Document:

<PAGE>   1
                                                                     EXHIBIT 4.1

                          FIRST SUPPLEMENTAL INDENTURE
                          Dated as of December 4, 2000

                                       to

                                   INDENTURE

                         Dated as of November 28, 2000

                                    between

                        NATIONAL HEALTH INVESTORS, INC.

                                      and

                     U.S. BANK TRUST NATIONAL ASSOCIATION,

                                   as Trustee

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

         Senior Subordinated Convertible Debentures due January 1, 2006

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

<PAGE>   2

                          FIRST SUPPLEMENTAL INDENTURE

                  FIRST SUPPLEMENTAL INDENTURE, dated as of December 4, 2000
between National Health Investors, Inc., a real estate investment trust (the
"Company"), and U.S. Bank Trust National Association, a national banking
association (the "Trustee"), to that certain Indenture, dated as of November
28, 2000, between the Company and the Trustee (the "Indenture").

                  WHEREAS, the parties hereto have entered into the Indenture
which provides for the issuance by the Company of the individual series of
securities thereunder, upon the Company and Trustee entering into a
supplemental indenture to the Indenture authorizing such series; and

                  WHEREAS, the Company wishes to issue its first series of
securities thereunder, designated as its Senior Subordinated Convertible
Debentures due January 1, 2006 (the "Debentures"); and

                  WHEREAS, all acts necessary to constitute this First
Supplemental Indenture as a valid, binding and legal obligation of the Company
have been done and performed.

                  NOW, THEREFORE, witnesseth that, in consideration of the
premises and of the covenants contained herein, it is hereby agreed as follows:

                                  ARTICLE ONE

                          The Terms of the Debentures

                  In accordance with Sections 2.01 and 2.02 of the Indenture,
the Company will issue its series of Debentures in the aggregate principal
amount of up to $20,000,000. Each Debenture shall be substantially in the
following form:

<PAGE>   3

                        NATIONAL HEALTH INVESTORS, INC.

         Senior Subordinated Convertible Debentures Due January 1, 2006

                  NATIONAL HEALTH INVESTORS, INC., a real estate investment
trust, promises to pay to

Prime plus 1%                                                  Prime plus 1%
DUE January 1, 2006                                      DUE January 1, 2006

                                S P E C I M E N

or registered assigns, the principal sum of Twenty Million Dollars, on January
1, 2006

                               CUSIP 63633D AD 6

           Interest Payment Dates: April 15, July 15, October 15 and January 15
           Record Dates: April 1, July 1, October 1 and January 1

                  Additional provisions of this Security are set forth on other
side of this Security.

Dated:
CERTIFICATE OF AUTHENTICATION                   NATIONAL HEALTH INVESTORS, INC.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the
Securities referred to in the within            By:
mentioned Indenture.                                     -----------------------
                                                         President

By:                                             By:
   -------------------------                             -----------------------
    Authorized Signatory                                 Secretary

                              Reverse of Debenture
                                  Page 1 of 8

<PAGE>   4

                        NATIONAL HEALTH INVESTORS, INC.
                  Subordinated Convertible Debentures Due 2006

                  1.       Interest. National Health Investors, Inc., a real
estate investment trust (the "Company"), promises to pay interest on the
principal amount of this Security at the annual rate of Prime (as reported in
the Money Section of the Wall Street Journal) plus 1%, adjusted quarterly on
January 1, April 1, July 1 and October 1 for the quarter commencing on the
date; provided, the interest rate shall not be below 9% and the interest rate
for the first period of December 29, 2000 to March 31, 2001 shall equal 10.5%.
The Company will pay interest quarterly in arrears on January 15, April 15,
July 15 and October 15 of each year beginning April 15, 2001. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from December 29, 2000; provided that,
if there is no existing Default in the payment of interest, and if this
Security is authenticated between a record date referred to on the face hereof
and the next succeeding interest payment date, interest shall accrue from such
interest payment date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

                  2.       Method of Payment. The Company will pay interest on
the Securities (except defaulted interest) to the Persons who are the
registered Holders of the Securities at the close of business on the January 1,
April 1, July 1 or October 1 next preceding the interest payment date. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
The Company, however, may pay principal and interest by its check payable in
such money. It may mail an interest check to a Holder's registered address.

                  The final installment of principal of and premium, if any, on
this Security shall be payable only upon surrender of this Security at the
office or agency designated by the Trustee. Payments of principal of and
premium, if any, and interest on this Security shall be made at the office or
agency designated by the Trustee, or, in the case of any such payments other
than the final payment of principal and premium, if any, at the Company's
option, by check mailed to the Person entitled thereto at such Person's address
last appearing on the Company's register.

                  3.       Registrar and Agents.  Initially, U.S. Bank Trust
National Association, will act as Registrar, Paying Agent, Conversion Agent and
agent for service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, Conversion Agent and agent for service of notices
and demands without notice. The Company or any of its Subsidiaries may act as
Paying Agent or Conversion Agent. The address of U.S. Bank Trust National
Association is 180 East Fifth Street, St. Paul, Minnesota 55101.

                  4.       Indenture; Limitations.  The Company issued the
Securities under an Indenture dated as of November 28, 2000 (the "Indenture")
between the Company and U.S. Bank Trust National Association, the trustee (in
such capacity, the "Trustee"). Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made

                              Reverse of Debenture
                                  Page 2 of 8

<PAGE>   5

part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code 77aaa-77bbbb) as in effect on the date of the Indenture. The Securities
are subject to all such terms, and the Holders of the Securities are referred
to the Indenture and said Act for a statement of them.

                  The Securities are general unsecured obligations of the
Company limited to $20,000,000 principal amount. The Indenture imposes certain
limitations on the ability of the Company to, among other things, make payments
in respect of its Capital Stock, merge or consolidate with any other Person and
sell, lease, transfer or otherwise dispose of its properties or assets.

                  5.       Optional Redemption by the Company. The Company may,
at its option, redeem the Securities, at any time after January 1, 2002 in
whole or from time to time in part. In addition, the Company may, at its
option, redeem the Securities in whole or in part, at any time, as necessary
for the Company to continue to qualify for Federal tax treatment as a real
estate investment trust ("REIT") under Sections 856 through 860 of the Internal
Revenue Code. The Securities will be immediately redeemable by the Company to
the extent, but only to the extent, deemed sufficient by the Board of Directors
of the Company to prevent the Holder of such Securities or any other person
having an interest therein (if the Securities were thereupon converted) from
being deemed to own shares of Capital Stock in excess of the limits prescribed
in Article Ninth of the Company's Charter. In each of the foregoing, the
Redemption Price shall be equal to 100% of the principal amount thereof, plus
accrued and unpaid interest to the date of redemption.

                  6.       Notice of Redemption. Notice of redemption will be
mailed at least 30 days, but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at his registered address. On and
after the Redemption Date interest ceases to accrue on Securities or portions
of them called for redemption.

                  7.       Conversion. A Holder of a Security may convert such
Security into shares of common stock of the Company at any time on and after
July 31, 2001 and before the close of business on January 1, 2006. If the
Security is called for redemption, the Holder may convert it at any time before
the close of business on the date fixed for such redemption. The initial
conversion price is $7.00 per share, subject to adjustment in certain events.
To determine the number of shares issuable upon conversion of a Security,
divide the principal amount, payable at maturity, to be converted by the
conversion price in effect on the conversion date. The Company will deliver a
check for any fractional share.

                  To convert a Security, a Holder must (1) complete and sign
the conversion notice on the back of the Security, (2) surrender the Security
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax if required. No payment or adjustment is to be made on
conversion for interest accrued hereon or for dividends on shares of common
stock issued on conversion; provided, however, that if a Security is
surrendered for conversion after the record date for a payment of interest and
on or before the interest payment date, then, notwithstanding such conversion,
the interest falling due to such interest payment date will be paid to the
Person in whose name the Security is

                              Reverse of Debenture
                                  Page 3 of 8

<PAGE>   6

registered at the close of business on such record date and any Security
surrendered for conversion during the period from the close of business on any
regular record payment date to the opening of business on the corresponding
interest payment date must be accompanied by payment of an amount equal to the
interest payable on such interest payment date. A Holder may convert a portion
of a Security if the remaining principal amount after conversion is equal to
$5,000 or more.

                  If the Company is a party to a consolidation or merger or a
transfer or lease of all or substantially all of its assets, the right to
convert a Security into shares of common stock may be changed into a right to
convert it into securities, cash or other assets of the Company or another
Person.

                  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, A HOLDER
SHALL NOT BE ENTITLED TO EFFECT THE CONVERSION OF, AND NEITHER THE COMPANY, THE
CONVERSION AGENT NOR THE REGISTRAR SHALL BE REQUIRED TO TAKE ANY STEPS TO
EFFECT THE CONVERSION OF, ANY SECURITY OR SECURITIES OF ANY SERIES IF SUCH
CONVERSION, IN THE GOOD FAITH OPINION OF THE BOARD OF DIRECTORS OF THE COMPANY
OR AN OFFICER, (A) MIGHT CAUSE THE COMPANY TO FAIL TO COMPLY WITH ANY
REQUIREMENT NECESSARY FOR THE CONTINUED QUALIFICATION OF THE COMPANY AS A REIT
UNDER THE CODE OR (B) WOULD RESULT IN A SINGLE PERSON BEING AN OWNER (OR UPON
CONVERSION OF ANY SECURITIES OR CONVERSION OR EXCHANGE OF ANY OTHER SECURITIES
OF THE COMPANY THEREUPON BEING AN OWNER) OF MORE THAN 9.9% OF THE COMPANY'S
OUTSTANDING COMMON STOCK (INCLUDING THE COMPANY'S COMMON STOCK RESERVED FOR
ISSUANCE UPON CONVERSION OF SECURITIES HELD BY SUCH PERSON OR CONVERSION OR
EXCHANGE OF OTHER SECURITIES OF THE COMPANY HELD BY SUCH PERSON). ANY ATTEMPTED
CONVERSION OF A SECURITY OR SECURITIES BY A HOLDER IN VIOLATION OF THE LIMITS
SET FORTH ABOVE SHALL BE NULL AND VOID AB INITIO.

                  8.       Subordination.  This Security is subordinated to all
Senior Indebtedness of the Company. To the extent and in the manner provided in
the Indenture, Senior Indebtedness must be paid before any payment may be made
to any Holders of Securities. Any Security holder by accepting this Security
agrees to the subordination and authorizes the Trustee to give it effect.

                  In addition to all other rights of Senior Indebtedness
described in the Indenture, the Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to the Senior Indebtedness or extension or renewal of the
Senior Indebtedness.

                  9.       Denominations, Transfer, Exchange.  This Security is
one of a duly authorized issue of Securities of the Company designated as its
Convertible Subordinated Debentures due 2006 limited in aggregate principal
amount to $20,000,000. The Securities are in registered form without coupons in
denominations of $5,000 principal

                              Reverse of Debenture
                                  Page 4 of 8

<PAGE>   7

amount or more. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities selected for
redemption or register the transfer of or exchange any Securities for a period
of 15 days before a selection of Securities to be redeemed.

                  10.      Persons Deemed Owners.  The registered Holder of a
Security may be treated as its owner for all purposes.

                  11.      Unclaimed Money.  If money for the payment of
principal or interest on any Securities remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the Company at its
request. After that, Holders may look only to the Company for payment.

                  12.      Discharge Prior to Redemption or Maturity. The
Indenture will be discharged and canceled except for certain sections thereof
upon payment of all the Securities, or upon the irrevocable deposit with the
Trustee of funds or U.S. Government Obligations maturing on or before such
payment date or Redemption Date, sufficient to pay principal, premium, if any,
and interest on such payment or redemption.

                  13.      Amendment and Waiver. Subject to certain exceptions,
without notice to the Holders of the Securities, the Indenture or the Securities
may be amended with the consent of the Holders of at least a majority in
principal amount of the Securities then outstanding and any existing default or
compliance with any provision may be waived with the consent of the Holders of a
majority in principal amount of the Securities then outstanding. Without the
consent of or notice to any Security holder, the Company may amend the Indenture
or the Securities to, among other things, provide for uncertificated Securities,
to establish another series of securities as permitted by the Indenture, to cure
any ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Security holder.

                  14.      Successors.  When a successor assumes all the
obligations of its predecessor under the Securities and the Indenture, the
predecessor will be released from those obligations.

                  15.      Defaults and Remedies. If an Event of Default, as
defined in the Indenture, occurs and is continuing, the Trustee or the Holders
of a majority in principal amount of Securities may declare all the Securities
to be due and payable immediately in the manner and with the effect provided in
the Indenture. Holders of Securities may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it, subject to the provisions of the TIA, before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power with respect to the
Securities. The Company is required

                              Reverse of Debenture
                                  Page 5 of 8

<PAGE>   8

to file periodic reports with the Trustee as to the absence of any Default or
Event of Default.

                  16.      Trustee Dealings with the Company.  U.S. Bank Trust
National Association, the Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not Trustee.

                  17.      No Recourse Against Others. No stockholder, director,
officer or incorporator, as such, past, present or future, of the Company or
any successor corporation or trust shall have any liability for any obligation
of the Company under the Securities or the Indenture or for any claim based on,
in respect of or by reason of, such obligations or their creation. Each Holder
of a Security by accepting a Security waives and releases all such liability.
This waiver and release are part of the consideration for the issuance of the
Securities.

                  18.      Authentication.  This Security shall not be valid
until the Trustee or an authenticating agent appointed by the Trustee signs the
certificate of authentication on the other side of this Security.

                  19.      Abbreviations.  Customary abbreviations may be used
in the name of a Security holder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=Custodian), and
U/G/M/A (=Uniform Gifts to Minors Act).

                  THE COMPANY WILL FURNISH TO ANY SECURITY HOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. IT ALSO WILL FURNISH THE
TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO: NATIONAL HEALTH
INVESTORS, INC., 100 VINE STREET, SUITE 1202, MURFREESBORO, TENNESSEE 37130
ATTENTION: PRESIDENT.

                              Reverse of Debenture
                                  Page 6 of 8

<PAGE>   9

                                ASSIGNMENT FORM

If you the Holder want to assign this Security, fill in the form below and have
your signature guaranteed:

For value received, I or we assign and transfer this Security to

                     (INSERT ASSIGNEE'S SOCIAL SECURITY OR
                           TAX IDENTIFICATION NUMBER)

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

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

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

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

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

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

             (Print or type assignee's name, address and zip code)

and irrevocably appoint
                        --------------------------------------

                            agent to transfer this Security on the books of the
----------------------------
Company.  The agent may substitute another to act for him.

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

Date:
      --------------------------------------

Your signature:
                 ---------------------------------------------
                     (Sign exactly as your name appears
                     on the other side of this Security)

Signature Guarantee:
                      ----------------------------------------

                              Reverse of Debenture
                                  Page 7 of 8

<PAGE>   10

                               CONVERSION NOTICE

To convert this Security into shares of common stock of the Company, check the
box:

[  ]

To convert only part of this Security, state the principal amount to be
converted:

                  -------------------------------------------------
                  $

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

If you want the Security certificate, if any, made out in another person's
name, fill in the form below:

                   (INSERT OTHER PERSON'S SOCIAL SECURITY OR
                           TAX IDENTIFICATION NUMBER)

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

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

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

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

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

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

           (Print or type other person's name, address and zip code)

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

Date:
       -------------------------------------------------------

Your Signature:
                 ------------------------------------

(Sign exactly as your name appears on the other side of this Security)

Signature Guaranteed By:
                        -------------------------------------------------------

                              Reverse of Debenture
                                  Page 8 of 8

<PAGE>   11

                                  ARTICLE TWO
                       Definition of Senior Indebtedness

                  For purposes of the Debentures issued pursuant to this First
Supplemental Indenture, "Senior Indebtedness" means the principal, premium, if
any, and unpaid interest (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the Company
whether or not a claim for post-filing interest is allowed in such proceeding),
fees, charges, expenses, reimbursement and indemnification obligations, and all
other amounts payable under or in respect of (i) Indebtedness of the Company
secured by a lien to which property or assets are subject, (ii) the Senior
Secured Debt, (iii) all indebtedness and other obligations guaranteed by the
Company, (iv) the Company's 10% Senior Subordinated Convertible Debentures in
the original aggregate principal amount of $110,000,000 due 2006; or (v) any
collateralized guarantee by the Company of Indebtedness of any Person to a
third party, as any of the foregoing may be outstanding at any time. "

                  "Subordinated Indebtedness" means (i) the principal, premium,
if any, and interest on any Indebtedness of the Company which by its terms is
expressly subordinated in right of payment to the Securities and (ii) any
account payable or other obligation created or assumed by the Company in the
ordinary course of its business in connection with the obtaining of materials
or services.

                  For purposes of this First Supplemental Indenture, "Senior
Secured Debt", means (i) the obligations of the Company with respect to the
Fifth Amended and Restated Credit Agreement with Dresdner Bank AG, New York and
Cayman Branches as Agent; (ii) the obligations of the Company with respect to
the Series A and Series B Senior Secured ESOP Notes issued by the National
Health Corporation Leveraged Employee Stock Ownership Trust; (iii) the
obligations of the Company under the Guarantee and Contingent Purchase
Agreement dated October 17, 1991 (as such may be amended from time to time)
between the Company, SunTrust Bank, Nashville, N.A., as agent, and certain
banks named therein; and (iv) the obligations of the Company with respect to
the NHC Guarantees (as delivered in the Indenture dated October 17, 1991
related to the Company's 10% Senior Subordinated Convertible Debentures).

                  The indebtedness represented by the Securities will be senior
and prior in right of payment to all Subordinated Indebtedness, to the extent
and in the manner provided in such Subordinated Indebtedness.

<PAGE>   12

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

                                      NATIONAL HEALTH INVESTORS, INC.

                                      By:  /s/ Richard F. LaRoche, Jr.
                                           ------------------------------------
                                      Title:  Vice President
                                            -----------------------------------

                                      U.S. BANK TRUST NATIONAL ASSOCIATION,
                                      as Trustee

                                      By: /s/ Lori-Anne Rosenberg
                                          -------------------------------------
                                      Title:  Assistant Vice President
                                            -----------------------------------<PAGE>   1
                                                                    Exhibit 10.1

                             SECURED PROMISSORY NOTE
                             -----------------------

$666,666.00                                              Date: November 17, 2000

                FOR VALUE RECEIVED, the undersigned, Jeffrey A. Cole,
("Borrower"), hereby unconditionally promises to pay to the order of Cole
National Corporation, a Delaware corporation (the "Company"), the principal sum
of Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six Dollars and 00/100
($666,666.00) in lawful money of the United States of America and in immediately
available funds, on January 18, 2004 and to pay simple interest (computed on the
basis of a 365 day year) on the unpaid principal amount hereof from and after
the date of this Secured Promissory Note until the entire principal amount
hereof has been paid in full, at the rate of 6.01% per annum. Interest is
payable on each anniversary of the date of this Secured Promissory Note with
respect to the period ending on such anniversary, and at maturity or upon full
prepayment of the principal hereof. Not later than five business days prior to
the date on which payment of interest is due, the Company shall give written
notice to the Borrower of the amount of the payment due on such date.

                For purposes of this Promissory Note, a "business day" shall
mean any day other than a Saturday, Sunday or federal holiday and shall consist
of the time period from 12:01 a.m. through 12:00 Midnight Eastern time.

                This Secured Promissory Note is delivered as payment of the
principal amount of that certain Amended and Restated Secured Promissory Note
dated March 15, 1998 from Borrower to Company. Payment of the principal and
interest on this Secured Promissory Note is secured with the property ("Pledged
Security") pursuant to the terms of the Stock Pledge and Security Agreement
dated November 17, 2000 between Borrower and the Company. This Secured
Promissory Note is subject to the following further terms and conditions:

                 1. PAYMENT AND PREPAYMENT.

                 (a) If the Borrower or any of his Permitted Transferees shall
                 sell any of the Pledged Security, such sale shall be made only
                 for cash, and Borrower agrees to promptly deliver to the
                 Company the consideration received by the Borrower on such sale
                 of shares of Stock (net of any taxes due as a result of such
                 sale) as partial payment of the unpaid

<PAGE>   2
                                                                               2

                 principal and accrued and unpaid interest on this Secured
                 Promissory Note until this Secured Promissory Note is paid in
                 full. In the event this Secured Promissory Note is not paid in
                 full, Borrower shall provide additional collateral in the event
                 the value or principal amount of the remaining Pledged Security
                 is less than the unpaid principal of this Secured Promissory
                 Note.

                 (b) All payments of principal and interest on this Secured
                 Promissory Note shall be made to the Company or its order in
                 lawful money of the United States of America and in immediately
                 available funds at the offices of the Company at its then
                 principal place of business (or at such other place as the
                 holder hereof shall notify Borrower in writing). Borrower may,
                 at his option, prepay this Secured Promissory Note in whole or
                 in part at any time or from time to time without penalty or
                 premium. Any prepayments of any portion of the principal amount
                 of this Secured Promissory Note shall be accompanied by payment
                 of all interest accrued but unpaid hereunder.

                 (c) Concurrently with any payment of any portion of this
                 Secured Promissory Note pursuant to paragraph 1(a) hereof or
                 any prepayment of any portion of the principal amount of this
                 Secured Promissory Note pursuant to paragraph 1(b) hereof, the
                 Company shall make a notation of such application or payment on
                 this Secured Promissory Note. If full payment of all unpaid
                 principal of and accrued and unpaid interest on this Secured
                 Promissory Note is made, this Secured Promissory Note shall be
                 cancelled. Any partial payment or prepayment shall be applied
                 first to accrued and unpaid interest hereon and then to the
                 unpaid installments of principal hereof in the inverse order of
                 their maturity.

                 (d) Borrower, at Borrower"s sole election, may repay any or all
                 of the unpaid principal amount of or interest on this Secured
                 Promissory Note, by delivery to the Company of Cole National
                 Group, Inc. 9-7/8% Senior Notes due 2006 or Cole National
                 Group, Inc. 8-5/8% Senior Notes due 2007, (collectively, the
                 "Bonds") in either case owned by Borrower, having a principal
                 amount equal to the principal amount or interest to be so
                 repaid, notwithstanding the prices at which the Bonds may trade
                 in the public markets. However, the foregoing sentence will not
                 apply, and Borrower will have no right to repay this Secured

<PAGE>   3
                                                                               3

                  Promissory Note by delivery of Cole National Group, Inc.
                  Senior Notes, if, at the time of delivery to the Company, Cole
                  National Group, Inc. is in default under the indentures
                  pursuant to which the Senior Notes were issued. Unless an
                  Event of Default shall have occurred, all interest paid on the
                  Bonds shall belong to Borrower.

                  2. CONVERSION DEMAND NOTE. In the event Borrower shall cease
to be employed by the Company as the result of:

                  (a) his death or permanent disability, then the unpaid
         principal of and accrued and unpaid interest of this Secured Promissory
         Note ("Unpaid Amounts") shall upon demand by the Company given in
         writing to the Borrower or his estate become due and payable one year
         from the date of such notice; or

                  (b) his voluntary termination of employment with the consent
         of the Board of Directors of the Company or through termination without
         cause, then the Unpaid Amounts shall upon demand by the Company given
         in writing to the Borrower become due and payable one year from the
         date of such notice; or

                  (c) his voluntary termination of employment without the
         consent of the Board of Directors of the Company or his termination by
         the Company with Cause (as defined in the Employment Agreement
         ("Employment Agreement") dated December 17, 1998 between the Company
         and Borrower), then the Unpaid Amounts shall upon demand by the Company
         given in writing to the Borrower become due and payable thirty (30)
         days from the date of such notice; or

                  (d) a "Change In Control" as defined in Employment Agreement
         triggering a payment to Borrower thereunder, then upon demand by the
         Company given in writing to the Borrower the Unpaid Amounts shall be
         paid in full at or prior to the time any Change in Control payment is
         made to Borrower.

         Notwithstanding anything in this Section 2, in no event shall the
Unpaid Amounts be due and payable later than January 18, 2004.

                  3. EVENTS OF DEFAULT. Upon the occurrence of any of the
following events ("Events of Default"):

                  (a) Failure to pay any principal of this Promissory Note,
                  including any prepayments required hereunder, when due which
                  shall remain unremedied for forty-five (45) days after notice
                  by the Company given in writing to the Borrower; or

<PAGE>   4
                                                                               4

                  (b) Failure to pay any interest due under this Secured
                  Promissory Note which shall remain unremedied for forty-five
                  (45) days after notice by the Company given in writing to the
                  Borrower; or

                  (c) A petition is filed by or against the Borrower seeking the
                  entry of an order for relief under the bankruptcy laws of the
                  United States, as now or hereafter amended or supplemented, or
                  there is an appointment of a permanent receiver or a permanent
                  trustee of all or substantially all the property of the
                  Borrower or an assignment is made by the Borrower for the
                  benefit of creditors;

then, and in any such event, the holder of this Secured Promissory Note may
declare, by notice of default given to Borrower, the entire principal amount of
this Secured Promissory Note to be forthwith due and payable, whereupon the
entire principal amount of this Secured Promissory Note outstanding and all
accrued and unpaid interest shall become due and payable without presentment,
demand, protest and notices of any kind or of dishonor, all of which are hereby
expressly waived. Upon the occurrence of an Event of Default, the accrued and
unpaid interest hereunder shall thereafter bear the same rate of interest as the
principal hereunder, but in no event shall such interest be charged which would
violate any applicable usury law. If an Event of Default shall occur hereunder,
Borrower shall pay costs of collection, including reasonable attorneys' fees,
incurred by the holder in the enforcement hereof.

                  No delay or failure by the holder of this Secured Promissory
Note in the exercise of any right or remedy shall preclude other or future
exercise thereof or the exercise of any other right or remedy.

                 4. ADDITIONAL RESTRICTIONS UPON OCCURRENCE OF AN EVENT OF
DEFAULT. In case an Event of Default shall occur and be continuing, the Borrower
agrees that he will not, without the prior written consent of the Company (which
consent shall not be unreasonably withheld), sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, any of the Pledged
Security (except for the purpose of curing any Event of Default hereunder)
pursuant to Section 1(a) hereof, nor will he create, incur or permit to exist
any pledge, lien, mortgage, hypothecation, security interest, charge, option or
any other encumbrances with respect to any of the Pledged Security, or any
interest therein, or any proceeds thereof.

                 5. MISCELLANEOUS.
<PAGE>   5
                                                                               5

                  (a) The provisions of this Secured Promissory Note shall be
                  governed by and construed in accordance with the laws of the
                  State of Delaware, without regard to the conflicts of laws
                  rules thereof.

                  (b) All notices and other communication hereunder shall be in
                  writing and will be deemed to have been duly given if
                  delivered in person or mailed by certified mail or guaranteed
                  overnight delivery service to the Company at its principal
                  executive offices and to the Borrower at the last address
                  reflected in the Company's records.

                  (c) The paragraph headings contained in this Promissory Note
                  are for reference purposes only and shall not affect in any
                  way the meaning or interpretations of the provisions thereof.

                  IN WITNESS WHEREOF, this Secured Promissory Note has been duly
executed and delivered by Borrower on the date first written above.

                                                /s/ Jeffrey A. Cole
                                                --------------------------------
                                                Borrower: Jeffrey A. Cole

Witness:

/s/ Cristina C. Garrett
--------------------------------
Cristina C. Garrett

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