have
     heretofore been delivered by the Offerors to the Representatives.

               (iii) The documents incorporated by reference in the Registration
     Statement,  any  Preliminary  Prospectus  or the  Prospectus  or from which
     information is so incorporated by reference,  when they became effective or
     were  filed  with  the  Commission,  as the case  may be,  complied  in all
     material  respects with the  requirements  of the 1934 Act and the 1934 Act
     Regulations,  and when read together and with the other  information in the
     Preliminary  Prospectus or the Prospectus,  as the case may be, at the time
     the Registration  Statement became or becomes  effective and at the Closing
     Date and any Option  Closing Date, did not or will not, as the case may be,
     contain an untrue  statement of a material fact or omit to state a material
     fact  required to be stated  therein or  necessary  to make the  statements
     therein,  in light of the  circumstances  under  which they were made,  not
     misleading.  As of the date that each Preliminary Prospectus was filed with
     the  Commission or as of the date that the  Prospectus and any amendment or
     supplement


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<PAGE>

     thereto  was filed  with the  Commission  (or,  if not  filed,  on the date
     provided  by the  Offerors  to the  Underwriters  in  connection  with  the
     offering and sale of the Designated Preferred Securities),  as the case may
     be, no event has or will have occurred  which should have been set forth in
     an  amendment  or  supplement  to  any  of the  documents  incorporated  by
     reference in the  Preliminary  Prospectus or the  Prospectus  which has not
     then been set forth in such an amendment or supplement.

               (iv) No order  preventing or suspending the use of the Prospectus
     (or, if the Prospectus is not in existence, any Preliminary Prospectus) has
     been issued by the Commission,  nor has the Commission, to the knowledge of
     the Offerors,  threatened to issue such an order or instituted  proceedings
     for that  purpose.  Each  Preliminary  Prospectus,  at the  time of  filing
     thereof, (A) complied in all material respects with the requirements of the
     1933 Act and the 1933 Act  Regulations  and (B) did not  contain  an untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary to make the statements  therein, in light of
     the  circumstances  under which they were made, not  misleading;  provided,
     however, that this representation and warranty does not apply to statements
     or  omissions  made in reliance  upon and in  conformity  with  information
     furnished in writing to the Offerors by any of the  Underwriters  expressly
     for inclusion in the Prospectus  beneath the heading  "Underwriting"  (such
     information referred to herein as the "Underwriters'  Information").  As of
     the date that each Preliminary  Prospectus was filed with the Commission or
     as of the date that the Prospectus and any amendment or supplement  thereto
     was filed with the  Commission  (or, if not filed,  on the date provided by
     the Offerors to the  Underwriters  in connection with the offering and sale
     of the Designated Preferred  Securities),  as the case may be, no event has
     or will have  occurred  which should have been set forth in an amendment or
     supplement to any  Preliminary  Prospectus or the Prospectus  which has not
     been set forth in any  Preliminary  Prospectus,  the  Prospectus or such an
     amendment or  supplement.  Each  Preliminary  Prospectus and the Prospectus
     will be identical to the  electronically  transmitted  copies thereof filed
     with the  Commission  pursuant  to its EDGAR  system,  except to the extent
     permitted by Regulation S-T.

               (v) The Registration  Statement has been declared effective under
     the 1933 Act, and no post-effective amendment to the Registration Statement
     has been filed with the  Commission  as of the date of this  Agreement.  No
     stop order suspending the  effectiveness of the Registration  Statement has
     been issued and no proceeding  for that purpose has been  instituted or, to
     the Company's  knowledge,  threatened by the  Commission.  At the Effective
     Date and at all times subsequent  thereto,  up to and including the Closing
     Date  and,  if  applicable,  the  Option  Closing  Date,  the  Registration
     Statement and any  post-effective  amendment  thereto (A) complied and will
     comply in all material  respects with the requirements of the 1933 Act, the
     1933 Act  Regulations  and the  Trust  Indenture  Act (and  the  rules  and
     regulations  thereunder)  and (B) did not and will not  contain  an  untrue
     statement of a material  fact or omit to state a material  fact required to
     be  stated  therein  or  necessary  to  make  the  statements  therein  not
     misleading;  provided,  however, that this representation and warranty does
     not apply to Underwriters'  Information.  At the Effective Date, and at all
     times when the  Prospectus is required to be delivered in  connection  with
     offers and sales of Designated  Preferred  Securities,  including,  without
     limitation,  the Closing Date and, if applicable,  the Option Closing Date,
     the Prospectus, as amended or supplemented, (A) complied and will comply in
     all material  respects with the  requirements  of the 1933 Act and the 1933
     Act  Regulations,  the 1934 Act and the 1934 Act  Regulations and the Trust
     Indenture Act (and the rules and  regulations  thereunder)  and (B) did not
     contain and will not contain an untrue statement of a material fact or omit
     to state any material  fact  required to be stated  therein or necessary to
     make the statements therein, in light of the circumstances under which they
     were made, not misleading;  provided, however, that this representation and
     warranty does not apply to Underwriters'  Information.  As of the date that
     the


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<PAGE>

     Registration Statement was filed with the Commission,  no event has or will
     have  occurred  which  should  have  been  set  forth  in an  amendment  or
     supplement to such registration statement which has not then been set forth
     in such an amendment or  supplement.  The  Registration  Statement  will be
     identical to the  electronically  transmitted  copy thereof  filed with the
     Commission pursuant to its EDGAR system,  except to the extent permitted by
     Regulation  S-T. As of the date hereof and at all times when the Prospectus
     is  required  to be  delivered  in  connection  with  offers  and  sales of
     Designated Preferred Securities, including, without limitation, the Closing
     Date and, if applicable,  the Option Closing Date, the Trust Agreement, the
     Indenture  and the  Guarantee  did or will comply in all material  respects
     with the applicable  requirements  of the Trust Indenture Act and the rules
     thereunder.

               (vi) The Merger Proxy/Registration Statement has become effective
     under the 1933 Act and no stop order  suspending the  effectiveness  of the
     Merger Proxy/Registration  Statement has been issued under the 1933 Act and
     no proceedings  for that purpose have been instituted or are pending or, to
     the best knowledge of the Offerors, are contemplated by the Commission, and
     any request on the part of the Commission for  additional  information  has
     been complied with. The Company is legally permitted, pursuant to the terms
     of the 1933 Act, to distribute  the shares of its capital stock as required
     by  the  Merger  Agreement   pursuant  to  the  Merger   Proxy/Registration
     Statement. At the time the Merger Proxy/Registration Statement was declared
     effective   under   the  1933   Act,   on  the   dates   that  the   Merger
     Proxy/Registration  Statement was delivered to the respective  shareholders
     of the Company  and/or  Lafayette  and at the Merger  Effective  Date,  the
     Merger Proxy/Registration  Statement complied in all material respects with
     the  requirements of the 1933 Act, the 1933 Act  Regulations,  the 1934 Act
     and the 1934 Act Regulations  and did not contain an untrue  statement of a
     material  fact or omit to  state a  material  fact  required  to be  stated
     therein or necessary to make the statements therein not misleading.

               (vii)

                    (A) The Company is duly organized,  validly  existing and in
     good standing  under the laws of the State of Indiana,  with full corporate
     and other power and authority to own,  lease and operate its properties and
     conduct its business as described in and  contemplated by the  Registration
     Statement and the Prospectus (or, if the Prospectus is not in existence, in
     each  Preliminary  Prospectus) and as currently being conducted and is duly
     registered as a bank holding  company under the Bank Holding Company Act of
     1956, as amended (the "BHC Act").

                    (B) The Trust has been duly created and is validly  existing
     as a statutory  business trust in good standing under the Delaware Business
     Trust  Act with the  power  and  authority  (trust  and  other)  to own its
     property  and  conduct  its  business  as  described  in  the  Registration
     Statement and the Prospectus (or, if the Prospectus is not in existence, in
     each Preliminary Prospectus),  to issue and sell its common securities (the
     "Common  Securities") to the Company  pursuant to the Trust  Agreement,  to
     issue  and sell the  Designated  Preferred  Securities,  to enter  into and
     perform  its  obligations  under  this  Agreement  and  to  consummate  the
     transactions herein contemplated; the Trust has no subsidiaries and is duly
     qualified to transact business and is in good standing in each jurisdiction
     in which the  conduct of its  business  or the  ownership  of its  property
     requires such qualification, except to the extent that the failure to be so
     qualified or be in good standing could not have, either  individually or in
     the  aggregate,  a  material  adverse  effect on the  Trust;  the Trust has
     conducted  and  will  conduct  no  business  other  than  the  transactions
     contemplated  by this Agreement and described in the Prospectus (or, if the
     Prospectus is not in existence, in each Preliminary Prospectus);  the Trust
     is not a party to or bound by any agreement or  instrument  other than this
     Agreement,  the Trust  Agreement  among the  Administrative  Trustees,  the
     Company and Wachovia Trust Company,  National  Association,


                                       7
<PAGE>

     dated December 12, 2001 (the "Original Trust Agreement") and the agreements
     and  instruments  contemplated  by the Trust Agreement and described in the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus);  the Trust has no liabilities or obligations  other than those
     arising out of the  transactions  contemplated  by this  Agreement  and the
     Trust  Agreement and described in the Prospectus  (or, if the Prospectus is
     not in existence, in each Preliminary Prospectus); the Trust is not a party
     to or subject to any action,  suit or proceeding  of any nature;  the Trust
     is, and at the Closing Date or any Option Closing Date will be,  classified
     as a grantor trust for United States federal income tax purposes; the Trust
     is not,  and at the Closing  Date or any Option  Closing  Date will not be,
     classified as an  association  taxable as a  corporation  for United States
     federal  income tax purposes;  and the Trust is, and as of the Closing Date
     or any Option Closing Date will be, treated as a consolidated subsidiary of
     the Company pursuant to generally accepted accounting principles.

               (viii) The Company has only the direct and indirect  subsidiaries
     identified  on  Exhibit A  attached  hereto and  incorporated  herein  (the
     "Subsidiaries").   The  Company  does  not  own  or  control,  directly  or
     indirectly,   more  than  5%  of  any  class  of  equity  security  of  any
     corporation,  association or other entity other than the Subsidiaries. Each
     Subsidiary is a corporation,  business trust, limited liability company, or
     bank duly organized or  incorporated,  as the case may be, validly existing
     and in good  standing  under  the laws of its  respective  jurisdiction  of
     organization.  Each such  Subsidiary  has full power and  authority to own,
     lease and operate its  properties  and to conduct its business as described
     in and contemplated by the  Registration  Statement and the Prospectus (or,
     if the Prospectus is not in existence,  in each Preliminary Prospectus) and
     as currently being conducted.  The deposit accounts of Decatur Bank & Trust
     Company,  First Merchants Bank,  National  Association,  The First National
     Bank of Portland,  First United Bank,  Frances Slocum Bank & Trust Company,
     The Madison  Community  Bank,  The Randolph  County Bank,  The Union County
     National   Bank  of  Liberty,   and   Lafayette   Bank  and  Trust  Company
     (collectively, the "Banks," individually, a "Bank") are insured by the Bank
     Insurance Fund  administered by the Federal Deposit  Insurance  Corporation
     (the "FDIC") up to the maximum  amount  provided by law, and no proceedings
     for the  modification,  termination or revocation of any such insurance are
     pending or, to the knowledge of the Offerors, threatened.

               (ix) The Company and each of the  Subsidiaries  is duly qualified
     to transact  business as a foreign  corporation,  bank,  limited  liability
     company or business  trust,  as the case may be, and is in good standing in
     each other jurisdiction in which it owns or leases property or conducts its
     business so as to require such qualification and in which the failure to so
     qualify could,  individually or in the aggregate,  have a material  adverse
     effect  on the  condition  (financial  or  otherwise),  earnings,  affairs,
     business,  prospects  or  results  of  operations  of the  Company  and the
     Subsidiaries  on a consolidated  basis.  All of the issued and  outstanding
     shares of capital stock or  membership  interests of the  Subsidiaries  (A)
     have been duly  authorized and are validly  issued,  (B) are fully paid and
     nonassessable,  and (C),  except as set forth on Exhibit A attached  hereto
     and incorporated herein, are wholly owned,  directly or indirectly,  by the
     Company free and clear of any security interest,  mortgage,  pledge,  lien,
     encumbrance, restriction upon voting or transfer, preemptive rights, claim,
     equity or other defect.

               (x) The capital stock of the Company and the equity securities of
     the Trust  conform in all  material  respects  to the  description  thereof
     contained in the Prospectus (or, if the Prospectus is not in existence,  in
     each Preliminary  Prospectus).  The outstanding shares of capital stock and
     equity  securities  of each Offeror have been duly  authorized  and validly
     issued and are fully paid and nonassessable, and no such shares were issued
     in violation of the preemptive or similar rights of any security  holder of
     an Offeror.  No person has any  preemptive or similar right to purchase any
     shares of capital stock or equity  securities  of the  Offerors.  Except as
     disclosed in


                                       8
<PAGE>

     the  Prospectus  (or,  if  the  Prospectus  is not in  existence,  in  each
     Preliminary  Prospectus),  there  are no  outstanding  rights,  options  or
     warrants to acquire any securities of the Offerors or the Subsidiaries, and
     there are no outstanding  securities  convertible  into or exchangeable for
     any securities of the Offerors or the Subsidiaries and no restrictions upon
     the  voting or  transfer  of any  capital  stock of the  Company  or equity
     securities of the Trust pursuant to the Company's articles of incorporation
     or bylaws,  the Trust  Agreement or any  agreement or other  instrument  to
     which an Offeror is a party or by which an Offeror is bound. As of the date
     set  forth  therein,   the  Company  had  an  authorized  and   outstanding
     capitalization  as  set  forth  in  the  Registration   Statement  and  the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus) and the capitalization of the Company immediately following the
     Effective  Time  will  be as  set  forth  in  the  Prospectus  (or,  if the
     Prospectus  is not in existence,  each  Preliminary  Prospectus)  under the
     caption "Capitalization" (except for subsequent issuances, if any, pursuant
     to  this  Agreement,   the  Merger   Agreement,   the  Company's   dividend
     reinvestment plan, pursuant to the Company's  acquisitions in January, 2002
     of two title insurance agencies,  or reservations or employee benefit plans
     referred to in the  Prospectus  (or, if the Prospectus is not in existence,
     in each Preliminary Prospectus)).

               (xi)

                    (A) The Trust has all requisite trust power and authority to
     issue, sell and deliver the Designated  Preferred  Securities in accordance
     with and upon the terms and  conditions  set forth in this  Agreement,  the
     Trust Agreement,  the Registration Statement and the Prospectus (or, if the
     Prospectus  is not in  existence,  in  each  Preliminary  Prospectus).  All
     corporate  and trust  action  required to be taken by the  Offerors for the
     authorization,  issuance,  sale and  delivery of the  Designated  Preferred
     Securities in accordance  with such terms and  conditions  has been validly
     and duly taken.  The Designated  Preferred  Securities,  when delivered and
     paid for in accordance with this Agreement, will be duly and validly issued
     and  outstanding,   will  represent  valid  fully  paid  and  nonassessable
     undivided beneficial interests in the assets of the Trust, will be entitled
     to the benefits of the Trust  Agreement  pertaining to holders of Preferred
     Securities, will not be issued in violation of or subject to any preemptive
     or  similar  rights,  and will  conform to the  description  thereof in the
     Registration  Statement and the Prospectus (or, if the Prospectus is not in
     existence, in each Preliminary Prospectus) and the Trust Agreement. None of
     the Designated Preferred Securities, immediately prior to delivery, will be
     subject to any security  interest,  lien,  mortgage,  pledge,  encumbrance,
     restriction upon voting or transfer,  preemptive rights,  claim,  equity or
     other defect.

                    (B) The  Debentures  have been duly and validly  authorized,
     and, when duly and validly  executed,  authenticated and issued as provided
     in  the  Indenture  and  delivered  to the  Trust  pursuant  to  the  Trust
     Agreement,  will constitute  valid and legally  binding  obligations of the
     Company,  enforceable  against the Company in accordance  with their terms,
     except to the  extent  that  enforcement  thereof  may be limited by and/or
     subject to bankruptcy, insolvency, reorganization or similar laws affecting
     the rights of  creditors  generally  and subject to general  principles  of
     equity,  will be in the form  contemplated by, and entitled to the benefits
     pertaining to holders of Debentures  under the  Indenture,  will conform in
     all  material  respects  to  the  description   thereof  contained  in  the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus)  and will be owned by the Trust free and clear of any  security
     interest,  mortgage, pledge, lien, encumbrance,  restriction upon transfer,
     preemptive rights, claim, equity or other defect.

                    (C) The Guarantee has been duly and validly authorized, and,
     when duly and validly  executed and delivered to the guarantee  trustee for
     the benefit of the holders of


                                       9
<PAGE>

     the  Preferred  Securities,  will  constitute  a valid and legally  binding
     obligation  of the Company,  enforceable  against the Company in accordance
     with its  terms,  except to the  extent  that  enforcement  thereof  may be
     limited  by  bankruptcy,   insolvency,   reorganization,  or  similar  laws
     affecting  the  rights  of  creditors  generally  and  subject  to  general
     principles  of equity,  and will  conform in all  material  respects to the
     description  thereof  contained in the Prospectus (or, if the Prospectus is
     not in existence, in each Preliminary Prospectus).

                    (D) The Agreement as to Expenses and Liabilities between the
     Company and the Trust (the "Expense  Agreement")  has been duly and validly
     authorized,  and,  when duly and  validly  executed  and  delivered  by the
     Company,  will  constitute a valid and legally  binding  obligation  of the
     Company  enforceable  against  the  Company in  accordance  with its terms,
     except to the  extent  that  enforcement  thereof  may be limited by and/or
     subject to bankruptcy, insolvency, reorganization or similar laws affecting
     the rights of  creditors  generally  and subject to general  principles  of
     equity,  and will  conform  in all  material  respects  to the  description
     thereof  contained  in the  Prospectus  (or,  if the  Prospectus  is not in
     existence, in each Preliminary Prospectus).

               (xii) The Merger  Agreement  was duly  authorized,  executed  and
     delivered by the Company and Lafayette and  constituted a valid,  legal and
     binding  agreement of the Company and  Lafayette,  enforceable  against the
     Company and  Lafayette in accordance  with its terms,  and conformed in all
     material  respects  to the  description  thereof  contained  in the  Merger
     Proxy/Registration  Statement.  The  shares  of the  capital  stock  of the
     Company  delivered  pursuant to the terms of the Merger Agreement were duly
     authorized  for issuance by the Company  pursuant to the Merger  Agreement,
     were  issued,  executed and  authenticated  in  accordance  with the Merger
     Agreement  and  delivered  as  provided  in the Merger  Agreement,  and are
     validly  issued  and  fully  paid and  non-assessable  and  conform  in all
     material   respects   to   the   description    thereof   in   the   Merger
     Proxy/Registration  Statement. The issuance of such shares of capital stock
     was not subject to preemptive or other similar  rights.  With the exception
     of  the  delivery  of  the  Merger  consideration,  all  conditions  to the
     obligations  of each of the Company and Lafayette to consummate  the Merger
     have been  satisfied or duly waived and the net  proceeds  from the sale of
     the Designated  Preferred Securities and the Company's cash on hand will be
     sufficient to pay the cash consideration payable to Lafayette  shareholders
     pursuant to the Merger and related fees and  expenses and to fund  ordinary
     business operations consistent with past practices.

               (xiii) The Offerors  and the  Subsidiaries  have  complied in all
     material  respects  with all foreign,  federal,  state and local  statutes,
     regulations,  ordinances  and rules as now in effect and  applicable to the
     ownership  and  operation  of  their  properties  or the  conduct  of their
     businesses as described in and contemplated by the  Registration  Statement
     and the  Prospectus  (or, if the  Prospectus is not in  existence,  in each
     Preliminary  Prospectus)  and as  currently  being  conducted.  Neither the
     Company nor any non-banking  Subsidiary  engages  directly or indirectly in
     any activity  prohibited  by the Board of Governors of the Federal  Reserve
     System  (the  "FRB")  or  the  BHC  Act  or  the  regulations   promulgated
     thereunder.

               (xiv)  The  Offerors  and  the  Subsidiaries  have  all  material
     permits, easements,  consents, licenses,  franchises and other governmental
     and regulatory authorizations from all appropriate federal, state, local or
     other  public  authorities  ("Permits")  as are  necessary to own and lease
     their  properties and conduct their  businesses in the manner  described in
     and contemplated by the  Registration  Statement and the Prospectus (or, if
     the Prospectus is not in existence,  in each Preliminary Prospectus) and as
     currently  being  conducted.  All such Permits are in full force and effect
     and each of the Offerors and the Subsidiaries are in all material  respects
     complying


                                       10
<PAGE>

     therewith,  and no event has occurred that allows, or after notice or lapse
     of time would allow,  revocation or  termination  thereof or will result in
     any other  material  impairment  of the  rights  of the  holder of any such
     Permit.  Such Permits contain no restrictions  that would materially impair
     the ability of the Company or the  Subsidiaries to conduct their businesses
     in the manner  consistent with their past  practices.  Neither the Offerors
     nor any of the Subsidiaries have received notice or otherwise has knowledge
     of any proceeding or action  relating to the revocation or  modification of
     any such Permit.

               (xv) Neither of the Offerors nor any of the  Subsidiaries  are in
     breach or violation of their corporate charter,  by-laws or other governing
     documents  (including without limitation,  the Original Trust Agreement) in
     any material  respect.  Neither of the Offerors nor any of the Subsidiaries
     is, and to the  knowledge of the Offerors no other party is, in  violation,
     breach or default (with or without  notice or lapse of time or both) in the
     performance  or observance of any term,  covenant,  agreement,  obligation,
     representation,  warranty  or  condition  contained  in (A)  any  contract,
     indenture,  mortgage, deed of trust, loan or credit agreement, note, lease,
     franchise, license, Permit or any other agreement or instrument to which it
     is a party or by which it or any of its properties may be bound, which such
     breach,  violation or default could,  individually or in the aggregate with
     other breaches,  violations or defaults,  have a material adverse effect on
     the  condition  (financial  or  otherwise),  earnings,  affairs,  business,
     prospects or results of operations of the Company and the Subsidiaries on a
     consolidated  basis,  and to the knowledge of the Offerors,  no other party
     has  asserted  that  the  Offerors  or any of the  Subsidiaries  is in such
     violation,  breach or default, or (B) any order, decree,  judgment, rule or
     regulation of any court, arbitrator,  government, or governmental agency or
     instrumentality, domestic or foreign, having jurisdiction over the Offerors
     or the  Subsidiaries  or any of their  respective  properties  the  breach,
     violation or default of which could,  individually or in the aggregate with
     other breaches,  violations or defaults,  have a material adverse effect on
     the  condition  (financial  or  otherwise),  earnings,  affairs,  business,
     prospects or results of operations of the Company and the Subsidiaries on a
     consolidated basis.

               (xvi) The execution,  delivery and  performance of this Agreement
     and the  consummation of the  transactions  contemplated by this Agreement,
     the Merger Agreement,  the Trust Agreement,  the Guarantee,  the Indenture,
     the Registration Statement and the Prospectus (or, if the Prospectus is not
     in  existence,  in  each  Preliminary   Prospectus)   (including,   without
     limitation,  the issuance and sale of the Designated  Preferred  Securities
     and  the  use  of  proceeds  from  the  sale  of the  Designated  Preferred
     Securities  as  described  in the  Prospectus  under  the  caption  "Use of
     Proceeds")  do not and will not  conflict  with,  result in the creation or
     imposition of any material lien, claim, charge,  encumbrance or restriction
     upon any  property  or assets of the  Offerors or the  Subsidiaries  or the
     Designated  Preferred  Securities  pursuant  to,  constitute  a  breach  or
     violation  of, or  constitute a default  under,  with or without  notice or
     lapse of time or both,  any of the terms,  provisions  or conditions of (A)
     the  charter  or  by-laws  of the  Company  or the  Subsidiaries,  (B)  any
     contract,  indenture,  mortgage,  deed of trust,  loan or credit agreement,
     note,  lease,  franchise,   license,  Permit  or  any  other  agreement  or
     instrument to which the Offerors or the Subsidiaries is a party or by which
     any of them or any of their respective  properties may be bound, or (C) any
     order,  decree,  judgment,  rule or  regulation  of any court,  arbitrator,
     government, or governmental agency or instrumentality, domestic or foreign,
     having  jurisdiction  over the Offerors or the Subsidiaries or any of their
     respective  properties  which  conflict,  creation,   imposition,   breach,
     violation or default could have, either individually or in the aggregate, a
     material  adverse  effect  on  the  condition   (financial  or  otherwise),
     earnings,  affairs,  business,  prospects or results of  operations  of the
     Offerors and the  Subsidiaries on a consolidated  basis. No  authorization,
     approval,  consent or order of or  filing,  registration  or  qualification
     with, any person (including,  without limitation,  any court,  governmental
     body  or  authority)  is  required  in


                                       11
<PAGE>

     connection with the transactions contemplated by this Agreement, the Merger
     Agreement,  the Trust Agreement,  the Indenture, the Guarantee, the Expense
     Agreement,   the   Registration   Statement  and  the  Prospectus  (or  any
     Preliminary  Prospectus),  except such as have been obtained under the 1933
     Act and the  Trust  Indenture  Act and  from  the  Nasdaq  National  Market
     relating to the listing of the Designated Preferred Securities, and such as
     may be required under state securities laws or  Interpretations or Rules of
     the National Association of Securities Dealers, Inc. ("NASD") in connection
     with the purchase and distribution of the Designated  Preferred  Securities
     by the Underwriters.

               (xvii) The Company has all requisite  power and authority and the
     Trust has all  requisite  trust  power  and  authority  to enter  into this
     Agreement and this Agreement has been duly and validly authorized, executed
     and delivered by the Offerors and constitutes the legal,  valid and binding
     agreement of the Offerors,  enforceable  against the Offerors in accordance
     with its  terms,  except  as the  enforcement  thereof  may be  limited  by
     bankruptcy, insolvency, reorganization or similar laws affecting the rights
     of  creditors  generally  and subject to general  principles  of equity and
     except as any  indemnification  or contribution  provisions  thereof may be
     limited under applicable securities laws. Each of the Indenture,  the Trust
     Agreement, the Guarantee and the Expense Agreement has been duly authorized
     by the Company,  and,  when  executed  and  delivered by the Company on the
     Closing Date,  each of said  agreements will constitute a valid and legally
     binding  obligation  of the  Company  and will be  enforceable  against the
     Company in accordance with its terms, except as the enforcement thereof may
     be limited  by  bankruptcy,  insolvency,  reorganization  or  similar  laws
     affecting  the  rights  of  creditors  generally  and  subject  to  general
     principles  of equity and  except as any  indemnification  or  contribution
     provisions thereof may be limited under applicable securities laws. Each of
     the  Indenture,  the  Trust  Agreement  and the  Guarantee  has  been  duly
     qualified under the Trust Indenture Act and will conform to the description
     thereof contained in the Prospectus.

               (xviii) The Company and the Subsidiaries have good and marketable
     title in fee simple to all real  property  and good  title to all  personal
     property  owned by them and material to their  business,  in each case free
     and  clear  of  all  security   interests,   liens,   mortgages,   pledges,
     encumbrances,  restrictions, claims, equities and other defects except such
     as are  referred  to in the  Prospectus  (or, if the  Prospectus  is not in
     existence,  in each  Preliminary  Prospectus)  or such as do not materially
     affect the value of such property in the  aggregate  and do not  materially
     interfere  with the use made or proposed to be made of such  property;  and
     all of the leases under which the Company or the Subsidiaries  hold real or
     personal  property are valid and existing leases,  enforceable  against the
     parties  thereto,  and in full force and effect with such exceptions as are
     not material and do not materially  interfere with the use made or proposed
     to be made of such real or personal  property,  and neither the Company nor
     any of the Subsidiaries is in default in any material respect of any of the
     terms or provisions of any material leases.

               (xix) BKD LLP,  who have  certified  certain of the  consolidated
     financial  statements  of the Company and the  Subsidiaries  including  the
     notes thereto,  included or incorporated  by reference in the  Registration
     Statement and Prospectus,  are independent  public accountants with respect
     to the  Company and the  Subsidiaries,  as required by the 1933 Act and the
     1933 Act Regulations.

               (xx) The consolidated  financial  statements  including the notes
     thereto,   included  or  incorporated  by  reference  in  the  Registration
     Statement and the Prospectus (or, if the Prospectus is not in existence, in
     each   Preliminary   Prospectus)  with  respect  to  the  Company  and  the
     Subsidiaries  comply  with the 1933  Act and the 1933 Act  Regulations  and
     present fairly in all material respects the consolidated financial position
     of the  Company  and the  Subsidiaries  as of


                                       12
<PAGE>

     the dates indicated and the consolidated results of operations,  cash flows
     and  shareholders'  equity  of the  Company  and the  Subsidiaries  for the
     periods  specified  and have been  prepared in  conformity  with  generally
     accepted   accounting   principles  applied  on  a  consistent  basis.  The
     consolidated financial statements including the notes thereto,  included or
     incorporated by reference in the Registration  Statement and the Prospectus
     (or, if the Prospectus is not in existence, in each Preliminary Prospectus)
     with respect to Lafayette and its subsidiaries comply with the 1933 Act and
     the 1933 Act  Regulations  and present fairly in all material  respects the
     consolidated financial position of Lafayette and its subsidiaries as of the
     dates indicated and the consolidated results of operations,  cash flows and
     shareholders'  equity of  Lafayette  and its  subsidiaries  for the periods
     specified  and have been  prepared in conformity  with  generally  accepted
     accounting   principles   applied  on  a  consistent  basis.  The  selected
     consolidated  financial data  concerning  the Company and the  Subsidiaries
     included  in the  Registration  Statement  and the  Prospectus  (or, if the
     Prospectus is not in existence,  in each Preliminary  Prospectus) comply in
     all  material  respects  with the  1933  Act and the 1933 Act  Regulations,
     present fairly the  information  set forth therein,  have been derived from
     the financial  statements or operating records of the Company and have been
     compiled  on a basis  consistent  with that of the  consolidated  financial
     statements  of  the  Company  and  the  Subsidiaries  in  the  Registration
     Statement and the Prospectus (or, if the Prospectus is not in existence, in
     each  Preliminary  Prospectus).  The selected  consolidated  financial data
     concerning  Lafayette  and its  subsidiaries  included in the  Registration
     Statement and the Prospectus (or, if the Prospectus is not in existence, in
     each Preliminary  Prospectus) comply in all material respects with the 1933
     Act and the 1933 Act Regulations,  present fairly the information set forth
     therein,  have been  derived  from the  financial  statements  or operating
     records of Lafayette and have been compiled on a basis consistent with that
     of the consolidated  financial statements of Lafayette and its subsidiaries
     in the Registration  Statement and the Prospectus (or, if the Prospectus is
     not in existence,  in each Preliminary  Prospectus).  The summary pro forma
     consolidated  financial information and the pro forma combined consolidated
     financial  information  included  in the  Registration  Statement  and  the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus)  present  fairly,  in all material  respects,  the  information
     relating to the Company, and the information  relating to Lafayette,  shown
     therein,  and have been  compiled  on a basis  consistent  with that of the
     audited   consolidated   financial   statements  of  the  Company  and  the
     assumptions  used  in  the  preparation  thereof  are  reasonable  and  the
     adjustments used therein are appropriate to give effect to the transactions
     and circumstances referred to therein. The other financial, statistical and
     numerical  information  included  in the  Registration  Statement  and  the
     Prospectus  (or such  Preliminary  Prospectus)  is accurate in all material
     respects,  complies in all material respects with the 1933 Act and the 1933
     Act  Regulations,  has  been  derived  from  the  financial  statements  or
     operating records of the Company or Lafayette, as the case may be, presents
     fairly the information shown therein, and to the extent applicable has been
     compiled on a basis consistent with the consolidated  financial  statements
     of the Company and the Subsidiaries included in the Registration  Statement
     and the  Prospectus  (or, if the  Prospectus is not in  existence,  in each
     Preliminary Prospectus).

               (xxi) Since the respective dates as of which information is given
     in the Registration  Statement and the Prospectus (or, if the Prospectus is
     not in  existence,  in each  Preliminary  Prospectus),  except as otherwise
     stated therein:

                    (A) neither of the Offerors nor any of the  Subsidiaries has
     sustained any loss or interference with its business from fire,  explosion,
     flood or other calamity,  whether or not covered by insurance,  or from any
     labor  dispute or court or  governmental  action,  order or decree which is
     material,  individually or in the aggregate, to the condition (financial or
     otherwise), earnings, affairs, business, prospects or results of operations
     of the Company and the Subsidiaries on a consolidated basis;


                                       13
<PAGE>

                    (B) there has not been any  material  adverse  change in, or
     any  development  which is  reasonably  likely to have a  material  adverse
     effect on, the  condition  (financial  or  otherwise),  earnings,  affairs,
     business,  prospects  or  results  of  operations  of the  Company  and the
     Subsidiaries  on a  consolidated  basis,  whether  or  not  arising  in the
     ordinary course of business;

                    (C) neither of the Offerors nor any of the  Subsidiaries has
     incurred any liabilities or obligations,  direct or contingent,  or entered
     into any  material  transactions,  other  than in the  ordinary  course  of
     business,  which are material,  individually  or in the  aggregate,  to the
     condition (financial or otherwise),  earnings, affairs, business, prospects
     or  results  of  operations  of  the  Company  and  the  Subsidiaries  on a
     consolidated basis;

                    (D)  neither  of the  Offerors  has  declared  or  paid  any
     dividend,  and  neither of the  Offerors  nor any of the  Subsidiaries  has
     become   delinquent  in  the  payment  of  principal  or  interest  on  any
     outstanding borrowings;

                    (E) there  has not been any  change  in the  capital  stock,
     equity  securities,  long-term debt,  obligations  under capital leases or,
     other than in the ordinary course of business, short-term borrowings of the
     Offerors or the Subsidiaries; and

                    (F) there  has not  occurred  any other  event and there has
     arisen  no set of  circumstances  required  by the 1933 Act or the 1933 Act
     Regulations to be disclosed in the Registration Statement or the Prospectus
     which  has not  been so set  forth  in the  Registration  Statement  or the
     Prospectus as fairly and accurately summarized therein.

               (xxii)  Since the  respective  dates as of which  information  is
     given in the Registration Statement,  the Prospectus (or, if the Prospectus
     is not in  existence,  in  each  Preliminary  Prospectus)  and  the  Merger
     Proxy/Registration  Statement,  there  has not  been any  material  adverse
     change  in the  condition  (financial  or  otherwise),  earnings,  affairs,
     business, prospects or results of operation of Lafayette and Lafayette Bank
     on a consolidated  basis,  whether or not arising in the ordinary course of
     business.

               (xxiii) No charge,  investigation,  action, suit or proceeding is
     pending  or, to the  knowledge  of the  Offerors,  threatened,  against  or
     affecting  the  Offerors  or the  Subsidiaries  or any of their  respective
     properties  before or by any  court or any  regulatory,  administrative  or
     governmental  official,  commission,  board,  agency or other  authority or
     body, or any arbitrator, wherein an unfavorable decision, ruling or finding
     could,  individually or in the aggregate with other unfavorable  decisions,
     rulings or findings,  have a material adverse effect on the consummation of
     this  Agreement or the  transactions  contemplated  herein or the condition
     (financial or otherwise), earnings, affairs, business, prospects or results
     of operations of the Offerors and the Subsidiaries on a consolidated  basis
     or which is required to be disclosed in the  Registration  Statement or the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus) and is not so disclosed.

               (xxiv) There are no contracts or other  documents  required to be
     filed as exhibits to the Registration Statement by the 1933 Act or the 1933
     Act  Regulations  or the Trust  Indenture Act (or any rules or  regulations
     thereunder)  which  have not been  filed as  exhibits  or  incorporated  by
     reference  into the  Registration  Statement,  or that are  required  to be
     summarized in the Prospectus (or, if the Prospectus is not in existence, in
     each Preliminary Prospectus) that are not so summarized.


                                       14
<PAGE>

               (xxv) Neither of the Offerors has taken,  directly or indirectly,
     any action  designed to result in or which has  constituted  or which might
     reasonably be expected to cause or result in  stabilization or manipulation
     of the price of any  security  of the  Offerors to  facilitate  the sale or
     resale  of  the  Designated   Preferred  Securities  in  violation  of  the
     Commission's  rules  and  regulations,   including,  but  not  limited  to,
     Regulation M, and neither of the Offerors is aware of any such action taken
     or to be taken by any affiliate of the Offerors.

               (xxvi) The Offerors and the Subsidiaries own, or possess adequate
     rights to use, all patents,  copyrights,  trademarks,  service marks, trade
     names and other rights necessary to conduct the businesses now conducted by
     them in all material respects or as described in the Prospectus (or, if the
     Prospectus is not in existence, in each Preliminary Prospectus) and neither
     the Company nor the  Subsidiaries  have received any notice of infringement
     or conflict  with  asserted  rights of others with  respect to any patents,
     copyrights,  trademarks,  service marks, trade names or other rights which,
     individually  or in  the  aggregate,  if  the  subject  of  an  unfavorable
     decision,  ruling or finding,  could have a material  adverse effect on the
     condition (financial or otherwise),  earnings, affairs, business, prospects
     or  results  of  operations  of  the  Company  and  the  Subsidiaries  on a
     consolidated  basis, and the Offerors do not know of any basis for any such
     infringement  or conflict which,  individually or in the aggregate,  if the
     subject  of an  unfavorable  decision,  ruling  or  finding,  could  have a
     material  adverse  effect  on  the  condition   (financial  or  otherwise),
     earnings,  affairs,  business,  prospects or results of  operations  of the
     Company and the Subsidiaries on a consolidated basis.

               (xxvii)  No  labor   dispute   involving   the   Company  or  the
     Subsidiaries exists or, to the knowledge of the Offerors, is imminent which
     could,  individually  or in  the  aggregate  with  other  disputes,  have a
     material  adverse  effect  on  the  condition   (financial  or  otherwise),
     earnings,  affairs,  business,  prospects or results of  operations  of the
     Company and the  Subsidiaries on a consolidated  basis or which is required
     to be  disclosed  in  the  Prospectus  (or,  if  the  Prospectus  is not in
     existence, in each Preliminary Prospectus).  Neither the Company nor any of
     the  Subsidiaries  has received notice of any existing or threatened  labor
     dispute by the  employees of any of its principal  suppliers,  customers or
     contractors  which  could,  individually  or in the  aggregate  with  other
     disputes,  have a material  adverse  effect on the condition  (financial or
     otherwise), earnings, affairs, business, prospects or results of operations
     of the Company and the Subsidiaries on a consolidated basis.

               (xxviii)  The  Offerors  and the  Subsidiaries  have  timely  and
     properly prepared and filed all necessary federal, state, local and foreign
     tax returns which are required to be filed and have paid all taxes shown as
     due  thereon and have paid all other  taxes and  assessments  to the extent
     that the same shall have become due,  except such as are being contested in
     good faith or where the failure to so timely and properly  prepare and file
     could not, individually or in the aggregate, have a material adverse effect
     on the condition  (financial or otherwise),  earnings,  affairs,  business,
     prospects or results of operations of the Company and the Subsidiaries on a
     consolidated  basis.  The Offerors have no knowledge of any tax  deficiency
     which  has  been  or  might  be  assessed   against  the  Offerors  or  the
     Subsidiaries  which, if the subject of an unfavorable  decision,  ruling or
     finding, could,  individually or in the aggregate,  have a material adverse
     effect  on the  condition  (financial  or  otherwise),  earnings,  affairs,
     business,  prospects  or  results  of  operations  of the  Company  and the
     Subsidiaries on a consolidated basis.

               (xxix) Each of the contracts, agreements and instruments material
     to the condition  (financial or otherwise),  earnings,  affairs,  business,
     prospects or results of operations of the Company and its Subsidiaries on a
     consolidated basis, or listed,  described, or attached as an exhibit to the
     Company's and  Lafayette's  respective  Annual Reports on Form 10-K for the
     year


                                       15
<PAGE>

     ended  December 31, 2001 as filed with the  Commission is in full force and
     effect and is the legal, valid and binding agreement of the Offerors or the
     Subsidiaries and the other parties thereto,  enforceable in accordance with
     its terms,  except as the enforcement thereof may be limited by bankruptcy,
     insolvency,   reorganization  or  similar  laws  affecting  the  rights  of
     creditors  generally and subject to general  principles  of equity,  except
     where  the  cancellation,   termination  or  unenforceability   could  not,
     individually or in the aggregate with other cancellations,  terminations or
     unenforceable  contracts,  agreements  and  instruments,  have  a  material
     adverse  effect  on  the  condition  (financial  or  otherwise),  earnings,
     affairs,  business,  prospects or results of  operations of the Company and
     the  Subsidiaries  on a  consolidated  basis.  Neither  the Company nor any
     Subsidiary  is (with or without  notice or lapse of time or both) in breach
     or default in any material  respect under any such contacts,  agreements or
     instruments  referred to in the preceding sentence (or upon consummation of
     the  transactions  contemplated  by this  Agreement  will be in  breach  or
     default in any material  respect  thereunder)  and, to the knowledge of the
     Offerors,  no other party to any such  agreement is (with or without notice
     or lapse of time or both) in  breach or  default  in any  material  respect
     thereunder.

               (xxx) No  relationship,  direct or  indirect,  exists  between or
     among the Company or the Subsidiaries,  on the one hand, and the directors,
     officers, trustees, shareholders,  customers or suppliers of the Company or
     the  Subsidiaries,  on the other hand, which is required to be described in
     the Registration Statement and the Prospectus (or, if the Prospectus is not
     in  existence,  in each  Preliminary  Prospectus)  which is not  adequately
     described therein.

               (xxxi) No person has the right to request or require the Offerors
     or the  Subsidiaries to register any securities for offering and sale under
     the 1933 Act by reason of the filing of the Registration Statement with the
     Commission or the issuance and sale of the Designated  Preferred Securities
     except  as  adequately  disclosed  in the  Registration  Statement  and the
     Prospectus (or, if the Prospectus is not in existence,  in each Preliminary
     Prospectus).

               (xxxii) The Designated  Preferred  Securities  have been approved
     for quotation on the Nasdaq  National  Market subject to official notice of
     issuance.

               (xxxiii)  Except  as  described  in the  Prospectus  (or,  if the
     Prospectus is not in existence, in each Preliminary Prospectus),  there are
     no contractual  encumbrances or restrictions or material legal restrictions
     required to be described therein, on the ability of the Subsidiaries (A) to
     pay  dividends or make any other  distributions  on its capital stock or to
     pay any indebtedness owed to the Company, (B) to make any loans or advances
     to, or  investments  in, the Company or (C) to transfer any of its property
     or assets to the Company.

               (xxxiv)  Neither of the Offerors is an  "investment  company," an
     entity "controlled" by an "investment  company" or an "investment  adviser"
     within the meaning of the  Investment  Company Act of 1940, as amended (the
     "Investment  Company  Act") or the  Investment  Advisers  Act of  1940,  as
     amended (the "Investment Advisers Act").

               (xxxv) The Offerors have not  distributed and will not distribute
     prior to the Closing Date or, if  applicable,  the Option Closing Date, any
     prospectus  in  connection  with the  Offering,  other  than a  Preliminary
     Prospectus,  the  Prospectus,  the  Registration  Statement  and the  other
     materials  permitted  by the  1933 Act and the  1933  Act  Regulations  and
     reviewed by the Representatives.

               (xxxvi) The activities of the Offerors and the  Subsidiaries  are
     permitted under applicable  federal and state banking laws and regulations.
     The Company has all  necessary


                                       16
<PAGE>

     approvals,  including the approval of the Office of the  Comptroller of the
     Currency  (the  "OCC") , the FDIC,  the  Indiana  Department  of  Financial
     Institutions  (the  "DFI") and the FRB, as  applicable,  to own the capital
     stock of the Subsidiaries.  Neither the Company nor any of the Subsidiaries
     is a party or subject to any agreement or memorandum  with, or directive or
     other  order  issued  by,  the FRB,  the OCC,  the  FDIC,  the DFI or other
     regulatory  authority having jurisdiction over it (each, a "Regulator," and
     collectively,   the  "Regulators"),   which  imposes  any  restrictions  or
     requirements  not generally  applicable to entities of the same type as the
     Company and the  Subsidiaries.  Neither the Company nor any  Subsidiary  is
     subject  to any order or other  directive  from any  Regulator  to make any
     material change in the method of conducting  their  respective  businesses,
     and no such directive is pending or threatened by such Regulators.

               (xxxvii)  The  Banks  and the other  Subsidiaries  have  properly
     administered all accounts for which they act as a fiduciary,  including but
     not  limited  to  accounts  for  which  they  serve  as a  trustee,  agent,
     custodian,  personal  representative,  guardian,  conservator or investment
     advisor,  in  accordance  with the  terms of the  governing  documents  and
     applicable  state and federal  law and  regulation  and common law,  except
     where the failure to be in  compliance  could not,  individually  or in the
     aggregate,  have a material adverse effect upon the condition (financial or
     otherwise), earnings, affairs, business, prospects or results of operations
     of the Company and the  Subsidiaries on a consolidated  basis.  None of the
     Banks  or  other  Subsidiaries  nor any of  their  directors,  officers  or
     employees has  committed  any material  breach of trust with respect to any
     such fiduciary account, and the accountings for each such fiduciary account
     are true and correct in all material  respects and  accurately  reflect the
     assets of such fiduciary account in all material respects.

               (xxxviii)Other  than as  contemplated  by this  Agreement  and as
     disclosed in the Registration  Statement,  the Company has not incurred any
     liability  for any  finder's  or  broker's  fee or  agent's  commission  in
     connection  with  the  execution  and  delivery  of this  Agreement  or the
     consummation of the transactions contemplated thereby.

               (xxxix) No report or  application  filed by the Company or any of
     its  Subsidiaries  with the FRB,  the OCC,  the FDIC,  the DFI or any other
     Regulator,  as of the date it was  filed or  amended,  contained  an untrue
     statement of a material  fact or omitted to state a material  fact required
     to be stated  therein  or  necessary  to make the  statements  therein  not
     misleading when made or failed to comply in all material  respects with the
     applicable  requirements  of the FRB,  the OCC,  the FDIC,  the DFI or such
     other Regulator, as the case may be.

               (xl) Based upon current  guidelines of the FRB, proceeds from the
     sale of the Debentures will  constitute  "Tier 1" capital (as defined in 12
     C.F.R.  Part 225),  subject to applicable  regulatory  restrictions  on the
     amount thereof that can be included in Tier 1 capital.

               (xli)  None of the  Offerors,  the  Subsidiaries  or, to the best
     knowledge of the Offerors,  any other person  associated  with or acting on
     behalf  of the  Offerors  or any of the  Subsidiaries,  including,  without
     limitation,  any  director,  officer,  agent,  or  employee  of  any of the
     Subsidiaries  or the Company has,  directly or indirectly,  while acting on
     behalf of such  Offeror  or  Subsidiary  (i) used any  corporate  funds for
     unlawful contributions,  gifts,  entertainment,  or other unlawful expenses
     relating to political activity;  (ii) made any unlawful contribution to any
     candidate  for  foreign or domestic  office,  or to any foreign or domestic
     government  officials or  employees  or other  person  charged with similar
     public or quasi-public duties, other than payments required or permitted by
     the laws of the United States or any jurisdiction  thereof or to foreign or
     domestic  political parties or campaigns from corporate funds, or failed to
     disclose  fully any  contribution  in violation of law;  (iii) violated any
     provision of the Foreign Corrupt Practices


                                       17
<PAGE>

     Act of 1977, as amended; or (iv) made any other payment of funds for either
     or both of the  Offerors  or a  Subsidiary  or  retained  any  funds  which
     constitute a violation of any law,  rule or  regulation  or which was or is
     required to be disclosed in the  Registration  Statement or the  Prospectus
     pursuant to the requirements of the 1933 Act or the 1933 Act Regulations.

               (xlii)  Neither the Company nor any  Subsidiary has any liability
     under any  "pension  plan," as defined in the  Employee  Retirement  Income
     Security Act of 1974, as amended  ("ERISA").  The employee  benefit  plans,
     including  employee  welfare  benefit plans, of the Company and each of the
     Subsidiaries   (the  "Employee  Plans")  have  been  operated  in  material
     compliance with the applicable  provisions of ERISA,  the Internal  Revenue
     Code of 1986,  as  amended  (the  "Code"),  all  regulations,  rulings  and
     announcements  promulgated or issued  thereunder  and all other  applicable
     governmental laws and regulations  (except to the extent such noncompliance
     could not, individually or in the aggregate, have a material adverse effect
     upon the condition  (financial or otherwise) earnings,  affairs,  business,
     prospects or results of operations of the Offerors or the Subsidiaries on a
     consolidated basis). No reportable event under Section 4043(c) of ERISA has
     occurred  with  respect to any  Employee  Plan of the Company or any of the
     Subsidiaries for which the reporting  requirements  have not been waived by
     the Pension Benefit Guaranty Corporation.  No prohibited  transaction under
     Section 406 of ERISA,  for which an exemption does not apply,  has occurred
     with  respect  to  any  Employee   Plan  of  the  Company  or  any  of  the
     Subsidiaries.  There are no pending or, to the  knowledge of the  Offerors,
     threatened, claims by or on behalf of any Employee Plan, by any employee or
     beneficiary  covered under any such  Employee  Plan or by any  governmental
     authority  or  otherwise  involving  such  Employee  Plans  or any of their
     respective  fiduciaries  (other than for routine claims for benefits).  All
     Employee  Plans that are group health plans have been  operated in material
     compliance with the group health plan continuation coverage requirements of
     Section 4980B of the Code.

               (xliii)  The  Company  and each of the  Subsidiaries  maintains a
     system of internal  accounting  controls  sufficient to provide  reasonable
     assurance   that  (A)   transactions   are  executed  in  accordance   with
     management's  general or  specific  authorizations,  (B)  transactions  are
     recorded as necessary to permit  preparation  of  financial  statements  in
     conformity with generally  accepted  accounting  principles and to maintain
     accountability  for  assets,  (C)  access to assets  is  permitted  only in
     accordance with management's general or specific authorization, and (D) the
     recorded  accounts  for  assets is  compared  with the  existing  assets at
     reasonable  intervals and appropriate action is taken with respect thereto.
     The books, records and accounts and systems of internal accounting controls
     of the Company and its  Subsidiaries  comply in all material  respects with
     the requirements of Section 13(b)(2) of the 1934 Act.

               (xliv) Except as described in the Registration  Statement and the
     Prospectus  (or, if the  Prospectus  is not in existence,  the  Preliminary
     Prospectus),  there  is no  factual  basis  for any  action,  suit or other
     proceeding  involving  the  Company  or the  Subsidiaries  or any of  their
     material assets for any failure of the Company or any of the  Subsidiaries,
     or any  predecessor  thereof,  to comply with any  requirements of federal,
     state or local regulation  relating to air, water,  solid waste management,
     hazardous  or  toxic  substances,  or  the  protection  of  health  or  the
     environment;  except where such action, suit or other proceeding could not,
     individually or in the aggregate with other actions,  suits or proceedings,
     have a material  adverse effect on the condition  (financial or otherwise),
     earnings,  affairs,  business,  prospects or results of  operations  of the
     Company and the Subsidiaries on a consolidated  basis.  Except as described
     in the Registration  Statement and the Prospectus (or, if the Prospectus is
     not  in  existence,  in  each  Preliminary  Prospectus)  or as  could  not,
     individually  or in the  aggregate,  have a material  adverse effect on the
     condition (financial or otherwise),  earnings, affairs, business, prospects
     or  results  of  operations  of  the  Company  and  the  Subsidiaries  on a
     consolidated  basis, none of the property owned or leased


                                       18
<PAGE>

     by the  Company  or  any  of the  Subsidiaries  or  their  predecessors  is
     contaminated  with any  waste or  hazardous  substances,  and  neither  the
     Company nor any of the Subsidiaries may be deemed an "owner or operator" of
     a "facility" or "vessel" which owns,  possesses,  transports,  generates or
     disposes of a "hazardous  substance"  as those terms are defined in ss.9601
     of the Comprehensive Environmental Response, Compensation and Liability Act
     of 1980, 42 U.S.C. ss.9601 et seq.

               (xlv)  The  Company  and  the  Subsidiaries   maintain  insurance
     covering in all material respects their properties, personnel and business.
     Such insurance insures against such losses and risks as, in the judgment of
     the  executive  officers  of the  Company,  are  adequate to protect in all
     material  respects the Company and the Subsidiaries  and their  businesses.
     Neither the Company nor any of the  Subsidiaries  has received  notice from
     any insurer or agent of such insurer that substantial capital  improvements
     or other  expenditures  shall  have to be made in order  to  continue  such
     insurance.  All such insurance is outstanding and duly in force on the date
     hereof and shall be outstanding  and duly in force on the Closing Date and,
     if applicable,  the Option Closing Date,  with such exceptions as would not
     have a material  adverse effect on the condition  (financial or otherwise),
     earnings,  affairs,  business,  prospects or results of  operations  of the
     Company and the Subsidiaries on a consolidated basis.

               (xlvi)  Other  than  the  Merger,  neither  the  Company  nor any
     Subsidiary  has  any  agreement  or  understanding   with  any  person  (A)
     concerning  the  future  acquisition  by  the  Company  or the  Banks  of a
     controlling interest in any entity or (B) concerning the future acquisition
     by any person of a controlling  interest in the Company or any  Subsidiary,
     in either case that is required by the 1933 Act or the 1933 Act Regulations
     to be disclosed by the Company that is not disclosed in the Prospectus.

     3. Offering by the Underwriters.

     After the Registration  Statement becomes effective or, if the Registration
Statement is already  effective,  after this Agreement  becomes  effective,  the
Underwriters  propose  to offer the Firm  Preferred  Securities  for sale to the
public  upon  the  terms  and  conditions  set  forth  in  the  Prospectus.  The
Underwriters  may from time to time thereafter  reduce the public offering price
and change the other selling terms, provided the proceeds to the Trust shall not
be reduced as a result of such reduction or change. Because the NASD is expected
to view the Preferred Securities as interests in a direct participation program,
the offering of the Preferred  Securities  is being made in compliance  with the
applicable provisions of Rule 2810 of the NASD's conduct rules.

     The  Underwriters  may  reserve and sell such of the  Designated  Preferred
Securities  purchased  by the  Underwriters  as the  Underwriters  may  elect to
dealers chosen by it (the "Selected  Dealers") at the public  offering price set
forth in the Prospectus less the applicable  Selected  Dealers'  concessions set
forth therein,  for re-offering by Selected  Dealers to the public at the public
offering price. The Underwriters may allow, and Selected Dealers may re-allow, a
concession set forth in the Prospectus to certain other brokers and dealers.

     4. Certain Covenants of the Offerors.

     The  Offerors  jointly and  severally  covenant  with the  Underwriters  as
follows:

          (a) The  Offerors  shall  cause  the  Registration  Statement  and any
amendments thereto, if not effective at the time of execution of this Agreement,
to become effective as promptly as possible.  If the Registration  Statement has
become or  becomes  effective  pursuant  to Rule 430A and  information  has been
omitted  therefrom in reliance on Rule 430A, then, the Offerors will prepare and
file in accordance


                                       19
<PAGE>

with Rule 430A and Rule 424(b) copies of the  Prospectus or, if required by Rule
430A, a post-effective  amendment to the Registration  Statement  (including the
Prospectus)  containing  all  information  so omitted and will provide  evidence
satisfactory to the Representatives of such timely filing.

          (b) The Offerors shall notify you immediately, and confirm such notice
in writing:

               (i)  when  the  Registration  Statement,  or  any  post-effective
     amendment to the Registration Statement,  has become effective, or when the
     Prospectus or any  supplement to the  Prospectus or any amended  Prospectus
     has been filed;

               (ii)  of the  receipt  of  any  comments  or  requests  from  the
     Commission;

               (iii) of any request of the Commission to amend or supplement the
     Registration Statement, any Preliminary Prospectus or the Prospectus or for
     additional information; and

               (iv) of the  issuance  by the  Commission  or any  state or other
     regulatory   body  of  any  stop  order  or  other  order   suspending  the
     effectiveness of the Registration  Statement,  preventing or suspending the
     use of any  Preliminary  Prospectus or the  Prospectus,  or suspending  the
     qualification of any of the Designated Preferred Securities for offering or
     sale in any jurisdiction or the institution or threat of institution of any
     proceedings  for any of such  purposes.  The Offerors  shall use their best
     efforts to prevent the issuance of any such stop order or of any other such
     order and if any such order is issued,  to cause such order to be withdrawn
     or lifted as soon as possible.

          (c) The Offerors shall furnish to the Underwriters,  from time to time
without charge,  as soon as available,  as many copies as the  Underwriters  may
reasonably request of (i) the registration  statement as originally filed and of
all amendments  thereto,  in executed form,  including  exhibits,  whether filed
before or after the Registration Statement becomes effective,  (ii) all exhibits
and documents  incorporated  therein or filed therewith,  (iii) all consents and
certificates of experts in executed form,  (iv) the  Preliminary  Prospectus and
all  amendments  and  supplements  thereto,  and  (v)  the  Prospectus,  and all
amendments and supplements thereto.

          (d) During the time when a  prospectus  is  required  to be  delivered
under the 1933 Act, the Offerors shall comply with the 1933 Act and the 1933 Act
Regulations  and the 1934 Act and the 1934 Act  Regulations  so as to permit the
completion  of  the  distribution  of the  Designated  Preferred  Securities  as
contemplated herein and in the Trust Agreement and the Prospectus.  The Offerors
shall not file any amendment to the  registration  statement as originally filed
or to the  Registration  Statement and shall not file any  amendment  thereto or
make  any  amendment  or  supplement  to any  Preliminary  Prospectus  or to the
Prospectus  of which you shall not  previously  have been advised in writing and
provided a copy a reasonable  time prior to the proposed  filings  thereof or to
which you or counsel for the  Underwriters  shall  reasonably  object.  If it is
necessary,  in the Company's  reasonable opinion or in the reasonable opinion of
the Company's counsel, to amend or supplement the Registration  Statement or the
Prospectus in  connection  with the  distribution  of the  Designated  Preferred
Securities,  the Offerors shall forthwith  amend or supplement the  Registration
Statement or the  Prospectus,  as the case may be, by preparing  and filing with
the Commission  (provided the Underwriters or counsel for the Underwriters  does
not reasonably  object),  and furnishing to you such number of copies as you may
reasonably  request  of an  amendment  or  amendments  of,  or a  supplement  or
supplements to, the Registration Statement or the Prospectus, as the case may be
(in form and substance satisfactory to you and counsel for the Underwriters). If
any  event  shall  occur  as a  result  of  which  it is  necessary  to amend or
supplement the  Prospectus to correct an untrue  statement of a material fact or
to include a material fact necessary to make


                                       20
<PAGE>

the  statements  therein,  in light of the  circumstances  under which they were
made, not misleading,  or if for any reason it is necessary at any time to amend
or  supplement  the  Prospectus  to  comply  with  the 1933 Act and the 1933 Act
Regulations,  the  Offerors  shall,  subject  to the  second  sentence  of  this
subsection  (d),  forthwith at their cost and expense  amend or  supplement  the
Prospectus by preparing and filing with the  Commission,  and furnishing to you,
such  number  of  copies  as you  may  reasonably  request  of an  amendment  or
amendments  of, or a supplement or  supplements  to, the Prospectus (in form and
substance  satisfactory to you and counsel for the  Underwriters) so that, as so
amended or supplemented, the Prospectus shall not contain an untrue statement of
a  material  fact  or omit  to  state a  material  fact  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

          (e)  The  Offerors  shall  cooperate  with  you  and  counsel  for the
Underwriters  in  order to  qualify  the  Designated  Preferred  Securities  for
offering and sale under the securities or blue sky laws of such jurisdictions as
you may reasonably  request and shall continue such  qualifications in effect so
long  as  may  be  advisable  for  distribution  of  the  Designated   Preferred
Securities;  provided,  however,  that the  Offerors  shall not be  required  to
qualify to do business  as a foreign  corporation  or file a general  consent to
service of process in any  jurisdiction  in connection  with the foregoing.  The
Offerors  shall file such  statements and reports as may be required by the laws
of each  jurisdiction  in which the Designated  Preferred  Securities  have been
qualified as above.  The Offerors will notify you immediately of, and confirm in
writing,  the suspension of qualification of the Designated Preferred Securities
or threat thereof in any jurisdiction.

          (f) The Offerors  shall use their best efforts to permit the Preferred
Securities to be eligible for clearance and settlement through the facilities of
DTC.

          (g) The Offerors  shall make  generally  available  to their  security
holders in the manner  contemplated  by Rule 158 of the 1933 Act Regulations and
furnish to you as soon as practicable, but in any event not later than 16 months
after the Effective Date, a consolidated  earnings  statement of the Offerors in
reasonable detail, covering a period of at least 12 consecutive months beginning
after the effective  date of the  Registration  Statement,  conforming  with the
requirements of Section 11(a) of the 1933 Act and Rule 158.

          (h) The  Offerors  shall  use the net  proceeds  from  the sale of the
Designated  Preferred Securities to be sold by the Trust hereunder in the manner
specified in the Prospectus under the caption "Use of Proceeds."

          (i) For five years from the Effective Date, the Offerors shall furnish
to the  Representatives  copies of all reports and communications  (financial or
otherwise)  furnished by the Offerors to the holders of the Designated Preferred
Securities as a class, copies of all reports and financial statements filed with
or  furnished to the  Commission  (other than  portions  for which  confidential
treatment has been obtained from the Commission) or with any national securities
exchange or the Nasdaq National Market or other self-regulatory organization and
such other  documents,  reports and  information  concerning  the  business  and
financial  conditions  of the  Offerors as the  Representatives  may  reasonably
request,  other  than such  documents,  reports  and  information  for which the
Offerors has the legal obligation not to reveal to the Representatives.

          (j) For a period  of 90 days from the  Effective  Date,  the  Offerors
shall not,  directly  or  indirectly,  offer for sale,  sell or agree to sell or
otherwise dispose of any Designated Preferred  Securities,  any other beneficial
interests  in the  assets  of the  Trust or any  securities  of the Trust or the
Company that are substantially  similar to the Designated  Preferred  Securities
(other  than the Common  Securities  of the Trust to be issued to the  Company),
including any guarantee of such beneficial interests or substantially


                                       21
<PAGE>

similar securities,  or securities  convertible into or exchangeable for or that
represent  the right to receive any such  beneficial  interest or  substantially
similar  securities,  except for the  registration  of the Designated  Preferred
Securities and the sales to the Underwriters pursuant to this Agreement, without
the prior written consent of the Representatives.

          (k) The Offerors  shall use their best efforts to cause the Designated
Preferred  Securities to become quoted on the Nasdaq National Market, or in lieu
thereof a national securities exchange,  and to remain so quoted,  provided this
shall not prevent the Company from redeeming the Designated Preferred Securities
pursuant  to the  terms of the  Trust  Agreement.  If the  Designated  Preferred
Securities are exchanged for Debentures,  the Company shall use its best efforts
to have the Debentures  promptly  listed on the Nasdaq  National Market or other
organization on which the Designated  Preferred  Securities are then listed, and
to have the Debentures promptly registered under the 1934 Act.

          (l)  Subsequent  to the date of this  Agreement  and  through the date
which is the later of (i) the day following the date on which the  Underwriters'
option to purchase the Option Preferred  Securities shall expire or (ii) the day
following  the  Option  Closing  Date  with  respect  to  any  Option  Preferred
Securities that the Underwriters shall elect to purchase, except as described in
or  contemplated  by  the  Prospectus,  neither  the  Offerors  nor  any  of the
Subsidiaries  shall take any action (or refrain  from  taking any action)  which
will result in the Offerors or the Subsidiaries incurring any material liability
or  obligation,  direct or contingent,  or enter into any material  transaction,
except in the ordinary  course of  business,  or take or refrain from taking any
action  which  will  cause or  result  in any  material  adverse  change  in the
financial  position,  capital stock, or any material increase in long-term debt,
obligations  under capital  leases or short-term  borrowings of the Offerors and
the Subsidiaries on a consolidated basis.

          (m) Except as described in the Prospectus, the Offerors shall not, for
a period of 180 days after the date hereof, without the prior written consent of
the Representatives,  purchase, redeem or call for redemption, or prepay or give
notice of prepayment (or announce any redemption or call for redemption,  or any
repayment  or notice  of  prepayment)  of the  Offerors'  securities;  provided,
however,  that this shall not apply to  repurchases by the Company of its common
stock.

          (n) The Offerors shall not take,  directly or  indirectly,  any action
designed to result in or which constitutes or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any security
of the  Offerors  in  connection  with  the  sale or  resale  of the  Designated
Preferred  Securities in violation of the  Commission's  rules and  regulations,
including,  but not limited to,  Regulation M, and the Offerors are not aware of
any such action taken or to be taken by any affiliate of the Offerors.

          (o) Prior to the Closing Date (and, if applicable,  the Option Closing
Date),  the  Offerors  will not issue any press  release or other  communication
directly  or  indirectly  or hold  any  press  conference  with  respect  to the
Offerors,   the  Subsidiaries  or  the  offering  of  the  Designated  Preferred
Securities without your prior consent.

          (p) The  Offerors  shall  comply  with all  registration,  filing  and
reporting  requirements of the 1934 Act for so long as the Preferred  Securities
or the Debentures shall remain outstanding.

     5. Payment of Expenses.

     Whether or not this  Agreement is terminated or the sale of the  Designated
Preferred  Securities to the Underwriters is consummated,  the Company covenants
and agrees that it will pay or cause to be paid  (directly or by  reimbursement)
all costs and expenses  incident to the  performance  of the  obligations of the
Offerors under this Agreement, including:


                                       22
<PAGE>

          (a) the preparation,  printing,  filing,  delivery and shipping of the
initial registration statement,  each Preliminary  Prospectus,  the Registration
Statement and the Prospectus and any amendments or supplements  thereto, and the
printing,  delivery and shipping of this  Agreement  and any other  underwriting
documents (including, without limitation, selected dealers agreements);

          (b) all fees,  expenses and disbursements of the Offerors' counsel and
accountants;

          (c)  all  fees  and   expenses   incurred  in   connection   with  the
qualification  of  the  Designated  Preferred  Securities,  Debentures  and  the
Guarantee under the securities or blue sky laws of such jurisdictions as you may
request, including all filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith.

          (d) all fees and  expenses  incurred in  connection  with filings made
with the NASD and DTC;

          (e) any applicable fees and other expenses incurred in connection with
the listing of the  Designated  Preferred  Securities  and, if  applicable,  the
Guarantee and the Debentures on the Nasdaq National Market;

          (f) the cost of furnishing  to you copies of the initial  registration
statements,  any  Preliminary  Prospectus,  the  Registration  Statement and the
Prospectus and all amendments or supplements thereto;

          (g) the costs and charges of any transfer  agent or registrar  and the
fees and disbursements of counsel for any transfer agent or registrar;

          (h) all costs and expenses  (including  stock transfer taxes) incurred
in  connection  with the  printing,  issuance  and  delivery  of the  Designated
Preferred Securities to the Underwriters;

          (i) all expenses  incident to the preparation,  execution and delivery
of the Trust Agreement,  the Indenture, the Guarantee and the Expense Agreement;
and

          (j) all other costs and expenses  incident to the  performance  of the
obligations of the Company  hereunder and under the Trust Agreement that are not
otherwise specifically provided for in this Section 5.

     If the  sale  of  Designated  Preferred  Securities  contemplated  by  this
Agreement  is not  completed  due to  termination  pursuant to the terms  hereof
(other  than  pursuant  to  Section 9  hereof),  the  Company  will pay you your
accountable out-of-pocket expenses in connection herewith or in contemplation of
the performance of your  obligations  hereunder,  including  without  limitation
travel  expenses,   fees,   expenses  and  disbursements  of  counsel  or  other
out-of-pocket  expenses incurred by you in connection with any discussion of the
Offering or the contents of the Registration Statement, any investigation of the
Offerors and the Subsidiaries,  or any preparation for the marketing,  purchase,
sale or delivery of the Designated Preferred Securities,  in each case following
presentation of reasonably detailed invoices therefor.

     If the  sale  of  Designated  Preferred  Securities  contemplated  by  this
Agreement is completed, the Company shall not be responsible for payment of fees
or disbursements  of counsel for the Underwriters  other than in accordance with
paragraph  (c)  above,  or  for  the   reimbursement  of  any  expenses  of  the
Underwriters.


                                       23
<PAGE>

     6. Conditions of the Underwriters' Obligations.

     The  obligations  of the  Underwriters  to  purchase  and pay for the  Firm
Preferred  Securities  and,  following  exercise  of the  option  granted by the
Offerors in Section 1 of this Agreement,  the Option Preferred  Securities,  are
subject,  in your sole discretion,  to the accuracy of the  representations  and
warranties and compliance  with the agreements of the Offerors  herein as of the
date hereof and as of the Closing  Date (or in the case of the Option  Preferred
Securities,  if any,  as of the Option  Closing  Date),  to the  accuracy of the
written  statements of the Offerors made pursuant to the provisions  hereof,  to
the performance by the Offerors of their covenants and obligations hereunder and
to the following additional conditions:

          (a) If the Registration Statement or any amendment thereto filed prior
to the  Closing  Date  has not  been  declared  effective  prior  to the time of
execution  hereof,  the Registration  Statement shall become effective not later
than 10:00 a.m., St. Louis time, on the first business day following the time of
execution of this Agreement,  or at such later time and date as you may agree to
in writing. If required,  the Prospectus and any amendment or supplement thereto
shall have been timely filed in accordance  with Rule 424(b) and Rule 430A under
the 1933 Act and Section 4(a) hereof. No stop order suspending the effectiveness
of the Registration  Statement or any amendment or supplement thereto shall have
been issued under the 1933 Act or any applicable  state  securities  laws and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to the knowledge of the Offerors or the  Representatives,  shall be contemplated
by the  Commission  or any  state  authority.  Any  request  on the  part of the
Commission or any state authority for additional  information (to be included in
the Registration Statement or Prospectus or otherwise) shall have been disclosed
to you and complied with to your satisfaction and to the satisfaction of counsel
for the Underwriters.

          (b) No  Underwriter  shall have  advised  the Company at or before the
Closing Date (and, if applicable, the Option Closing Date) that the Registration
Statement or any  post-effective  amendment  thereto,  or the  Prospectus or any
amendment or supplement  thereto,  contains an untrue statement of a fact which,
in your opinion, is material or omits to state a fact which, in your opinion, is
material and is required to be stated therein or is necessary to make statements
therein (in the case of the  Prospectus or any amendment or supplement  thereto,
in light of the  circumstances  under which they were made) not misleading.  (c)
All corporate proceedings and other legal matters incident to the authorization,
form and validity of this  Agreement,  the Trust  Agreement,  and the Designated
Preferred  Securities,  and  the  authorization  and  form  of the  Registration
Statement  and  the  Prospectus,  other  than  financial  statements  and  other
financial  data, and all other legal matters  relating to this Agreement and the
transactions contemplated hereby or by the Trust Agreement shall be satisfactory
in all material respects to counsel for the  Underwriters,  and the Offerors and
the  Subsidiaries  shall  have  furnished  to such  counsel  all  documents  and
information  relating thereto that they may reasonably request to enable them to
pass upon such matters.

          (d)  Bingham  McHale,  LLP,  counsel  for  the  Offerors,  shall  have
furnished  to you their  signed  opinion,  dated the Closing  Date or the Option
Closing Date, as the case may be, in form and substance  satisfactory to counsel
for the Underwriters, to the effect that:

               (i)  The  Company  has  been  duly  incorporated  and is  validly
     existing under the laws of the State of Indiana,  and is duly registered as
     a bank  holding  company  under the BHC Act. To the best of such  counsel's
     knowledge,  the  entities  listed on  Exhibit A are the only  subsidiaries,
     direct  or  indirect,  of the  Company.  Each of the  Subsidiaries  is duly
     incorporated or organized,  validly existing and in good standing under the
     laws of its jurisdiction of incorporation


                                       24
<PAGE>

     or  organization,  as the  case  may  be.  Each  of  the  Company  and  the
     Subsidiaries  has full power  (corporate or otherwise) and authority to own
     or lease its  properties  and to conduct its  business as such  business is
     currently  conducted in all material respects.  Each of the Company and the
     Subsidiaries  is  duly  qualified  as a  foreign  corporation  to  transact
     business  and is in  good  standing  in each  jurisdiction  in  which  such
     qualification is required, whether by reason of the ownership or leasing of
     property or the conduct of business, except where the failure so to qualify
     or to be  in  good  standing  would  not  result,  individually  or in  the
     aggregate,  in a material  adverse  effect on the  condition  (financial or
     otherwise), business, prospects or results of operations of the Company and
     the  Subsidiaries  on a consolidated  basis.  To the best of such counsel's
     knowledge,  except  as  set  forth  on  Exhibit  A to  the  Agreement,  all
     outstanding shares of capital stock of the Subsidiaries are owned, directly
     or  indirectly,  by the Company  free and clear of any  security  interest,
     mortgage,  pledge,  lien,  encumbrance,  claim or  equity,  and none of the
     outstanding  shares  of  capital  stock of any  Subsidiary  was  issued  in
     violation of the preemptive or similar rights of any securityholder of such
     subsidiary,  and,  to the  best  of such  counsel's  knowledge,  except  as
     disclosed in the Prospectus,  there are no outstanding  rights,  options or
     warrants to  purchase  any such shares or  securities  convertible  into or
     exchangeable  for any such shares.  For purposes of this opinion,  the term
     "Subsidiary"  shall  not  include  Independent  Bankers'  Life  Reinsurance
     Company of Indiana, Ltd.

               (ii) The  Debentures  and Guarantee of the Company and the equity
     securities of the Trust conform to the description thereof contained in the
     Prospectus in all material respects. The authorized, issued and outstanding
     capital   stock  of  the   Company  is  as  set  forth  under  the  caption
     "Capitalization"  in the Prospectus  (except for subsequent  issuances,  if
     any,  pursuant to the Underwriting  Agreement,  the Merger  Agreement,  the
     Company's acquisitions in January, 2002 of two title insurance agencies, or
     pursuant to reservations,  agreements or employee benefit plans or programs
     referred  to in  the  Prospectus  or  pursuant  to the  Company's  dividend
     reinvestment  plan).  The  capital  stock  of the  Company  has  been  duly
     authorized and validly issued, and is fully paid and nonassesable. The form
     of  certificates to evidence the Designated  Preferred  Securities has been
     approved by the Trust and is in due and proper form and  complies  with all
     applicable requirements. To the best of such counsel's knowledge, there are
     no  outstanding  rights,   options  or  warrants  to  purchase,   no  other
     outstanding  securities  convertible  into  or  exchangeable  for,  and  no
     commitments, plans or arrangements to issue, any shares of capital stock of
     the Company or equity  securities of the Trust,  except as described in the
     Prospectus or pursuant to the Company's  dividend  reinvestment  plan,  and
     none of the  outstanding  shares of capital stock of the Company was issued
     in  violation  of  the   preemptive   or  other   similar   rights  of  any
     securityholder of the Company.

               (iii) The issuance, sale and delivery of the Designated Preferred
     Securities  and  Debentures in accordance  with the terms and conditions of
     this Agreement and the Indenture have been duly authorized by all necessary
     actions of the Offerors.  All of the Designated  Preferred  Securities have
     been  duly and  validly  authorized  and,  when  delivered  and paid for in
     accordance with this Agreement, will be duly and validly issued, fully paid
     and  nonassessable,  and will  conform  to the  description  thereof in the
     Registration  Statement,  the  Prospectus  and  the  Trust  Agreement.  The
     Designated  Preferred  Securities  have been  approved for quotation on the
     Nasdaq National Market subject to official notice of issuance. There are no
     preemptive or other rights to subscribe for or to purchase,  and other than
     as disclosed in the Prospectus, no restrictions upon the voting or transfer
     of,  any  equity  securities  of the  Offerors  pursuant  to the  corporate
     charter,   by-laws  or  other  governing   documents   (including   without
     limitation,  the Trust Agreement) of the Offerors,  or, to the best of such
     counsel's  knowledge,  any  agreement or other  instrument  to which either
     Offeror is a party or by which either Offeror may be bound.


                                       25
<PAGE>

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

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

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

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

               (viii) To the best of such  counsel's  knowledge,  neither of the
     Offerors  nor any of the  Subsidiaries  is in  breach or  violation  of, or
     default  under,  with or  without  notice  or lapse  of time or  both,  its
     corporate  charter,   by-laws  or  governing  document  (including  without
     limitation,  the Trust Agreement). To the best of such counsel's knowledge,
     no breach or default by the Company or any  Subsidiary  exists (nor has any
     event occurred which with notice, lapse of time, or both, would result in a
     breach  of, or  constitute  a  default  under)  in the due  performance  or
     observance  of any material  obligation,  agreement,  covenant or condition
     contained in any material  contract,  indenture,  mortgage,  deed of trust,
     loan or credit  agreement,  note,  lease,  franchise,  license or any other
     agreement or instrument to which either the Company or any  Subsidiary is a
     party or by which any of them or any of their respective  properties may be
     bound.  The execution,  delivery and  performance of this Agreement and the
     consummation of the transactions contemplated by this Agreement, the Merger
     Agreement,  the Trust Agreement,  the Indenture, the Guarantee or the other
     agreements  contemplated  hereby or  thereby  do not and will not  conflict
     with,  result in the creation or  imposition of any material  lien,  claim,
     charge,  encumbrance  or  restriction  upon any  property  or assets of the
     Offerors  or  the  Subsidiaries  or  the  Designated  Preferred  Securities
     pursuant  to, or  constitute  a breach or  violation  of, or  constitute  a
     default under,  with or without notice or lapse of time or both, any of the
     terms,  provisions  or  conditions  of the  charter,  by-laws or  governing
     document  (including  without  limitation,  the  Trust  Agreement)  of  the
     Offerors  or  the  Subsidiaries,   or  any  material  contract,  indenture,
     mortgage, deed of trust, loan or credit agreement,  note, lease, franchise,
     license or any other agreement or instrument to which either Offeror or the
     Subsidiaries is a party or by which any of them or any of their  respective
     properties may be bound or any order, decree, judgment, franchise, license,


                                       26
<PAGE>

     Permit,  rule  or  regulation  of any  court,  arbitrator,  government,  or
     governmental agency or instrumentality,  domestic or foreign, known to such
     counsel having jurisdiction over the Offerors or the Subsidiaries or any of
     their  respective  properties  which,  in each  case,  is  material  to the
     Offerors and the Subsidiaries on a consolidated basis.

               (ix)  To  the  best  of  such  counsel's  knowledge,  holders  of
     securities of the Offerors do not have any right that, if exercised,  would
     require  the  Offerors  to cause  such  securities  to be  included  in the
     Registration  Statement  or have  waived  such  right.  To the best of such
     counsel's  knowledge,  neither the Company nor any of the Subsidiaries is a
     party to any  agreement  or other  instrument  which  grants  rights for or
     relating to the registration of any securities of the Offerors.

               (x) To the best of such counsel's  knowledge,  no action, suit or
     proceeding  at law  or in  equity  is  pending  or  threatened  against  or
     affecting  the  Offerors or the  Subsidiaries  or any of their  properties,
     before or by any court or governmental official, commission, board or other
     administrative  agency,  authority or body, or any  arbitrator,  wherein an
     unfavorable  decision,  ruling or finding  could  reasonably be expected to
     have a material adverse effect on the consummation of this Agreement or the
     issuance and sale of the Designated  Preferred  Securities as  contemplated
     herein  or the  condition  (financial  or  otherwise),  earnings,  affairs,
     business,  prospects  or  results of  operations  of the  Offerors  and the
     Subsidiaries  on a consolidated  basis or which is required to be disclosed
     in the Registration Statement or the Prospectus and is not so disclosed.

               (xi) No authorization,  approval,  consent or order of or filing,
     registration  or  qualification   with,  any  person   (including   without
     limitation,  any court,  governmental  body or  authority)  is  required in
     connection with the transactions  contemplated by this Agreement, the Trust
     Agreement,  the Registration  Statement and the Prospectus,  except such as
     have been  obtained  under the 1933 Act,  the Trust  Indenture  Act and the
     Nasdaq National Market with respect to listing matters,  and except such as
     may be required under state securities laws or  Interpretations or Rules of
     the NASD in connection with the purchase and distribution of the Designated
     Preferred  Securities by the Underwriters.  All governmental and regulatory
     authorizations,  approvals, consents, orders and filings, registrations and
     qualifications  required  in order  to  consummate  the  Merger  have  been
     obtained or otherwise received.

               (xii) Each of the Registration Statement,  the Prospectus and the
     Merger  Proxy/Registration  Statement  and any  amendments  or  supplements
     thereto (other than the exhibits,  financial  statements or other financial
     data included therein or omitted therefrom and  Underwriters'  Information,
     as to which such counsel need express no opinion)  comply as to form in all
     material  respects with the  requirements  of the 1933 Act and the 1933 Act
     Regulations as of their respective dates of effectiveness or issuance.  The
     Company's  Annual  Report  on Form  10-K  and  Current  Report  on Form 8-K
     incorporated by reference in the Registration  Statement and the Prospectus
     (other than the  exhibits,  financial  statements or other  financial  data
     included  therein  or omitted  therefrom,  as to which  such  counsel  need
     express no opinion)  comply as to form in all  material  respects  with the
     requirements  of the  1934 Act and the  1934  Act  Regulations  as of their
     respective dates of effectiveness or filing.

               (xiii)  To the best of such  counsel's  knowledge,  there  are no
     contracts, agreements, leases or other documents of a character required to
     be  disclosed  in the  Registration  Statement,  Merger  Proxy/Registration
     Statement or the Prospectus or to be filed as exhibits to the  Registration
     Statement or Merger Proxy/Registration  Statement that are not so disclosed
     or filed.


                                       27
<PAGE>

               (xiv)  The  statements   under  the  captions   "Risk   Factors",
     "Description  of the Trust",  "Description  of the  Preferred  Securities,"
     "Description   of  the   Debentures,"   "Description   of  the  Guarantee,"
     "Relationship  Among  the  Preferred  Securities,  the  Debentures  and the
     Guarantee,"   "Certain  Federal  Income  Tax   Consequences,"   and  "ERISA
     Considerations"  in the Prospectus  and the  statements  under the captions
     "Description  of the Trusts",  "Description  of the Preferred  Securities,"
     "Description  of  the   Debentures,"   "Description  of  the   Guarantees,"
     "Relationship  Among  the  Preferred  Securities,  the  Debentures  and the
     Guarantee," in the Base  Prospectus  and the statements  under the captions
     "Regulation  and  Supervision"  in "Item 1.  Business"  and "Item 3.  Legal
     Proceedings" in the Company's Annual Report on Form 10-K for the year ended
     December 31, 2001,  incorporated by reference into the Prospectus,  insofar
     as such statements constitute a description of legal or regulatory matters,
     documents or instruments referred to therein, are accurate  descriptions of
     the matters purported to be summarized therein in all material respects and
     fairly  present the  information  called for with  respect to such legal or
     regulatory matters, documents and instruments.

               (xv) Such counsel has been advised by the staff of the Commission
     that the  Registration  Statement has become  effective under the 1933 Act;
     any required filing of the Prospectus pursuant to Rule 424(b) has been made
     within  the  time  period  required  by Rule  424(b);  to the  best of such
     counsel's  knowledge,  no stop order  suspending the  effectiveness  of the
     Registration  Statement has been issued and no proceedings for a stop order
     are pending or threatened by the Commission.

               (xvi)  Except  as  disclosed  in  the  Prospectus,  there  are no
     material  legal  restrictions  or, to the best  knowledge of such  counsel,
     contractual  encumbrances or  restrictions  required to be disclosed on the
     ability  of the  Subsidiaries  (A) to  pay  dividends  or  make  any  other
     distributions  on its  capital  stock  or to pay  indebtedness  owed to the
     Offerors,  (B) to make any loans or  advances  to, or  investments  in, the
     Offerors or (C) to transfer any of its property or assets to the Offerors.

               (xvii) To the best of such counsel's knowledge,  the Offerors and
     the  Subsidiaries  possess and are  operating in all  material  respects in
     compliance  with the  terms,  provisions  and  conditions  of all  Permits,
     consents,   licenses,    franchises   and   governmental   and   regulatory
     authorizations  ("Authorizations")  required to conduct  their  business as
     currently  conducted  and  which  are  material  to the  Offerors  and  the
     Subsidiaries on a consolidated  basis,  except in those instances where the
     loss thereof or non-compliance  therewith would not have a material adverse
     effect  on the  condition  (financial  or  otherwise),  earnings,  affairs,
     business,  prospects  or  results of  operations  of the  Offerors  and the
     Subsidiaries  on a  consolidated  basis;  to the  best  of  such  counsel's
     knowledge,  all such Authorizations are valid and in full force and effect,
     and, to the best of such counsel's knowledge, no action, suit or proceeding
     is pending or  threatened  which may lead to the  revocation,  termination,
     suspension  or  non-renewal  of any  such  Authorization,  except  in those
     instances  where the loss  thereof or  non-compliance  therewith  would not
     materially  impair  the  ability of the  Offerors  or the  Subsidiaries  to
     conduct their  businesses  and would not have a material  adverse effect on
     the  condition  (financial  or  otherwise),  earnings,  affairs,  business,
     prospects or results of operations of the Offerors and the  Subsidiaries on
     a consolidated basis.

               (xviii)  Neither the Company nor the Trust is and,  after  giving
     effect to the offering and sale of the Designated  Preferred Securities and
     the  application  of the proceeds  thereof as described in the  Prospectus,
     neither  the  Company nor the Trust will be, an  "investment  company,"  an
     entity "controlled" by an "investment  company" or an "investment  adviser"
     as defined in the Investment Company Act and the Investment Advisers Act.


                                       28
<PAGE>

     In giving the above opinion,  such counsel may state that,  insofar as such
opinion involves factual matters, they have relied upon certificates of officers
of the Offerors including,  without limitation,  certificates as to the identity
of any and all material contracts, indentures,  mortgages, deeds of trust, loans
or credit agreements, notes, leases, franchises, licenses or other agreements or
instruments, and all material permits, easements, consents, licenses, franchises
and government regulatory authorizations,  for purposes of paragraphs (viii) and
(xvii) hereof,  and  certificates of public  officials.  In giving such opinion,
such  counsel may rely upon the opinion of  Richards,  Layton & Finger,  special
Delaware counsel to the Offerors as to certain matters relating to the Trust and
the Designated Preferred Securities which are governed by Delaware law.

     Such counsel shall also confirm that, in connection with the preparation of
the  Registration  Statement and  Prospectus,  such counsel has  participated in
conferences  with  officers and  representatives  of the Offerors and with their
independent  public  accountants  and  with  you  and  your  counsel,  at  which
conferences  such counsel made inquiries of such officers,  representatives  and
accountants and discussed in detail the contents of the Registration  Statement,
the  Prospectus  and the Merger  Proxy/Registration  Statement and the documents
incorporated  therein by reference and such counsel has no reason to believe (A)
that the Registration Statement and the Merger  Proxy/Registration  Statement or
any amendment thereto (except for the financial statements and related schedules
included therein or omitted therefrom or Underwriters' Information,  as to which
such counsel need express no opinion),  at the time the  Registration  Statement
and  the  Merger  Proxy/Registration  Statement  or any  such  amendment  became
effective, contained any untrue statement of a material fact or omitted to state
any  material  fact  required  to be stated  therein  or  necessary  to make the
statements therein not misleading or (B) that the Prospectus or any amendment or
supplement thereto and the documents  incorporated  therein by reference (except
for the financial  statements and related schedules  included therein or omitted
therefrom or Underwriters' Information, as to which such counsel need express no
opinion),  at the time the  Registration  Statement became effective (or, if the
term  "Prospectus"  refers to the prospectus first filed pursuant to Rule 424(b)
of the 1933 Act Regulations, at the time the Prospectus was issued), at the time
any such amended or supplemented Prospectus was issued, at the Closing Date and,
if  applicable,  the Option  Closing  Date,  contained  or  contains  any untrue
statement  of a material  fact or omitted  or omits to state any  material  fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under which they were made,  not  misleading or (C)
that  there  is any  amendment  to the  Registration  Statement  and the  Merger
Proxy/Registration  Statement  required  to be filed that has not  already  been
filed.

          (e)  Richards,  Layton  &  Finger,  special  Delaware  counsel  to the
Offerors,  shall have furnished to you their signed opinion, dated as of Closing
Date or the  Option  Closing  Date,  as the case may be,  in form and  substance
satisfactory to such counsel, to the effect that:

               (i) The Trust has been duly  created  and is validly  existing in
     good  standing as a business  trust under the Delaware  Business  Trust Act
     and, under the Trust Agreement and the Delaware Business Trust Act, has the
     trust power and  authority  to conduct its  business  as  described  in the
     Prospectus.

               (ii) The Trust has all  requisite  trust  power to enter into and
     perform its  obligations  under this  Agreement.  The Trust  Agreement is a
     legal,  valid and binding  agreement  of the Company,  as sponsor,  and the
     Trustees,  and is  enforceable  against the  Company,  as sponsor,  and the
     Trustees, in accordance with its terms.

               (iii) Under the Trust  Agreement and the Delaware  Business Trust
     Act, this  Agreement  and its execution and delivery by the Trust,  and the
     performance  by  the  Trust  of  its  obligations  thereunder,   have  been
     authorized by all requisite trust action on the part of the Trust.


                                       29
<PAGE>

               (iv) The issuance,  sale and delivery of the Designated Preferred
     Securities in accordance with the Trust Agreement have been duly authorized
     by all necessary action of the Trust. The Designated  Preferred  Securities
     have been duly and  validly  authorized  by the Trust  Agreement,  and when
     issued and sold in  accordance  with the Trust  Agreement,  the  Designated
     Preferred  Securities will be, subject to the  qualifications  set forth in
     paragraph (v) below,  fully paid and nonassessable  beneficial  interest in
     the  assets  of the  Trust  and  entitled  to  the  benefits  of the  Trust
     Agreement.  The form of certificate  to evidence the  Designated  Preferred
     Securities has been approved by the Trust and is in due and proper form and
     complies with all applicable  requirements  of the Delaware  Business Trust
     Act.

               (v) Holders of  Designated  Preferred  Securities,  as beneficial
     owners of the Trust,  will be entitled to the same  limitation  of personal
     liability  extended to  shareholders  of private,  for-profit  corporations
     organized under the General Corporation Law of the State of Delaware.  Such
     opinion may note that the holders of Designated Preferred Securities may be
     obligated to make payments as set forth in the Trust Agreement.

               (vi)  Under  the  Delaware  Business  Trust  Act  and  the  Trust
     Agreement,  the  issuance of the  Designated  Preferred  Securities  is not
     subject to preemptive rights or other similar rights.

               (vii)  The  issuance  and  sale by the  Trust  of the  Designated
     Preferred Securities and the Common Securities, the execution, delivery and
     performance by the Trust of this  Agreement,  and the  consummation  of the
     transactions  contemplated by this Agreement,  do not violate (a) the Trust
     Agreement, or (b) any applicable Delaware law, rule or regulation.

     Such  opinion  may  state  that it is  limited  to the laws of the State of
Delaware and that the opinion  expressed  in paragraph  (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy,  insolvency,  moratorium,
receivership,  reorganization,  liquidation,  fraudulent  conveyance  and  other
similar  laws  relating to or  affecting  the rights and  remedies of  creditors
generally,  (ii)  principles  of equity,  including  applicable  law relating to
fiduciary duties  (regardless of whether  considered and applied in a proceeding
in equity or at law),  and (iii) the effect of  applicable  public policy on the
enforceability of provisions relating to indemnification or contribution.

          (f) Lewis, Rice & Fingersh, L.C., counsel for the Underwriters,  shall
have  furnished you their signed  opinion,  dated the Closing Date or the Option
Closing  Date,  as the case  may be,  with  respect  to the  sufficiency  of all
corporate  procedures and other legal matters  relating to this  Agreement,  the
validity of the Designated Preferred Securities, the Registration Statement, the
Prospectus  and such other  related  matters as you may  reasonably  request and
there  shall  have been  furnished  to such  counsel  such  documents  and other
information  as they may  request  to enable  them to pass on such  matters.  In
giving such opinion, Lewis, Rice & Fingersh, L.C. may rely as to matters of fact
upon  statements  and  certifications  of officers of the  Offerors and of other
appropriate  persons  and may rely as to matters  of law,  other than law of the
United States and the State of Missouri, and upon the opinions of Bingham McHale
LLP and Richards, Layton & Finger described herein.

          (g) On the date of this  Agreement  and on the Closing  Date (and,  if
applicable,  any Option Closing Date), the  Representatives  shall have received
from BKD LLP and Crowe,  Chizek and Company LLP letters,  dated the date of this
Agreement and the Closing Date (and, if  applicable,  the Option  Closing Date),
respectively,  in  form  and  substance  satisfactory  to  the  Representatives,
confirming  that,  with  respect  to  BKD  LLP,  they  are  independent   public
accountants with respect to the Company and the Subsidiaries, within the meaning
of the 1933 Act and the 1933 Act Regulations and, with respect to Crowe,  Chizek
and  Company,  LLP,  they are  independent  public  accountants  with respect to
Lafayette and


                                       30
<PAGE>

its  subsidiaries  within  the  meaning  of  the  1933  Act  and  the  1933  Act
Regulations, and each stating in effect that:

               (i) In their opinion,  the consolidated  financial  statements of
     the Company or Lafayette,  as the case may be, audited by them and included
     or incorporated  by reference in the  Registration  Statement  comply as to
     form in all material respects with the applicable  accounting  requirements
     of the 1933 Act,  the 1934 Act, the 1933 Act  Regulations  and the 1934 Act
     Regulations.

               (ii) On the basis of  limited  procedures,  not  constituting  an
     audit in  accordance  with  U.S.  generally  accepted  auditing  standards,
     consisting of a reading of the unaudited interim  financial  statements and
     other  information  referred  to below,  a reading of the latest  available
     unaudited  condensed  consolidated  financial  statements of the Company or
     Lafayette,  as the  case  may be,  inspection  of the  minute  books of the
     Company  or  Lafayette,  as the case may be,  since the date of the  latest
     audited financial  statements of the Company or Lafayette,  as the case may
     be, included or incorporated  by reference in the  Registration  Statement,
     inquiries  of officials  of the Company or  Lafayette,  as the case may be,
     responsible  for financial and accounting  matters and such other inquiries
     and  procedures  as may be specified in such letter,  nothing came to their
     attention that caused them to believe that:

                    (A) as of a specified  date not more than five days prior to
     the date of such  letter,  there have been any changes in the  consolidated
     capital stock of the Company or Lafayette, as the case may be, any increase
     in the consolidated  debt of the Company or Lafayette,  as the case may be,
     or any decreases in consolidated total assets or consolidated shareholders'
     equity of the  Company or  Lafayette,  as the case may be, or any  changes,
     decreases or increases in other items specified by the Representatives,  in
     each  case as  compared  with  amounts  shown  in the  latest  consolidated
     statement of financial  condition of the Company or Lafayette,  as the case
     may be, included or incorporated by reference in the Registration Statement
     except  in  each  case  for  changes,  increases  or  decreases  which  the
     Registration Statement specifically discloses have occurred or may occur or
     which are described in such letter; and

                    (B) for the period from the date of the latest  consolidated
     financial  statements  of the  Company  or  Lafayette,  as the case may be,
     included or incorporated by reference in the Registration  Statement to the
     specified date referred to in clause (iii)(A),  there were any decreases in
     the consolidated  interest income, net interest income or net income of the
     Company or Lafayette, as the case may be, or in the per share amount of net
     income of the  Company or  Lafayette,  as the case may be, or any  changes,
     decreases or increases in other items specified by the  Representatives  as
     compared  with the  comparable  period of the  preceding  year and with any
     other period of  corresponding  length  specified  by the  Representatives,
     except in each  case for  increases  or  decreases  which the  Registration
     Statement  discloses have occurred or may occur,  or which are described in
     such letter.

               (iii) In  addition  to the  audit  referred  to in  their  report
     included or incorporated by reference in the Registration Statement and the
     limited  procedures,  inspection  of  minute  books,  inquiries  and  other
     procedures  referred  to in  paragraph  (ii) above,  they have  carried out
     certain specified procedures,  not constituting an audit in accordance with
     U.S.  generally  accepted  auditing  standards,  with  respect  to  certain
     amounts,   percentages   and   financial   information   specified  by  the
     Representatives  which are derived from the general  accounting records and
     consolidated financial statements of the Company or Lafayette,  as the case
     may be,  which  appear  in the  Registration  Statement  and the  documents
     incorporated by reference  therein  specified by the  Representatives,  and
     have compared such amounts, percentages and financial information


                                       31
<PAGE>

     with the accounting  records and the material derived from such records and
     consolidated financial statements of the Company or Lafayette,  as the case
     may be, have found them to be in agreement.

               (iv) With respect to the pro forma  financial  information  which
     appear in the  Registration  Statement  and the documents  incorporated  by
     reference therein,  BKD LLP shall provide the information  contemplated in,
     and comment upon the matters described in, Example D "Comments on Pro Forma
     Information"  included in SAS No. 72 "Letters for  Underwriters and Certain
     Other Requesting Parties."

     In the event that the letter to be  delivered  on the date  hereof,  on the
Closing Date (and, if applicable, any Option Closing Date) referred to above set
forth any such changes,  decreases or increases as specified in clauses  (ii)(A)
or (ii)(B)  above,  or any exceptions  from such  agreement  specified in clause
(iii)  above,  it  shall  be a  further  condition  to  the  obligations  of the
Underwriters that the Representatives  shall have determined,  after discussions
with officers of the Company  responsible for financial and accounting  matters,
that such changes,  decreases,  increases or exceptions as are set forth in such
letters do not (x) reflect a material  adverse change in the items  specified in
clause  (ii)(A)  above  as  compared  with  the  amounts  shown  in  the  latest
consolidated  statement of financial  condition of the Company or Lafayette,  as
the case may be,  included or  incorporated  by  reference  in the  Registration
Statement,  (y)  reflect a material  adverse  change in the items  specified  in
clause  (ii)(B)  above as compared with the  corresponding  periods of the prior
year or other period specified by the Representatives, or (z) reflect a material
adverse  change in items  specified in clause (iii) above from the amounts shown
in the Preliminary Prospectus distributed by the Underwriters in connection with
the offering contemplated hereby or from the amounts shown in the Prospectus.

          (h) At the Closing Date and, if  applicable,  the Option Closing Date,
you shall have  received  certificates  of the chief  executive  officer and the
chief financial and accounting officer of the Company,  which certificates shall
be deemed to be made on behalf of the Company, dated as of the Closing Date and,
if  applicable,   the  Option  Closing  Date,  evidencing  satisfaction  of  the
conditions  of  Section  6(a)  and  stating  that  (i) the  representations  and
warranties  of the Company set forth in Section 2 hereof are  accurate as of the
Closing Date and, if  applicable,  the Option Closing Date, and that each of the
Offerors has complied with all  agreements  and satisfied all  conditions on its
part to be  performed  or  satisfied  at or prior to such  Closing  Date and, if
applicable, the Option Closing Date; (ii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any material adverse change in the condition  (financial or otherwise),
earnings,  affairs, business,  prospects or results of operations of the Company
and the Subsidiaries on a consolidated  basis;  (iii) since such dates there has
not  been  any  material  transaction  entered  into  by  the  Offerors  or  the
Subsidiaries  other than  transactions in the ordinary  course of business;  and
(iv) they have carefully examined the Registration  Statement and the Prospectus
as amended or  supplemented  and nothing has come to their  attention that would
lead them to believe that either the  Registration  Statement or the Prospectus,
or any amendment or supplement thereto as of their respective effective or issue
dates, contained,  and the Prospectus as amended or supplemented at such Closing
Date  (and,  if  applicable,  the  Option  Closing  Date),  contains  any untrue
statement of a material  fact,  or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein (in the case
of the Prospectus, in the light of the circumstances under which they were made)
not  misleading;  and (v)  covering  such other  matters  as you may  reasonably
request.  The officers'  certificate  of the Company shall further state that no
stop  order  affecting  the  Registration  Statement  is in effect  or, to their
knowledge, threatened.

          (i) At the Closing Date and, if  applicable,  the Option Closing Date,
you shall have received a certificate  of an  authorized  representative  of the
Trust  to the  effect  that to the  best of his or her  knowledge  based  upon a
reasonable  investigation,  the  representations  and warranties of the Trust in
this


                                       32
<PAGE>

Agreement  are true and  correct as though  made on and as of the  Closing  Date
(and, if applicable,  the Option Closing Date);  the Trust has complied with all
the agreements and satisfied all the conditions required by this Agreement to be
performed or satisfied by the Trust on or prior to the Closing  Date,  and since
the most recent date as of which information is given in the Prospectus,  except
as  described  in the  Prospectus,  the  Trust  has not  incurred  any  material
liabilities or obligations,  direct or contingent,  or entered into any material
transactions  not in the ordinary  course of business and there has not been any
material adverse change in the condition (financial or otherwise) of the Trust.

          (j) On the Closing Date,  all conditions  precedent  under each of the
Merger  Agreement,  the Trust  Agreement,  the Guarantee,  the Indenture and the
Expense Agreement,  other than delivery of the Merger consideration,  shall have
been  satisfied  or duly  waived,  and you  shall  have  received  copies of all
documentation required to evidence same.

          (k) The NASD,  upon review of the terms of the public  offering of the
Designated  Preferred  Securities,  shall not have objected to the Underwriters'
participation in such offering.

          (l) Prior to the Closing Date and, if  applicable,  the Option Closing
Date, the Offerors shall have furnished to you and counsel for the  Underwriters
all such other  documents,  certificates  and  opinions as they have  reasonably
requested.

     All  opinions,  certificates,  letters  and  other  documents  shall  be in
compliance with the provisions  hereof only if they are reasonably  satisfactory
in form and  substance  to you. The Offerors  shall  furnish you with  conformed
copies of such opinions, certificates,  letters and other documents as you shall
reasonably request.

     If any of the conditions  referred to in this Section 6 shall not have been
fulfilled when and as required by this Agreement,  this Agreement and all of the
Underwriters'  obligations  hereunder  may be terminated by you on notice to the
Company at, or at any time before,  the Closing Date or the Option Closing Date,
as  applicable.   Any  such  termination  shall  be  without  liability  of  the
Underwriters to the Offerors.

     7. Indemnification and Contribution.

          (a) The Offerors  jointly and  severally  agree to indemnify  and hold
harmless each Underwriter,  each of its directors, officers and agents, and each
person, if any, who controls any Underwriter within the meaning of the 1933 Act,
against any and all losses, claims, damages, liabilities and expenses (including
reasonable  costs of  investigation  and attorneys fees and expenses),  joint or
several, arising out of or based upon (i) any untrue statement or alleged untrue
statement  of a material  fact made by or on behalf of the  Company or the Trust
contained in Section 2 of this Agreement (or any certificate  delivered by or on
behalf of the  Company or the Trust  pursuant to  Sections  6(h),  6(i) and 6(l)
hereto) or in the registration statement as originally filed or the Registration
Statement,  the Base Prospectus,  any Preliminary Prospectus,  the Prospectus or
the Merger  Proxy/Registration  Statement,  or in any  amendment  or  supplement
thereto,  (ii) any omission or alleged  omission to state a material fact in the
registration  statement as originally filed or the Registration  Statement,  the
Base  Prospectus,  any  Preliminary  Prospectus,  the  Prospectus  or the Merger
Proxy/Registration  Statement,  or  in  any  amendment  or  supplement  thereto,
required to be stated  therein or necessary to make the  statements  therein not
misleading,  and against any and all losses,  claims,  damages,  liabilities and
expenses (including reasonable costs of investigation and attorneys fees), joint
or several,  arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Base  Prospectus,  any Preliminary
Prospectus, the Prospectus or the Merger Proxy/Registration Statement, or in any
amendment or supplement thereto, or arising out of or based upon any omission or
alleged  omission to state therein a


                                       33
<PAGE>

material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading or (iii) the  enforcement  of this  indemnification  provision or the
contribution   provisions  of  Section  7(d);  and  shall  reimburse  each  such
indemnified party for any reasonable legal or other expenses as incurred, but in
no event less frequently than 30 days after each invoice is submitted,  incurred
by them in connection with  investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim,  damage,  liability
or action, notwithstanding the possibility that payments for such expenses might
later be held to be  improper,  in which case such  payments  shall be  promptly
refunded;  provided,  however, that the Offerors shall not be liable in any such
case to the  extent,  but only to the  extent,  that any  such  losses,  claims,
damages,  liabilities  and  expenses  arise out of or are based  upon any untrue
statement  or  omission  or  allegation  thereof  that has been made  therein or
omitted  therefrom in reliance  upon and in  conformity  with the  Underwriters'
Information.  The foregoing  indemnity agreement is in addition to any liability
the Company or the Trust may otherwise have to any such indemnified party.

          (b) Each Underwriter,  severally and not jointly,  agrees to indemnify
and hold  harmless each Offeror,  each of the Company's  directors,  each of the
Company's  officers  who  signed  the  Registration   Statement,   each  of  the
Administrative  Trustees of the Trust and each  person,  if any, who controls an
Offeror  within the  meaning of the 1933 Act,  to the same extent as required by
the  foregoing  indemnity  from the Company to each  Underwriter,  but only with
respect to the Underwriters'  Information.  The foregoing indemnity agreement is
in addition to any liability  which any  Underwriter  may otherwise  have to any
such indemnified party.

          (c) If any action or claim  shall be brought or  asserted  against any
indemnified  party or any person  controlling an indemnified party in respect of
which  indemnity may be sought from the  indemnifying  party,  such  indemnified
party or controlling  person shall  promptly  notify the  indemnifying  party in
writing, and the indemnifying party shall assume the defense thereof,  including
the employment of counsel  reasonably  satisfactory to the indemnified party and
the payment of all expenses;  provided,  however,  that the failure so to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under such paragraph,  and further, shall
only relieve it from  liability  under such  paragraph to the extent  prejudiced
thereby.  Any indemnified  party or any such  controlling  person shall have the
right to employ  separate  counsel in any such action and to  participate in the
defense  thereof,  but the fees and  expenses  of such  counsel  shall be at the
expense of such  indemnified  party or such  controlling  person  unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing,  (ii) the  indemnifying  party has failed to assume  the  defense or to
employ counsel  reasonably  satisfactory to the  indemnified  party or (iii) the
named parties to any such action (including any impleaded  parties) include both
such indemnified party or such controlling person and the indemnifying party and
such  indemnified  party or such  controlling  person shall have been advised by
such counsel that there may be one or more legal  defenses  available to it that
are different from or in addition to those available to the  indemnifying  party
(in which case, if such  indemnified  party or controlling  person  notifies the
indemnifying  party in writing that it elects to employ separate  counsel at the
expense of the indemnifying  party,  the  indemnifying  party shall not have the
right to assume the defense of such action on behalf of such  indemnified  party
or such controlling person) it being understood,  however, that the indemnifying
party  shall  not,  in  connection  with any one such  action  or  separate  but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time and for all
such  indemnified  party(ies)  and  controlling  persons,  which  firm  shall be
designated in writing by the indemnified  party(ies)  (and, if such  indemnified
parties are Underwriters,  by you, as  Representatives).  Each indemnified party
and each  controlling  person,  as a  condition  of such  indemnity,  shall  use
reasonable  efforts to cooperate with the  indemnifying  party in the defense of
any such  action or claim.  The  indemnifying  party shall not be liable for any
settlement of any such action effected without its written consent, but if there
shall be a final judgment for the plaintiff in


                                       34
<PAGE>

any such action,  the  indemnifying  party agrees to indemnify and hold harmless
any indemnified party and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.

     An indemnifying  party shall not, without the prior written consent of each
indemnified party, settle, compromise or consent to the entry of any judgment in
any pending or threatened claim,  action, suit or proceeding in respect of which
indemnity may be sought hereunder  (whether or not such indemnified party or any
person who controls such indemnified party within the meaning of the 1933 Act is
a party to such claim,  action,  suit or  proceeding),  unless such  settlement,
compromise  or  consent  includes  a  release  of each  such  indemnified  party
reasonably satisfactory to each such indemnified party and each such controlling
person from all liability arising out of such claim,  action, suit or proceeding
or unless the indemnifying  party shall confirm in a written agreement with each
indemnified party, that  notwithstanding any federal,  state or common law, such
settlement,  compromise or consent shall not alter the right of any  indemnified
party or controlling  person to  indemnification  or contribution as provided in
this Agreement.

          (d)  If  the  indemnification  provided  for  in  this  Section  7  is
unavailable  or  insufficient  to  hold  harmless  an  indemnified  party  under
paragraphs  (a),  (b) or (c) hereof in respect of any losses,  claims,  damages,
liabilities or expenses referred to therein,  then each  indemnifying  party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or  payable  by such  indemnified  party as a  result  of such  losses,  claims,
damages,  liabilities  or expenses (i) in such  proportion as is  appropriate to
reflect the relative  benefits  received by the Offerors on the one hand and the
Underwriters  on  the  other  from  the  offering  of the  Designated  Preferred
Securities  or (ii) if the  allocation  provided  by  clause  (i)  above  is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault  of the  Offerors  on the one hand and the  Underwriters  on the  other in
connection  with the  statements  or  omissions  that  resulted in such  losses,
claims,  damages,  liabilities  or  expenses,  as  well  as any  other  relevant
equitable considerations.  The relative benefits received by the Offerors on the
one hand and the  Underwriters  on the  other  shall be deemed to be in the same
proportion  as the  total  net  proceeds  from the  offering  of the  Designated
Preferred  Securities (before deducting  expenses) received by the Offerors bear
to the total underwriting  discounts,  commissions and compensation  received by
the  Underwriters,  in each case as set forth in the table on the cover  page of
the  Prospectus.  The relative  fault of the Offerors on the one hand and of the
Underwriters  on the other shall be  determined  by  reference  to,  among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the  Offerors  or by the  Underwriters  and the  parties'  relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such untrue statement or omission.  The Offerors and the Underwriters agree that
it would not be just and equitable if  contribution  pursuant to this  paragraph
(d) were  determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount  paid or payable by an  indemnified  party as a result of the losses,
claims,  damages,  liabilities and expenses referred to in the first sentence of
this paragraph (d) shall be deemed to include,  subject to the  limitations  set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection  with  investigating  or defending any such action or claim.
Notwithstanding  the provisions of this  paragraph (d), no Underwriter  shall be
required  to  contribute  any  amount in excess of the amount by which the total
price  at  which  the  Designated  Preferred  Securities  underwritten  by  such
Underwriter and distributed to the public were offered to the public exceeds the
amount of any damages that such  Underwriters has otherwise been required to pay
by reason of such  untrue or alleged  untrue  statement  or  omission or alleged
omission. No person guilty of fraudulent  misrepresentation  (within the meaning
of Section  11(f) of the 1933 Act) shall be  entitled to  contribution  from any
person who was not guilty of such fraudulent misrepresentation.


                                       35
<PAGE>

     For purposes of this paragraph (d), each person who controls an Underwriter
within the meaning of the 1933 Act shall have the same rights to contribution as
such Underwriter,  and each person who controls an Offeror within the meaning of
the 1933 Act,  each  officer and trustee of an Offeror who shall have signed the
Registration  Statement  and each  director  of an  Offeror  shall have the same
rights to  contribution  as the Offerors  subject in each case to the  preceding
sentence.  The  obligations of the Offerors under this paragraph (d) shall be in
addition  to any  liability  which  the  Offerors  may  otherwise  have  and the
obligations of the Underwriters under this paragraph (d) shall be in addition to
any liability that the Underwriters may otherwise have.

          (e)  The  indemnity  and  contribution  agreements  contained  in this
Section 7 and the  representations  and  warranties of the Offerors set forth in
this Agreement shall remain  operative and in full force and effect,  regardless
of (i) any  investigation  made by or on behalf of any Underwriter or any person
controlling  an  Underwriter  or  by or on  behalf  of  the  Offerors,  or  such
directors,  trustees or officers (or any person  controlling  an Offeror),  (ii)
acceptance of any Designated Preferred Securities and payment therefor hereunder
and (iii) any termination of this  Agreement.  A successor of any Underwriter or
of  an  Offeror,  such  directors,  trustees  or  officers  (or  of  any  person
controlling  an  Underwriter or an Offeror) shall be entitled to the benefits of
the  indemnity,  contribution  and  reimbursement  agreements  contained in this
Section 7.

          (f) The  Company  agrees to  indemnify  the Trust  against any and all
losses,  claims, damages or liabilities that may become due from the Trust under
this Section 7.

     8. Termination.

     You shall  have the right to  terminate  this  Agreement  at any time at or
prior to the Closing Date or, with respect to the  Underwriters'  obligation  to
purchase the Option Preferred Securities,  at any time at or prior to the Option
Closing Date, without liability on the part of the Underwriters to the Offerors,
if:

          (a) Either  Offeror  shall have  failed,  refused,  or been  unable to
perform any agreement on its part to be performed under this  Agreement,  or any
of the conditions  referred to in Section 6 shall not have been fulfilled,  when
and as required by this Agreement;

          (b) The Offerors or any of the  Subsidiaries  shall have sustained any
material loss or interference with its business from fire,  explosion,  flood or
other calamity,  whether or not covered by insurance,  or from any labor dispute
or court or  governmental  action,  order or decree which in the judgment of the
Representatives  materially  impairs the  investment  quality of the  Designated
Preferred Securities;

          (c) There has been since the respective dates as of which  information
is given in the Registration Statement or the Prospectus, any materially adverse
change in, or any development  which in your  reasonable  judgment is reasonably
likely to have a  material  adverse  effect  on,  the  condition  (financial  or
otherwise),  earnings, affairs, business,  prospects or results of operations of
the  Offerors  and the  Subsidiaries  on a  consolidated  basis,  whether or not
arising in the ordinary course of business;

          (d) There has occurred any outbreak or  escalation of  hostilities  or
other calamity or crisis (including, without limitation, an act of terrorism) or
material  change in general  economic,  political  or financial  conditions,  or
internal conditions,  the effect of which on the financial markets of the United
States  is such as to make it, in your  reasonable  judgment,  impracticable  to
market the Designated  Preferred Securities or enforce contracts for the sale of
the Designated Preferred Securities;


                                       36
<PAGE>

          (e) Trading  generally  on the New York Stock  Exchange,  the American
Stock  Exchange or the Nasdaq  National  Market  shall have been  suspended,  or
minimum or maximum  prices for trading shall have been fixed,  or maximum ranges
for prices for securities shall have been required,  by any of said exchanges or
market system or by the Commission or any other governmental authority; or

          (f) A banking  moratorium  shall have been declared by either federal,
New York or Indiana authorities; or

          (g) Any action shall have been taken by any  government  in respect of
its monetary affairs which, in your reasonable judgment,  has a material adverse
effect  on the  United  States  securities  markets  so as to make  it,  in your
reasonable judgment, impracticable to market the Designated Preferred Securities
or to enforce contracts for the sale of the Designated Preferred Securities.

     If this  Agreement  shall be  terminated  pursuant  to this  Section 8, the
Offerors  shall not then be under any  liability to the  Underwriters  except as
provided in Sections 5 and 7 hereof.

     9. Default of Underwriters.

     If  any  Underwriter  or  Underwriters   shall  default  in  its  or  their
obligations to purchase Designated  Preferred  Securities  hereunder,  the other
Underwriters  shall be obligated  severally,  in proportion to their  respective
commitments  hereunder,  to purchase the Designated  Preferred  Securities which
such  defaulting  Underwriter  or  Underwriters  agreed but failed to  purchase;
provided,  however,  that  the  non-defaulting  Underwriters  shall  be under no
obligation to purchase  such  Designated  Preferred  Securities if the aggregate
number of Designated Preferred Securities to be purchased by such non-defaulting
Underwriters  shall exceed 110% of the aggregate  underwriting  commitments  set
forth in  Schedule  I  hereto,  and  provided  further,  that no  non-defaulting
Underwriter shall be obligated to purchase  Designated  Preferred  Securities to
the extent that the number of such Designated  Preferred Securities is more than
110% of such  Underwriter's  underwriting  commitment  set forth in  Schedule  I
hereto.

     In the event that the  non-defaulting  Underwriters are not obligated under
the above paragraph to purchase the Designated  Preferred  Securities  which the
defaulting  Underwriter  or  Underwriters  agreed  but failed to  purchase,  the
Representatives  may  in  their  discretion  arrange  for  one  or  more  of the
Underwriters  or for  another  party or  parties  to  purchase  such  Designated
Preferred  Securities on the terms contained  herein. If within one business day
after such default the  Representatives  do not arrange for the purchase of such
Designated Preferred Securities, then the Company shall be entitled to a further
period of one  business  day within  which to procure  another  party or parties
satisfactory  to the  Representatives  to  purchase  such  Designated  Preferred
Securities on such terms.

     In the event that the Representatives or the Company do not arrange for the
purchase of any Designated  Preferred  Securities to which a default  relates as
provided above, this Agreement shall be terminated.

     If the remaining  Underwriters  or  substituted  underwriters  are required
hereby or agree to take up all or a part of the Designated  Preferred Securities
of a defaulting  Underwriter or  Underwriters as provided in this Section 9, (i)
you shall have the right to postpone  the Closing  Date for a period of not more
than five full  business  days,  in order to effect  any  changes  that,  in the
opinion of counsel  for the  Underwriters  or the  Company,  may thereby be made
necessary  in the  Registration  Statement  or the  Prospectus,  or in any other
documents or agreements,  and the Company agrees promptly to file any amendments
to the  Registration  Statement or supplements to the Prospectus  which,  in its
opinion,  may  thereby  be made  necessary  and (ii) the  respective  numbers of
Designated Preferred Securities to be purchased by the remaining Underwriters or
substituted  underwriters  shall  be taken  as the  basis of their


                                       37
<PAGE>

underwriting  obligation  for all  purposes of this  Agreement.  Nothing  herein
contained shall relieve any defaulting  Underwriter of any liability it may have
for  damages  occasioned  by its  default  hereunder.  Any  termination  of this
Agreement  pursuant to this Section 9 shall be without  liability on the part of
any non-defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 7.

     10. Effective Date of Agreement.

     If the Registration  Statement is not effective at the time of execution of
this Agreement,  this Agreement shall become  effective on the Effective Date at
the time the  Commission  declares the  Registration  Statement  effective.  The
Company  shall  immediately   notify  the  Underwriters  when  the  Registration
Statement becomes effective.

     If the Registration Statement is effective at the time of execution of this
Agreement,  this Agreement  shall become  effective at the earlier of 11:00 a.m.
St. Louis time,  on the first full  business day following the day on which this
Agreement is executed,  or at such  earlier  time as the  Representatives  shall
release the Designated  Preferred  Securities for initial public  offering.  The
Representatives  shall notify the Offerors immediately after they have taken any
action which causes this Agreement to become effective.

     Until such time as this Agreement  shall have become  effective,  it may be
terminated by the Offerors,  by notifying you or by you, as  Representatives  of
the  several  Underwriters,   by  notifying  either  Offeror,  except  that  the
provisions of Sections 5 and 7 shall at all times be effective.

     11. Representations, Warranties and Agreements to Survive Delivery.

     The  representations,   warranties,   indemnities,   agreements  and  other
statements of the Offerors and their  officers and trustees set forth in or made
pursuant to this Agreement and the agreements of the  Underwriters  contained in
Section 7 hereof shall remain operative and in full force and effect  regardless
of any investigation made by or on behalf of the Offerors or controlling persons
of either Offeror, or by or on behalf of the Underwriters or controlling persons
of the  Underwriters  or any  termination or  cancellation of this Agreement and
shall survive delivery of and payment for the Designated Preferred Securities.

     12. Notices.

     Except as  otherwise  provided  in this  Agreement,  all  notices and other
communications  hereunder  shall be in writing  and shall be deemed to have been
duly given if delivered by hand,  mailed by registered or certified mail, return
receipt requested,  or transmitted by any standard form of telecommunication and
confirmed. Notices to Offerors shall be sent to 200 East Jackson Street, Muncie,
Indiana 47305, Attention:  Michael L. Cox (with a copy to Bingham McHale LLP, 10
West Market Street,  Indianapolis,  Indiana 46204, Attention: David R. Prechtel,
Esq.) and  notices  to the  Underwriters  shall be sent to  Stifel,  Nicolaus  &
Company, Incorporated, 501 North Broadway, 9th Floor, St. Louis, Missouri 63102,
Attention:  Rick E. Maples  (with a copy to Lewis,  Rice & Fingersh,  L.C.,  500
North Broadway, Suite 2000, St. Louis, Missouri 63102, Attention: Thomas C. Erb,
Esq.). In all dealings with the Company under this Agreement, Stifel, Nicolaus &
Company,  Incorporated  shall  act as  representative  of and on  behalf  of the
several Underwriters, and the Company shall be entitled to act and rely upon any
statement,  request, notice or agreement on behalf of the Underwriters,  made or
given by Stifel, Nicolaus & Company, Incorporated on behalf of the Underwriters,
as if the same shall have been made or given in writing by the Underwriters.


                                       38
<PAGE>

     13. Parties.

     The  Agreement  herein  set forth is made  solely  for the  benefit  of the
Underwriters and the Offerors and, to the extent expressed,  directors, trustees
and  officers  of the  Offerors,  any person  controlling  the  Offerors  or the
Underwriters, and their respective successors and assigns. No other person shall
acquire  or have  any  right  under or by  virtue  of this  Agreement.  The term
"successors and assigns" shall not include any purchaser,  in his status as such
purchaser, from the Underwriters of the Designated Preferred Securities.

     14. Governing Law.

     This  Agreement  shall be  governed  by the laws of the State of  Missouri,
without  giving  effect to the  choice  of law or  conflicts  of law  principles
thereof.

     15. Authority.

     Any certificate signed by an authorized officer of the Company or the Trust
and delivered to the Representatives or to counsel for the Underwriters pursuant
to this Agreement shall be deemed a  representation  and warranty by the Company
and the Trust to the Underwriters as to the matters covered thereby.


                                       39
<PAGE>

     16. Counterparts.

     This   Agreement   may  be  executed  by  facsimile  and  in  one  or  more
counterparts,  and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same Agreement.

                       Signatures appear on the next page


                                       40
<PAGE>

     If the  foregoing  is in  accordance  with  the your  understanding  of our
agreement,  please sign and return to us a counterpart  hereof,  whereupon  this
shall  become a binding  agreement  between  the  Company,  the Trust and you in
accordance with its terms.

                                        Very truly yours,

                                        FIRST MERCHANTS CORPORATION

                                        By: /s/ Larry R. Helms
                                            ---------------------------
                                        Name: Larry R. Helms
                                              -------------------------
                                        Title: Senior Vice President
                                               ------------------------

                                        FIRST MERCHANTS CAPITAL TRUST I

                                        By: /s/ Larry R. Helms
                                            ---------------------------
                                        Name: Larry R. Helms
                                              -------------------------
                                        Title: Administrative Trustee
                                              -------------------------

CONFIRMED AND ACCEPTED,
as of the date first above written

STIFEL, NICOLAUS & COMPANY, INCORPORATED

By: /s/ Patrick R. Koster
    -------------------------
Name:
      -----------------------
Title:
       ----------------------

For itself and as co-Representative
of the several Underwriters named in
Schedule I hereto.

RBC DAIN RAUSCHER INC.

By: /s/ Mark W. Biche
    -------------------------
Name: Mark W. Biche
      -----------------------
Title: Managing Director
       ----------------------

For itself and as co-Representative
of the several Underwriters named in
Schedule I hereto.


                                       41
<PAGE>

                                   SCHEDULE I

                     Underwriter                            Number of Securities

Stifel, Nicolaus & Company, Incorporated...........................858,000
RBC Dain Rauscher Inc..............................................572,000
A.G. Edwards & Sons, Inc............................................40,000
Bear, Stearns & Co. Inc.............................................40,000
Friedman, Billings, Ramsey & Co., Inc...............................40,000
Prudential Securities Incorporated..................................40,000
Advest, Inc.........................................................20,000
BB&T Capital Markets, a division of Scott &
   Stringfellow, Inc................................................20,000
City Securities Corporation.........................................20,000
D.A. Davidson & Co..................................................20,000
Fahnestock & Co. Inc................................................20,000
Ferris, Baker Watts, Inc............................................20,000
Howe Barnes Investments, Inc........................................20,000
Janney Montgomery Scott LLC.........................................20,000
NatCity Investments, Inc............................................20,000
Sandler O'Neill & Partners, L.P.....................................20,000
Stephens Inc........................................................20,000
Utendahl Capital Partners, L.P......................................20,000
David A. Noyes & Company.............................................5,000
Redwine & Company, Inc...............................................5,000
Smith, Moore & Co....................................................5,000
Wunderlich Securities Inc............................................5,000
Total............................................................1,850,000
<PAGE>

                                    EXHIBIT A

                              LIST OF SUBSIDIARIES

Decatur Bank & Trust Company
First Merchants Bank, National Association
First Merchants Insurance Services, Inc.
First Merchants Reinsurance Co. Ltd. (First Merchants Corporation owns 79%)
The First National Bank of Portland
First United Bank
Frances Slocum Bank & Trust Company
The Madison Community Bank
The Randolph County Bank
The Union County National Bank of Liberty
First Merchants Capital Trust I
First Merchants Capital Trust II
First Merchants Capital Trust III
Indiana Title Insurance Company
Indiana Title Insurance Company, LLC
   (First Merchants Corporation owns, indirectly, 52.12%)
Lafayette Bank and Trust Company
Independent Bankers' Life Reinsurance Company of Indiana, Ltd.
   (First Merchants Corporation owns, indirectly, 8.54%) (sale pending)