Document:

EXHIBIT 10(7)

                    EXEMPT LOAN AND SHARE PURCHASE AGREEMENT

     THIS EXEMPT LOAN AND SHARE PURCHASE  AGREEMENT  (this  "Agreement" or "Loan
Agreement"),  dated June 29, 2004,  between the Trust (the "Trust")  established
pursuant to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN  AND  TRUST  AGREEMENT  (EFFECTIVE  AS OF JUNE 1,  2004)  (the  "ESOP")  by
HomeFederal  Bank, as Trustee (the  "Trustee"),  and Third Century  Bancorp,  an
Indiana corporation (the "Company").

                              W I T N E S S E T H:

     WHEREAS, the Company has duly established the ESOP in connection with which
the Trust has been created;

     WHEREAS,  pursuant to the ESOP and  direction  of the  Company  pursuant to
Section 8.7 of the ESOP,  the Trust desires to borrow from the Company,  and the
Company desires to lend to the Trust, an aggregate principal amount equal to the
cost of the  purchase  on the open  market of  132,250  shares of Common  Stock,
without par value ("Common Stock") of the Company (the "Trust Loan," which shall
include an initial  amount of  $1,322,500  (the  "Initial  Trust Loan") and such
additional  amounts  as may be  required  to  purchase  such  132,250  shares (a
"Subsequent Trust Loan or Loans"));

     WHEREAS,  the  parties  hereto  intend  that the Trust Loan  constitute  an
"exempt  loan" within the meaning of Section  4975(d)(3)  of the Code,  Treasury
Regulation ss. 54.4975-7(b), Section 408(b)(3) of ERISA, and Department of Labor
Regulation  ss.  2550.408b-3  (collectively,  the  "Exempt  Loan  Rules") and an
"Exempt Loan" within the meaning of Sections 1.17 and 8.7 of the ESOP;

     WHEREAS,  the parties  intend that the Trustee  will utilize the Trust Loan
for the  purpose of  effecting  purchases  on the open  market or  otherwise  of
132,250  shares of Company  Common Stock  ("Shares") to be held in the Trust for
participants in the ESOP.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements herein contained and other good and valuable  consideration  (the
receipt,  adequacy  and  sufficiency  of which  each party  hereto  respectively
acknowledges by its execution  hereof),  the parties hereto intending legally to
be bound do hereby agree as follows:

                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

     Section 1.1. General Interpretation.  This Agreement shall be construed and
interpreted  so as to maintain  the status of the ESOP as a qualified  leveraged
employee stock  ownership plan under Sections 401(a) and 4975(e)(7) of the Code,
the Trust as exempt from  taxation  under  Section  501(a) of the Code,  and the
Trust Loan as an "exempt  loan" under the Exempt  Loan Rules,  and as an "Exempt
Loan" under Section 8.7 of the ESOP (collectively, the "Required Status").

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     Section  1.2.  Certain  Definitions.  In  this  Agreement,  unless  a clear
contrary  intention  appears,  the  terms  set forth  below  have the  following
meanings when used herein. Other terms are defined elsewhere herein.

          (a)  "Business  Day"  means a day,  other than a  Saturday,  Sunday or
     public holiday, on which commercial banks are open in Franklin, Indiana for
     the purpose of conducting commercial banking business.

          (b) "Code" means the Internal  Revenue Code of 1986,  as amended,  and
     regulations promulgated thereunder.

          (c) "Default"  means an event or  circumstance  which,  with notice or
     lapse of time or both,  would  constitute an Event of Default as defined in
     Section 6.1.

          (d) "ERISA" means the Employee Retirement Income Security Act of 1974,
     as amended, and regulations promulgated thereunder.

          (e) "Loan Documents"  shall mean,  collectively,  this Agreement,  the
     Trust  Note,  the  Share  Pledge  Agreement  and any other  instruments  or
     documents required to be delivered pursuant hereto or thereto, in each case
     as amended and in effect from time to time.

                                   ARTICLE II
                        TRUST LOAN; TRUST NOTE; PAYMENTS

     Section  2.1.  Trust  Loan.  Subject  to the terms and  conditions  of this
Agreement,  the Company agrees to make available to the Trust, and the Trust may
borrow from the Company,  on the Initial Closing Date (as  hereinafter  defined)
and  thereafter  from time to time,  the Trust Loan under this  Agreement  in an
aggregate amount equal to the cost of 8% of the Shares sold in the Offering. The
Company  shall,  upon  fulfillment  of the  applicable  conditions  set forth in
Article V, on the Initial Closing Date make available to the Trustee One Million
Three  Hundred  Twenty-Two  Thousand  Five  Hundred  Dollars  ($1,322,500)  (the
"Initial Trust Loan") in immediately  available funds, at its principal  office.
Notwithstanding  the  foregoing,  the Company shall not be obligated to make any
portion of the Initial  Trust Loan  available to the Trust if the  conversion of
Mutual  Savings  Bank  (the  "Bank")  to stock  form (the  "Conversion")  is not
consummated.  The closing of the Initial Trust Loan (the "Initial Closing") will
occur  at  the  offices  of  Barnes  &  Thornburg,  11  South  Meridian  Street,
Indianapolis,  Indiana 46204,  on the same date that the Conversion  closes,  or
such later date as the parties shall agree upon (the "Initial Closing Date").

     The Company shall, upon fulfillment of the applicable  conditions set forth
in Article V, on a  Subsequent  Closing Date or Dates (as  hereinafter  defined)
make available to the Trustee in immediately  available  funds, at its principal
office,  such additional  amounts (a "Subsequent Trust Loan") as may be required
to acquire  132,250  shares of Common  Stock of the  Company.  The  closing of a
Subsequent Trust Loan (a "Subsequent  Closing") will occur at the offices of the
Company on such date as the  parties  shall  agree upon (a  "Subsequent  Closing
Date").

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     Section 2.2. Use of Trust Loan Proceeds. The Trust will use the proceeds of
the Initial Trust Loan and any Subsequent  Trust Loans to purchase Shares on the
open market, in accordance with Article VII hereof.

     Section 2.3.  Trust Notes.  The Initial Trust Loan will be represented by a
promissory  note of the Trust (the "Initial Trust Note"),  substantially  in the
form of Exhibit A hereto,  appropriately  completed,  dated the Initial  Closing
Date payable to the order of the Company in the amount of the $1,322,500,  or so
much thereof as may at any time have been advanced hereunder and thereunder,  on
the maturity date thereof.  A Subsequent Trust Loan or Loans will be represented
by a promissory  note or notes,  substantially  in the form of Exhibit A hereto,
appropriately complete, dated the appropriate Subsequent Closing Date payable to
the order of the Company in the initial  principal  amount of a Subsequent Trust
Loan,  or so much thereof as may at any time have been  advanced  hereunder  and
thereunder,  on the  maturity  date  thereof.  The  Initial  Trust  Note and any
Subsequent Trust Note shall be referred to collectively as the Trust Note.

     Section 2.4. Interest.  The portion of the Trust Loan principal outstanding
at any time shall accrue and bear daily interest at a fixed rate per annum equal
to the prime rate as  published  in "The Wall  Street  Journal"  on the  Initial
Closing Date (the "Interest Rate"),  payable annually in accordance with Section
2.5.  On any stated or  accelerated  maturity  of the Trust Loan all accrued and
unpaid interest thereon shall be forthwith due and payable.

     Section  2.5.  Payments.  The Trust shall pay the  principal  amount of the
Trust Loan together with accrued interest as follows:

          (a) an initial  principal  installment of one thirtieth  (1/30) of the
     initial  principal  amount of the Trust  Loan,  shall be due and payable on
     December 31,  2004,  together  with all interest  accrued on the Trust Loan
     from the date of the Trust Loan through and including December 31, 2004;

          (b)  thereafter,  payments of principal and interest  shall be made in
     annual installments due and payable on the last business day of December of
     each year,  commencing on December 31, 2005, through and including December
     31, 2018, which annual  installments  shall include a principal  payment in
     the amount of  one-fifteenth  of the initial  principal amount of the Trust
     Loan, plus all interest accrued on the Trust Loan through and including the
     date of such payment; and

          (c) a final payment of principal in the amount of one thirtieth (1/30)
     of the  initial  principal  amount of the  Trust  Loan,  together  with all
     interest  accrued on the Trust Loan through and  including the date of such
     payment shall be due and payable on June 30, 2019.

The  outstanding  principal  of the Trust  Loan,  together  with all accrued and
unpaid interest and any other obligations then outstanding, will in any event be
due and payable in full on June 30, 2019.

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     Section 2.6. Optional Prepayment.

          (a) Upon  compliance  with this Section 2.6, the Trust, at its option,
     may  prepay  the Trust  Note at any time and from  time to time,  either in
     whole or in part, by payment of the  principal  amount of the Trust Note or
     portion thereof to be prepaid and accrued  interest  thereon to the date of
     such prepayment.

          (b) The Trustee will give notice of any  prepayment  of the Trust Note
     pursuant  to this  Section 2.6 to the Company not less than 3 days nor more
     than 60 days before the date fixed for such optional prepayment  specifying
     (i) such date, (ii) that prepayment is to be made under Section 2.6 of this
     Agreement,  (iii) the  principal  amount of the Trust Note to be prepaid on
     such date, and (iv) accrued  interest  applicable to the  prepayment.  Such
     notice of prepayment  shall be signed by the Trustee.  Notice of prepayment
     having  been so given,  the  aggregate  principal  amount of the Trust Note
     specified in such notice,  together  with accrued  interest  thereon  shall
     become due and payable on the prepayment date.

          (c)  Partial  prepayments  of the  Trust  Note made  pursuant  to this
     Section  2.6 shall be  credited in each case  against  remaining  scheduled
     payments  on the Trust Note in the  inverse  order of the due dates of such
     payments.

          (d) No such prepayment shall, however, be permitted if such prepayment
     would adversely affect the Required Status.

     Section 2.7.  Place and Time of Payment.  All payments of principal  of, or
interest  on, the Trust  Note shall be made by the Trust to the  Company in same
day funds at Franklin, Indiana, not later than 11:00 a.m. on the date due. Funds
received  after  that hour  shall be deemed  to have been  received  on the next
following Business Day.

     Section 2.8. Application of Certain Payments. If, and to the extent, Shares
acquired  with  proceeds  of the  Trust  Loan,  held  in the  Trust  and not yet
allocated to participant accounts are sold, then, to the extent allowable by the
Exempt Loan Rules and applicable law, the Trustee,  at the direction of the ESOP
Committee  administering  the ESOP (the  "Committee"),  may  apply the  proceeds
thereof  toward  the  repayment  of the  Trust  Loan.  Dividends  or other  cash
distributions  paid on the Shares  purchased with the proceeds of the Trust Loan
(whether or not allocated to the accounts of Participants)  shall be used by the
Trustee, at the discretion of the Committee,  to the extent permissible to repay
the Trust Loan in accordance with the provisions of Section 4.5 of the ESOP.

     Section  2.9.  Due Date  Extension.  If any  payment  of  principal  of, or
interest on, the Trust Note falls due on a day that is not a Business  Day, then
such due  date  shall  be  extended  to the next  following  Business  Day,  and
additional  interest  shall  accrue  and be  payable  for  the  period  of  such
extension.

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     Section 2.10. Computations.  All computations of interest on the Trust Loan
and other amounts due hereunder shall be based on a year of 360 days, comprising
twelve 30-day months.

     Section 2.11.  Interest on Overdue Amounts. If any payment of principal of,
or interest  on, the Trust Note is not made when due,  interest  shall accrue on
the amount  thereof,  commencing on such due date through the date on which such
amount is paid in full,  at a rate per annum equal to the Interest Rate plus two
percent (2%).

                                  ARTICLE III
                                    SECURITY

     Section 3.1.  Security.  Payment of the Trust Note and  performance  by the
Trust of its obligations under this Agreement and the Trust Note will be secured
by a pledge  of,  and the grant of a  security  interest  in,  the Shares by the
Trustee  on  behalf of the  Trust to and in favor of the  Company  under a Share
Pledge  Agreement,  substantially  in the form of Exhibit B hereto  (the  "Share
Pledge Agreement").

     Section  3.2.  Release of Shares.  Notwithstanding  any  provision  of this
Agreement  or the Share Pledge  Agreement to the contrary  contained or implied,
the Company will release from the pledge and security  interest  under the Share
Pledge Agreement,  such Shares as must be allocated to ESOP  participants  under
the ESOP pursuant to Section  8.7(h) of the ESOP and  otherwise  under the Code,
the Exempt Loan Rules or other  applicable law,  provided that Section 8.7(h) of
the ESOP shall not be amended without the Trustee's prior consent.

                                   ARTICLE IV
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section  4.1.  Representations  and  Warranties  of Trustee.  To induce the
Company  to  enter  this  Agreement  and to make the  Trust  Loan,  the  Trustee
represents and warrants to the Company as follows:

          (a) The Trustee has  determined  that the Trust Loan is primarily  for
     the benefit of ESOP participants and their beneficiaries and bears interest
     at a rate not in excess of a reasonable rate and that the terms of the loan
     are at least as  favorable  to the Trust and the ESOP  participants  as the
     terms of a comparable loan resulting from arm's-length negotiations between
     completely independent parties;

          (b) The Trustee is an Indiana commercial bank, legally existing and in
     good standing  under federal law, has corporate  power and authority and is
     duly authorized to enter into and perform the Trust;

          (c) The  Trustee  has full  right,  power and  authority  to  execute,
     deliver and perform on behalf of the Trust under the Trust  Agreement,  the
     ESOP and otherwise the obligations set forth in the Loan Documents, and the
     execution and  performance  of such  obligations  will not conflict with or
     result  in a breach  of the  terms of the ESOP or the  Trust or result in a

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     breach or violation of the  Trustee's  Articles of Conversion or By-Laws or
     of any law or regulation, order, writ, injunction or decree of any court or
     governmental authority binding on the Trust or Trustee;

          (d) The ESOP  (and  related  Trust)  has been duly  authorized  by all
     necessary  corporate  action on the part of the  Trustee  and has been duly
     executed  by an  authorized  officer  of  the  Trustee  and  delivered  and
     constitutes  a legal,  valid and  binding  obligation  of the  Trustee  and
     declaration of trust enforceable in accordance with its terms;

          (e) The  Loan  Documents  have  been  duly  authorized,  executed  and
     delivered  by  the  Trustee  and  constitute   legal,   valid  and  binding
     obligations,  contracts  and  agreements  of the  Trustee  on behalf of the
     Trust, enforceable in accordance with their respective terms;

          (f) The execution,  delivery and  performance of the Loan Documents do
     not conflict  with,  or result in the creation or imposition of any lien or
     encumbrance  upon  any of the  property  of the  Trustee  (other  than  the
     Collateral,  as  defined in the Share  Pledge  Agreement)  pursuant  to the
     provisions of the ESOP (and related Trust) or any other  agreement or other
     instrument to which the Trustee is a party or may be bound; and

          (g) No approval,  consent or  withholding of objection on the part of,
     or filing,  registration  or  qualification  with, any  governmental  body,
     Federal,  state or local,  is necessary in connection  with the  execution,
     delivery and performance by the Trustee of the Loan Documents.

     Section 4.2. Representations and Warranties of Company. To induce the Trust
to enter this  Agreement and undertake the  obligations  hereunder,  the Company
represents and warrants to the Trust as follows:

          (a) The Company is a corporation  duly organized and validly  existing
     under the laws of the State of Indiana,  has corporate  power and authority
     and is duly authorized to enter into and perform its obligations under this
     Agreement;

          (b) Neither the  execution  and  delivery of this  Agreement,  nor the
     performance  of the terms hereof nor the  establishment  of the ESOP or the
     Trust  violates,  conflicts with or  constitutes a default under  Company's
     Articles of Incorporation or By-Laws or any material agreement to which the
     Company  is a party or by which the  Company or any of its assets is bound,
     or violates any law, regulation,  order or decree of any court, arbitration
     or  governmental  authority  applicable to the Company,  in any manner that
     would have a material  adverse effect on the Trust,  the ESOP, the Required
     Status or the Company;

          (c) The  Company  and the Bank have taken all  actions  required to be
     taken  by it to  establish  the ESOP and the  related  Trust.  The ESOP and
     related Trust are intended to, and the terms thereof have been drafted with
     the purpose to, comply with the  requirements of Sections 401(a) and 501(a)
     of the Code,  as  applicable,  with the  requirements  for  treatment  as

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     a  leveraged  employee  stock  ownership  plan,  as that term is defined in
     Section 4975(e)(7) of the Code, and with other applicable laws;

          (d) The Bank has duly  appointed  the  Trustee as trustee of the Trust
     and the Committee under the ESOP;

          (e) The Company has  delivered  to Trustee  copies of its  Articles of
     Incorporation  and its By-Laws,  the ESOP, and  resolutions of its Board of
     Directors  with respect to approval of this  Agreement and entering into of
     the  transactions  and  execution  of all  documents  contemplated  by this
     Agreement,  in each case  certified by the Secretary of the Company,  which
     copies  are  true,  correct  and  complete.   None  of  such  documents  or
     resolutions  has been amended or modified in any respect and such documents
     and resolutions  remain in full force and in effect, in the form previously
     delivered to the Trustee;

          (f) Other than the Common  Stock,  the Company has no other classes of
     shares outstanding or treasury shares.

          (g) The  Company's  ability to honor put options (the "Put  Options"),
     which would  obligate  the  Company to  repurchase  shares of Common  Stock
     distributed from time to time to ESOP participants and beneficiaries  under
     Section 6.14 of the ESOP, is not presently  restricted by the provisions of
     any law,  rule or  regulation  in effect  on the date  hereof  (except  for
     capital, liquidation account, requirements to obtain regulatory approval of
     repurchase  transactions,  and similar  constraints  imposed by  regulatory
     authorities  on savings  banks) or by the terms of any loan,  financing  or
     other  agreement or  instrument to which the Company is a party or by which
     the Company is or may be bound.

          (h) There are no actions,  proceedings,  or investigations pending or,
     to the Company's knowledge,  threatened against or affecting the Company or
     any of its property or rights at law or in equity or before or by any court
     or  tribunal  that have not been  disclosed  to the  Trustee and may have a
     material adverse effect on the value of the Common Stock.

          (i) All employee  plans of the Bank and the Company are in compliance,
     in all material  respects,  with all applicable  reporting,  disclosure and
     filing  requirements  pertaining to employee benefit plans set forth in the
     Code and ERISA.

          (j) No  consent,  approval  or other  authorization  or  notice to any
     governmental  authority or  expiration  of any  government-imposed  waiting
     period is required in  connection  with the  execution  or delivery of this
     Agreement, except such as has been obtained, given or expired.

          (k)  The  shares  of  Common  Stock  constitute  "qualifying  employer
     securities" within the meaning of Section 409(l) of the Code.

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     Section 4.3. Covenants of Company. The Company covenants that:

          (a) The Company  shall submit or cause to be submitted to the Internal
     Revenue  Service within ninety (90) days following the Initial Closing Date
     an  application  for a  determination  letter  confirming  that  the  ESOP,
     effective  as of June 1, 2004,  and the  related  Trust are  qualified  and
     exempt from taxation under Sections 401(a) and 501(a), respectively, of the
     Code and that the ESOP meets the requirements of Section  4975(e)(7) of the
     Code.

          (b) The  Company  and the  Bank  shall  make  all  changes  reasonably
     requested  by the  Internal  Revenue  Service as a condition of obtaining a
     determination  letter from the Internal Revenue Service with respect to the
     ESOP, effective June 1, 2004. The Company and the Bank shall continue to do
     all  things  necessary  to cause  the ESOP and the Trust at all times to be
     operated  and  administered  such  that the ESOP  remains  qualified  under
     Section 401(a) and remains an employee  stock  ownership plan under Section
     4975(e)(7)  of the Code and the  Trust  remains  tax-exempt  under  Section
     501(a) of the Code.

          (c) If at any time the ESOP is  required,  by  applicable  law,  court
     order, or otherwise,  to make  distributions of Shares that otherwise would
     be in violation of Federal or state securities laws, the Company shall take
     all actions  necessary to permit such required  distributions to be made in
     full compliance with such laws.

          (d) The  Company  shall  honor the Put  Options if, and to the extent,
     required  by Section  409(h) of the Code and  regulations  thereunder,  and
     shall not  permit  its  ability  to honor  such  Options  to be  materially
     restricted in any way.

          (e)  The  Company  or  the  Bank  shall  provide  to the  Trustee  all
     governmental  filings  relating to the ESOP and all ESOP amendments  within
     sixty days of the date on which such filing or amendment is effected,  and,
     on an annual basis, shall provide complete financial statements of the ESOP
     and the Company.

                                   ARTICLE V
                              CONDITIONS PRECEDENT

     Section 5.1.  Documentation  Satisfactory to Company. The obligation of the
Company  to make the  Initial  Trust  Loan is,  in  addition  to the  applicable
conditions  precedent  contained  in  Section  5.2,  subject  to  the  condition
precedent  that the Company  shall have  received  each of the  following,  duly
executed and dated as of the Initial Closing Date (or such earlier date as shall
be  satisfactory  to the Company) and in form and substance  satisfactory to the
Company:

          (a) the Initial Trust Note;

          (b) the Share Pledge Agreement; and

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          (c) a certificate of the Trustee, substantially in the form of Exhibit
     C hereto,  with such changes  thereto as shall be acceptable to the Company
     and its counsel,  and with respect to such other matters as the Company may
     reasonably request.

     The  obligation  of the  Company  to make a  Subsequent  Trust  Loan is, in
addition  to the  applicable  conditions  precedent  contained  in Section  5.2,
subject to the condition  precedent that the Company shall have received each of
the following,  duly executed and dated as of the applicable  Subsequent Closing
Date (or such earlier date as shall be  satisfactory to the Company) and in form
and substance satisfactory to the Company:

          (a) the applicable Subsequent Trust Note; and

          (b) a certificate of the Trustee, substantially in the form of Exhibit
     C hereto,  with such changes as shall be  acceptable to the Company and its
     counsel,  and  with  respect  to such  other  matters  as the  Company  may
     reasonably request.

     Section 5.2. Other Conditions Precedent to Company Obligations. In addition
to the  condition  precedent  contained in Section 5.1,  the  obligation  of the
Company to make the Initial  Trust Loan  available is subject to the  conditions
precedent that (i) the Conversion is consummated,  (ii) the  representations and
warranties  made by the Trustee herein shall be true and correct in all material
respects on the Initial Closing Date as if made on and as of the Initial Closing
Date;  and (iii) the ESOP  shall be  permitted  to  purchase  Shares on the open
market.

     In  addition to the  condition  precedent  contained  in Section  5.1,  the
obligation of the Company to make a Subsequent  Trust Loan  available is subject
to the conditions  precedent that (1) the representations and warranties made by
the Trust  herein  shall be true and  correct in all  material  respects  on the
applicable  Subsequent  Closing  Date and (2) the ESOP  shall  be  permitted  to
purchase Shares on the open market.

     Section 5.3.  Documentation  Satisfactory to Trustee. The obligation of the
Trust to enter into the Initial Trust Loan is subject to the condition precedent
that the Trustee shall have received  each of the  following,  duly executed and
dated  as of the  Initial  Closing  Date  (or  such  earlier  date as  shall  be
satisfactory to Trustee) and in form and substance satisfactory to Trustee:

          (a) The Share Pledge Agreement; and

          (b) A certificate of the Company, substantially in the form of Exhibit
     D hereto,  with such changes  thereto as shall be acceptable to the Trustee
     and its counsel,  and with respect to such other matters as the Trustee may
     reasonably request.

     The  obligation  of the  Trust to enter  into a  Subsequent  Trust  Loan is
subject to the condition  precedent that the Trustee shall have received each of
the following,  duly executed and dated as of the applicable  Subsequent Closing
Date (or such earlier date as shall be  satisfactory to Trustee) and in form and
substance  satisfactory to Trustee, a certificate of the Company,  substantially
in the  form of  Exhibit  D  hereto,  with  such  changes  thereto  as  shall be
acceptable  to the  Trustee  and its  counsel,

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and with respect to such other matters as the Trustee may reasonably request.

     Section  5.4.  Other  Conditions  Precedent to  Trustee's  Obligation.  The
obligation of the Trustee to enter into the Initial Trust Loan is subject to the
conditions   precedent  that  (i)  the  Conversion  is  consummated,   (ii)  the
representations  and  warranties  made by the Company  herein  shall be true and
correct in all material  respects on the Initial  Closing Date as if made on and
as of the Initial  Closing Date,  and (iii) no injunction or  restraining  order
shall be in effect or  litigation  pending or threatened to forbid or enjoin the
consummation of the transactions contemplated by this Agreement.

     The  obligation  of the  Trustee to enter into a  Subsequent  Trust Loan is
subject to the conditions  precedent that (1) the representations and warranties
made by the Company herein shall be true and correct in all material respects on
the applicable  Subsequent  Closing Date as if made on and as of such Subsequent
Closing Date, and (2) no injunction or  restraining  order shall be in effect or
litigation  pending or  threatened to forbid or enjoin the  consummation  of the
transactions contemplated by this Agreement.

                                   ARTICLE VI
                       EVENTS OF DEFAULT AND THEIR EFFECT

     Section 6.1. Events of Default;  Effect. If default in the payment when due
of any  principal  on, or default  (and  continuance  thereof for 5 days) in the
payment when due of interest on, the Trust Note (an "Event of Default")  occurs,
unless the effect  thereof as an Event of Default  has been waived in writing by
the Company,  then the Company may declare the Trust Note to be due and payable,
whereupon  the Trust Note shall  become  immediately  due and  payable,  without
presentment,  demand,  protest  or notice  to the  Trust or other  action by the
Company of any kind whatsoever,  all of which actions the Trust hereby waives to
the maximum extent permitted by law.

     The Company shall promptly  advise the Trust of any declaration of default,
but  failure  to do so or delay in doing so shall not  impair the effect of such
declaration.  Notwithstanding  anything to the  contrary  herein or in the Trust
Note or the Share Pledge Agreement  contained or implied,  if a Default or Event
of Default  occurs  with  respect  to the Trust Loan by the Trust,  the value of
Trust assets transferred in satisfaction  thereof shall not exceed the amount of
such default. In addition, such a transfer of such Trust assets shall only occur
upon and to the extent of the failure of the Trust to meet the payment  schedule
of the Trust Loan provided in Article II.

                                  ARTICLE VII
                                 SHARE PURCHASES

     Section  7.1.  Purchase  of  Shares.  The  Company is making the Trust Loan
available  to the Trustee  for the  purpose of allowing  the Trustee to purchase
132,250  Shares on the open  market.  To the  extent  the ESOP is  permitted  to
purchase up to 132,250 Shares on the open market,  the Trustee agrees to use all
of the proceeds of the Trust Loan to purchase  132,250 Shares in accordance with
this Article VII.

                                       10
<PAGE>

     Section 7.2. Manner of Purchase. The Trustee shall draw upon the Trust Loan
and use the proceeds thereof to purchase 132,250 Shares.

     Section 7.3. No Prohibited Transactions.  The Trustee in the performance of
its obligations  under this Agreement,  shall observe its fiduciary  obligations
under Section 404 of ERISA,  shall not engage in any  transaction  prohibited by
ERISA or contrary to such fiduciary obligations, and, in acquiring Shares, shall
not  (and  shall  not  be  deemed   obligated   to)  pay  more  than   "adequate
consideration," as defined in Section 3(18) of ERISA.

     Section 7.4. Maximum Number of Shares.  The Trust shall not purchase Shares
with proceeds of the Trust Loan in excess of 132,250 Shares.

                                  ARTICLE VIII
                                     GENERAL

     Section 8.1. Waivers;  Amendments.  No delay on the part of the Company, or
the holder of the Trust Note in the exercise of any right, power or remedy shall
operate as a waiver thereof,  nor shall any single or partial exercise by any of
them of any right,  power or remedy preclude other or further exercise  thereof,
or the exercise of any other right, power or remedy. No amendment,  modification
or waiver of, or consent with respect to, any provision of this  Agreement,  the
Trust Note or the Share Pledge  Agreement shall in any event be effective unless
the same shall be in writing  and signed and  delivered  by the Company and then
any such amendment,  modification,  waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

     Section  8.2.  Confirmations;  Information.  The  Company and the Trust (or
holder of the Trust Note) agree from time to time, upon written request received
by it from the other,  to confirm to the other in writing the  aggregate  unpaid
principal  balance then outstanding  under the Trust Note and such other matters
relating to the Trust Loan, the Trust, the ESOP or the purchase of Shares as may
reasonably be the subject of inquiry.

     Section 8.3.  Captions.  Section  captions  used in this  Agreement are for
convenience only, and shall not affect the construction of this Agreement.

     Section 8.4.  Governing  Law. To the extent not  preempted  by ERISA,  this
Agreement  and the Trust Note shall be a contract made under and governed by the
laws of the State of Indiana, without regard to conflict of laws principles. All
obligations of the Trust and rights of the Company and other holder of the Trust
Note  expressed  herein or in such Trust Note shall be in addition to and not in
limitation of those provided by law.

     Section 8.5. Notices.  All communications and notices hereunder shall be in
writing  and shall be deemed to be given when sent by  registered  or  certified
mail,  postage  prepaid,  return  receipt  requested,  or  by  telecopier,  duly
confirmed, and addressed to such party at the address indicated below or to such
other  address as such party may  designate in writing  pursuant to this Section
8.5.

                                       11
<PAGE>

                            Third Century Bancorp
                            80 East Jefferson Street
                            Franklin, Indiana   46131
                            Attention: Robert D. Heuchan, President

                                       12
<PAGE>

                            HomeFederal Bank
                            501 Washington Street
                            Columbus, Indiana   47201
                            Attention: David L. Fisher

     Section 8.6. Expenses. All expenses of the transaction contemplated by this
Agreement shall be paid by the Company.

     Section 8.7.  Reimbursement.  If the Trustee uses  proceeds  from the Trust
Loan to purchase  Common Stock directly from the Company and it is  subsequently
determined by a court of competent  jurisdiction that the Trustee paid in excess
of "adequate  consideration"  within the meaning of ERISA for such  shares,  the
Company  shall,  as soon as practicable  following such judgment,  reimburse the
Trustee for the amount of the excess payment.

     Section  8.8.  Entire  Agreement.  This  Agreement  constitutes  the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties.

     Section  8.9.  Severability.  Should any clause,  paragraph or part of this
Agreement  be held or declared  to be void or illegal for any reason,  all other
clauses,  paragraphs or parts of this  Agreement  which can be affected  without
such illegal clause,  paragraph or part shall nevertheless  remain in full force
and effect.

     Section 8.10. No  Assignment.  This  Agreement and the  obligations  of the
parties herein may not be assigned or assumed by any other parties.

     Section 8.11.  Counterparts.  This Agreement may be executed in two or more
counterparts,  each of which shall be deemed an  original,  but all of which put
together shall constitute one and the same instrument.

                                   ARTICLE IX
                                LIMITED RECOURSE

     Section 9.1.  Limited  Recourse.  Notwithstanding  anything to the contrary
herein or in the Trust Note, the Share Pledge Agreement or any other instrument,
agreement or document  contained or implied,  the obligations of the Trust under
this Agreement, the Trust Note and the Share Pledge Agreement (collectively, the
"Trust Loan  Obligations")  shall be enforceable to the extent  permitted  under
law,  including  (without  limitation)  the Exempt Loan Rules,  only against the
Trust to the extent of the Collateral (as defined in the Share Pledge Agreement)
not theretofore  released from the pledge and security  interest under the Share
Pledge Agreement as provided in Section 3.2 and contributions and other payments
(other  than  contributions  of  employer  securities)  made  to  the  Trust  in
accordance  with the ESOP to enable the Trust to pay and  satisfy the Trust Loan
Obligations and from earnings  attributable  to the Shares  purchased with Trust
Loan   proceeds  and  the   investment  of  such

                                       13
<PAGE>

contributions  and  payments  (collectively,  the "Trust Loan  Collateral").  No
recourse  shall be had to or against the Trust or the assets thereof (other than
the Trust Loan Collateral) for any deficiency judgment against the Trust for the
purpose  of  obtaining   payment  or  other   satisfaction  of  the  Trust  Loan
Obligations.

     Section 9.2. No Personal  Recourse  Against  Trustee.  Without limiting the
provisions  of Section  9.1,  the  Trustee of the Trust  shall have no  personal
liability for any of the Trust Loan Obligations.

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed  and  delivered  by their  respective  representatives  thereunto  duly
authorized as of the date first above written.

                                TRUST UNDER THIRD CENTURY BANCORP
                                EMPLOYEE STOCK OWNERSHIP PLAN AND
                                TRUST AGREEMENT

                                By: HomeFederal Bank, Trustee

                                By: /s/ David L. Fisher
                                   ---------------------------------------------

                                Printed:  David L. Fisher
                                        ----------------------------------------

                                Its:   Vice President & Senior Trust Officer

                                THIRD CENTURY BANCORP

                                By: /s/ Robert D. Heuchan
                                   ---------------------------------------------

                                Printed:   Robert D. Heuchan
                                        ----------------------------------------

                                Its:   President and Chief Executive Officer

                                       14
<PAGE>

                                                                       Exhibit A

                                   TRUST NOTE

$___________                                                  ____________, 2004
                                                              Due: June 30, 2019

     FOR VALUE RECEIVED,  the undersigned,  the Trust (the "Trust")  established
pursuant to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT, DATED AND EFFECTIVE AS OF JUNE 1, 2004 (the "Plan") by
HOMEFEDERAL  BANK, as Trustee (the  "Trustee"),  promises to pay to the order of
Third Century  Bancorp,  an Indiana  corporation  (together with its successors,
endorsees and assigns, the "Company"), at such place and in such other manner as
the Company may direct in writing,  and when required pursuant to the provisions
of that certain Exempt Loan and Share Purchase  Agreement,  dated June ___, 2004
(the "Loan Agreement"),  by and among the Trustee and the Company, the principal
amount of ____________________________  Dollars ($__________) or so much thereof
as may be  advanced  by the  Company to the Trust  hereunder  and under the Loan
Agreement,  said amount being due and payable  together with accrued interest in
such installments and at such times as provided in the Loan Agreement,  with the
entire unpaid principal balance due and payable with accrued interest in full on
June 30, 2019, as provided in the Loan Agreement.

     The  principal  balance  hereof  from time to time  outstanding  shall bear
interest from the date of each  disbursement of the Trust Loan evidenced by this
Trust Note through and including the date on which such principal amount is paid
in full, at the times provided in the Loan  Agreement,  at the Interest Rate, as
defined in the Loan Agreement which is _____________  percent (_____%) per annum
(or, in the case of overdue  principal and, to the extent  legally  enforceable,
overdue interest, at the Interest Rate plus two percent (2%) per annum).

     This Trust Note has been issued by the Trust in  accordance  with the terms
of the Loan  Agreement  to  evidence  the Trust Loan made by the  Company to the
Trust  under the Loan  Agreement,  to which  reference  is  hereby  made for the
statement of the terms thereof.  This Trust Note and the Company are entitled to
the benefits of the Loan Agreement and the Company may enforce the agreements of
the Trust  contained  therein and in the Loan  Documents,  and may  exercise the
respective  remedies  provided  for thereby or  otherwise  available  in respect
thereof,  all in accordance with the respective  terms thereof.  All capitalized
terms used in this Trust Note which are not  otherwise  defined  herein have the
respective meanings assigned to them in the Loan Agreement.

     The Trust has the right to prepay the  principal  amount of this Trust Note
without penalty on the terms and conditions specified in the Loan Agreement.

     If any Event of Default shall occur,  the entire unpaid principal amount of
this Trust Note and all of the accrued but unpaid interest thereon may become or
be due and  payable  in the  manner  and with the  effect  provided  in the Loan
Agreement.  The collection and enforcement of this Trust Note are subject to the
provisions and limitations of Section 9.1 of the Loan Agreement.

<PAGE>

     To the extent not preempted by ERISA,  this Trust Note and the  obligations
of the Trust  hereunder  shall be  governed  by the laws of the State of Indiana
without regard to principles of conflict of laws.

     All  parties  to  this  Trust  Note,  including  endorsers,   sureties  and
guarantors,  if any, hereby waive presentment,  demand, protest,  notice, relief
from valuation and  appraisement  laws and any and all other notices and demands
in connection with the delivery, acceptance, performance and enforcement of this
Trust  Note and also  hereby  assent to  extensions  of the time of  payment  or
forbearance or other indulgences without notice, and agree to remain bound until
the principal,  premium, if any, and interest are paid in full,  notwithstanding
any extensions of time for payment which may be granted,  even though the period
or periods of extension may be indefinite,  and notwithstanding any inaction by,
or  failure to assert any legal  rights  available  to, the holder of this Trust
Note.

     IN WITNESS WHEREOF,  the Trust has caused this instrument to be executed by
the Trustee, the day and year first above written.

                        TRUST UNDER THIRD CENTURY BANCORP
                        EMPLOYEE STOCK OWNERSHIP PLAN AND
                        TRUST AGREEMENT

                        By: HomeFederal Bank, Trustee

                        By:
                           -----------------------------------------------------
                           David L. Fisher, Vice President and Senior
                           Trust Officer

<PAGE>

                                                                       Exhibit B

                             SHARE PLEDGE AGREEMENT

                                     between

                                   TRUST UNDER
                              THIRD CENTURY BANCORP
                    STOCK OWNERSHIP PLAN AND TRUST AGREEMENT

                                       and

                              THIRD CENTURY BANCORP

                              Dated: June ___, 2004

<PAGE>

                             SHARE PLEDGE AGREEMENT

     THIS SHARE PLEDGE AGREEMENT (this "Agreement" or "Share Pledge Agreement"),
dated as of June ___, 2004, between the Trust (the "Trust") established pursuant
to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT (EFFECTIVE AS OF JUNE 1, 2004) (the "Plan") by HOMEFEDERAL BANK,
as Trustee  ("Trustee"),  and Third Century Bancorp, an Indiana corporation (the
"Company").

                                   WITNESSETH:

     WHEREAS, contemporaneously herewith, the Trust and the Company have entered
into  that  certain  Exempt  Loan  and  Share  Purchase   Agreement  (the  "Loan
Agreement";  definitions  of terms  appearing  in which  have the same  meanings
herein,  unless a clear  contrary  intention  appears),  dated  June ___,  2004,
pursuant to which the Company has agreed to lend to the Trust, and the Trust has
agreed to borrow from the Company,  the Trust Loan,  and the Trust,  to evidence
its indebtedness to the Company with respect to the Trust Loan, has executed and
delivered the Trust Note to the Company; and

     WHEREAS,  it is a condition  precedent to the  obligation of the Company to
make the Trust Loan that, among other things, the Trust execute and deliver this
Agreement to the Company,

     NOW,  THEREFORE,  in consideration of the Loan Agreement and the Trust Loan
and other good and valuable consideration (the receipt, adequacy and sufficiency
of which the Trust acknowledges by its execution hereof), the Trust intending to
be legally bound does hereby covenant and agree with the Company as follows:

     Section 1. Pledge.  To secure the due and punctual  payment and performance
of the  obligations of the Trust  hereunder and under the Loan Agreement and the
Trust Note (collectively, the "Liabilities"), the Trustee on behalf of the Trust
hereby pledges,  hypothecates,  assigns,  transfers, sets over and delivers unto
the Company,  its successors  and assigns and hereby grants to the Company,  its
successors and assigns a security interest in:

          (a) all Shares of Company  Common  Stock  purchased or to be purchased
     with the proceeds of the Trust Loan  (collectively,  the "Pledged  Shares")
     and the certificates representing or evidencing the Pledged Shares, and, to
     the extent permitted by Section  4975(e)(7) of the Internal Revenue Code of
     1986, as amended, and Reg. ss. 54.4975-7(b)(5)  promulgated thereunder, all
     cash,  securities,  interest,  dividends,  rights and other property at any
     time and from time to time received in respect of or in exchange for any or
     all of the Pledged Shares; and

          (b) all proceeds of all of the foregoing

<PAGE>

(all such Pledged Shares, certificates,  cash, securities,  interest, dividends,
rights and other property, and proceeds thereof, other than as released, sold or
otherwise  applied by the Company  pursuant to the terms  hereof,  being  herein
collectively  called  the  "Collateral"),  TO HAVE AND TO HOLD such  Collateral,
together  with  all  rights,  titles,  interests,   privileges  and  preferences
appertaining or incidental  thereto,  forever,  subject,  however, to the terms,
covenants and conditions hereafter set forth.

     Section 2. Warranties and Covenants.

          (a) The Trust  represents  and  warrants to the Company that the Trust
     is, or at the time of any future delivery,  pledge,  assignment or transfer
     will be, the lawful owner of the  Collateral,  free of all claims and liens
     other than the  security  interest  hereunder,  with full right to deliver,
     pledge,  assign and transfer the  Collateral  to the Company as  Collateral
     hereunder.

          (b) So long as any of the Liabilities  remain  outstanding,  the Trust
     will, unless the Company shall otherwise consent in writing:

               (i)   promptly   deliver  to  the  Company   from  time  to  time
          certificates  representing Pledged Shares as the Trustee acquires them
          and,  upon  request  of the  Company,  such  stock  powers  and  other
          documents,  satisfactory  in form and  substance to the Company,  with
          respect to the  Collateral  as the Company may  reasonably  request to
          preserve and protect, and to enable the Company to enforce, its rights
          and remedies hereunder;

               (ii) not create or suffer to exist any lien, security interest or
          other charge or encumbrance  against, in or with respect to any of the
          Collateral  except for the pledge hereunder and the security  interest
          created hereby;

               (iii) not make or consent to any amendment or other  modification
          or waiver  with  respect  to any of the  Collateral  or enter into any
          agreement  or permit to exist any  restriction  with respect to any of
          the Collateral other than pursuant hereto; and

               (iv)  not  take or fail to take  any  action  which  would in any
          manner impair the value or  enforceability  of the Company's  security
          interest in any of the Collateral.

     Section  3.  Care of  Collateral.  The  Company  shall  be  deemed  to have
exercised  reasonable  care with  respect  to the  interest  of the Trust in the
custody  and  preservation  of the  Collateral  if it takes such action for that
purpose as the Trust  shall  request  in writing or as it would with  respect to
similar  assets of its own,  but  failure of the Company to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.

                                       2
<PAGE>

     Section 4. Certain Rights Regarding Collateral and Liabilities.

          (a) The Company may from time to time,  whether before or after any of
     the Liabilities shall become due and payable,  without notice to the Trust,
     to the extent otherwise  permitted (i) retain or obtain a security interest
     in  the  Collateral,  to  secure  payment  and  performance  of  any of the
     Liabilities,  (ii) retain or obtain the primary or  secondary  liability of
     any party or parties,  in addition to the Trust, with respect to any of the
     Liabilities,  (iii)  extend or renew for any period  (whether or not longer
     than the original  period) or exchange any of the Liabilities or release or
     compromise any obligation of any nature of any party with respect  thereto,
     and (iv) surrender, release or exchange all or any part of any property, in
     addition to the Collateral,  securing payment and performance of any of the
     Liabilities,  or compromise  or extend or renew for any period  (whether or
     not longer than the original  period) any  obligations of any nature of any
     party with respect to any such property.

          (b) The Company  shall have no right to vote the Pledged  Shares prior
     to the  occurrence  of an Event of Default  (hereinafter  in  Section  6(a)
     hereof  defined).  After the  occurrence of an Event of Default,  the Trust
     shall  have  the  right  to  vote  any  and all of the  Pledged  Shares  in
     accordance  with the Plan  unless  and until it  receives  notice  from the
     Company that such right has been  terminated with respect to shares subject
     to execution as a result of the Default.

     Section 5. Dividends, etc.

          (a) So long as no Default or Event of Default, shall have occurred and
     be  continuing,  the Trust  shall be  entitled  to receive any and all cash
     dividends on the Pledged Shares which it is otherwise  entitled to receive,
     and to vote the Pledged Shares in accordance with the terms of the Plan and
     to give  consents,  waivers  and  ratifications  in respect of the  Pledged
     Shares, but any and all stock and/or liquidating  dividends,  distributions
     in  property,  returns  of  capital  or other  distributions  made on or in
     respect  of the  Pledged  Shares,  whether  resulting  from a  subdivision,
     combination or  reclassification  of the  outstanding  capital stock of any
     issuer  thereof or received in exchange for the Pledged  Shares or any part
     thereof or as a result of any merger,  consolidation,  acquisition or other
     exchange of assets to which any issuer may be a party or otherwise, and any
     and all cash and other  property  received in exchange  for any  Collateral
     shall be, and become  part of the  Collateral  pledged  hereunder  and,  if
     received by the Trust,  shall  forthwith be delivered to the Company or its
     designated nominee (accompanied,  if appropriate,  by proper instruments of
     assignment and/or stock powers executed by the Trust in accordance with the
     Company's  instructions)  to be held subject to the terms of this Agreement
     and the Plan.

          (b) Upon the  occurrence  and  during the  continuance  of an Event of
     Default,  subject to the terms of Section  4(b)  hereof,  all rights of the
     Trust  pursuant to Section  5(a) hereof  shall cease and the Company  shall
     have the sole and  exclusive  right and authority to receive and retain the
     dividends  which the Trust would  otherwise be authorized to retain and, to
     the  extent  permitted  by law,  to vote and  give  consents,  waivers  and
     ratifications  pursuant to Section 5(a) hereof. Any and all money and other
     property paid over to or received by the Company pursuant to the provisions
     of this  paragraph  (b) shall be  retained  by the  Company  as  additional
     Collateral  hereunder  and be applied  in  accordance  with the  provisions
     hereof.

                                       3
<PAGE>

     Section 6. Event of Default.

          (a) The occurrence of any of the following  shall  constitute an Event
     of Default  hereunder:  nonpayment,  when due,  whether by  acceleration or
     otherwise,  of any amount  payable on any of the  Liabilities;  an Event of
     Default as defined in the Loan Agreement; any representation or warranty of
     the Trust  contained  herein or given  pursuant  hereto being untrue in any
     material  respect;  or the  Trust's  failure to  perform  any  covenant  or
     agreement contained herein.

          (b) Upon the  occurrence  of an Event of Default,  (i) the Company may
     exercise  from time to time any rights and  remedies  available to it under
     the  Uniform  Commercial  Code as in effect from time to time in Indiana or
     otherwise available to it, including, but not limited to, sale, assignment,
     or other disposal of the Pledged Shares in exchange for cash or credit, and
     (ii) the Company may,  without demand or notice of any kind, but subject to
     Section  7,  appropriate  and  apply  toward  the  payment  of  such of the
     Liabilities, and in such order of application, as the Company may from time
     to time elect, any balances,  credits, deposits,  accounts or moneys of the
     Trust. If any notification of intended disposition of any of the Collateral
     is  required  by  law,  such  notification,  if  mailed,  shall  be  deemed
     reasonably  and properly given if mailed at least five (5) days before such
     disposition, postage prepaid, addressed to the Trust, either at the address
     of the Trust shown below, or at any other address of the Trust appearing on
     the records of the Company.  Any proceeds of any  disposition of Collateral
     shall be applied as provided in Section 7 hereof.  All rights and  remedies
     of the Company expressed  hereunder are in addition to all other rights and
     remedies  possessed  by it,  including  those under any other  agreement or
     instrument  relating to any of the  Liabilities  or security  therefor.  No
     delay on the part of the  Company  in the  exercise  of any right or remedy
     shall operate as a waiver thereof, and no single or partial exercise by the
     Company of any right or remedy  shall  preclude  other or further  exercise
     thereof or the  exercise  of any other  right or  remedy.  No action of the
     Company  permitted  hereunder  shall  impair  or affect  the  rights of the
     Company in and to the Collateral.

          (c)  The  Trust  agrees  that  in any  sale  of any of the  Collateral
     whenever  an  Event  of  Default  hereunder  shall  have  occurred  and  be
     continuing,  the Company is hereby authorized to comply with any limitation
     or restriction in connection with such sale as it may be advised by counsel
     is necessary in order to avoid any  violation  of law  (including,  without
     limitation,  compliance  with such procedures as may restrict the number of
     prospective  bidders and purchasers,  require that such prospective bidders
     and purchasers have certain  qualification,  and restrict such  prospective
     bidders and  purchasers  to persons who will  represent and agree that they
     are  purchasing for their own account for investment and not with a view to
     the distribution or resale of such  Collateral),  or in order to obtain any
     required  approval  of the  sale or of the  purchaser  by any  governmental
     regulatory  authority or official,  and the Trust further  agrees that such
     compliance  shall not result in such sale being considered or deemed not to
     have been made in a commercially  reasonable  manner, nor shall the Company
     be liable  nor  accountable  to the Trust for any  discount  allowed by the
     reason of the fact that such Collateral is sold in compliance with any such
     limitation or restriction.

                                       4
<PAGE>

          (d)  Notwithstanding  anything to the contrary  herein or in the Trust
     Note or the Loan  Agreement  contained  or implied,  if an Event of Default
     occurs  with  respect to the Trust  Loan by the  Trust,  the value of Trust
     assets  transferred in satisfaction  thereof shall not exceed the amount of
     such default. In addition,  such a transfer of such Trust assets shall only
     occur  upon,  and to the  extent of the  failure  of, the Trust to meet the
     payment  schedule  of the Trust  Loan  provided  in  Article II of the Loan
     Agreement.

     Section 7. Application of Proceeds of Sale or Cash Held as Collateral.  The
proceeds of sale of  Collateral  sold  pursuant to the terms of Section 6 hereof
and/or after an Event of Default, the cash held as Collateral  hereunder,  shall
be applied by the  Company,  to the  extent  permitted  by  applicable  law,  as
follows:

               First:  to  payment  of the  costs  and  expenses  of such  sale,
          including the out-of-pocket  costs and expenses of the Company and the
          reasonable  fees and  out-of-pocket  costs  and  expenses  of  counsel
          employed in connection  therewith,  and to the payment of all advances
          made by the  Company for the  account of the Trust  hereunder  and the
          payment  of  all  costs  and  expenses  incurred  by  the  Company  in
          connection with the  administration and enforcement of this Agreement,
          to the extent that such  advances,  costs and expenses  shall not have
          been reimbursed to the Company;

               Second: to the payment in full of the Liabilities; and

               Third: the balance, if any, of such proceeds shall be paid to the
          Trust,  its  successors  and  assigns,  or  as a  court  of  competent
          jurisdiction may direct.

     Section 8. Authority of Company.  The Company shall have and be entitled to
exercise all such powers hereunder as are specifically  delegated to the Company
by the terms hereof,  together with such powers as are incidental  thereto.  The
Company  may  execute  any of its  duties  hereunder  by or  through  agents  or
employees  and shall be entitled to retain  counsel and to act in reliance  upon
the advice of such  counsel  concerning  all  matters  pertaining  to its duties
hereunder.  Neither the Company,  nor any  director,  officer or employee of the
Company,  shall be liable for any  action  taken or omitted to be taken by it or
them  hereunder  or in  connection  herewith,  except for its or their own gross
negligence  or  willful  misconduct.  The Trust  hereby  agrees,  to the  extent
permitted by applicable law, to reimburse the Company,  on demand, for all costs
and expenses  incurred by the Company in connection with the enforcement of this
Agreement  (including  costs and expenses  incurred by any agent employed by the
Company).

     Section  9.  Termination.  This  Agreement  shall  terminate  when  all the
Liabilities have been fully paid and performed,  at which time the Company shall
reassign and redeliver (or cause to be reassigned and redelivered) to the Trust,
or to such person or persons as the Trust shall designate, against receipt, such
of the Collateral (if any) as shall not have been theretofore released,  sold or
otherwise applied by the Company pursuant to the terms hereof and shall still be
held by it hereunder,  together with any appropriate instruments of reassignment
and  release.   Any  such  reassignment  shall  be  without  recourse  upon,  or
representation  or warranty by, the  Company.

                                       5
<PAGE>

     Section 10. Required Release of Collateral.  Notwithstanding  any provision
of this Agreement or the Loan  Agreement to the contrary,  the Company from time
to time will  release  from the  pledge  and  security  interest  under the Loan
Agreement,  such Collateral as must be allocated to participants  under the Plan
pursuant to Section 8.7(h) of the Plan and otherwise  under the Code, the Exempt
Loan Rules or other applicable law.

     Section 11.  Limited  Recourse.  Notwithstanding  anything to the  contrary
herein  or in the  Trust  Note,  the Loan  Agreement  or any  other  instrument,
agreement or document contained or implied, the Liabilities shall be enforceable
to the extent permitted under applicable law, including, without limitation, the
Exempt Loan Rules,  only against the Trust to the extent of the  Collateral  not
theretofore  released from the pledge and security interest under this Agreement
as  provided  herein and  contributions  (other than  contributions  of employer
securities) made to the Trust in accordance with the Plan to enable the Trust to
pay and satisfy the Liabilities and from earnings attributable to the Shares and
the   investment  of  such   contributions   (collectively,   the  "`Trust  Loan
Collateral").  No  recourse  shall be had to or against  the Trust or the assets
thereof  (other  than the Trust Loan  Collateral)  for any  deficiency  judgment
against the Trust for the purpose of obtaining payment or other  satisfaction of
the Liabilities.  Without limiting the foregoing, the Trustee of the Trust shall
have no personal liability for any of the Liabilities, other than as required by
or arising under applicable law.

     Section 12. Notices.  All  communications and notices hereunder shall be in
writing and, if mailed,  shall be deemed to be given when sent by  registered or
certified mail,  postage prepaid,  return receipt  requested,  or by telecopier,
duly confirmed, and addressed to such party at the address indicated below or to
such other  address  as such party may  designate  in writing  pursuant  to this
Section 12.

                                    THIRD CENTURY BANCORP
                                    80 East Jefferson Street
                                    Franklin, Indiana   46131
                                    Attention: Robert D. Heuchan, President

                                    HOMEFEDERAL BANK
                                    501 Washington Street
                                    Columbus, Indiana   47201
                                    Attention: David L. Fisher

     Section 13. Binding Agreement  Assignment.  This Agreement,  and the terms,
covenants and conditions hereof,  shall be binding upon and inure to the benefit
of the parties hereto, and their respective  successors and assigns,  except the
Trust shall not be permitted to assign this Agreement or any interest  herein or
in the  Collateral,  or any part  thereof,  or  otherwise  grant any option with
respect to the Collateral,  or any part thereof and the Company shall not assign
any interest  herein or in the  Collateral  unless such  assignment is expressly
made subject to the terms of the Loan Documents.

                                       6
<PAGE>

     Section  14.  Miscellaneous  Provisions.  Neither  this  Agreement  nor any
provision hereof may be amended,  modified, waived, discharged or terminated nor
may any of the  Collateral  be released or the pledge or the  security  interest
created hereby extended, except by an instrument in writing duly signed by or on
behalf of the  Company  hereunder.  The  section  headings  used  herein are for
convenience  of reference  only and shall not define or limit the  provisions of
this Agreement. This Agreement may be executed in any number of counterparts and
by the  different  parties on separate  counterparts  and each such  counterpart
shall be deemed to be an  original,  but all such  counterparts  shall  together
constitute but one and the same Agreement.

     Section 15. Governing Law; Interpretation. This Agreement has been made and
delivered at Franklin,  Indiana,  and, except to the extent  preempted by ERISA,
shall be governed by the internal laws of the State of Indiana,  without  regard
to principles  of conflict of laws.  Wherever  possible  each  provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such  provision  shall be  ineffective  to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision or the remaining provisions of this Agreement.

     Section 16. Filing as a Financing Statement.  At the option of the Company,
this  Agreement,  or a  carbon,  photographic  or  other  reproduction  of  this
Agreement or of any Uniform  Commercial  Code financing  statement  covering the
Collateral or any portion  thereof  shall be sufficient as a Uniform  Commercial
Code financing statement and may be filed as such.

                                       7
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their respective  representatives  thereunto duly authorized as
of the date first above written.

                          TRUST UNDER THE THIRD CENTURY
                          BANCORP EMPLOYEE STOCK OWNERSHIP
                          PLAN AND TRUST AGREEMENT

                          By: HomeFederal Bank, Trustee

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

                          Printed:   David L. Fisher
                                   -----------------------------------
                          Its:     Vice President & Senior Trust Officer

                          THIRD CENTURY BANCORP

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

                          Printed:  Robert D. Heuchan
                                  ---------------------------------------------

                          Its:  President and Chief Executive Officer

                                       8
<PAGE>

                                                                       Exhibit C

                             CERTIFICATE OF TRUSTEE

     The  undersigned,  HomeFederal  Bank,  an Indiana  commercial  bank, in its
capacity as Trustee  ("Trustee")  of the Trust under the Third  Century  Bancorp
Employee Stock Ownership Plan and Trust Agreement (Effective as of June 1, 2004)
(the  "Trust")  hereby  certifies,  pursuant to Section  5.1(c) of that  certain
Exempt Loan and Share  Purchase  Agreement  between the Trust and Third  Century
Bancorp of even date herewith (the "Loan Agreement") that:

          (i) it has  determined  that the Trust  Loan,  as  defined in the Loan
     Agreement,  is  primarily  for the benefit of ESOP  participants  and their
     beneficiaries  and bears  interest at a rate not in excess of a  reasonable
     rate and that the terms of the loan are at least as  favorable to the Trust
     and the ESOP  participants as the terms of a comparable loan resulting from
     arm's-length negotiations between completely independent parties;

          (ii) the other  representations  and warranties of the Trust contained
     in the Loan  Agreement are true in all material  respects as of the date of
     this Certificate; and

          (iii) the conditions set forth in Article V of the Loan Agreement,  to
     the extent their satisfaction  depends upon action on the part of the Trust
     or the Trustee, have been satisfied as of the date of this Certificate.

     EXECUTED this ____ day of _____________, 2004.

                               HOMEFEDERAL BANK,
                               as Trustee of the Trust under the Third
                               Century Bancorp Employee Stock
                               Ownership Plan and Trust Agreement
                               (Effective as of June 1, 2004)

                               By:
                                  --------------------------------------------
                                  David L. Fisher
                                  Vice President & Senior Trust Officer

<PAGE>

                                                                       Exhibit D

                           CERTIFICATE OF THE COMPANY

     The  undersigned,  Third  Century  Bancorp,  an  Indiana  corporation  (the
"Company"),  pursuant to Section  5.3(b) of that  certain  Exempt Loan and Share
Purchase Agreement between  HomeFederal Bank, an Indiana commercial bank, in its
capacity as Trustee of the Trust under the Third Century Bancorp  Employee Stock
Ownership  Plan and  Trust  Agreement  (Effective  as of June 1,  2004)  and the
Company of even date herewith (the "Loan Agreement"),  hereby certifies that the
representations  and  warranties of the Company  contained in the Loan Agreement
are true and correct in all material respects,  and the Company is in compliance
with its covenants set forth in the Loan Agreement in all material respects,  as
of the date of this Certificate.

     EXECUTED as of this ___ day of ____________, 2004.

                                 THIRD CENTURY BANCORP

                                 By:
                                    --------------------------------------------
                                    Robert D. Heuchan, President and
                                    Chief Executive OfficerEXHIBIT 10(8)

                             SHARE PLEDGE AGREEMENT

                                     between

                                   TRUST UNDER
                              THIRD CENTURY BANCORP
                    STOCK OWNERSHIP PLAN AND TRUST AGREEMENT

                                       and

                              THIRD CENTURY BANCORP

                              Dated: June 29, 2004

<PAGE>

                             SHARE PLEDGE AGREEMENT

     THIS SHARE PLEDGE AGREEMENT (this "Agreement" or "Share Pledge Agreement"),
dated as of June 29, 2004, between the Trust (the "Trust")  established pursuant
to the provisions of the THIRD CENTURY BANCORP EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT (EFFECTIVE AS OF JUNE 1, 2004) (the "Plan") by HOMEFEDERAL BANK,
as Trustee  ("Trustee"),  and Third Century Bancorp, an Indiana corporation (the
"Company").

                                   WITNESSETH:

     WHEREAS, contemporaneously herewith, the Trust and the Company have entered
into  that  certain  Exempt  Loan  and  Share  Purchase   Agreement  (the  "Loan
Agreement";  definitions  of terms  appearing  in which  have the same  meanings
herein,  unless a clear  contrary  intention  appears),  dated  June ___,  2004,
pursuant to which the Company has agreed to lend to the Trust, and the Trust has
agreed to borrow from the Company,  the Trust Loan,  and the Trust,  to evidence
its indebtedness to the Company with respect to the Trust Loan, has executed and
delivered the Trust Note to the Company; and

     WHEREAS,  it is a condition  precedent to the  obligation of the Company to
make the Trust Loan that, among other things, the Trust execute and deliver this
Agreement to the Company,

     NOW,  THEREFORE,  in consideration of the Loan Agreement and the Trust Loan
and other good and valuable consideration (the receipt, adequacy and sufficiency
of which the Trust acknowledges by its execution hereof), the Trust intending to
be legally bound does hereby covenant and agree with the Company as follows:

     Section 1. Pledge.  To secure the due and punctual  payment and performance
of the  obligations of the Trust  hereunder and under the Loan Agreement and the
Trust Note (collectively, the "Liabilities"), the Trustee on behalf of the Trust
hereby pledges,  hypothecates,  assigns,  transfers, sets over and delivers unto
the Company,  its successors  and assigns and hereby grants to the Company,  its
successors and assigns a security interest in:

          (a) all Shares of Company  Common  Stock  purchased or to be purchased
     with the proceeds of the Trust Loan  (collectively,  the "Pledged  Shares")
     and the certificates representing or evidencing the Pledged Shares, and, to
     the extent permitted by Section  4975(e)(7) of the Internal Revenue Code of
     1986, as amended, and Reg. ss. 54.4975-7(b)(5)  promulgated thereunder, all
     cash,  securities,  interest,  dividends,  rights and other property at any
     time and from time to time received in respect of or in exchange for any or
     all of the Pledged Shares; and

          (b) all proceeds of all of the foregoing

<PAGE>

(all such Pledged Shares, certificates,  cash, securities,  interest, dividends,
rights and other property, and proceeds thereof, other than as released, sold or
otherwise  applied by the Company  pursuant to the terms  hereof,  being  herein
collectively  called  the  "Collateral"),  TO HAVE AND TO HOLD such  Collateral,
together  with  all  rights,  titles,  interests,   privileges  and  preferences
appertaining or incidental  thereto,  forever,  subject,  however, to the terms,
covenants and conditions hereafter set forth.

     Section 2. Warranties and Covenants.

          (a) The Trust  represents  and  warrants to the Company that the Trust
     is, or at the time of any future delivery,  pledge,  assignment or transfer
     will be, the lawful owner of the  Collateral,  free of all claims and liens
     other than the  security  interest  hereunder,  with full right to deliver,
     pledge,  assign and transfer the  Collateral  to the Company as  Collateral
     hereunder.

          (b) So long as any of the Liabilities  remain  outstanding,  the Trust
     will, unless the Company shall otherwise consent in writing:

               (i)   promptly   deliver  to  the  Company   from  time  to  time
          certificates  representing Pledged Shares as the Trustee acquires them
          and,  upon  request  of the  Company,  such  stock  powers  and  other
          documents,  satisfactory  in form and  substance to the Company,  with
          respect to the  Collateral  as the Company may  reasonably  request to
          preserve and protect, and to enable the Company to enforce, its rights
          and remedies hereunder;

               (ii) not create or suffer to exist any lien, security interest or
          other charge or encumbrance  against, in or with respect to any of the
          Collateral  except for the pledge hereunder and the security  interest
          created hereby;

               (iii) not make or consent to any amendment or other  modification
          or waiver  with  respect  to any of the  Collateral  or enter into any
          agreement  or permit to exist any  restriction  with respect to any of
          the Collateral other than pursuant hereto; and

               (iv)  not  take or fail to take  any  action  which  would in any
          manner impair the value or  enforceability  of the Company's  security
          interest in any of the Collateral.

     Section  3.  Care of  Collateral.  The  Company  shall  be  deemed  to have
exercised  reasonable  care with  respect  to the  interest  of the Trust in the
custody  and  preservation  of the  Collateral  if it takes such action for that
purpose as the Trust  shall  request  in writing or as it would with  respect to
similar  assets of its own,  but  failure of the Company to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.

                                       2
<PAGE>

     Section 4. Certain Rights Regarding Collateral and Liabilities.

          (a) The Company may from time to time,  whether before or after any of
     the Liabilities shall become due and payable,  without notice to the Trust,
     to the extent otherwise  permitted (i) retain or obtain a security interest
     in  the  Collateral,  to  secure  payment  and  performance  of  any of the
     Liabilities,  (ii) retain or obtain the primary or  secondary  liability of
     any party or parties,  in addition to the Trust, with respect to any of the
     Liabilities,  (iii)  extend or renew for any period  (whether or not longer
     than the original  period) or exchange any of the Liabilities or release or
     compromise any obligation of any nature of any party with respect  thereto,
     and (iv) surrender, release or exchange all or any part of any property, in
     addition to the Collateral,  securing payment and performance of any of the
     Liabilities,  or compromise  or extend or renew for any period  (whether or
     not longer than the original  period) any  obligations of any nature of any
     party with respect to any such property.

          (b) The Company  shall have no right to vote the Pledged  Shares prior
     to the  occurrence  of an Event of Default  (hereinafter  in  Section  6(a)
     hereof  defined).  After the  occurrence of an Event of Default,  the Trust
     shall  have  the  right  to  vote  any  and all of the  Pledged  Shares  in
     accordance  with the Plan  unless  and until it  receives  notice  from the
     Company that such right has been  terminated with respect to shares subject
     to execution as a result of the Default.

     Section 5. Dividends, etc.

          (a) So long as no Default or Event of Default, shall have occurred and
     be  continuing,  the Trust  shall be  entitled  to receive any and all cash
     dividends on the Pledged Shares which it is otherwise  entitled to receive,
     and to vote the Pledged Shares in accordance with the terms of the Plan and
     to give  consents,  waivers  and  ratifications  in respect of the  Pledged
     Shares, but any and all stock and/or liquidating  dividends,  distributions
     in  property,  returns  of  capital  or other  distributions  made on or in
     respect  of the  Pledged  Shares,  whether  resulting  from a  subdivision,
     combination or  reclassification  of the  outstanding  capital stock of any
     issuer  thereof or received in exchange for the Pledged  Shares or any part
     thereof or as a result of any merger,  consolidation,  acquisition or other
     exchange of assets to which any issuer may be a party or otherwise, and any
     and all cash and other  property  received in exchange  for any  Collateral
     shall be, and become  part of the  Collateral  pledged  hereunder  and,  if
     received by the Trust,  shall  forthwith be delivered to the Company or its
     designated nominee (accompanied,  if appropriate,  by proper instruments of
     assignment and/or stock powers executed by the Trust in accordance with the
     Company's  instructions)  to be held subject to the terms of this Agreement
     and the Plan.

          (b) Upon the  occurrence  and  during the  continuance  of an Event of
     Default,  subject to the terms of Section  4(b)  hereof,  all rights of the
     Trust  pursuant to Section  5(a) hereof  shall cease and the Company  shall
     have the sole and  exclusive  right and authority to receive and retain the
     dividends  which the Trust would  otherwise be authorized to retain and, to
     the  extent  permitted  by law,  to vote and  give  consents,  waivers  and
     ratifications  pursuant to Section 5(a) hereof. Any and all money and other
     property paid over to or received by the Company pursuant to the provisions
     of this  paragraph  (b) shall be  retained  by the  Company  as  additional
     Collateral  hereunder  and be applied  in  accordance  with the  provisions
     hereof.

                                       3
<PAGE>

     Section 6. Event of Default.

          (a) The occurrence of any of the following  shall  constitute an Event
     of Default  hereunder:  nonpayment,  when due,  whether by  acceleration or
     otherwise,  of any amount  payable on any of the  Liabilities;  an Event of
     Default as defined in the Loan Agreement; any representation or warranty of
     the Trust  contained  herein or given  pursuant  hereto being untrue in any
     material  respect;  or the  Trust's  failure to  perform  any  covenant  or
     agreement contained herein.

          (b) Upon the  occurrence  of an Event of Default,  (i) the Company may
     exercise  from time to time any rights and  remedies  available to it under
     the  Uniform  Commercial  Code as in effect from time to time in Indiana or
     otherwise available to it, including, but not limited to, sale, assignment,
     or other disposal of the Pledged Shares in exchange for cash or credit, and
     (ii) the Company may,  without demand or notice of any kind, but subject to
     Section  7,  appropriate  and  apply  toward  the  payment  of  such of the
     Liabilities, and in such order of application, as the Company may from time
     to time elect, any balances,  credits, deposits,  accounts or moneys of the
     Trust. If any notification of intended disposition of any of the Collateral
     is  required  by  law,  such  notification,  if  mailed,  shall  be  deemed
     reasonably  and properly given if mailed at least five (5) days before such
     disposition, postage prepaid, addressed to the Trust, either at the address
     of the Trust shown below, or at any other address of the Trust appearing on
     the records of the Company.  Any proceeds of any  disposition of Collateral
     shall be applied as provided in Section 7 hereof.  All rights and  remedies
     of the Company expressed  hereunder are in addition to all other rights and
     remedies  possessed  by it,  including  those under any other  agreement or
     instrument  relating to any of the  Liabilities  or security  therefor.  No
     delay on the part of the  Company  in the  exercise  of any right or remedy
     shall operate as a waiver thereof, and no single or partial exercise by the
     Company of any right or remedy  shall  preclude  other or further  exercise
     thereof or the  exercise  of any other  right or  remedy.  No action of the
     Company  permitted  hereunder  shall  impair  or affect  the  rights of the
     Company in and to the Collateral.

          (c)  The  Trust  agrees  that  in any  sale  of any of the  Collateral
     whenever  an  Event  of  Default  hereunder  shall  have  occurred  and  be
     continuing,  the Company is hereby authorized to comply with any limitation
     or restriction in connection with such sale as it may be advised by counsel
     is necessary in order to avoid any  violation  of law  (including,  without
     limitation,  compliance  with such procedures as may restrict the number of
     prospective  bidders and purchasers,  require that such prospective bidders
     and purchasers have certain  qualification,  and restrict such  prospective
     bidders and  purchasers  to persons who will  represent and agree that they
     are  purchasing for their own account for investment and not with a view to
     the distribution or resale of such  Collateral),  or in order to obtain any
     required  approval  of the  sale or of the  purchaser  by any  governmental
     regulatory  authority or official,  and the Trust further  agrees that such
     compliance  shall not result in such sale being considered or deemed not to
     have been made in a commercially  reasonable  manner, nor shall the Company
     be liable  nor  accountable  to the Trust for any  discount  allowed by the
     reason of the fact that such Collateral is sold in compliance with any such
     limitation or restriction.

                                       4
<PAGE>

          (d)  Notwithstanding  anything to the contrary  herein or in the Trust
     Note or the Loan  Agreement  contained  or implied,  if an Event of Default
     occurs  with  respect to the Trust  Loan by the  Trust,  the value of Trust
     assets  transferred in satisfaction  thereof shall not exceed the amount of
     such default. In addition,  such a transfer of such Trust assets shall only
     occur  upon,  and to the  extent of the  failure  of, the Trust to meet the
     payment  schedule  of the Trust  Loan  provided  in  Article II of the Loan
     Agreement.

     Section 7. Application of Proceeds of Sale or Cash Held as Collateral.  The
proceeds of sale of  Collateral  sold  pursuant to the terms of Section 6 hereof
and/or after an Event of Default, the cash held as Collateral  hereunder,  shall
be applied by the  Company,  to the  extent  permitted  by  applicable  law,  as
follows:

               First:  to  payment  of the  costs  and  expenses  of such  sale,
          including the out-of-pocket  costs and expenses of the Company and the
          reasonable  fees and  out-of-pocket  costs  and  expenses  of  counsel
          employed in connection  therewith,  and to the payment of all advances
          made by the  Company for the  account of the Trust  hereunder  and the
          payment  of  all  costs  and  expenses  incurred  by  the  Company  in
          connection with the  administration and enforcement of this Agreement,
          to the extent that such  advances,  costs and expenses  shall not have
          been reimbursed to the Company;

               Second: to the payment in full of the Liabilities; and

               Third: the balance, if any, of such proceeds shall be paid to the
          Trust,  its  successors  and  assigns,  or  as a  court  of  competent
          jurisdiction may direct.

     Section 8. Authority of Company.  The Company shall have and be entitled to
exercise all such powers hereunder as are specifically  delegated to the Company
by the terms hereof,  together with such powers as are incidental  thereto.  The
Company  may  execute  any of its  duties  hereunder  by or  through  agents  or
employees  and shall be entitled to retain  counsel and to act in reliance  upon
the advice of such  counsel  concerning  all  matters  pertaining  to its duties
hereunder.  Neither the Company,  nor any  director,  officer or employee of the
Company,  shall be liable for any  action  taken or omitted to be taken by it or
them  hereunder  or in  connection  herewith,  except for its or their own gross
negligence  or  willful  misconduct.  The Trust  hereby  agrees,  to the  extent
permitted by applicable law, to reimburse the Company,  on demand, for all costs
and expenses  incurred by the Company in connection with the enforcement of this
Agreement  (including  costs and expenses  incurred by any agent employed by the
Company).

     Section  9.  Termination.  This  Agreement  shall  terminate  when  all the
Liabilities have been fully paid and performed,  at which time the Company shall
reassign and redeliver (or cause to be reassigned and redelivered) to the Trust,
or to such person or persons as the Trust shall designate, against receipt, such
of the Collateral (if any) as shall not have been theretofore released,  sold or
otherwise applied by the Company pursuant to the terms hereof and shall still be
held by it hereunder,  together with any appropriate instruments of reassignment
and  release.   Any  such  reassignment  shall  be  without  recourse  upon,  or
representation  or warranty by, the  Company.

                                       5
<PAGE>

     Section 10. Required Release of Collateral.  Notwithstanding  any provision
of this Agreement or the Loan  Agreement to the contrary,  the Company from time
to time will  release  from the  pledge  and  security  interest  under the Loan
Agreement,  such Collateral as must be allocated to participants  under the Plan
pursuant to Section 8.7(h) of the Plan and otherwise  under the Code, the Exempt
Loan Rules or other applicable law.

     Section 11.  Limited  Recourse.  Notwithstanding  anything to the  contrary
herein  or in the  Trust  Note,  the Loan  Agreement  or any  other  instrument,
agreement or document contained or implied, the Liabilities shall be enforceable
to the extent permitted under applicable law, including, without limitation, the
Exempt Loan Rules,  only against the Trust to the extent of the  Collateral  not
theretofore  released from the pledge and security interest under this Agreement
as  provided  herein and  contributions  (other than  contributions  of employer
securities) made to the Trust in accordance with the Plan to enable the Trust to
pay and satisfy the Liabilities and from earnings attributable to the Shares and
the   investment  of  such   contributions   (collectively,   the  "`Trust  Loan
Collateral").  No  recourse  shall be had to or against  the Trust or the assets
thereof  (other  than the Trust Loan  Collateral)  for any  deficiency  judgment
against the Trust for the purpose of obtaining payment or other  satisfaction of
the Liabilities.  Without limiting the foregoing, the Trustee of the Trust shall
have no personal liability for any of the Liabilities, other than as required by
or arising under applicable law.

     Section 12. Notices.  All  communications and notices hereunder shall be in
writing and, if mailed,  shall be deemed to be given when sent by  registered or
certified mail,  postage prepaid,  return receipt  requested,  or by telecopier,
duly confirmed, and addressed to such party at the address indicated below or to
such other  address  as such party may  designate  in writing  pursuant  to this
Section 12.

                                    THIRD CENTURY BANCORP
                                    80 East Jefferson Street
                                    Franklin, Indiana   46131
                                    Attention: Robert D. Heuchan, President

                                    HOMEFEDERAL BANK
                                    501 Washington Street
                                    Columbus, Indiana   47201
                                    Attention: David L. Fisher

     Section 13. Binding Agreement  Assignment.  This Agreement,  and the terms,
covenants and conditions hereof,  shall be binding upon and inure to the benefit
of the parties hereto, and their respective  successors and assigns,  except the
Trust shall not be permitted to assign this Agreement or any interest  herein or
in the  Collateral,  or any part  thereof,  or  otherwise  grant any option with
respect to the Collateral,  or any part thereof and the Company shall not assign
any interest  herein or in the  Collateral  unless such  assignment is expressly
made subject to the terms of the Loan Documents.

                                       6
<PAGE>

     Section  14.  Miscellaneous  Provisions.  Neither  this  Agreement  nor any
provision hereof may be amended,  modified, waived, discharged or terminated nor
may any of the  Collateral  be released or the pledge or the  security  interest
created hereby extended, except by an instrument in writing duly signed by or on
behalf of the  Company  hereunder.  The  section  headings  used  herein are for
convenience  of reference  only and shall not define or limit the  provisions of
this Agreement. This Agreement may be executed in any number of counterparts and
by the  different  parties on separate  counterparts  and each such  counterpart
shall be deemed to be an  original,  but all such  counterparts  shall  together
constitute but one and the same Agreement.

     Section 15. Governing Law; Interpretation. This Agreement has been made and
delivered at Franklin,  Indiana,  and, except to the extent  preempted by ERISA,
shall be governed by the internal laws of the State of Indiana,  without  regard
to principles  of conflict of laws.  Wherever  possible  each  provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such  provision  shall be  ineffective  to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision or the remaining provisions of this Agreement.

     Section 16. Filing as a Financing Statement.  At the option of the Company,
this  Agreement,  or a  carbon,  photographic  or  other  reproduction  of  this
Agreement or of any Uniform  Commercial  Code financing  statement  covering the
Collateral or any portion  thereof  shall be sufficient as a Uniform  Commercial
Code financing statement and may be filed as such.

                                       7
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their respective  representatives  thereunto duly authorized as
of the date first above written.

                          TRUST UNDER THE THIRD CENTURY
                          BANCORP EMPLOYEE STOCK OWNERSHIP
                          PLAN AND TRUST AGREEMENT

                          By: HomeFederal Bank, Trustee

                          By: /s/ David L. Fisher
                             --------------------------------------------------

                          Printed:   David L. Fisher
                                   -----------------------------------
                          Its:     Vice President & Senior Trust Officer

                          THIRD CENTURY BANCORP

                          By: /s/ Robert D. Heuchan
                             --------------------------------------------------

                          Printed:  Robert D. Heuchan
                                  ---------------------------------------------

                          Its:  President and Chief Executive Officer

                                       8

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