Document:

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                                                                     EXHIBIT 4.1

                               PURCHASE AGREEMENT

                  THIS AGREEMENT is made as of the 4th day of April, 2002, by
and between FSI International, Inc., a corporation organized under the laws of
the State of Minnesota (the "Company"), with its principal offices at 3455 Lyman
Boulevard, Chaska, Minnesota 55318-3052, and the purchaser whose name and
address is set forth on the signature page hereof (the "Purchaser").

                  IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser agree as follows:

                  SECTION 1. Authorization of Sale of the Shares. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
up to 4,000,000 shares (the "Shares") of common stock, no par value per share
(the "Common Stock"), of the Company. The Company reserves the right to increase
or decrease the number of shares of Common Stock sold in this private placement
prior to the Closing Date.

                  SECTION 2. Agreement to Sell and Purchase the Shares. At the
Closing (as defined in Section 3), the Company will sell to the Purchaser and
the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares (and at the purchase price) shown
below:

                                         Price Per
       Number to Be                      Share In                   Aggregate
        Purchased                        Dollars                      Price
        ---------                        -------                      -----

                  The Company proposes to enter into this same form of purchase
agreement with certain other investors (the "Other Purchasers") and expects to
complete sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agents" shall mean Lehman Brothers Inc. and Needham & Company, Inc.

                  SECTION 3. Delivery of the Shares at the Closing. The
completion of the purchase and sale of the Shares (the "Closing") shall occur at
the offices of Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New
York 10038 as soon as practicable and as agreed by the parties hereto within
three business days following the execution of the Agreements, or on such later
date or at such different location as the parties shall agree in writing, but
not prior to the date that the conditions for Closing set forth below have been
satisfied or waived by the appropriate party (the "Closing Date"). The Closing
shall occur at a time to be agreed upon by

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the Company and the Placement Agents and of which the Purchasers will be
notified by facsimile transmission or otherwise.

                  At the Closing, the Company shall deliver to the Purchaser one
or more stock certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser in writing, representing the
number of Shares set forth in Section 2 above and bearing an appropriate legend
referring to the fact that the Shares were sold in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act") provided by Section 4(2) thereof and Rule 506 thereunder. The name(s) in
which the stock certificates are to be registered are set forth in the Stock
Certificate Questionnaire attached hereto as part of Appendix I. The Company's
obligation to complete the purchase and sale of the Shares and deliver such
stock certificate(s) to the Purchaser at the Closing shall be subject to the
following conditions, any one or more of which may be waived by the Company: (a)
receipt by the Company of same-day funds in the full amount of the purchase
price for the Shares being purchased hereunder; (b) completion of the purchases
and sales under the Agreements with all of the Other Purchasers; and (c) the
accuracy of the representations and warranties (as if such representations and
warranties were made on the Closing Date) made by the Purchasers and the
fulfillment of those undertakings of the Purchasers to be fulfilled prior to the
Closing. The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject to
the conditions: (1) that the representations and warranties made by the Company
herein are accurate as of the Closing Date; (2) that the Company has fulfilled
all undertakings to be fulfilled prior to the Closing; (3) that the Closing Date
shall occur on a date that is not later than April 5, 2002; and (4) that the
Common Stock shall be quoted on the Nasdaq National Market System. The
Purchaser's obligations hereunder are expressly conditioned on the purchase by
the Other Purchasers of Shares having an aggregate purchase price of at least
$20,000,000.

SECTION 4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Purchaser as follows:

                  4.1 Organization and Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Minnesota and the Company is qualified to do business as a
foreign corporation in each jurisdiction in which qualification is required,
except where failure to so qualify would not reasonably be expected to have a
material adverse effect upon the business, financial condition, properties or
operations of the Company and its subsidiaries, which are listed on Exhibit 21.0
to the Company's Annual Report on Form 10-K for the fiscal year ended August 25,
2001 (each a "Subsidiary" and collectively the "Subsidiaries"), taken as a whole
(a "Material Adverse Effect"). Each Subsidiary is a direct or indirect
wholly-owned subsidiary of the Company. Each Subsidiary is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified to do business as a foreign corporation in each
jurisdiction in which qualification is required, except where failure to so
qualify would not have a Material Adverse Effect.

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                  4.2 Authorized Capital Stock. As of February 23, 2002, the
authorized capital stock of the Company consists of (a) 50,000,000 shares of
Common Stock, of which 26,163,959 shares are issued and outstanding and
4,034,677 are reserved for issuance under the Company's stock option and
purchase plans; (b) 10,000,000 shares of preferred stock, no par value, 300,000
shares of which have been designated as Series A Junior Participating Preferred
Stock, none of which are issued or outstanding. The issued and outstanding
shares of the Company's Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform in all material respects to the description thereof
contained in the Private Placement Memorandum. Except for stock options and
other awards granted under the option, award and purchase plans of the Company
described in the Private Placement Memorandum (as defined herein) or except as
disclosed in or contemplated by the Confidential Private Placement Memorandum
dated March 20, 2002 prepared by the Company, including all exhibits thereto
(except Exhibit E) and supplements and amendments thereto (the "Private
Placement Memorandum"), the Company does not have outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
stock, stock bonus and other stock plans or arrangements and the options or
other rights granted and exercised thereunder, set forth in the Private
Placement Memorandum accurately and fairly presents all material information
with respect to such plans, arrangements, options and rights, except that since
the date of the Private Placement Memorandum the Company has entered into an
amendment to the Rights Agreement dated May 22, 1997, by and between the Company
and Harris Trust and Savings Bank as Rights Agent. With respect to each
Subsidiary, (i) the Company owns, directly or indirectly, 100% of the
Subsidiary's capital stock (except for directors' qualifying shares), (ii) all
the issued and outstanding shares of the Subsidiary's capital stock have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with applicable federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and (iii) there are no outstanding options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of the Subsidiary's capital stock or any
such options, rights, convertible securities or obligations.

                  4.3 Issuance, Sale and Delivery of the Shares. The Shares have
been duly authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right (which
has not been waived or has not expired by reason of lapse of time following
notification of the Company's intent to file the registration statement to be
filed by it pursuant to Section 7.1 (the "Registration Statement")) to require
the Company to register the sale of any shares owned by such stockholder under
the Securities Act of 1933, as amended (the "Securities Act"), in the

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Registration Statement. No further approval or authority of the stockholders or
the Board of Directors of the Company will be required for the issuance and sale
of the Shares to be sold by the Company as contemplated herein.

                  4.4 Due Execution, Delivery and Performance of this Agreement.
The Company has full legal right, corporate power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company. The execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions herein contemplated will not violate any provision of the
organizational documents of the Company and will not result in the creation of
any lien, charge, security interest or encumbrance upon any assets of the
Company or of any of its Subsidiaries pursuant to the terms or provisions of, or
will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any of their
respective properties may be bound or affected and in each case which would have
a Material Adverse Effect or, to the Company's knowledge, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or any of its Subsidiaries or any of their respective properties
where such conflict, breach, violation or default is likely to result in a
Material Adverse Effect. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement, except for compliance with the
Blue Sky laws and federal securities laws applicable to the offering of the
Shares. Upon the execution and delivery of this Agreement, and assuming the
valid execution thereof by the Purchaser, this Agreement will constitute a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 7.3 hereof may be legally unenforceable.

                  4.5 Accountants. The firm of KPMG LLP, which has expressed its
opinion with respect to the consolidated financial statements to be included in
the Registration Statement and the Prospectus which forms a part thereof, has
represented to the Company that KPMG LLP is an independent accountant as
required by the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations").

                  4.6 No Defaults. Except as disclosed in the Private Placement
Memorandum, neither the Company nor any of its Subsidiaries is in violation or
default of any provision of its articles of incorporation or bylaws, or in
breach of or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which it is a party or by which it or any of its
properties are bound

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and where such breach or default is reasonably likely to result in a Material
Adverse Effect; and there does not exist any state of fact which, with notice or
lapse of time or both, would constitute an event of default on the part of the
Company or any of its Subsidiaries as defined in such documents and which would
have a Material Adverse Effect.

                  4.7. Contracts. The contracts described in the Private
Placement Memorandum that are material to the Company are in full force and
effect on the date hereof; and neither the Company nor any of its Subsidiaries
nor, to the Company's knowledge, any other party thereto, is in breach of or
default under any of such contracts which breach or default would have a
Material Adverse Effect.

                  4.8 No Actions. Except as disclosed in the Private Placement
Memorandum, (1) there are no legal or governmental actions, suits, proceedings,
pending and (2) to the Company's knowledge, there are no inquiries or
investigations, nor are there any legal or governmental actions, suits, or
proceedings threatened, to which the Company or any of its Subsidiaries is or
may be a party or subject or of which property owned or leased by the Company or
any of its Subsidiaries is or may be the subject, or related to environmental or
discrimination matters, or instituted by the Commission, the National
Association of Securities Dealers, Inc., any state securities commission or
other governmental or regulatory entity, which actions, suits or proceedings,
individually or in the aggregate, might prevent or might reasonably be expected
to prevent or materially and adversely affect the transactions contemplated by
this Agreement or result in a Material Adverse Effect; and, to the Company's
knowledge, no labor disturbance by the employees of the Company or of any of its
Subsidiaries exists, or is imminent which is reasonably expected to have a
Material Adverse Effect. Except as disclosed in the Private Placement
Memorandum, neither the Company nor any of its Subsidiaries is party to or
subject to the provisions of any material injunction, judgment, decree or order
of any court, regulatory body administrative agency or other governmental body.

                  4.9 Properties. Each of the Company and its Subsidiaries has
good and marketable title to all the properties and assets reflected as owned by
it in the consolidated financial statements included in the Private Placement
Memorandum, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (i) those, if any, reflected in such consolidated financial
statements, or (ii) those which are not material in amount and do not adversely
affect the use made and intended to be made of such property by the Company or
any of its Subsidiaries. Each of the Company and its Subsidiaries owns or leases
all such properties as are necessary to its operations as now conducted. Each of
the Company and its Subsidiaries holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to its business.

                  4.10 No Material Change. Since August 25, 2001 and except as
described in or specifically contemplated by the Private Placement Memorandum:
(i) neither the Company nor any of its Subsidiaries has incurred any material
liabilities or obligations, indirect, or contingent, or entered into any
material verbal or written agreement or other transaction not in the ordinary
course of business or which could reasonably be expected to have a Material
Adverse Effect; (ii) neither the Company nor any of its Subsidiaries has
sustained any material loss or interference

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with its businesses or properties from fire, flood, windstorm, accident or other
calamity not covered by insurance; (iii) neither the Company nor any of its
Subsidiaries has paid or declared any dividends or other distributions with
respect to its capital stock and neither the Company nor any of its Subsidiaries
is in default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company or of any of its Subsidiaries other than the sale of the Shares
hereunder and shares or options issued pursuant to employee equity incentive
plans or purchase plans approved by the Company's Board of Directors and
repurchases of shares or options pursuant to repurchase plans already approved
by the Company's Board of Directors, or any increase in indebtedness material to
the Company or any of its Subsidiaries; and (v) there has not been any other
event or change that would have a Material Adverse Effect.

                  4.11 Intellectual Property. Except as disclosed in the Private
Placement Memorandum: (i) the Company owns or has obtained valid and enforceable
licenses or options for the inventions, patent applications, patents, trademarks
(both registered and unregistered), trade names, copyrights and trade secrets
necessary for the conduct of the Company's business as currently conducted
(collectively, the "Intellectual Property"); and (ii) (a) there are no third
parties who have any ownership rights to any Intellectual Property that is owned
by, or has been licensed to, the Company for the products described in the
Private Placement Memorandum that would preclude the Company from conducting its
business as currently conducted and have a Material Adverse Effect, except for
the ownership rights of the owners of the Intellectual Property licensed or
optioned by the Company; (b) to the Company's knowledge, there are currently no
sales of any products that would constitute an infringement by third parties of
any Intellectual Property owned, licensed or optioned by the Company, which
infringement would have a Material Adverse Effect; (c) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the rights of the Company in or to any Intellectual Property
owned, licensed or optioned by the Company, other than claims which would not
reasonably be expected to have a Material Adverse Effect; (d) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any Intellectual Property
owned, licensed or optioned by the Company, other than non-material actions,
suits, proceedings and claims; and (e) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary right of others, other than non-material actions,
suits, proceedings and claims.

                  4.12 Compliance. Neither the Company nor any of its
Subsidiaries has been advised, nor has reason to believe, that it is not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting its business,
including, without limitation, all applicable local, state and federal
environmental laws and regulations; in each case, except where failure to be in
compliance would not have a Material Adverse Effect.

                  4.13 Taxes. Each of the Company and its Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and neither the Company nor
any of its Subsidiaries has knowledge of a

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tax deficiency which has been or might be asserted or threatened against it
which is reasonably likely to have a Material Adverse Effect.

                  4.14 Transfer Taxes. On the Closing Date, all stock transfer
or other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to the Purchaser
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been complied with.

                  4.15 Investment Company. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company, within the meaning of the Investment Company Act of
1940, as amended.

                  4.16 Offering Materials. The Company has not distributed and
will not distribute prior to the Closing Date any offering material in
connection with the offering and sale of the Shares other than the Private
Placement Memorandum or any amendment or supplement thereto. Neither the Company
nor any person acting on its behalf has in the past or will hereafter take any
action independent of the Placement Agents to sell, offer for sale or solicit
offers to buy any securities of the Company which would subject the offer,
issuance or sale of the Shares, as contemplated by this Agreement, to the
registration requirements of Section 5 of the Securities Act.

                  4.17 Insurance. The Company maintains insurance of the types
and in the amounts that the Company reasonably believes is adequate for its
business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against
by similarly situated companies, all of which insurance is in full force and
effect.

                  4.18 Contributions. The Company has not at any time since its
incorporation, directly or indirectly, (i) made any unlawful contribution to any
candidate for public office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.

                  4.19 Additional Information. The information contained in the
following documents, which the Placement Agents have furnished to the Purchaser,
or will furnish prior to the Closing, does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading, as of their respective filing dates or,
if amended, as so amended:

                  (a)      the Company's Annual Report on Form 10-K for the year
                           ended August 25, 2001;

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                  (b)      the Company's Quarterly Report on Form 10-Q for the
                           quarter ended November 24, 2001;

                  (c)      the Company's Current Report on Form 8-K filed with
                           the Commission on January 24, 2002;

                  (d)      the Company's Quarterly Report on Form 10-Q for the
                           quarter ended February 23, 2002; and

                  (e)      all other documents, if any, filed by the Company
                           with the Securities and Exchange Commission (the
                           "Commission") since August 25, 2001 pursuant to the
                           reporting requirements of the Securities Exchange Act
                           of 1934, as amended (the "Exchange Act").

In addition, as of the date of this Agreement, the Private Placement Memorandum
(including the exhibits thereto), which the Placement Agents have furnished to
the Purchaser, or will furnish prior to the Closing, when read together with the
information, qualifications and exceptions contained in this Agreement, does not
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading.

                  4.20 Legal Opinion. Prior to the Closing, Faegre & Benson LLP,
counsel to the Company, will deliver its legal opinion to the Placement Agents
substantially in the form attached as Exhibit A to this agreement. Such opinion
shall also state that each of the Purchasers may rely thereon as though it were
addressed directly to such Purchaser.

                  4.21 Certificate. At the Closing, the Company will deliver to
the Purchaser a certificate executed by the chief executive officer, or the
chief financial or accounting officer of the Company, dated the Closing Date, in
form and substance reasonably satisfactory to the Purchaser, to the effect that
the representations and warranties of the Company set forth in this Section 4
are true and correct as of the date of this Agreement and as of the Closing
Date, and the Company has complied in all material respects with all the
agreements and satisfied all the conditions herein on its part to be performed
or satisfied on or prior to such Closing Date.

                  4.22 Price of Common Stock. The Company has not taken, and
will not take, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of the
Common Stock to facilitate the sale or resale of the Shares.

                  4.23 Reporting Company; Form S-3. The Company is subject to
the reporting requirements of the Exchange Act, has a class of securities
registered under Section 12 of the Exchange Act, and has filed all reports
required thereby. The Company is eligible to register the Shares for resale by
the Purchaser on a registration statement on Form S-3 under the Securities Act.
There exist no facts or circumstances (including without limitation any required
approvals or waivers or any circumstances that may delay or prevent the
obtaining of accountant's

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consents) that reasonably could be expected to prohibit or delay the preparation
and filing of a registration statement on Form S-3 that will be available for
the resale of the Shares by the Purchaser.

                  4.24 Use of Proceeds. The Company shall use the proceeds from
the sale of Shares as described under "Use of Proceeds" in the Private Placement
Memorandum.

                  4.25 Quotation on Nasdaq. The Company shall use its
commercially reasonable efforts to maintain the designation and quotation, or
listing, of the Common Stock on the Nasdaq National Market System or on another
national securities exchange for a minimum of two (2) years following the
Closing Date.

                  4.26 Use of Purchaser Name. Except as may be required by
applicable law, the Company shall not use, directly or indirectly, the
Purchaser's name or the name of any of its affiliates in any advertisement,
announcement, press release or other similar communication unless it has
received the prior written consent of the Purchaser for the specific use
contemplated or as otherwise required by applicable law or regulation.

                  4.27 Non-Public Information. The Company has not disclosed to
the Purchaser, whether in the Private Placement Memorandum or otherwise,
information that would constitute material non-public information as of the
Closing Date.

                  SECTION 5. Representations, Warranties and Covenants of the
Purchaser. (a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company and
comparable entities, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Shares; (ii) the Purchaser is acquiring the number of Shares set forth in
Section 2 above in the ordinary course of its business and for its own account
for investment only and with no present intention of distributing any of such
Shares, and no arrangement or understanding exists with any other persons
regarding the distribution of such Shares (this representation and warranty not
limiting the Purchaser's right to sell such Shares pursuant to the Registration
Statement or in compliance with the Securities Act and the Rules and
Regulations, or, other than with respect to any claims arising out of a breach
of this representation and warranty, the Purchaser's right to indemnification
under Section 7.3); (iii) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares, nor will
Purchaser engage in any short sale which results in a disposition of any of the
Shares by Purchaser, except in compliance with the Securities Act, the Rules and
Regulations and such other securities or Blue Sky laws as may be applicable;
(iv) the Purchaser has completed or caused to be completed the Registration
Statement Questionnaire attached hereto as part of Appendix I, for use in
preparation of the Registration Statement, and the answers thereto are true and
correct as of the date hereof and will be true and correct as of the effective
date of the Registration Statement, and the Purchaser will

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notify the Company immediately of any material change in any such information
provided in the Registration Statement Questionnaire; (v) the Purchaser has, in
connection with its decision to purchase the number of Shares set forth in
Section 2 above, relied solely upon the Private Placement Memorandum and the
documents included therein or incorporated by reference and the representations
and warranties of the Company contained herein; (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act; and (vii) the Purchaser agrees to notify
the Company immediately of any change in any of the foregoing information until
such time as the Purchaser has sold all of its Shares or the Company is no
longer required to keep the Registration Statement effective.

                  (b) The Purchaser understands that the Shares are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of Securities Act, the Rules and Regulations and state
securities laws, and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Shares.

(c) For the benefit of the Company, the Purchaser previously agreed orally with
the Placement Agents to keep confidential all information concerning this
private placement. The Purchaser understands that the information contained in
the Private Placement Memorandum is strictly confidential and proprietary to the
Company and has been prepared from the Company's publicly available documents
and other information and is being submitted to the Purchaser solely for such
Purchaser's confidential use. The Purchaser agrees to use the information
contained in the Private Placement Memorandum for the sole purpose of evaluating
a possible investment in the Shares and the Purchaser hereby acknowledges that
it is prohibited from reproducing or distributing the Private Placement
Memorandum, this Purchase Agreement, or any other offering materials or other
information provided by the Company in connection with the Purchaser's
consideration of its investment in the Company, in whole or in part, or
divulging or discussing any of their contents. Further, the Purchaser
understands that the existence and nature of all conversations and
presentations, if any, regarding the Company and this offering must be kept
strictly confidential. The Purchaser understands that the federal securities
laws impose restrictions on trading based on information regarding this
offering. In addition, the Purchaser hereby acknowledges that unauthorized
disclosure of information regarding this offering may cause the Company to
violate Regulation FD. In addition to the above, the Purchaser shall maintain in
confidence the receipt and content of any notice of a Suspension (as defined in
Section 5(h) below). The foregoing agreements shall not apply to any information
that is or becomes publicly available through no fault of the Purchaser, or that
the Purchaser is legally required to disclose; provided, however, that if the
Purchaser is requested or ordered to disclose any such information pursuant to
any court or other government order or any other applicable legal procedure, it
shall provide the Company with prompt notice of any such request or order in
time sufficient to enable the Company to seek an appropriate protective order.

                  (d) The Purchaser understands that its investment in the
Shares involves a significant degree of risk and that the market price of the
Common Stock has been and continues

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to be volatile and that no representation is being made as to the future value
of the Common Stock. The Purchaser has the knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Shares and has the ability to bear the economic risks of an
investment in the Shares. The Purchaser has been afforded the opportunity to ask
questions of the Company regarding such matters.

                  (e) The Purchaser understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Shares.

                  (f) The Purchaser understands that, until such time as the
Registration Statement has been declared effective or the Shares may be sold by
non-affiliates of the Company pursuant to Rule 144 under the Securities Act
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, the Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for the Shares):

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
                  SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
                  ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
                  SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL, IN FORM,
                  SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT
                  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD
                  PURSUANT TO RULE 144 UNDER SAID ACT."

                  (g) The Purchaser's principal executive offices are in the
jurisdiction set forth immediately below the Purchaser's name on the signature
pages hereto.

                  (h) The Purchaser hereby covenants with the Company not to
make any sale of the Shares under the Registration Statement without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied, and the Purchaser acknowledges and agrees that such Shares are not
transferable on the books of the Company unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate Purchaser's
Certificate of Subsequent Sale (i) in the form of Appendix II hereto, (ii)
executed by an officer of, or other authorized person designated by, the
Purchaser, and (iii) to the effect that (A) the Shares have been sold in
accordance with the Registration Statement, the Securities Act and any
applicable state securities or Blue Sky laws and (B) if applicable, the
requirement of delivering a current prospectus has been satisfied. The Purchaser
acknowledges that there may occasionally be times when the Company must suspend
the use of the prospectus forming a part of the Registration Statement (a
"Suspension") until such time as an amendment to the Registration Statement has
been filed by the Company and declared effective by the Commission, or such time
as such prospectus has been supplemented, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act.
The Purchaser hereby covenants that it will not sell any Shares pursuant to said
prospectus

                                      -11-
<PAGE>

during the period commencing at the time at which the Company gives the
Purchaser written notice of the Suspension of the use of said prospectus and
ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said prospectus. The Purchaser
shall not be prohibited from selling Shares under the Registration Statement as
a result of Suspensions on more than two occasions of not more than 30 days each
in any twelve-month period, unless, in the good faith judgment of the Company's
Board of Directors, upon advice of counsel, the sale of Shares under the
Registration Statement in reliance on this paragraph would be reasonably likely
to cause a violation of the Securities Act or the Exchange Act.

                  (i) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
legal, valid and binding obligation of the Purchaser, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Purchaser in Section 7.3
hereof may be legally unenforceable.

                  SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants, agreements, representations
and warranties made by the Company and the Purchaser herein and in the
certificates for the Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.

                  SECTION 7. Registration of the Shares; Compliance with the
Securities Act.

                  7.1 Registration Procedures and Expenses. The Company shall:

                  (a) as soon as reasonably practicable, but in no event later
than ten days following the Closing Date, prepare and file with the Commission
the Registration Statement on Form S-3 relating to the sale of the Shares by the
Purchaser and the Other Purchasers from time to time on the Nasdaq National
Market or the facilities of any national securities exchange on which the Common
Stock is then traded or in privately-negotiated transactions;

                  (b) use its best efforts, subject to receipt of necessary
information from the Purchasers, to cause the Commission to declare the
Registration Statement effective within 60 days after the Closing Date;

                                      -12-

<PAGE>

                  (c) use its best efforts to promptly prepare and file with the
Commission such amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective until the earliest of (i) two years after the
effective date of the Registration Statement, or (ii) such time as the Shares
become eligible for resale by non-affiliates pursuant to Rule 144(k) under the
Securities Act of 1933, as amended;

                  (d) furnish to the Purchaser with respect to the Shares
registered under the Registration Statement (and to each underwriter, if any, of
such Shares) such number of copies of prospectuses and such other documents as
the Purchaser may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Shares by the Purchaser;

                  (e) file documents required of the Company for normal Blue Sky
clearance in states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;

                  (f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the registration of the
Shares pursuant to the Registration Statement, other than fees and expenses, if
any, of counsel or other advisers to the Purchaser or the Other Purchasers or
underwriting discounts, brokerage fees and commissions incurred by the Purchaser
or the Other Purchasers, if any;

                  (g) file a Form D with respect to the Shares as required under
Regulation D and to provide a copy thereof to the Purchaser promptly after
filing;

                  (h) issue a press release describing the transactions
contemplated by this Agreement on the Closing Date; and

                  (i) make available, while the Registration Statement is
effective and available for resale, its Chief Executive Officer, Chief Financial
Officer, and Executive Vice President--Business Development for questions
regarding information which the Purchaser may reasonably request in order to
fulfill any due diligence obligation on its part.

                  The Company understands that the Purchaser disclaims being an
underwriter, but the Purchaser being deemed an underwriter shall not relieve the
Company of any obligations it has hereunder. A draft of the proposed form of the
Registration Statement is included in the Private Placement Memorandum and a
questionnaire related thereto to be completed by the Purchaser is attached
hereto as Appendix I.

                  7.2 Transfer of Shares After Registration. While the
Registration Statement is effective and available for resale, the Purchaser
agrees that it will not effect any disposition of the Shares or its right to
purchase the Shares that would constitute a sale within the meaning of the
Securities Act, except as contemplated in the Registration Statement referred to
in Section 7.1 hereof in the section titled "Plan of Distribution," and that it
will promptly notify the

                                      -13-

<PAGE>

Company of any changes in the information set forth in the Registration
Statement regarding the Purchaser or its plan of distribution.

                  7.3  Indemnification.  For the purpose of this Section 7.3:

                  (i)      the term "Purchaser/Affiliate" shall mean any
                           affiliates of the Purchaser and any person who
                           controls the Purchaser or any affiliate of the
                           Purchaser within the meaning of Section 15 of the
                           Securities Act or Section 20 of the Exchange Act; and

                  (ii)     the term "Registration Statement" shall include any
                           final prospectus, exhibit, supplement or amendment
                           included in or relating to, and any document
                           incorporated by reference in, the Registration
                           Statement referred to in Section 7.1 hereof.

                  (a) The Company agrees to indemnify and hold harmless the
Purchaser and the Purchaser/Affiliate against any losses, claims, damages,
liabilities or expenses, joint or several, to which the Purchaser or
Purchaser/Affiliate may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434, of the Rules and Regulations, or the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state in any of them a material fact required to be stated therein
or necessary to make the statements in the Registration Statement or any
amendment or supplement thereto not misleading or in the Prospectus or any
amendment or supplement thereto not misleading in the light of the circumstances
under which they were made, or arise out of or are based in whole or in part on
any inaccuracy in the representations and warranties of the Company contained in
this Agreement, or any failure of the Company to perform its obligations
hereunder or under law, and will reimburse the Purchaser or Purchaser/Affiliate
for any legal and other expenses as such expenses are reasonably incurred by the
Purchaser or Purchaser/Affiliate in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Purchaser expressly for use

                                      -14-

<PAGE>

therein, or (ii) the failure of the Purchaser to comply with the covenants and
agreements contained in Sections 5(h) or 7.2 hereof respecting the sale of the
Shares, or (iii) the inaccuracy of any representations made by the Purchaser
herein or (iv) any statement or omission in any Prospectus that is corrected in
any subsequent Prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser.

                  (b) The Purchaser will severally, but not jointly, indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, against any losses, claims, damages, liabilities or expenses
to which the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Purchaser) insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
(i) any failure to comply with the covenants and agreements contained in
Sections 5(h) or 7.2 hereof respecting the sale of the Shares or (ii) the
inaccuracy of any representation made by the Purchaser herein or (iii) any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements in the Registration Statement or any amendment or supplement thereto
not misleading or in the Prospectus or any amendment or supplement thereto not
misleading in the light of the circumstances under which they were made, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by the Purchaser expressly for use therein, and will reimburse the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person for any legal and other expense reasonably
incurred by the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.

                  (c) Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3 promptly notify the indemnifying party
in writing thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such failure.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume

                                      -15-

<PAGE>

the defense thereof with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any such action include both the
indemnified party, based upon the advice of such indemnified party's counsel,
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 7.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
approved by such indemnifying party in the case of paragraph (a), representing
the indemnified parties who are parties to such action (including indemnified
parties under other Purchase Agreements), plus local counsel, if appropriate) or
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of action, in each of which cases
the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.

                  (d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of the Common Stock
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchaser on the other
shall be deemed to be in the same proportion as the amount paid by the Purchaser
to the Company pursuant to this Agreement for the Shares purchased by the
Purchaser that were sold pursuant to the Registration Statement bears to the
difference between the amount the Purchaser paid for the Shares that were sold
pursuant to the Registration Statement and the amount received by the Purchaser
from such sale. The relative fault of the Company on the one hand and the
Purchaser on the other shall be determined by reference to, among other things,
whether

                                      -16-

<PAGE>

the untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company or
by the Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in paragraph (c) of this Section 7.3, any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 7.3 with respect to the notice of the threat or
commencement of any threat or action shall apply if a claim for contribution is
to be made under this paragraph (d); provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under paragraph (c) for purposes of indemnification. The Company
and the Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, the Purchaser shall not be required to contribute any amount in excess of
the amount the Purchaser paid to the Company pursuant to this Agreement for the
Shares purchased by the Purchaser that were sold pursuant to the Registration
Statement. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchaser's obligation to contribute pursuant to this Section 7.3 is several and
not joint.

                  7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares upon
the passage of two years from the effective date of the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory in
form and substance to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.

                  7.5 Information Available. So long as the Registration
Statement is effective covering the resale of Shares owned by the Purchaser, the
Company will furnish to the Purchaser:

                  (a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, concurrently with delivery to its
shareholders generally) one copy of (i) its Annual Report to Stockholders (which
Annual Report shall contain financial statements audited in accordance with US
generally accepted accounting principles by a national firm of certified public
accountants), (ii) if not included in substance in the Annual Report to
Stockholders, upon the request of the Purchaser, its Annual Report on Form 10-K,
(iii) upon the request of the Purchaser, its Quarterly Reports on Form 10-Q,
(iv) upon the request of the Purchaser, its Current Reports on Form 8-K, and (v)
a full copy of the particular Registration Statement covering the Shares (the
foregoing, in each case, excluding exhibits);

                                      -17-

<PAGE>

                  (b) upon the request of the Purchaser, all exhibits excluded
by the parenthetical to subparagraph (a)(v) of this Section 7.5; and

                  (c) upon the request of the Purchaser, a reasonable number of
copies of the prospectuses to supply to any other party requiring such
prospectuses;

and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss information relevant for disclosure in the Registration Statement
covering the Shares.

                  SECTION 8. Broker's Fee. The Purchaser acknowledges that the
Company intends to pay to the Placement Agents a fee in respect of the sale of
the Shares to the Purchaser. Each of the parties hereto hereby represents that,
on the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchaser.

                  SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:

                  (a)      if to the Company, to:

                                FSI International, Inc.
                                3455 Lyman Boulevard
                                Chaska, Minnesota 55318-3052
                                Attention: Chief Financial Officer
                                Facsimile: (952) 448-1300

                           with a copy to:

                                Faegre & Benson LLP
                                2200 Wells Fargo Center
                                90 South Seventh Street
                                Minneapolis, MN 55402-3902
                                Attention: Douglas P. Long, Esq.
                                Facsimile: (612) 766-1600

                           or to such other person at such other place as the
                           Company shall designate to the Purchaser in writing;
                           and

                  (b)      if to the Purchaser, at its address as set forth at
                           the end of this Agreement, or at such other address
                           or addresses as may have been furnished to the
                           Company in writing.

                                      -18-

<PAGE>

                  SECTION 10. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.

                  SECTION 11. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

                  SECTION 12. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                  SECTION 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and the
federal law of the United States of America.

                  SECTION 14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties. Facsimile signatures shall be deemed
original signatures.

                  SECTION 15. Entire Agreement. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchaser
makes any representation, warranty, covenant or undertaking with respect to such
matters.

                  SECTION 16. Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

                  SECTION 17. Assignment. This Agreement and the rights of the
Purchaser hereunder may not be assigned by Purchaser without the prior written
consent of the Company (except (x) by operation of law; (y) by the Purchaser to
its wholly owned subsidiary; or (z) by an investment advisor to a fund for which
it is the advisor or by or among funds that are under common control, provided
that such assignee agrees to be bound by the terms of this Agreement) and shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective permitted successors, heirs and legal representatives.

                                      -19-

<PAGE>

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

                                   FSI INTERNATIONAL, INC.

                                   By:
                                      ------------------------------------
                                      Name:
                                      Title:

Print or Type:
                                   Name of Purchaser
                                      (Individual or Institution):

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

                                   Name of Individual representing
                                      Purchaser (if an Institution):

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

                                   Title of Individual representing
                                      Purchaser (if an Institution):

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

Signature by:
                                   Individual Purchaser or Individual
                                      representing Purchaser:

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

                                   Address:
                                           -------------------------------

                                   Telephone:
                                             -----------------------------

                                   Facsimile:
                                             -----------------------------

<PAGE>

                       SUMMARY INSTRUCTION SHEET FOR PURCHASER

                   (to be read in conjunction with the entire
                        Purchase Agreement that follows)

A.       Complete the following items on BOTH Purchase Agreements (Please sign
         TWO originals):

         1.       Page 19 - Signature:

                  (i)      Name of Purchaser (Individual or Institution)

                  (ii)     Name of Individual representing Purchaser (if an
                           Institution)

                  (iii)    Title of Individual representing Purchaser (if an
                           Institution)

                  (iv)     Signature of Individual Purchaser or Individual
                           representing Purchaser

         2.       Appendix I - Stock Certificate Questionnaire:

                  Provide the information requested by the Stock Certificate
                  Questionnaire.

         3.       Return BOTH properly completed and signed Purchase Agreements
                  including the properly completed Appendix I to (initially by
                  facsimile with hard copy by overnight delivery):

                           Lehman Brothers Inc.
                           745 Seventh Avenue,
                            19th Floor
                           New York, NY 10019
                           Attention: Grant Miller

                           Facsimile: 646-758-3885

B.       Instructions regarding the transfer of funds for the purchase of Shares
         will be sent by facsimile to the Purchaser by the Placement Agents at a
         later date.

C.       Upon the resale of the Shares by the Purchaser after the Registration
         Statement covering the Shares is effective, as described in the
         Purchase Agreement, the Purchaser:

                  (i)      must deliver a current prospectus of the Company to
                           the buyer (prospectuses must be obtained from the
                           Company at the Purchaser's request); and

                  (ii)     must send a letter in the form of Appendix II to the
                           Company so that the Shares may be properly
                           transferred.
<PAGE>

                                                                      APPENDIX I

                             FSI INTERNATIONAL, INC.
                        STOCK CERTIFICATE QUESTIONNAIRE

         Pursuant to Section 3 of the Agreement, please provide us with the
following information:

1.       The exact name that your Shares are to be
         registered in (this is the name that will appear
         on your stock certificate(s)). You may use a
         nominee name if appropriate:
                                                              ------------------
2.       The relationship between the Purchaser of the
         Shares and the Registered Holder listed
         in response to item 1 above:
                                                              ------------------
3.       The mailing address of the Registered Holder
         listed in response to item 1 above:
                                                              ------------------

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

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

                                                              ------------------
4.       The Social Security Number or Tax
         Identification Number of the Registered
         Holder listed in response to item 1 above:
                                                              ------------------

<PAGE>

                             FSI INTERNATIONAL, INC.
                      REGISTRATION STATEMENT QUESTIONNAIRE

                  In connection with the preparation of the Registration
Statement, please provide us with the following information:

                  1. Pursuant to the "Selling Shareholder" section of the
Registration Statement, please state your or your organization's name exactly as
it should appear in the Registration Statement:

                  2. Please provide the number of shares that you or your
organization will beneficially own immediately after Closing, including those
Shares purchased by you or your organization pursuant to this Purchase Agreement
and those shares purchased by you or your organization through other
transactions:

                  3. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates?

                                 Yes               No
                           -----             -----

       If yes, please indicate the nature of any such relationships below:

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

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

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

                  4. Are you (i) an NASD Member (see definition), (ii) a
Controlling (see definition) shareholder of an NASD Member, (iii) a Person
Associated with a Member of the NASD (see definition), or (iv) an Underwriter or
a Related Person (see definition) with respect to the proposed offering; or (b)
do you own any shares or other securities of any NASD Member not purchased in
the open market; or (c) have you made any outstanding subordinated loans to any
NASD Member?

         Answer:  [   ] Yes    [   ] No    If "yes," please describe below

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

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

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

<PAGE>

         NASD Member. The term "NASD member" means either any broker or dealer
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)

         Control. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)

         Person Associated with a member of the NASD. The term "person
associated with a member of the NASD" means every sole proprietor, partner,
officer, director, branch manager or executive representative of any NASD
Member, or any natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a NASD
Member, whether or not such person is registered or exempt from registration
with the NASD pursuant to its bylaws. (NASD Manual, By-laws Article I,
Definitions)

         Underwriter or a Related Person. The term "underwriter or a related
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)

                                        3
<PAGE>

                                                                     APPENDIX II

 Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

         The undersigned, [an officer of, or other person duly authorized by]
            _____________________________________________________________

[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of
     the shares evidenced by the attached certificate, and as such,
sold such shares on __________________ in accordance with and in the manner
                          [date]
described in
Registration Statement number __________________________________________________
                                   [fill in the number of or otherwise identify

________________________________  and the requirement of delivering a
Registration Statement]
current prospectus by the Company has been complied with in connection with
such sale.

Print or Type:

          Name of Purchaser
            (Individual or
            Institution):      ______________________

          Name of Individual
            representing
            Purchaser (if an
            Institution)       ______________________

          Title of Individual
            representing
            Purchaser (if an
            Institution):      ______________________

Signature by:

          Individual Purchaser
            or Individual
            representing
            Purchaser:         ______________________

<PAGE>

                                    Exhibit A

                              Form of Legal Opinion

                  1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Minnesota. Each
subsidiary of the Company organized in the United States has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of formation. The Company and each of its subsidiaries
organized in the United States have all requisite corporate power and authority
to own, lease, license and operate its properties and assets and to conduct its
business as described in the Private Placement Memorandum.

                  2. The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Company's registration statement on Form 8-A.

                  3. The Shares have been duly authorized and, when issued and
delivered to the Investors against payment therefor in accordance with the terms
of the Purchase Agreements, will be validly issued, fully paid and nonassessable
and free of any preemptive or similar rights.

                  4. The form of the certificates for the Shares conforms to the
requirements of Minnesota Business Corporation Act.

                  5. The Company has full corporate power and authority to enter
into the Purchase Agreements and the Engagement Letter and to issue, sell and
deliver the Shares to the Investors as provided in the Purchase Agreements, and
the Purchase Agreements and the Engagement Letter have been duly authorized,
executed and delivered by the Company and are the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.

                  6. The Company's execution, delivery and performance of the
Purchase Agreements and the Engagement Letter do not and will not (i) violate
the Articles of Incorporation or Bylaws of the Company or any of its
subsidiaries, (ii) violate, result in a breach of or constitute a default (alone
or with notice or passage of time or both) any agreement, indenture, lease or
other instrument to which the Company or any of its subsidiaries is a party or
by which any of them or any of their respective properties or assets is bound or
subject that is made an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended August 25, 2001 (the "Form 10-K"), any Quarterly Report on
Form 10-Q or any Current Report on Form 8-K filed by the Company subsequent to
the filing of the Form 10-K, (iii) result in the creation or imposition of any
lien, charge, claim, security interest or encumbrance upon any property or
assets of the Company or any of its subsidiaries under such agreements,
indentures, leases and other instruments, or (iv) result in any violation of any
existing federal or Minnesota corporate law, regulation or ruling applicable to
the Company or any of its subsidiaries (assuming compliance with all applicable
state securities and Blue Sky laws, the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended), or any

<PAGE>

judgment, injunction, order or decree known to us to be applicable to the
Company, any of its subsidiaries or any of their respective properties or
assets.

                  7. No consent, approval, authorization or order of, or
registration or filing with any federal, state or local governmental or
regulatory commission, board, body, authority or agency is required on the part
of the Company for the performance by the Company of its obligations at the
closing of the transactions contemplated by the Purchase Agreements, except as
may be required under the Securities Act or such as may be required under the
state securities or Blue Sky laws governing the purchase and distribution of the
Shares in connection with the purchase and sale of the Shares.

                  8. To our knowledge, there are no actions, suits,
arbitrations, claims, governmental or other proceedings or investigations
pending or threatened against the Company or any of its subsidiaries or any of
their respective operations, businesses, properties or assets which challenge
the validity of any actions taken or to be taken by the Company pursuant to the
Purchase Agreements, the Engagement Letter or the transactions contemplated
thereby.

                  9. To our knowledge, no holders of securities of the Company
have rights, which have not been waived or complied with, to the registration of
shares of Common Stock or other securities of the Company because of the filing
of the Resale Registration Statement or the offering contemplated thereby.

                  10. The Company is not, and after giving effect to the
offering and sale of the Shares will not be required to register as, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.

                  11. Assuming the accuracy of the representations and
warranties of the Purchasers and the Company made in the Purchase Agreements,
and the compliance by the Placement Agent with the offering and solicitation
procedures outlined in its certificate attached hereto, the offer and sale of
the Shares is exempt from the registration requirements of the Act, subject to
the timely filing by the Company of a Form D pursuant to Regulation D
promulgated by the Securities and Exchange Commission under the Act.

                                        2<PAGE>
                                                                     EXHIBIT 4.1
================================================================================

                                 TRUST INDENTURE

                       BETWEEN FIRST SHARES BANCORP, INC.

                        AND THE HUNTINGTON NATIONAL BANK,
                                   AS TRUSTEE

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

                                             , 2002
                              ---------------

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

                           FIRST SHARES BANCORP, INC.

================================================================================

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                                PAGE
<S>                                                                                                             <C>

                                                    ARTICLE ONE
                                          DEFINITIONS AND OTHER PROVISIONS
                                              OF GENERAL APPLICATION

   Section 101.  Definitions......................................................................................1

   Section 102.  Compliance Certificates and Opinions.............................................................8

   Section 103.  Form of Documents Delivered to Trustee...........................................................8

   Section 104.  Acts of Debentureholders.........................................................................9

   Section 105.  Notices, etc.  to Trustee and Company...........................................................10

   Section 106.  Notices to Debentureholders; Waiver.............................................................10

   Section 107.  Incorporation of Trust Indenture Act............................................................11

   Section 108.  Effect of Headings and Table of Contents........................................................11

   Section 109.  Successors and Assigns..........................................................................11

   Section 110.  Separability Clause.............................................................................11

   Section 111.  Benefits of Indenture...........................................................................11

   Section 112.  Governing Law...................................................................................11

   Section 113.  Legal Holidays..................................................................................11

                                                    ARTICLE TWO
                                                  DEBENTURE FORMS

   Section 201.  Forms Generally.................................................................................12

   Section 202.  Form of Commonly Registered Debenture...........................................................12

   Section 203.  Form of Trustee's Certificate of Authentication
                 of Commonly Registered Debentures...............................................................18

   Section 204.  Form of Unrestricted Debenture..................................................................19

   Section 205.  Form of Trustee's Certificate of Authentication of Unrestricted Debentures......................23

                                                   ARTICLE THREE
                                                  THE DEBENTURES

   Section 301.  Title and Terms.................................................................................24

   Section 302.  Denominations...................................................................................24
</Table>

                                        i

<PAGE>

<Table>
<S>                                                                                                             <C>

   Section 303.  Execution, Authentication and Delivery and Dating...............................................24

   Section 304.  Temporary Commonly Registered Debentures and Unrestricted Debentures............................25

   Section 305.  Registration, Transfer and Exchange.............................................................26

   Section 306.  Mutilated, Destroyed, Lost or Stolen Debentures.................................................27

   Section 307.  Payment of Interest; Interest Rights Preserved..................................................28

   Section 308.  Persons Deemed Owners...........................................................................29

   Section 309.  Cancellation....................................................................................30

   Section 310.  Authentication and Delivery of Original Issue...................................................30

   Section 311.  Issuance of Debentures upon Partial Payments under Equity Contracts.............................30

   Section 312.  Computation of Interest.........................................................................31

                                                   ARTICLE FOUR
                                            SUBORDINATION OF DEBENTURES

   Section 401.  Agreement to Subordinate........................................................................31

   Section 402.  Payments Upon Distribution of Assets............................................................31

   Section 403.  Subrogation.....................................................................................33

   Section 404.  Obligation of Company Unconditional.............................................................33

   Section 405.  Rights of Holders of Senior Indebtedness Not Impaired...........................................34

   Section 406.  Obligation of Company to Pay Debentures Not Impaired............................................34

   Section 407.  Trustee Authorized to Act for Debentureholder...................................................34

   Section 408.  Trustee Not Charged with Knowledge of Senior Indebtedness.......................................34

   Section 409.  Applicability of Article Four...................................................................35

   Section 410.  "Trustee" to Include Paying Agent...............................................................35

                                                   ARTICLE FIVE
                                            SATISFACTION AND DISCHARGE

   Section 501.  Satisfaction and Discharge of Indenture.........................................................35

   Section 502.  Application of Trust Money......................................................................36

                                                    ARTICLE SIX
                                                     REMEDIES

   Section 601.  Events of Default...............................................................................36
</Table>

                                       ii
<PAGE>

<Table>
<S>                                                                                                             <C>
   Section 602.  Acceleration of Maturity; Rescission and Annulment..............................................37

   Section 603.  Collection of Indebtedness and Suits for Enforcement by Trustee.................................38

   Section 604.  Trustee May File Proofs of Claim................................................................39

   Section 605.  Trustee May Enforce Claims Without Possession of Debentures.....................................40

   Section 606.  Application of Money Collected..................................................................40

   Section 607.  Limitation on Suits.............................................................................41

   Section 608.  Unconditional Right of Holders to Receive Principal, Premium and Interest.......................41

   Section 609.  Restoration of Rights and Remedies..............................................................41

   Section 610.  Rights and Remedies Cumulative..................................................................42

   Section 611.  Delay or Omission Not Waiver....................................................................42

   Section 612.  Control by Debentureholders.....................................................................42

   Section 613.  Waiver of Past Defaults.........................................................................42

   Section 614.  Undertaking for Costs...........................................................................43

                                                   ARTICLE SEVEN
                                                    THE TRUSTEE

   Section 701.  Certain Duties and Responsibilities.............................................................43

   Section 702.  Notice of Defaults..............................................................................44

   Section 703.  Certain Rights of Trustee.......................................................................45

   Section 704.  Not Responsible for Recitals or Issuance of Debentures..........................................46

   Section 705.  May Hold Debentures.............................................................................46

   Section 706.  Money Held in Trust.............................................................................46

   Section 707.  Compensation and Reimbursement..................................................................46

   Section 708.  Disqualification; Conflicting Interests.........................................................47

   Section 709.  Corporate Trustee Required; Eligibility.........................................................47

   Section 710.  Resignation and Removal; Appointment of Successor...............................................47

   Section 711.  Acceptance of Appointment by Successor..........................................................48

   Section 712.  Merger, Conversion, Consolidation or Succession to Business.....................................49

   Section 713.  Preferential Collection of Claims Against Company...............................................49

   Section 714.  Appointment of Authenticating Agent.............................................................49
</Table>

                                      iii
<PAGE>

<Table>
<S>                                                                                                             <C>
                                                   ARTICLE EIGHT
                                        DEBENTUREHOLDERS' LISTS AND REPORTS
                                              BY TRUSTEE AND COMPANY

   Section 801.  Company to Furnish Trustee Names and Addresses of Debentureholders..............................51

   Section 802.  Preservation of Information; Communications to Debentureholders.................................51

   Section 803.  Reports by Trustee..............................................................................51

   Section 804.  Reports by Company..............................................................................51

                                                   ARTICLE NINE
                                  CONSOLIDATION, MERGER, CONVEYANCE AND TRANSFER

   Section 901.  Company May Consolidate, etc., Only on Certain Terms............................................52

   Section 902.  Successor Corporation Substituted...............................................................53

                                                    ARTICLE TEN
                                              SUPPLEMENTAL INDENTURES

   Section 1001.  Supplemental Indentures without Consent of Debentureholders....................................53

   Section 1002.  Supplemental Indentures with Consent of Holders................................................54

   Section 1003.  Execution of Supplemental Indentures...........................................................55

   Section 1004.  Effect of Supplemental Indentures..............................................................55

   Section 1005.  Reference in Debentures to Supplemental Indentures.............................................55

                                                  ARTICLE ELEVEN
                                                     COVENANTS

   Section 1101.  Payment of Principal, Premium and Interest.....................................................55

   Section 1102.  Maintenance of Office or Agency................................................................55

   Section 1103.  Money for Debenture Payments to be Held in Trust...............................................56

   Section 1104.  Corporate Existence............................................................................57

   Section 1105.  Restrictions on Disposition of Capital Stock of Major Subsidiaries.............................58

   Section 1106.  Statement as to Compliance.....................................................................58
</Table>

                                       iv
<PAGE>

<Table>
<S>                                                                                                             <C>
                                                  ARTICLE TWELVE
                                             REDEMPTION OF DEBENTURES

   Section 1201.  Conditions; Redemption Price...................................................................58

   Section 1202.  Notice of Redemption...........................................................................59

   Section 1203.  Payment of Debentures on Redemption............................................................60

                                                 ARTICLE THIRTEEN
                                    EXCHANGE OF COMMONLY REGISTERED DEBENTURES
                                            FOR UNRESTRICTED DEBENTURES

   Section 1301.  Exchange Privilege.............................................................................60

   Section 1302.  Manner of Exercise of Exchange Privilege.......................................................61

   Section 1303.  Conversion of Commonly Registered Debentures
                  Upon Cancellation of Equity Contracts..........................................................62

                                                 ARTICLE FOURTEEN
                                      EXCHANGE OF UNRESTRICTED DEBENTURES FOR
                                          COMMONLY REGISTERED DEBENTURES

   Section 1401.  Exchange Privilege.............................................................................62

   Section 1402.  Manner of Exercise of Exchange Privilege.......................................................63
</Table>

                                       v

<PAGE>

         INDENTURE dated as of ___________________, 2002, between FIRST SHARES
BANCORP, INC., an Indiana corporation (hereinafter called the "Company") having
its principal office at 996 South State Road 135, Greenwood, Indiana 46143, and
THE HUNTINGTON NATIONAL BANK, a national banking association (hereinafter called
the "Trustee").

                             RECITALS OF THE COMPANY

         The Company has duly authorized the creation of an issue of its
debentures of substantially the tenor and amount hereinafter set forth
(hereinafter called the "Debentures") and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture. Debentures may be
issued either as Debentures which may be transferred only upon compliance with
certain provisions set forth or referred to therein (hereinafter called
"Commonly Registered Debentures") and Debentures which may be transferred upon
compliance with the usual requirements for transfer of negotiable securities
(hereinafter called "Unrestricted Debentures").

         All things necessary to make the Debentures, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly issued
by the Company in accordance with the provisions of this Indenture, the valid
obligations of the Company and to make this Indenture a valid agreement of the
Company, in accordance with their and its respective terms, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the value received by the
Company for the Debentures upon issuance thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Debentures, as follows:

                                   ARTICLE ONE

                       DEFINITIONS AND OTHER PROVISIONS OF
                               GENERAL APPLICATION

         Section 101.  Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

         (1)      the terms defined in this Article have the meanings assigned
                  to them in this Article, and include the plural as well as the
                  singular;

                                       1
<PAGE>

         (2)      all other terms used herein which are defined in the Trust
                  Indenture Act, either directly or by reference therein, have
                  the meanings assigned to them therein, except that in the
                  event of a conflict, any definition in this Indenture
                  controls;

         (3)      all accounting terms not otherwise defined herein have the
                  meanings assigned to them in accordance with generally
                  accepted accounting principles; and

         (4)      the words "herein", "hereof" and "hereunder and other words of
                  similar import refer to this Indenture as a whole and not to
                  any particular Article, Section or other subdivision.

         Certain terms, used principally in Article Seven, are defined in that
Article.

         "Act" when used with respect to any Holder has the meaning specified in
Section 104.

         "Adverse Capital Determination" means the occurrence of any of the
following:

         (i)      the receipt by the Company of written notice (whether in an
                  examination report of the Company or otherwise) from the
                  Federal Reserve Board to the effect that all or any
                  substantial portion of the Debentures will not be considered
                  and, under the laws, rules, regulations or guidelines then
                  existing will not in the future (regardless of the amount of
                  the Company's other capital) be eligible to be considered, by
                  the Federal Reserve Board as capital of the Company for the
                  purpose of measurement or assessment by the Federal Reserve
                  Board of the Company's capital adequacy; or

         (ii)     the receipt by the Company of written advice from its counsel
                  (other than a regular employee of the Company) that there is a
                  substantial likelihood, arising as a result of governmental
                  action (including, without limitation, a change of law,
                  regulation, rule, guideline or ruling or interpretation,
                  whether or not requested by the Company), that all or any
                  substantial portion of the Debentures will not be considered
                  and, under the laws, rules, regulations or guidelines then
                  existing will not in the future (regardless of the amount of
                  the Company's other capital) be eligible to be considered, by
                  the Federal Reserve Board as capital of the Company for the
                  purpose of measurement or assessment by the Federal Reserve
                  Board of the Company's capital adequacy.

         Such Adverse Capital Determination shall be deemed to have occurred
upon the date of the occurrence of the earlier of the events set forth in clause
(i) and clause (ii) of this definition and shall be evidenced by an Opinion of
Counsel which counsel shall not be a regular employee of the Company) furnished
to the Trustee.

         "Adverse Tax Determination" means the occurrence of any of the
following:

         (i)      the issuance of a written notice of deficiency or other final
                  notice to the Company from, or any other action taken by, the
                  Internal Revenue Service of the United

                                       2
<PAGE>

                  States which is not subject to further review or rehearing
                  except by the filing of a petition in the Tax Court of the
                  United States or by other judicial proceeding with or having
                  the effect that interest paid on the Debentures is not fully
                  deductible from the gross income of the Company for Federal
                  income tax purposes; or

         (ii)     the receipt by the Company of written advice from its counsel
                  (other than a regular employee of the Company) that there is a
                  substantial likelihood (including a change of law, issuance of
                  temporary, proposed or final Treasury Regulations or issuance
                  of an Internal Revenue Service ruling) that the Internal
                  Revenue Service will take the position that interest paid on
                  the Debentures is not fully deductible from the gross income
                  of the Company for Federal income tax purposes.

         Such Adverse Tax Determination shall be deemed to have occurred upon
the date of the occurrence of the earlier of the events set forth in clause (i)
and clause (ii) of this definition and shall be evidenced by an Opinion of
Counsel (which counsel shall not be a regular employee of the Company) furnished
to the Trustee.

         "Affiliate" of any specified Person mans any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Debentures.

         "Authorized Newspaper" means a newspaper of general circulation in the
relevant area, printed in the English language and customarily published on each
Business Day.

         "Bank" means First Bank, Greenwood, Indiana, a banking institution
wholly owned by the Company and duly organized and existing under the laws of
the State of Indiana, and any successor to its corporate trust business.

         "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that Board.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.

         "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday except any of such days on which banking institutions in the State of
Indiana are closed pursuant to authorization of law.

                                       3
<PAGE>

         "Collateralized Equity Contract" has the meaning specified in the
recitals to the Master Equity Contract.

         "Commission" means the Securities and Exchange Commission, as from time
to time instituted, created under the Securities Exchange Art of 1934, or if at
any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.

         "Common Stock" has the meaning specified in the recitals to the Master
Equity Contract.

         "Commonly Registered Equity Contract" has the meaning specified in the
recitals to the Master Equity Contract.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

         "Company Request" and "Company Order" mean, respectively, a written
request, instruction or order signed in the name of the Company by its Chairman
of the Board, President or any Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary, or an Assistant Secretary, and delivered to
the Trustee.

         "Corporate Trust Office" means the corporate trust office of the
Trustee in Columbus, Ohio, at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Indenture is located at 7 Easton Oval, EA4E63, Columbus, Ohio 43219.

         "Debentureholder" means a Person in whose name a Debenture is
registered in the Debenture Register.

         "Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 305.

         "Default" has the meaning specified in Section 603.

         "Default Situation" means any event which is, or after notice or lapse
of time, or both, would become, a Default or an Event of Default.

         "Defaulted Interest" has the meaning specified in Section 307.

         "Equity Contract" has the meaning specified in the recitals to the
Master Equity Contract.

         "Equity Contract Agent" means First Bank, Greenwood, Indiana, as Equity
Contract Agent, and its successors in such capacity as provided in the Master
Equity Contract.

                                       4
<PAGE>

         "Event of Default" has the meaning specified in Section 601.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.

         "Holder" when used with respect to any Debenture means a
Debentureholder.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

         "Independent" when used with respect to any specified Person means such
a Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
other obligor upon the Debentures or in any Affiliate of the Company or of such
other obligor, and (iii) is not connected with the Company or such other
obligor, or any Affiliate of the Company or such other obligor as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions., but, in case of an accountant, may be regularly retained to
make annual and other similar audits of the books of the Company or any
Affiliate thereof. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by a Company Order and approved by the Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within the meaning
hereof.

         "Interest Payment Date" means the Stated Maturity of an installment of
interest on the Debentures.

         "Major Subsidiary" means any subsidiary consolidated with the Company
for financial reporting purposes the assets of which, as shown on such
subsidiary's balance sheet as of the end of the fiscal quarter immediately
preceding any determination required hereunder, equal or exceed twenty percent
(20%) of the consolidated assets of the Company as shown on its consolidated
balance sheet as of the end of such quarter.

         "Master Equity Contract" means that certain Equity Contract Agency
Agreement dated as of ___________________, 2002, between the Company and First
Bank, Greenwood, Indiana, as Equity Contract Agent, as it may from time to time
be supplemented or amended.

         "Maturity" when used with respect to any Debenture means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity, by declaration of acceleration,
by call for redemption or otherwise.

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.

                                       5
<PAGE>

         "Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be counsel for the
Company or other counsel acceptable to the Trustee.

         "Outstanding" when used with respect to Debentures means, as of the
date of determination, all Debentures theretofore authenticated and delivered
under this Indenture, except:

         (i)      Debentures theretofore cancelled by the Trustee or delivered
                  to the Trustee for cancellation;

         (ii)     Debentures for the payment or redemption of which money in the
                  necessary amount has been theretofore deposited with the
                  Trustee or any Paying Agent (other than the Company) in trust
                  for the Holders of such Debentures; provided that, if such
                  Debentures are to be redeemed, notice of such redemption has
                  been duly given pursuant to this Indenture or provision
                  therefor satisfactory to the Trustee has been made; and

         (iii)    Debentures in exchange for or in lieu of which other
                  Debentures have been authenticated and delivered pursuant to
                  this Indenture;

provided, however, that in determining whether the Holders of the requisite
principal amount of Debentures Outstanding have given any request, demand,
authorization, direction, notice, consent, waiver or other action hereunder,
Debentures owned by the Company or any other obligor upon the Debentures or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Debentures which the Trustee knows
to be so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Debentures and that the pledgee is not the Company or any other obligor
upon the Debentures or any Affiliate of the Company or such other obligor.

         "Paying Agent" means any Person authorized by the Company to pay the
principal of, premium (if any) or interest on any Debenture on behalf of the
Company.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, other type
of business entity or government or any agency or political subdivision thereof.

         "Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and for the purposes of this definition,
any Debenture authenticated and delivered under Section 306 in lieu of a
mutilated, lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Debenture.

                                       6
<PAGE>

         "Redemption Date" when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Premium" when used with respect to any Debenture to be
redeemed, means the premium to be paid with respect thereto pursuant to this
Indenture.

         "Redemption Price" when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Regular Record Date" for the interest payable on any Interest Payment
Date means the date specified in Section 307.

         "Responsible Officer" when used with respect to the Trustee means the
Chairman of the Board of Directors, the chairman or the vice chairman of the
executive committee of the Board of Directors, the President, any Vice Chairman,
the Chairman of the Trust Committee, any Executive Vice President, any Senior
Vice President, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, the cashier, any trust officer, any assistant trust
officer, or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.

         "Senior Indebtedness" means the principal of, premium (if any) and
interest on indebtedness (other than the Debentures) of the Company for money
borrowed evidenced by bonds, notes, debentures or similar obligations, including
any guaranty by the Company of any indebtedness for money borrowed of any other
Person, whether any such indebtedness or guaranty is outstanding on the date of
this Indenture or is hereafter created, assumed or incurred, unless in the
instrument creating or evidencing such indebtedness it is expressly provided
that such indebtedness is not senior in right of payment to the Debentures.
Senior Indebtedness shall include expenses of collection if and to the extent
that such expenses are payable by the borrower under the instrument creating or
evidencing the indebtedness.

         "Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) means a date fixed by the Trustee pursuant to Section
307.

         "Stated Maturity" when used with respect to any Debenture or any
installment of interest thereon means the date specified in such Debenture as
the fixed date on which the principal of such Debenture or such installment of
interest is due and payable.

         "Subsidiary" means any corporation at least a majority of whose
outstanding voting stock shall at the time be owned by the Company or by one or
more Subsidiaries or by the Company and one or more Subsidiaries. For this
purpose "voting stock" of any corporation means stock of any class or classes
(however designated), including any and all shares, interests, participations or
other equivalents (however designated) of corporate stock, having ordinary
voting power for

                                       7
<PAGE>

the election of a majority of the directors of such corporation, other than
stock having such power only by reason of the happening of a contingency.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.

         "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed, except as
provided in Section 1005.

         "Vice President" when used with respect to the Company means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."

         Section 102. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:

         (i)      a statement that each individual signing such certificate or
                  opinion has read such covenant or condition and the
                  definitions herein relating thereto;

         (ii)     a brief statement as to the nature and scope of the
                  examination or investigation upon which the statements or
                  opinions contained in such certificate or opinion are based;

         (iii)    a statement that, in the opinion of each such individual, he
                  has made such examination or investigation as is necessary to
                  enable him to express an informed opinion as to whether or not
                  such covenant or condition has been complied with; and

         (iv)     a statement as to whether, in the opinion of each such
                  individual, such condition or covenant has been complied with.

         Section 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such

                                       8
<PAGE>

Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may be
based, in so far as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

         Section 104.  Acts of Debentureholders.

         (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Debentureholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Debentureholders in person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are actually received by the Trustee, and, where it is hereby expressly
required, by the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Debentureholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 701)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

         (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is other than in an individual capacity, such certificate or affidavit
shall also constitute sufficient proof of the authority of the executing
individual. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee reasonably deems sufficient.

         (c) The ownership of Debentures shall be proved by the Debenture
Register.

                                       9
<PAGE>

         (d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Debenture shall be conclusive and
binding upon such Holder and upon all future Holders of such Debenture and of
any Debenture issued upon the transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done or suffered to be done by the Trustee
or the Company in reliance thereon, whether or not notation of such action is
made upon such Debenture.

         (e) In connection with any direction pursuant to Section 612 or waiver
pursuant to Section 613, the Company may establish a record date in accordance
with TIA Section 316(c) for the purpose of determining the identity of Holders
entitled to vote or consent to such direction or waiver.

         Section 105. Notices, etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Debentureholders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

         (i)      the Trustee by any Debentureholder or by the Company shall be
                  sufficient for every purpose hereunder, except as provided in
                  Section 603(3), if made, given, furnished or filed in writing
                  to or with the Trustee at its Corporate Trust Office,
                  Attention: Corporate Trust Department, or

         (ii)     the Company by the Trustee or by any Debentureholder shall be
                  sufficient for every purpose hereunder, except as provided in
                  Section 603(3), if in writing and mailed, first class postage
                  prepaid, to the Company addressed to it at the address of its
                  principal office specified in the first paragraph of this
                  instrument or at any other address previously furnished in
                  writing to the Trustee by the Company.

         Section 106. Notices to Debentureholders; Waiver. Where this Indenture
provides for notice to Debentureholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first class postage prepaid, to each Debentureholder affected by
such event, at his address as it appears on the Debenture Register not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
In any case where notice to Debentureholders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Debentureholder shall affect the sufficiency of such notice with
respect to other Debentureholders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Debentureholders shall be
filed with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.

                  In case, by reason of the suspension of publication of any
Authorized Newspaper, or by reason of any other cause, it shall be impossible to
make publication of any notice in an Authorized Newspaper or Authorized
Newspapers as required by this Indenture, then such

                                       10
<PAGE>

method of publication or notification as shall be made with the approval of the
Trustee shall constitute a sufficient publication of such notice.

                  In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice of any event to
Holders when said notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be satisfactory
to the Trustee shall be deemed to be a sufficient giving of such notice.

         Section 107. Incorporation of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.

         Section 108. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

         Section 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.

         Section 110. Separability Clause. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions thereof shall
not in any way be affected or impaired thereby.

         Section 111. Benefits of Indenture. Nothing in this Indenture or in the
Debentures, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the holders of Senior Indebtedness and
the Debentureholders, respectively, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

         Section 112. Governing Law. This Indenture and the Debentures shall be
construed in accordance with and governed by the laws of the State of Indiana.

         Section 113. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date or the Stated Maturity of any Debenture shall not be a
Business Day, then (notwithstanding any other provision of this Indenture)
payment of interest on, premium (if any) on or principal of such Debenture need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity, and no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.

                                       11
<PAGE>

                                   ARTICLE TWO

                                 DEBENTURE FORMS

         Section 201. Forms Generally. The Commonly Registered Debentures and
Unrestricted Debentures and the Trustee's certificates of authentication thereof
shall be in substantially the respective forms thereof set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may be required to comply with the rules of any
securities exchange, or as may, consistently herewith, be determined by the
officers executing such Commonly Registered Debentures or Unrestricted
Debentures, as the case may be, as evidenced by their execution thereof.

                  The definitive Commonly Registered Debentures and Unrestricted
Debentures shall be printed, lithographed or engraved or produced by any
combination of these methods on steel engraved borders or may be produced in any
other manner permitted by the rules of any securities exchange, all as
determined by the officers executing the same, as evidenced by their execution
thereof.

         Section 202. Form of Commonly Registered Debenture. The form of the
face of the definitive Commonly Registered Debenture shall be as follows:

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

              8% Redeemable Subordinated Debenture Due July 1, 2011

                  THIS DEBENTURE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR
         OTHERWISE DISPOSED OF UNLESS THE CONDITIONS FOR TRANSFER, AS SET FORTH
         MORE FULLY HEREIN OR IN THE WITHIN MENTIONED INDENTURE, SHALL HAVE BEEN
         FULLY COMPLIED WITH. UNLESS THE COMMONLY REGISTERED EQUITY CONTRACT
         REFERRED TO BELOW SHALL HAVE BEEN DULY REGISTERED IN A NAME OTHER THAN
         THE NAME OF THE REGISTERED HOLDER OF THIS DEBENTURE, THE OBLIGATION TO
         PURCHASE COMMON STOCK UNDER SUCH COMMONLY REGISTERED EQUITY CONTRACT
         SHALL REMAIN THE OBLIGATION OF THE REGISTERED HOLDER OF THIS DEBENTURE,
         AND ON AND AFTER JANUARY 1, 2011. THE COMPANY SHALL BE ENTITLED TO
         OFFSET ITS OBLIGATION TO REPAY AT MATURITY THE PRINCIPAL HEREOF, IN
         WHOLE OR IN PART, AGAINST ANY UNPAID OBLIGATION OF THE REGISTERED
         HOLDER OF THIS DEBENTURE TO PURCHASE COMMON STOCK.

                                       12
<PAGE>

                  THE COMMONLY REGISTERED EQUITY CONTRACT REFERRED TO ABOVE IS
         COMMONLY REGISTERED EQUITY CONTRACT NO. CREC ______.

         $                                              CRD-
          ------------------                                -------------------

                  FIRST SHARES BANCORP, INC., an Indiana corporation
         (hereinafter called the "Company", which term includes any successor
         corporation under the Indenture hereinafter referred to), for value
         received, hereby promises to pay to)

         , or registered assigns, the principal sum of ________________ Dollars
         on July 1, 2011, and to pay interest thereon from the first date of
         issuance, or from the most recent Interest Payment Date to which
         interest has been paid or duly provided for, quarterly on the first day
         of January, April, July and October in each year, commencing July 1,
         2002, at the rate of 8% per annum, until the principal hereof is paid
         or duly provided for. The interest so payable, and punctually paid or
         duly provided for, on any Interest Payment Date will, as provided in
         said Indenture, be paid to the Person in whose name this Debenture (or
         one or more Predecessor Debentures, as defined in said Indenture) is
         registered at the close of business on the Regular Record Date for such
         interest which shall be the fifteenth day of the month (whether or not
         a Business Day) next preceding such Interest Payment Date. Any such
         interest not so punctually paid or duly provided for shall forthwith
         cease to be payable to the registered Holder on such Regular Record
         Date, and may be paid to the person in whose name this Debenture (or
         one or more Predecessor Debentures) is registered at the close of
         business on a Special Record Date for the payment of such Defaulted
         Interest to be fixed by the Trustee, notice whereof shall be given to
         Debentureholders not less than 10 days prior to such Special Record
         Date, or may be paid, at any time in any other lawful manner not
         inconsistent with the requirements of any securities exchange on which
         the Debentures may be listed, and upon such notice as may be required
         by such exchange, all as more fully provided in said Indenture. Payment
         of the principal of, premium (if any) and interest on this Debenture
         will be made at the office or agency of the Company maintained for that
         purpose in the City of Columbus, Ohio, in such coin or currency of the
         United States of America as at the time of payment is legal tender for
         payment of public and private debts; provided, however, that at the
         option of the Company, payment of interest may be made by check mailed
         to the address of the Person entitled thereto as such address shall
         appear in the Debenture Register.

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

                  Unless the certificate of authentication hereon has been
         executed by or on behalf of the Trustee referred to on the reverse
         hereof by manual signature, this Debenture shall not be entitled to any
         benefit under the Indenture, or be valid or obligatory for any purpose.

                                       13
<PAGE>

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

         Dated:                   .
                ------------------

                                         FIRST SHARES BANCORP, INC.

         Attest:

                                         By:
         ------------------------             -----------------------------
         Secretary                            President

                  The form of the reverse of the definitive Commonly Registered
         Debenture shall be as follows:

                  This Debenture is one of a duly authorized issue of Debentures
         of the Company designated as its 8% Redeemable Subordinated Debentures
         Due July 1, 2011 (herein called the "Debentures"), limited in aggregate
         principal amount to $5,000,000, issued and to be issued under an
         Indenture dated as of _______, 2002 (herein called the "Indenture"),
         between the Company and The Huntington National Bank, as Trustee
         (herein called the "Trustee", which term includes any successor trustee
         under the Indenture), to which Indenture and all indentures
         supplemental thereto reference is hereby made for a statement of the
         respective rights, limitations of rights, duties and immunities
         thereunder of the Company, the Trustee, the holders of Senior
         Indebtedness and the Holders of the Debentures, and the terms upon
         which the Debentures are, and are to be, authenticated and delivered.

                  The indebtedness evidenced by the Debentures is, to the extent
         and in the manner provided in the Indenture, subordinated and subject
         in right of payment to the prior payment in full of all Senior
         Indebtedness of the Company. As provided in the Indenture, each holder
         of this Debenture, by his acceptance hereof, agrees to and shall be
         bound by all the provisions of the Indenture relating to such
         subordination and authorizes the Trustee to take such action on his
         behalf as may be necessary or appropriate to effectuate, as between the
         holders of the Debentures and the holders of Senior Indebtedness, the
         subordination of the indebtedness evidenced by this Debenture as
         provided in the Indenture and appoints the Trustee his attorney-in-fact
         for any and all such purposes.

                  The Debentures are issuable in fully registered form without
         coupons either as Commonly Registered Debentures or as Unrestricted
         Debentures, each in original denominations of $1,000 or any integral
         multiple of $1,000. As provided in the Indenture and subject to certain
         limitations herein and therein set forth, the Debentures are
         exchangeable for a like aggregate principal amount of Debentures of
         denominations of $1,000 and integral multiples of $1,000, as requested
         by the Holder surrendering the same.

                                       14
<PAGE>

                  The Company may, at its option redeem the Debentures, in whole
         but not in part, at any time prior to Maturity (a) if such redemption
         is made either (i) out of the proceeds of sale of common stock or
         perpetual preferred stock or other equity securities of the Company
         qualifying as regulatory capital pursuant to criteria established by
         the Federal Reserve Board or (ii) with the approval of the Federal
         Reserve Board, and (b) if at the time of mailing of the notice of
         redemption the Company is not in default in the payment of any Senior
         Indebtedness and at such time redemption of the Debentures would not
         result in a default in any covenant contained in any indenture or other
         instrument pursuant to which Senior Indebtedness is outstanding. Such
         redemption shall be at a Redemption Price which shall be the principal
         amount of each Debenture plus a Redemption Premium on such principal
         amount equal to the percentage of such principal amount then applicable
         under the following schedule:

                  If the Redemption Date is during the 12 months' period
         beginning July 1.

<Table>
<Caption>
                                                               Redemption
                  Year                                          Premium
                  ----                                         ----------
<S>                                                           <C>
                  2002..............................................8%
                  2003..............................................7%
                  2004..............................................6%
                  2005..............................................5%
                  2006..............................................4%
                  2007..............................................3%
                  2008..............................................2%
                  2009..............................................1%
</Table>

         provided, however, that if the Debentures are redeemed prior to July 1,
         2010, but after the occurrence of a Adverse Tax Determination (as
         defined in the Indenture) with respect to the deductibility from the
         Company's gross income for Federal income tax purposes of the interest
         paid on the Debentures, or an Adverse Capital Determination (as defined
         in the Indenture) with respect to the measurement or assessment of the
         Company's capital adequacy, the Redemption Premium shall be one percent
         (1%). The Debentures may be redeemed without any Redemption Premium at
         any time on or after July 1, 2010. Notice of redemption shall be given
         by mailing to holders of the Debentures a notice of such redemption by
         first class mail, postage prepaid, not less than thirty (30) nor more
         than sixty (60) days prior to the Redemption Date, to their last
         addresses as they shall appear upon the Debenture Register. Upon any
         redemption, interest accrued from the most recent Interest Payment Date
         to the Redemption Date will be paid along with the Redemption Price.

                  The Indenture permits, with certain exceptions as therein
         provided, the amendment thereof and the modification of the rights and
         obligations of the Company and the rights of the Holders of the
         Debentures under the Indenture at any time by the Company with the
         consent of the Holders of 66-2/3% in aggregate principal amount of

                                       15
<PAGE>

         the Outstanding Debentures. The Indenture also contains provisions
         permitting the Holders of specified percentages in aggregate principal
         amount of the Outstanding Debentures, on behalf of the Holders of all
         the Debentures, to waive compliance by the Company with certain
         provisions of the Indenture and certain past defaults under the
         Indenture and their consequences. Any such consent or waiver by the
         Holder of this Debenture shall be conclusive and binding upon such
         Holder and upon all future Holders of this Debenture and of any
         Debenture issued upon the transfer hereof or in exchange herefor or in
         lieu hereof whether or not notation of such consent or waiver is made
         upon this Debenture.

                  Subject to the right of offset referred to herein, no
         reference herein to the Indenture and no provision of this Debenture or
         of the Indenture shall alter or impair the obligation of the Company,
         which is absolute and unconditional, to pay the principal of, premium
         (if any) and interest on this Debenture at the times, places and rate,
         and in the coin or currency, herein prescribed.

                  The Commonly Registered Equity Contract referred to on the
         face hereof, inter alia, obligates the registered obligor thereunder to
         purchase on January 1, 2011 shares of Common Stock, par value $0.01 per
         share (the "Common Stock"), of the Company. The Holder of this
         Debenture is deemed to be the registered obligor under such Commonly
         Registered Equity Contract until such Commonly Registered Equity
         contract shall have been registered in a name other than the name of
         the Holder of this Debenture pursuant to the provisions of such
         Commonly Registered Equity Contract and of the Master Equity Contract
         (as defined in the Indenture).

                  This Debenture (or any portion of the principal amount hereof
         which is $1,000 or an integral multiple of $1,000) may be surrendered
         by the Holder hereof to the Equity Contract Agent (as defined in the
         Indenture) at any time or from time to time prior to Stated Maturity in
         full or partial satisfaction of the aggregate purchase obligation of
         such Holder set forth in the Commonly Registered Equity Contract
         referred to on the face hereof, at which time the Company will pay to
         the Holder the interest accrued on this Debenture from the most recent
         Interest Payment Date to which interest has been paid or duly provided
         for.

                  As provided in the Indenture and the Master Equity Contract,
         and subject to certain limitations therein and herein set forth, this
         Debenture is transferable on the Debenture Register of the Company,
         upon surrender of this Debenture for transfer at the office of the
         Equity Contract Agent in the City of Greenwood, Indiana, duly endorsed
         by, or accompanied by a written instrument of transfer in form
         satisfactory to the Company and the Debenture Registrar duly executed
         by, the Holder hereof or his attorney duly authorized in writing
         together with the instruments and notices hereinafter referred to.

                  In order to effect registration of transfer to a single
         transferee of this Debenture and the Commonly Registered Equity
         Contract referred to on the face hereof, this Debenture shall be
         surrendered to the Equity Contract Agent as hereinabove provided,

                                       16
<PAGE>

         together with the Commonly Registered Equity Contract referred to on
         the face hereof, with the form of Assignment II and the form of
         Acceptance on the reverse of such Commonly Registered Equity Contract
         (or separate written acceptance agreement satisfactory to the Company)
         duly completed and executed by the obligor thereunder and the
         transferee, respectively, in the manner contemplated thereby.
         Thereupon, a Commonly Registered Debenture in the same aggregate
         principal amount, registered in the name of the transferee, will be
         delivered to the Equity Contract Agent for delivery to the transferee,
         together with a Commonly Registered Equity Contract registered in the
         name of such transferee. Each Commonly Registered Debenture so issued
         shall refer on the face thereof (by letters and numbers) to such
         Commonly Registered Equity Contract which shall represent an aggregate
         purchase obligation for shares of Common Stock equal to the principal
         amount of such Commonly Registered Debenture.

                  In order to effect registration of transfer of this Debenture
         separately from the Commonly Registered Equity Contract referred to on
         the face hereof, this Debenture shall be surrendered to the Equity
         Contract Agent as hereinabove provided, together with (i) the Commonly
         Registered Equity Contract referred to on the face hereof, with a
         collateral agreement in the form set forth on the reverse of such
         Commonly Registered Equity Contract (or separate written collateral
         agreement satisfactory to the Company) duly completed and executed by
         the obligor thereunder in the manner contemplated thereby, and (ii) the
         collateral referred to in such collateral agreement which shall be of
         the kind and value required by Article VII of the Master Equity
         Contract. Thereupon, an Unrestricted Debenture in the same aggregate
         principal amount, registered in the name of the transferee, will be
         delivered to the Equity Contract Agent for delivery to the transferee,
         and such Commonly Registered Equity Contract shall be exchanged by the
         Equity Contract Agent in accordance with the provisions of the Master
         Equity Contract for a Collateralized Equity Contract which shall be
         delivered by the Equity Contract Agent to the transferor in accordance
         with the provisions of the Master Equity Contract. No transfer of this
         Debenture separately from such Commonly Registered Equity Contract may
         be registered after the Company shall have given notice of redemption
         of the Debentures as provided in Section 1202 of the Indenture.

                  In the manner and subject to the limitations provided in the
         Indenture and the Master Equity Contract, but without payment of any
         service charge, this Debenture may be surrendered to the Equity
         Contract Agent, together with the Commonly Registered Equity Contract
         referred to on the face hereof, to be exchanged for Commonly Registered
         Debentures and/or Unrestricted Debentures of authorized denominations
         at the office of the Equity Contract Agent in the City of Greenwood,
         Indiana; provided, however, that no exchange of this Debenture for an
         Unrestricted Debenture or Debentures may be made after the Company
         shall have given notice of redemption of the Debentures as provided in
         Section 1202 of the Indenture.

                  If an Event of Default involving the bankruptcy, insolvency or
         reorganization of the Company, as set forth in the Indenture, shall
         occur and be continuing, the principal of

                                       17
<PAGE>

         all the Debentures may be declared due and payable in the manner and
         with the effect provided in the Indenture.

                  On or after January 1, 2011, the Company shall be entitled to
         offset the obligation of the Company to pay the principal hereof
         (whether or not prior to the Maturity hereof), in whole or in part,
         against any unpaid obligation of the registered obligor under the
         Commonly Registered Equity Contract referred to on the face hereof to
         purchase the shares of Common Stock covered thereby, and if the Company
         shall effect such offset it shall deliver to the Equity Contract Agent
         certificates for such shares, which certificates shall be delivered to
         the Holder hereof upon presentation hereof to the Equity Contract
         Agent. If the Company shall have offset its obligation to pay all or a
         portion of the principal of this Debenture as provided above, then from
         and after the date of such offset interest on all or such portion of
         the principal of this Debenture shall cease to accrue.

                  Upon any cancellation of the Equity Contracts pursuant to
         Section 2.06 of the Master Equity Contract, this Debenture shall be
         deemed to be converted into an Unrestricted Debenture of like unpaid
         principal amount and registered in the name of the Holder hereof.

                  The Company will not be required to transfer or exchange this
         Debenture after January 1, 2011, except as provided in the Indenture.

                  No service charge will be made for any transfer or exchange of
         this Debenture but the Company may require payment of a sum sufficient
         to cover any tax or governmental charge payable in connection
         therewith.

                  Prior to due presentment for transfer, the Company, the
         Trustee and any agent of the Company or of the Trustee may treat the
         Person in whose name this Debenture is registered as the owner hereof
         for the purpose of receiving payment as herein provided and for all
         other purposes, including the determination of the Company's right to
         offset payment of the principal hereof on or after January 1, 2011,
         against any unpaid obligation of the registered obligor under the
         Commonly Registered Equity Contract referred to on the face hereof,
         whether or not this Debenture be overdue, and neither the Company, the
         Trustee nor any such agent shall be affected by notice to the contrary.

                  This Debenture shall be construed in accordance with and
         governed by the laws of the State of Indiana.

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

         Section 203. Form of Trustee's Certificate of Authentication of
Commonly Registered Debentures. The form of Trustee's certificate of
authentication of Commonly Registered Debentures shall be as follows:

                                       18
<PAGE>

                  This is one of the Commonly Registered Debentures referred to
         in the within-mentioned Indenture.

                       THE HUNTINGTON NATIONAL BANK, as Trustee

                  By:
                       ----------------------------
                             Authorized Officer

         Section 204. Form of Unrestricted Debenture. The form of the face of
the definitive Unrestricted Debenture shall be as follows:

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

              8% Redeemable Subordinated Debenture Due July 1, 2011

         $                                             No.
          ----------------------                          ----------------------

                  First Shares Bancorp, Inc. an Indiana corporation (hereinafter
         called the "Company," which term includes any successor corporation
         under the Indenture hereinafter referred to), for value received hereby
         promises to pay to _______________________, or registered assigns, the
         principal sum of ________________________ Dollars on July 1, 2011, and
         to pay interest thereon from the date of issuance, or from the most
         recent Interest Payment Date to which interest has been paid or duly
         provided for, quarterly on the first day of January, April, July and
         October in each year, commencing July 1, 2002 at the rate of 8% per
         annum, until the principal hereof is paid or duly provided for. The
         interest so payable, and punctually paid or duly provided for, on any
         Interest Payment Date will, as provided in said Indenture, be paid to
         the Person in whose name this Debenture (or one or more Predecessor
         Debentures, as defined in said Indenture) is registered at the close of
         business on the Regular Record Date for such interest which shall be
         the fifteenth day of the month (whether or not a Business Day) next
         preceding such Interest Payment Date. Any such interest not so
         punctually paid or duly provided for shall forthwith cease to be
         payable to the registered Holder on such Regular Record Date, and may
         be paid to the Person in whose name this Debenture (or one or more
         Predecessor Debentures) is registered at the close of business on a
         Special Record Date for the payment of such Defaulted Interest to be
         fixed by the Trustee, notice whereof shall be given to Debentureholders
         not less than 10 days prior to such Special Record Date, or may be
         paid, at any time in any other lawful manner not inconsistent with the
         requirements of any securities exchange on which the Debentures may be
         listed, and upon such notice as may be required by such exchange, all
         as more fully provided in said Indenture. Payment of the principal of,
         premium (if any) and interest on this Debenture will be made at the
         office or agency of the Company maintained for that purpose in the City
         of Columbus, Ohio, in such coin or currency of the United states of
         America as at the time of payment is legal tender for payment of public
         and private debts; provided, however, that at the option of the

                                       19
<PAGE>

         Company payment of interest may be made by check mailed to the address
         of the Person entitled thereto as such address shall appear in the
         Debenture Register.

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

                  Unless the certificate of authentication hereon has been
         executed by or on behalf of the Trustee referred to on the reverse
         hereof, by manual signature, this Debenture shall not be entitled to
         any benefit under the Indenture, or be valid or obligatory for any
         purpose.

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

         Dated:
                ----------------------
                                               FIRST SHARES BANCORP, INC.

         Attest:

                                               By:
         -----------------------------            -----------------------------
         Secretary                                President

                  The form of the reverse of the definitive Unrestricted
         Debenture shall be as follows:

                  This Debenture is one of a duly authorized issue of Debentures
         of the Company designated as its 8% Redeemable Subordinated Debentures
         Due July 1, 2011 (herein called the "Debentures"), limited in aggregate
         principal amount to $5,000,000 issued and to be issued under an
         Indenture dated as of ______, 2002 (herein called the "Indenture"),
         between the Company and The Huntington National Bank, as Trustee
         (herein called the "Trustee," which term includes any successor trustee
         under the Indenture), to which Indenture and all indentures
         supplemental thereto reference is hereby made for a statement of the
         respective rights, limitations of rights, duties and immunities
         thereunder of the Company, the Trustee, the holders of Senior
         Indebtedness and the Holders of the Debentures, and the terms upon
         which the Debentures are, and are to be, authenticated and delivered.

                  The indebtedness evidenced by the Debentures is, to the extent
         and in the manner provided in the Indenture, subordinated and subject
         in right of payment to the prior payment in full of all Senior
         Indebtedness of the Company. As provided in the Indenture, each holder
         of this Debenture, by his acceptance hereof, agrees to and shall be
         bound by

                                       20
<PAGE>

         all the provisions of the Indenture relating to such subordination and
         authorizes the Trustee to take such action on his behalf as may be
         necessary or appropriate to effectuate, as between the holders of the
         Debentures and the holders of Senior Indebtedness, the subordination of
         the indebtedness evidenced by this Debenture as provided in the
         Indenture and appoints the Trustee his attorney-in-fact for any and all
         such purposes.

                  The Debentures are issuable in fully registered form, without
         coupons, either as Commonly Registered Debentures or as Unrestricted
         Debentures, in original denominations of $1,000 or any integral
         multiple of $1,000. As provided in the Indenture and subject to certain
         limitations therein set forth, the Debentures are exchangeable for a
         like aggregate principal amount of Debentures in denominations of
         $1,000 and integral multiples of $1,000, as requested by the Holder
         surrendering the same.

                  The Company may, at its option, redeem the Debentures in whole
         but not in part, at any time prior to Maturity, (a) if such redemption
         is made either (i) out of the proceeds of sale of common stock or
         perpetual preferred stock or other equity securities of the Company
         qualifying as regulatory capital pursuant to criteria established by
         the Federal Reserve Board or (ii) with the approval of the Federal
         Reserve Board, and (b) if at the time of mailing of the notice of
         redemption the Company is not in default in the payment of any Senior
         Indebtedness and at such time redemption of the Debentures would not
         result in a default in any covenant contained in any indenture or other
         instrument pursuant to which Senior Indebtedness is outstanding. Such
         redemption shall be at a Redemption Price which shall be the principal
         amount of each Debenture plus a Redemption Premium on such principal
         amount equal to the percentage of such principal amount then applicable
         under the following schedule:

                  If the Redemption Date is during the 12 months' period
         beginning July 1,

<Table>
<Caption>
                                                                     Redemption
                  Year                                                 Premium
                  ----                                               ----------
<S>                                                                  <C>

                  2002.....................................................8%
                  2003.....................................................7%
                  2004.....................................................6%
                  2005.....................................................5%
                  2006.....................................................4%
                  2007.....................................................3%
                  2008.....................................................2%
                  2009.....................................................1%
</Table>

         provided, however, that if the Debentures are redeemed prior to July 1,
         2010, but after the occurrence of a Adverse Tax Determination (as
         defined in the Indenture) with respect to the deductibility from the
         Company's gross income for Federal income tax purposes of the interest
         paid on the Debentures, or an Adverse Capital Determination (as defined
         in the Indenture) with respect to the measurement or assessment of the
         Company's capital

                                       21
<PAGE>

         adequacy, the Redemption Premium shall be one percent (1%). The
         Debentures may be redeemed without any Redemption Premium at any time
         on or after July 1, 2010. Notice of redemption shall be given by
         mailing to holders of the Debentures a notice of such redemption by
         first class mail, postage prepaid, not less than thirty (30) nor more
         than sixty (60) days prior to the Redemption Date, to their last
         addresses as they shall appear upon the Debenture Register. Upon any
         redemption, interest accrued from the most recent Interest Payment Date
         to the Redemption Date will be paid along with the Redemption Price.

                  The Indenture permits, with certain exceptions as therein
         provided, the amendment thereof and the modification of the rights and
         obligations of the Company and the rights of the Holders of the
         Debentures under the Indenture at any time by the Company with the
         consent of the Holders of 66-2/3% in aggregate principal amount of the
         Outstanding Debentures. The Indenture also contains provisions
         permitting the Holders of specified percentages in aggregate principal
         amount of the Outstanding Debentures, on behalf of the Holders of all
         the Debentures, to waive compliance by the Company with certain
         provisions of the Indenture and certain past defaults under the
         Indenture and their consequences. Any such consent or waiver by the
         Holder of this Debenture shall be conclusive and binding upon such
         Holder and upon all future Holders of this Debenture and of any
         Debenture issued upon the transfer hereof or in exchange herefor or in
         lieu hereof whether or not notation of such consent or waiver is made
         upon this Debenture.

                  No reference herein to the Indenture and no provision of this
         Debenture or of the Indenture shall alter or impair the obligation of
         the Company, which is absolute and unconditional, to pay the principal
         of, premium (if any) and interest on this Debenture at the times,
         places and rate, and in the coin or currency, herein prescribed.

                  This Debenture (or any portion of the principal amount hereof
         which is $1,000 or an integral multiple of $1,000) may be surrendered
         by the Holder hereof to the Equity Contract Agent (as defined in the
         Indenture) at any time or from time to time prior to Stated Maturity in
         full or partial satisfaction of the purchase obligation of such Holder
         pursuant to a Collateralized Equity Contract referred to in the
         Indenture, at which time the Company will pay to the Holder the
         interest accrued on this Debenture from the most recent Interest
         Payment Date to which interest has been paid or duly provided for.

                  As provided in the Indenture and subject to certain
         limitations therein forth, this Debenture is transferable on the
         Debenture Register of the Company, upon surrender of this Debenture for
         transfer at the office or agency of the Company in the City of
         Greenwood, Indiana, duly endorsed by, or accompanied by a written
         instrument of transfer in form satisfactory to the Company and the
         Debenture Registrar duly executed by, the Holder hereof or his attorney
         duly authorized in writing, and thereupon a new Debenture or Debentures
         of authorized denominations and for the same aggregate principal
         amount, will be issued to the designated transferee or transferees.

                                       22
<PAGE>

                  In the manner and subject to the limitations provided in the
         Indenture and the Master Equity Contract (as defined in the Indenture),
         but without payment of any service charge, this Debenture may be
         surrendered to the Equity Contract Agent, together with a
         Collateralized Equity Contract, to be exchanged for an equal aggregate
         principal amount of Commonly Registered Debentures of authorized
         denominations at the office of the Equity Contract Agent in the City of
         Greenwood, Indiana. In the manner and subject to the limitations
         provided in the Indenture, but without payment of any service charge,
         this Debenture may be surrendered to the Company to be exchanged for an
         equal aggregate principal amount of Unrestricted Debentures of
         authorized denominations, at the office or agency of the Company for
         such exchange in the City of Greenwood, Indiana.

                  If an Event of Default involving the bankruptcy, insolvency or
         reorganization of the Company, as set forth in the Indenture, shall
         occur and be continuing, the principal of all the Debentures may be
         declared due and payable in the manner and with the effect provided in
         the Indenture.

                  No service charge will be made for any transfer or exchange of
         this Debenture, but the Company may require payment of a sum sufficient
         to cover any tax or other governmental charge payable in connection
         therewith.

                  Prior to due presentment for transfer, the Company, the
         Trustee and any agent of the Company or of the Trustee may treat the
         Person in whose name this Debenture is registered as the owner hereof
         for the purpose of receiving payment as herein provided and for all
         other purposes, whether or not this Debenture be overdue, and neither
         the Company, the Trustee nor any such agent shall be affected by notice
         to the contrary.

                  This Debenture shall be construed in accordance with and
         governed by the laws of the State of Indiana.

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

         Section 205. Form of Trustee's Certificate of Authentication of
Unrestricted Debentures. The form of Trustee's certificate of authentication of
Unrestricted Debentures shall be as follows:

                  This is one of the Unrestricted Debentures referred to in the
         within-mentioned Indenture.

                                    THE HUNTINGTON NATIONAL BANK, as Trustee

                                    By:
                                         ---------------------------------------
                                                     Authorized Officer

                                       23
<PAGE>

                                  ARTICLE THREE

                                 THE DEBENTURES

         Section 301. Title and Terms. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture is
limited to $5,000,000, except for Debentures authenticated and delivered upon
transfer of, or in exchange for, or in lieu of other Debentures pursuant to
Section 304, 305, 306 or 1006, or pursuant to Article Thirteen or Fourteen.

                  The Debentures shall be known and designated as the 8%
Redeemable Subordinated Debentures Due July 1, 2011, of the Company and shall be
evidenced by either Commonly Registered Debentures or Unrestricted Debentures.
In each case their Stated Maturity shall be July 1, 2011 and they shall bear
interest, at the rate per annum set forth in the form of Commonly Registered
Debenture set forth in Section 202, and in the form of Unrestricted Debenture
set forth in Section 204, from the date of issuance, or from the most recent
Interest Payment Date to which interest has been paid thereon or duly provided
for, payable quarterly on the first day of January, April, July and October in
each year, commencing July 1, 2002, until the principal thereof is paid or duly
provided for.

                  The principal of, premium (if any) and interest on the
Debentures shall be payable at the office or agency of the Company in the City
of Columbus, Ohio; provided, however, that at the option of the Company payment
of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Debenture Register.

         The Debentures shall be redeemable at the option of the Company as
provided in Article Twelve.

         Section 302. Denominations. The Debentures may be issued only in
denominations of $1,000 or any integral multiple of $1,000. Debentures issued
upon transfer of, or in exchange for, or in lieu of other Debentures may be
issued in denominations of $l,000 and integral multiples $1,000.

         Section 303. Execution, Authentication and Delivery and Dating. The
Debentures shall be executed on behalf of the Company by its President or any
Vice President under its corporate seal reproduced thereon attested by its
Secretary or Assistant Secretary. The signatures of any of these officers on the
Debentures may be manual or facsimile.

                  Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Debentures or
did not hold such offices at the date of such Debentures.

                                       24
<PAGE>

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Commonly Registered
Debentures and Unrestricted Debentures executed by the Company to the Trustee
for authentication together with a Company Order for the authentication and
delivery of such Debentures; and the Trustee shall authenticate and deliver such
Commonly Registered Debentures and Unrestricted Debentures as in this Indenture
provided and not otherwise.

                  Commonly Registered Debentures shall be delivered only to the
Equity Contract Agent. The Equity Contract Agent is authorized, prior to the
delivery of a Commonly Registered Debenture, to place thereon the letters and
numbers of the Commonly Registered Equity Contract representing an aggregate
purchase obligation for shares of Common Stock equal to the principal amount of
such Commonly Registered Debenture and registered in the name of the registered
owner of such Commonly Registered Debenture.

                  All Debentures shall be dated the date of their
authentication.

                  No Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Debenture a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be conclusive evidence, and the only
evidence, that such Debenture has been duly authenticated and delivered
hereunder.

         Section 304. Temporary Commonly Registered Debentures and Unrestricted
Debentures. Pending the preparation of definitive Commonly Registered Debentures
or Unrestricted Debentures, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Commonly Registered Debentures
or temporary Unrestricted Debentures, as the case may be, which are printed,
lithographed, typewritten, photocopied, mimeographed or otherwise produced, in
any denomination, substantially of the tenor of the definitive Commonly
Registered Debentures or of the definitive Unrestricted Debentures, as the case
may be, in lieu of which they are issued, with such appropriate insertions,
omissions, substitutions and other variations as the officers executing the same
may determine, as evidenced by their execution thereof.

                  If temporary Commonly Registered Debentures or temporary
Unrestricted Debentures, as the case may be, are issued, the Company will cause
definitive Commonly Registered Debentures or definitive Unrestricted Debentures,
as the case may be, to be prepared without unreasonable delay. After the
preparation of definitive Commonly Registered Debentures or definitive
Unrestricted Debentures, as the case may be, the temporary Commonly Registered
Debentures or temporary Unrestricted Debentures, as the case may be, shall be
exchangeable for definitive Commonly Registered Debentures or definitive
Unrestricted Debentures, as the case may be, upon surrender of the temporary
Commonly Registered Debentures or temporary Unrestricted Debentures, as the case
may be, at the office or agency of the Company designated pursuant to Section
1102, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Commonly Registered Debentures or

                                       25
<PAGE>

temporary Unrestricted Debentures, as the case may be, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Commonly Registered Debentures or definitive
Unrestricted Debentures, as the case may be, of authorized denominations. Until
so exchanged, the temporary Commonly Registered Debentures or temporary
Unrestricted Debentures, as the case may be, shall in all respects be entitled
to the same benefits under this Indenture as definitive Commonly Registered
Debentures or definitive Unrestricted Debentures, as the case may be.

         Section 305. Registration, Transfer and Exchange. The Company shall
cause to be kept at one of the offices or agencies to be maintained by the
Company in accordance with Section 1102 a register (herein sometimes referred to
as the "Debenture Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Debentures
and of transfers of Debentures. The Bank is hereby appointed "Debenture
Registrar" for the purpose of registering Debentures and transfers of Debentures
as herein provided. The Debenture Register shall be open to inspection by the
Trustee and by the Company.

                  Upon surrender for exchange or transfer of any Commonly
Registered Debenture or Unrestricted Debenture, as the case may be, at the
office or agency of the Company maintained for such purpose pursuant to Section
1102, or at the office of the Equity Contract Agent maintained pursuant to
Section 8.03(f) of the Master Equity Contract, if required by the provisions of
this Indenture, the Debentures or the Master Equity Contract, and compliance
with any applicable requirements set forth in this Indenture or the Master
Equity Contract, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the Holder thereof or the designated transferee or
transferees, as the case may be, one or more new Commonly Registered Debentures
or Unrestricted Debentures, as the case may be, of any authorized denominations
of a like aggregate principal amount.

                  At the option of the Holder, Commonly Registered Debentures
and Unrestricted Debentures, as the case may be, may be exchanged for other
Commonly Registered Debentures or Unrestricted Debentures, as the case may be,
of any authorized denominations, of a like aggregate principal amount, as
provided, respectively, in the form of Commonly Registered Debenture set forth
in Section 202 and the form of Unrestricted Debenture set forth in Section 204.

                  Commonly Registered Debentures may be exchanged for
Unrestricted Debentures as provided in the form of Commonly Registered
Debentures set forth in Section 202 and in Article Thirteen; except that no such
exchange may be made after the Company shall have given notice of redemption of
the Debentures as provided in Section 1202. Unrestricted Debentures may be
exchanged for Commonly Registered Debentures as provided in the form of
Unrestricted Debenture set forth in Section 204 and in Article Fourteen.

                  All Debentures issued upon any transfer or exchange of
Commonly Registered Debentures or Unrestricted Debentures pursuant to this
Section 305 or pursuant to Article Thirteen or Fourteen, as the case may be,
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the

                                       26
<PAGE>

Commonly Registered Debentures or Unrestricted Debentures, as the case may be,
surrendered upon such transfer or exchange.

                  Every Debenture presented or surrendered for transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Debenture Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing. In addition, whenever a Commonly
Registered Debenture is presented or surrendered to the Equity Contract Agent
for transfer together with the Commonly Registered Equity Contract referred to
on the face thereof, or if a Commonly Registered Debenture is presented or
surrendered for transfer separately from the Commonly Registered Equity Contract
referred to on the face thereof, such transfer may be made only in accordance
with the provisions of the form of Commonly Registered Debenture set forth in
Section 202 or in Article Thirteen, if applicable.

                  No service charge shall be made for any transfer or exchange
of Debentures but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Debentures, other than exchanges pursuant to Section 304
or 306 or Article Thirteen or Fourteen not involving any transfer.

                  The Company shall not be required to issue, transfer or
exchange any Commonly Registered Debentures after January 1, 2011.

         Section 306. Mutilated, Destroyed, Lost or Stolen Debentures. If (i)
any mutilated Debenture is surrendered to the Trustee, or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Debenture and (ii) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Debenture has been acquired by a bona fide purchaser,
the Company shall execute and upon its request, the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Commonly Registered Debenture or Unrestricted Debenture, a new
Commonly Registered Debenture or Unrestricted Debenture, as the case may be, of
like tenor and principal amount, bearing a number not contemporaneously
outstanding. Such Commonly Registered Debenture shall be delivered to the Equity
Contract Agent.

                  In case any such mutilated, destroyed, lost or stolen
Debenture has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture, pay such Debenture.

                  Upon the issuance of any new Debenture under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                                       27
<PAGE>

                  Every new Debenture issued pursuant to this Section in lieu of
any destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.

                  The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Debentures.

         Section 307. Payment of Interest; Interest Rights Preserved. Interest
on any Debenture which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
fifteenth day of the month (whether or not a Business Day) next preceding such
Interest Payment Date.

                  Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date; and, except as
hereinafter provided, such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (i) or (ii) below:

                  (i)      The Company may elect to make payment of any
                           Defaulted Interest to the Persons in whose names the
                           Debentures (or their respective Predecessor
                           Debentures) are registered at the close of business
                           on a Special Record Date for the payment of such
                           Defaulted Interest, which shall be fixed in the
                           following manner. The Company shall notify the
                           Trustee in writing of the amount of Defaulted
                           Interest proposed to be paid on each Debenture and
                           the date of the proposed payment, and at the same
                           time the Company shall deposit with the Trustee an
                           amount of money equal to the aggregate amount
                           proposed to be paid in respect of such Defaulted
                           Interest or shall make arrangements satisfactory to
                           the Trustee for such deposit prior to the date of the
                           proposed payment, such money when deposited to be
                           held in trust for the benefit of the Persons entitled
                           to such Defaulted Interest as in this clause
                           provided. Thereupon the Trustee shall fix a Special
                           Record Date for the payment of such Defaulted
                           Interest which shall be not more than 15 and not less
                           than 10 days prior to the date of the proposed
                           payment and not less than 10 days after the receipt
                           by the Trustee of the notice of the proposed payment.
                           The Trustee shall promptly notify the Company of such
                           Special Record Date and, in the name and at the
                           expense of the Company, shall cause notice of the
                           Proposed Payment of such Defaulted Interest and the
                           Special Record Date therefor to be mailed,
                           first-class postage prepaid, to each Debentureholder
                           at his address as it appears in the Debenture
                           Register not less than 10 days prior to such

                                       28
<PAGE>

                           Special Record Date. The Trustee may, in its
                           discretion, in the name and at the expense of the
                           Company, cause a similar notice to be published at
                           least once in an Authorized Newspaper in the City of
                           Greenwood, Indiana, but such publication shall not be
                           a condition precedent to the establishment of such
                           Special Record Date. Notice of the Proposed Payment
                           of such Defaulted Interest and the Special Record
                           Date therefor having been mailed as aforesaid, such
                           Defaulted Interest shall be paid to the Persons in
                           whose names the Debentures (or their respective
                           Predecessor Debentures), are registered on such
                           Special Record Date and shall no longer be payable
                           pursuant to the following Clause (ii).

                  (ii)     The Company may make payment of any Defaulted
                           Interest on the Debentures in any other lawful manner
                           not inconsistent with the requirements of any
                           securities exchange on which the Debentures may be
                           listed, and upon such notice as may be required by
                           such exchange, if, after notice given by the Company
                           to the Trustee of the proposed payment pursuant to
                           this Clause, such payment shall be deemed practicable
                           by the Trustee.

                  Subject to the foregoing provisions of this Section, each
Debenture delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Debenture.

                  In the case of any Debenture which is surrendered in payment
of an obligation under an Equity Contract after any Interest Payment Date and on
or prior to the next succeeding Regular Record Date, interest thereon shall
cease to accrue upon such surrender and interest theretofore accrued but unpaid
(whether or not punctually paid or duly provided for) shall be paid at the time
of such surrender to the Person in whose name such Debenture (or one or more
Predecessor Debentures) is registered at such time. In the case of any Debenture
which is surrendered in payment of an obligation under an Equity Contract after
any Regular Record Date and on or prior to the next succeeding Interest Payment
Date (other than any Debenture whose Maturity is prior to such Interest Payment
Date), interest whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such surrender and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Debenture (or one or more Predecessor Debentures)
is registered at the close of business on such Regular Record Date.

         Section 308. Persons Deemed Owners. Prior to due presentment for
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Debenture is registered as the owner of
such Debenture for the purpose of receiving payment of principal of, premium (if
any) and (subject to Section 307) interest on such Debenture and for all other
purposes whatsoever whether or not such Debenture be overdue, and neither the
Company, the Trustee, nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

                                       29
<PAGE>

         Section 309. Cancellation. All Debentures surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Debentures so delivered
shall be promptly cancelled by the Trustee. No Debentures shall be authenticated
in lieu of or in exchange for any Debentures cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Debentures held by the Trustee shall be disposed of as directed by a Company
Order. The Trustee, upon not less than 30 days' prior written notice to the
Company, may at its option destroy all cancelled Debentures held by it for over
six (6) months and shall provide a certificate evidencing same to the Company.

         Section 310. Authentication and Delivery of Original Issue. Forthwith
upon the execution and delivery of this Indenture, or from time to time
thereafter, and subject to and upon compliance with the provisions of this
Section 310, Debentures up to the aggregate principal amount of $5,000,000 may
be executed by the Company and delivered to the Trustee for authentication, and
shall thereupon be authenticated and delivered by the Trustee pursuant to
Company Order, without any further action by the Company. Each Commonly
Registered Debenture shall be originally issued as a unit with a Commonly
Registered Equity Contract representing an aggregate purchase obligation for
shares of Common Stock equal to the principal amount of such Commonly Registered
Debenture. Such Commonly Registered Equity Contract shall be referred to (by
letters and numbers) on the face of such Commonly Registered Debenture, and such
Commonly Registered Debenture shall be registered in the name of the obligor
under and registered owner of such Commonly Registered Equity Contract.

         Section 311. Issuance of Debentures upon Partial Payments under Equity
Contracts. Notwithstanding the provisions of Section 305, if any Debenture shall
be surrendered by the Holder thereof prior to January 1, 2011 in full or partial
satisfaction of the purchase obligation for shares of Common Stock of such
Holder under an Equity Contract, and if less than the full unpaid principal
amount of such Debenture is to be applied to the payment of the aggregate
purchase price of the shares of Common Stock purchased, then, upon the written
request of the Equity Contract Agent, a new Debenture or Debentures, of
authorized denominations in an aggregate principal amount equal to the principal
amount of the Debenture so surrendered less the amount of the principal thereof
applied to the aggregate purchase price for such shares of Common Stock, shall
be delivered to the Equity Contract Agent for delivery to such Holder by the
Equity Contract Agent in accordance with the Master Equity Contract; provided,
however, that in any case in which a Commonly Registered Debenture is
surrendered prior to January 1, 2011 in partial payment for shares of Common
Stock, any new Debenture so delivered shall be a Commonly Registered Debenture,
and shall be registered in the name of the Holder in whose name the Commonly
Registered Equity Contract representing the remaining aggregate purchase
obligation shall be registered; and provided further that, in any case in which
an Unrestricted Debenture is surrendered at any time in full or partial payment
for shares of Common Stock, any new Debenture or Debentures so delivered shall
be an Unrestricted Debenture or Unrestricted Debentures. In any case in which
less than the full unpaid principal amount of any Commonly

                                       30
<PAGE>

Registered Debenture is to be applied on or after January 1, 2011, whether upon
surrender or upon exercise of the Company's right of offset as provided in the
form of Commonly Registered Equity Contract referred to on the face thereof,
then upon the written request of the Equity Contract Agent, and upon surrender
of any such Commonly Registered Debenture in respect of which the Company shall
have exercised such right of offset, a new Unrestricted Debenture or
Unrestricted Debentures of authorized denominations in an aggregate principal
amount equal to the principal amount of the Commonly Registered Debenture so
surrendered less the amount of the principal thereof applied to the aggregate
purchase price for such shares of Common Stock, shall be delivered to the Equity
Contract Agent for delivery to such Holder by the Equity Contract Agent in
accordance with the provisions of the Master Equity Contract.

         Section 312. Computation of Interest. Interest on the Debentures shall
be computed on the basis of a year of twelve 30-day months. Interest on the
Debentures with respect to any period of less than a full calendar month shall
be calculated on the basis of a fraction whose numerator is the actual number of
days in such period multiplied by the interest rate per annum on the Debentures
and whose denominator is the actual number of days in such calendar month
multiplied by twelve (12).

                                  ARTICLE FOUR

                           SUBORDINATION OF DEBENTURES

         Section 401. Agreement to Subordinate. The Company, for itself, its
successors and assigns, covenants and agrees, and each holder of Debentures by
his acceptance thereof likewise covenants and agrees, that the payment of the
principal of, premium (if any) and interest on, each and all of the Debentures
is hereby expressly subordinated, to the extent and in the manner hereinafter
set forth, to the prior payment in full of all Senior Indebtedness.

         Section 402.  Payments Upon Distribution of Assets.

                  (a) Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation, reorganization, recapitalization or
readjustment of the Company or its securities (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or any other arrangement or marshalling of the assets and liabilities of the
Company, or otherwise),

                           (1)      all Senior indebtedness shall first be paid
                                    in full, or have provision made for payment
                                    in full in cash, before the Debentureholders
                                    are entitled to receive any payment on
                                    account of the principal of, premium (if
                                    any) or interest on, the indebtedness
                                    evidenced by the Debentures, and

                           (2)      any payment or distribution of assets of the
                                    Company of any kind or character, whether in
                                    cash, property or securities, to which the
                                    Debentureholders or the Trustee would be
                                    entitled except for the

                                       31
<PAGE>

                                    provisions of this Article Four, shall be
                                    paid by the liquidating trustee or agent or
                                    other person making such payment or
                                    distribution, whether a trustee in
                                    bankruptcy, a receiver or liquidating
                                    trustee or other trustee or agent, directly
                                    to the holders of Senior Indebtedness or
                                    their representative or representatives or
                                    to the trustee or trustees under any
                                    indenture under which any instruments
                                    evidencing any of such Senior Indebtedness
                                    may have been issued, ratably according to
                                    the aggregate amounts remaining unpaid on
                                    account of the principal of, premium (if
                                    any) and interest on, the Senior
                                    Indebtedness held or represented by each, to
                                    the extent necessary to make payment in full
                                    of all Senior Indebtedness remaining unpaid,
                                    after giving effect to any concurrent
                                    payment or distribution, or provision
                                    therefor, to the holders of such Senior
                                    Indebtedness.

                  (b) No payments on account of principal of, premium (if any)
or interest on, the Debentures shall be made unless full payment of amounts then
due for principal, premium (if any), sinking funds, and interest on all Senior
Indebtedness has been made or duly provided for in cash. No payments on account
of principal of, premium (if any) or interest on, the Debentures shall be made
if, at the time of such payment or immediately after giving effect thereto,
there shall exist under any Senior Indebtedness or any agreement pursuant to
which any Senior Indebtedness is issued any default or any condition, event or
act, which, with notice or lapse of time or both, would constitute a default or
an event of default as defined in any such agreement.

                  (c) Upon the happening of any Event of Default and upon
declaration that the Debentures are due and payable as provided in Article Six,
then all principal of and premium (if any) and interest on all Senior
Indebtedness outstanding at the time of such Event of Default shall first be
paid or prepaid in full, or such payment shall have been duly provided for to
the satisfaction of the holders of Senior Indebtedness, before any payment on
account of principal, premium (if any) or interest is made upon the Debentures;
provided, however, that if such declaration is waived, rescinded, or annulled as
provided in said Article Six, then the requirement contained in this paragraph
(c) for payment or prepayment (or provision therefor) of the Senior Indebtedness
shall cease.

                  (d) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by the Trustee or the
Debentureholders before all Senior Indebtedness is paid in full, or provision
made for its payment, such payment or distribution (subject to Sections 406 and
408) shall be immediately paid by the Trustee or such Holder, as the case may
be, over to the holders of Senior Indebtedness remaining unpaid or unprovided
for or their representative or representatives or to the trustee or trustees
under any indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, as provided in the foregoing subparagraph (2)
of paragraph (a) of this Section 402, for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have been

                                       32
<PAGE>

paid in full, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.

                  Nothing in this Section 402 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 707.

         Section 403. Subrogation. Subject to the payment in full of all Senior
Indebtedness, the Debentureholders shall be subrogated (equally and ratably with
the holders of all other subordinated indebtedness of the Company, which, by its
terms, is not superior in right of payment to the Debentures, and ranks on a
parity with the Debentures) to all rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal of, premium
(if any) and interest on the Debentures shall be paid in full, and for purposes
of such subrogation, no such payment or distributions to the holders of Senior
Indebtedness of cash, property or securities distributable to the holders of
Senior Indebtedness under the provisions hereof which otherwise would be payable
or distributable to the Debentureholders shall, as between the Company, its
creditors (other than the holders of Senior Indebtedness), and the
Debentureholders, be deemed to be a payment by the Company to or on account of
the Senior Indebtedness. It is understood that the provisions of this Article
Four are and are intended solely for the purpose of defining the relative rights
of the Debentureholders on the one hand, and the holders of the Senior
Indebtedness on the other hand.

         Section 404. Obligation of Company Unconditional. Nothing contained in
this Article Four or elsewhere in this Indenture or in the Debentures is
intended to or shall alter or impair, as between the Company, its creditors
(other than the holders of Senior Indebtedness), and the Debentureholders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Debentureholders the principal of, premium (if any) and interest on the
Debentures as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Debentureholders and creditors of the Company, other than the holders of the
Senior Indebtedness, nor shall anything herein or in any Debentures prevent the
Trustee or any Debentureholder from exercising all remedies otherwise permitted
by applicable law upon the happening of any Event of Default under this
Indenture, subject to the rights, if any, under this Article Four of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy and subject to the limitations set
forth in Article 6. Upon any distribution of assets of the Company referred to
in this Article Four, the Trustee, subject as between the Trustee and the
Debentureholders to the provisions of Section 701, and the Debentureholders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
the Debentureholders for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Four. In the event that the Trustee determines, in
good faith, that further evidence is required with respect to the right of any
Person as a holder of

                                       33
<PAGE>

Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such Person under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness.

         Section 405. Rights of Holders of Senior Indebtedness Not Impaired. No
right of any present or future holder of any Senior Indebtedness of the Company
to enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

         Section 406. Obligation of Company to Pay Debentures Not Impaired.
Nothing contained in this Article Four or elsewhere in this Indenture, or in any
of the Debentures, shall, however, (a) affect the obligation of the Company to
make, or prevent the Company from making, at any time, except as provided in
Section 402, payments of principal of, premium (if any) or interest on the
Debentures, or (b) prevent the application by the Trustee or any Paying Agent of
any moneys deposited with it hereunder by the Company to the payment of or on
account of the principal of, premium (if any) or interest on the Debentures, if
the Trustee or such Paying Agent, as the case may be, did not have written
notice of any event prohibiting the payment of such principal, premium (if any)
or interest on or prior to the second business day preceding the date such
payment is due.

         Section 407. Trustee Authorized to Act for Debentureholder. Each Holder
of Debentures by his acceptance thereof authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
as between the Debentureholders and the holders of Senior Indebtedness the
subordination provided in this Article Four and appoints the Trustee his
attorney-in-fact for such purpose.

         Section 408. Trustee Not Charged with Knowledge of Senior Indebtedness.
Notwithstanding the provisions of this Article Four or any other provisions of
this Indenture, neither the Trustee nor any Paying Agent shall be charged with
knowledge of the existence of any Senior Indebtedness, or of any default in the
payment of the principal of, or premium, if any, or interest on, or the
existence of, or failure to comply with, any covenant of or condition in, any
Senior Indebtedness or of the maturity thereof by lapse of time, acceleration or
otherwise, unless and until the Trustee or such Paying Agent shall have received
written notice thereof from the Company or a holder, or a trustee or similar
representative of any class, of Senior Indebtedness; and, prior to the receipt
of any such written notice, the Trustee or any Paying Agent shall be entitled to
assume that no such default or other failure exists; provided, however, that,
unless the Trustee or any Paying Agent has received the notice provided for in
this Section 408 at least two

                                       34
<PAGE>

(2) business days prior to the date upon which by the terms of this Indenture
any money may become payable for any purpose (including, without limitation, the
payment of either the principal of, or the interest on, any Debenture), then,
anything herein contained to the contrary notwithstanding, the Trustee or any
Paying Agent shall have full power and authority to receive such money and to
apply the same to the purpose for which it was received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date.

         Section 409. Applicability of Article Four. Notwithstanding anything
herein contained to the contrary, all the provisions of this Indenture shall,
except as otherwise provided in Sections 107, 502, 706 and 707, be subject to
the provisions of this Article Four so far as the same may be applicable
thereto.

         Section 410. "Trustee" to Include Paying Agent. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article Four shall
in such case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article Four in
place of the Trustee.

                                  ARTICLE FIVE

                           SATISFACTION AND DISCHARGE

         Section 501. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to rights of transfer or exchange
of Debentures or to exchange Commonly Registered Debentures for Unrestricted
Debentures herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

                  (1)      either

                           (A)      all Debentures theretofore authenticated and
                                    delivered (other than (i) Debentures which
                                    have been destroyed, lost or stolen and
                                    which have been replaced or paid as provided
                                    in Section 306 and (ii) Debentures for whose
                                    payment money has theretofore been deposited
                                    in trust or segregated and held in trust by
                                    the Company and thereafter repaid to the
                                    Company or discharged from such trust, as
                                    provided in Section 1103) have been
                                    delivered to the Trustee for cancellation;
                                    or

                           (B)      all such Debentures not theretofore
                                    delivered to the Trustee for cancellation
                                    (i) have become due and payable, or (ii)
                                    will become due and payable at their Stated
                                    Maturity within one year, and the Company,
                                    in the case of (i) or (ii) above, has
                                    deposited or caused to be deposited with the
                                    Trustee as trust funds in trust for the

                                       35
<PAGE>

                                    purpose an amount sufficient to pay and
                                    discharge the entire indebtedness on such
                                    Debentures not theretofore delivered to the
                                    Trustee for cancellation, for principal,
                                    premium (if any) and interest to the date of
                                    such deposit (in the case of Debentures
                                    which have become due and payable), or to
                                    the Stated Maturity, as the case may be;

                  (2)      the Company has paid or caused to be paid all other
                           sums payable hereunder by the Company; and

                  (3)      the Company has delivered to the Trustee an Officers'
                           Certificate and an Opinion of Counsel each stating
                           that all conditions precedent herein provided for
                           relating to the satisfaction and discharge of this
                           Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 707 and the obligations
of the Trustee to any Authenticating Agent under Section 714 shall survive.

         Section 502. Application of Trust Money. All money deposited with the
Trustee pursuant to Section 501 shall be held in trust and applied by it in
accordance with the provisions of the Debentures and of this Indenture to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), as the Trustee may determine to the persons
entitled thereto of the principal, premium (if any) and interest for whose
payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.

                                   ARTICLE SIX

                                    REMEDIES

         Section 601. Events of Default. "Event of Default," wherever used
herein means any one of the following events (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or to be effected by
operation of law pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):

                  (1)      the Company or any of its Subsidiaries that is a
                           Major Subsidiary or any group of Subsidiaries that,
                           taken as a whole, would constitute a Major Subsidiary
                           pursuant to or within the meaning of Title 11, U.S.
                           Code or any similar Federal or state law for the
                           relief of debtors (herein referred to as "Bankruptcy
                           Law"):

                           (A)      commences a voluntary case,

                                       36
<PAGE>

                           (B)      consents to the entry of an order for relief
                                    against it in an involuntary case,

                           (C)      consents to the appointment of a custodian
                                    of it or for all or substantially all of its
                                    property,

                           (D)      makes a general assignment for the benefit
                                    of its creditors, or

                           (E)      generally is not paying its debts as they
                                    become due; or

                  (2)      a court of competent jurisdiction enters an order or
                           decree under any Bankruptcy Law that:

                           (A)      is for relief against the Company or any of
                                    its Subsidiaries that is a Major Subsidiary
                                    or any group of Subsidiaries that, taken as
                                    a whole, would constitute a Major Subsidiary
                                    in an involuntary case;

                           (B)      appoints a receiver, trustee, assignee,
                                    liquidator, custodian or other similar
                                    official under any Bankruptcy Law (i) of the
                                    Company or any of its Subsidiaries that is a
                                    Major Subsidiary or any group of
                                    Subsidiaries that, taken as a whole, would
                                    constitute a Major Subsidiary or (ii) for
                                    all or substantially all of the property of
                                    the Company or any of its Subsidiaries that
                                    is a Major Subsidiary or any group of
                                    Subsidiaries that, taken as a whole, would
                                    constitute a Major Subsidiary; or

                           (C)      orders the liquidation of the Company or any
                                    of its Subsidiaries that is a Major
                                    Subsidiary or any group of Subsidiaries
                                    that, taken as a whole, would constitute a
                                    Major Subsidiary;

                  and the order or decree remains unstayed and in effect for 60
                  consecutive days.

         Section 602. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing (but not in the event of a Default as
defined in Section 603 of this Indenture), then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal of all the Debentures to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal shall
become immediately due and payable in cash. In the event that for any reason the
foregoing acceleration provision shall be unenforceable, the Company agrees to
pay immediately to the Holders, upon any such declaration of acceleration, in
cash, as liquidated damages for loss of a bargain and not as a penalty, the
principal amount of all the Debentures.

                  At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as

                                       37
<PAGE>

hereinafter in this Article provided, the Holders of a majority in principal
amount of the Outstanding Debentures, by written notice to Company and the
Trustee, may rescind and annul such declaration and its consequences if:

                  (1)      the Company has paid or deposited with the Trustee a
                           sum sufficient to pay

                           (A)      all overdue installments of interest on all
                                    Debentures,

                           (B)      the principal and premium (if any) of any
                                    Debentures which have become due otherwise
                                    than by declaration of acceleration and
                                    interest thereon at the rate or rates
                                    prescribed therefor in such Debentures,

                           (C)      to the extent that payment of such interest
                                    is lawful, interest upon overdue
                                    installments of interest at the rate or
                                    rates prescribed therefor in such
                                    Debentures, and

                           (D)      all sums paid or advanced by the Trustee
                                    hereunder and the reasonable compensation,
                                    expenses, disbursements and advances of the
                                    Trustee, its agents and counsel;

         and

                  (2)      all Events of Default have been cured or waived as
                           provided in Section 613.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

         Section 603. Collection of Indebtedness and Suits for Enforcement by
Trustee. "Default" wherever used herein means any one of the following events
(whatever the reason for such Default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):

                  (1)      default in the payment of any installment of interest
                           on any Debenture when such interest becomes due and
                           payable and such default continues for a period of 30
                           days;

                  (2)      default in the payment of principal or premium (if
                           any) of any Debenture at the Maturity thereof; or

                  (3)      default in the performance of any covenant or
                           warranty of the Company in this Indenture (other than
                           a covenant or warranty a default in the performance
                           of which is elsewhere in this Section specifically
                           dealt with),

                                       38
<PAGE>

                           and such Default continues for a period of 60 days
                           after there has been given, by registered or
                           certified mail, to the Company by the Trustee or to
                           the Company and the Trustee by the Holders of at
                           least 10% in principal amount of the Outstanding
                           Debentures, a written notice specifying such Default
                           and requiring it to be remedied and stating that such
                           notice is a "Default Notice" hereunder.

The Company covenants that if any Event of Default or Default under clauses (1)
or (2) above shall occur, the Company will upon demand of the Trustee pay to it,
for the benefit of the Holders, the whole amount then due and payable on the
Debentures for principal, premium (if any) and interest, with interest upon the
overdue principal and premium (if any) at the original rate per annum prescribed
in the Debenture and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest at the rate of eleven
percent (11%) per annum, compounded quarter-annually, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

                  If the Company fails to pay any such amount forthwith upon
such demand, the Trustee, in its own name and as Trustee of an express trust,
may institute a judicial proceeding to compel the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company, or any other obligor upon the Debentures
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Company, or any other obligor upon the
Debentures wherever situated.

                  If an Event of Default or Default occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

         Section 604. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Debentures or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Debentures shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal, premium (if any) or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

                  (1)      to file and prove a claim for the whole amount of
                           principal, premium (if any) and interest owing and
                           unpaid in respect of the Debentures and to file such
                           other papers or documents as may be necessary or
                           advisable in order to have the claims of the Trustee
                           (including any claim for the reasonable

                                       39
<PAGE>

                           compensation, expenses, disbursements and advances of
                           the Trustee, its agents and counsel) and of the
                           Debentureholders allowed in such judicial proceeding,
                           and

                  (2)      to collect and receive any moneys or other property
                           payable or deliverable on any such claims and to
                           distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Debentureholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 707.

                  Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Debentureholder in
any such proceeding.

         Section 605. Trustee May Enforce Claims Without Possession of
Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the possession
of any of the Debentures or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgment has been recovered.

         Section 606. Application of Money Collected. Subject to Article Four,
any money collected by the Trustee pursuant to this Article shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal, premium (if any) or
interest, upon presentation of the Debentures and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

                  FIRST:            To the payment of all amounts due the
                                    Trustee under Section 707; and

                  SECOND:           To the payment of the amounts then due and
                                    unpaid upon the Debentures for principal,
                                    premium (if any) and interest, in respect of
                                    which or for the benefit of which such money
                                    has been collected, ratably, without
                                    preference or priority of any kind,
                                    according to the amounts due and payable on
                                    such Debentures, for principal, premium (if
                                    any) and interest, respectively.

                                       40
<PAGE>

         Section 607. Limitation on Suits. No Holder of any Debenture shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

                  (1)      such Holder has previously given written notice to
                           the Trustee of a continuing Event of Default or
                           Default, specifying such Default and stating that
                           such notice is a "Notice of Default" hereunder;

                  (2)      the Holders of not less than 25% in principal amount
                           of the Outstanding Debentures shall have made written
                           request to the Trustee to institute proceedings in
                           respect of such Event of Default or Default in its
                           own name as Trustee hereunder;

                  (3)      such Holder or Holders have offered to the Trustee
                           reasonable indemnity against the costs, expenses and
                           liabilities to be incurred in compliance with such
                           request;

                  (4)      the Trustee for 60 days after its receipt of such
                           notice, request and offer of indemnity has failed to
                           institute any such proceeding; and

                  (5)      no direction inconsistent with such written request
                           has been given to the Trustee during such 60-day
                           period by the Holders of a majority in principal
                           amount of the Outstanding Debentures;

it being understood and intended that no one or more Holders of Debentures shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Debentures, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders of Debentures.

         Section 608. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Subject, in the case of any Commonly Registered Debenture,
to the Company's right of offset provided in the form of Commonly Registered
Debenture set forth in Section 202 and to the provisions of Section 606, the
Holder of any Debenture shall have the right, which is absolute and
unconditional, to receive payment of the principal (in accordance with the
respective terms of the Commonly Registered Debentures or of the Unrestricted
Debentures, as the case may be) of, premium (if any) and (subject to Section
307) interest on such Debenture at its Stated Maturity expressed in such
Debenture (or in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

         Section 609. Restoration of Rights and Remedies. If the Trustee or any
Debentureholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined

                                       41
<PAGE>

adversely to the Trustee or to such Debentureholder, then and in every such case
the Company, the Trustee and the Debentureholders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Debentureholders shall continue as though no such proceeding had
been instituted.

         Section 610. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Debentureholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law and not expressly in conflict with the provisions
of this Indenture, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

         Section 611. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Debenture to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Debentureholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Debentureholders,
as the case may be.

         Section 612. Control by Debentureholders. The Holders of a majority in
principal amount of the Outstanding Debentures shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that:

                  (1)      such direction shall not be in conflict with any rule
                           of law or with this Indenture, and

                  (2)      the Trustee may take any other action deemed proper
                           by the Trustee which is not inconsistent with such
                           direction, any rule of law or this Indenture.

         Section 613. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Debentures may on behalf of the
Holders of all of the Debentures waive any past Default Situation hereunder and
its consequences, except a Default Situation:

                  (1)      in the payment of the principal of, premium (if any)
                           or interest on any Debenture, or

                  (2)      in respect of a covenant or provision hereof which
                           under Article Ten cannot be modified or amended
                           without the consent of the Holder of each Outstanding
                           Debenture affected.

                                       42
<PAGE>

                  Upon any such waiver, such Default Situation shall cease to
exist, and any Default or Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default Situation or impair any right
consequent thereon.

         Section 614. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply (i) to
any suit instituted by the Trustee, (ii) to any suit instituted by any
Debentureholder, or group of Debentureholders, holding in the aggregate more
than 10% of the principal amount of the Outstanding Debentures, or (iii) to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium (if any) or interest on any Debenture on or after the
respective Stated Maturity expressed in such Debenture or, in the case of
redemption, on or after the Redemption Date.

                                  ARTICLE SEVEN

                                   THE TRUSTEE

         Section 701. Certain Duties and Responsibilities.

                  (a)      Except during the continuance of an Event of Default
                           or a Default,

                           (1)      the Trustee undertakes to perform such
                                    duties and only such duties as are
                                    specifically set forth in this Indenture,
                                    and no implied covenants or obligations
                                    shall be read into this Indenture against
                                    the Trustee; and

                           (2)      in the absence of bad faith on its part, the
                                    Trustee may conclusively rely, as to the
                                    truth of the statements and the correctness
                                    of the opinions expressed therein, upon
                                    certificates or opinions furnished to the
                                    Trustee and conforming to the requirements
                                    of this Indenture; but in the case of any
                                    such certificates or opinions which by any
                                    provision hereof are specifically required
                                    to be furnished to the Trustee, the Trustee
                                    shall be under a duty to examine the same to
                                    determine whether or not they conform to the
                                    requirements of this Indenture.

                                       43
<PAGE>

                  (b) In case an Event of Default or a Default has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

                  (c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                           (1)      this Subsection shall not be construed to
                                    limit the effect of Subsection (a) of this
                                    Section;

                           (2)      the Trustee shall not be liable for any
                                    error of judgment made in good faith by a
                                    Responsible Officer, unless it shall be
                                    proved that the Trustee was negligent in
                                    ascertaining the pertinent facts;

                           (3)      the Trustee shall not be liable with respect
                                    to any action taken or omitted to be taken
                                    by it in good faith in accordance with the
                                    direction of the Holders of a majority in
                                    principal amount of the Outstanding
                                    Debentures relating to the time, method and
                                    place of conducting any proceedings for any
                                    remedy available to the Trustee, or
                                    exercising any trust or power conferred upon
                                    the Trustee, under this Indenture; and

                           (4)      no provision of this Indenture shall require
                                    the Trustee to expend or risk its own funds
                                    or otherwise incur any financial liability
                                    in the performance of any of its duties
                                    hereunder, or in the exercise of any of its
                                    rights or powers, if it shall have
                                    reasonable grounds for believing that
                                    repayment of such funds or adequate
                                    indemnity against such risk or liability is
                                    not reasonably assured to it.

                  (d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.

         Section 702. Notice of Defaults. Within 90 days after the occurrence of
any Default Situation hereunder, the Trustee shall transmit by mail to all
Debentureholders, as their names and addresses appear in the Debenture Register,
notice of such Default Situation hereunder known to the Trustee, unless such
Default Situation shall have been cured or waived; provided, however, that,
except in the case of a Default Situation involving failure to make payment of
the principal of, premium (if any) or interest on any Debenture, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Debentureholders; and
provided,

                                       44
<PAGE>

further, that in the case of any Default Situation of the character specified in
Section 603(3), no such notice to Debentureholders shall be given until at least
30 days after the occurrence thereof.

         Section 703. Certain Rights of Trustee. Except as otherwise provided in
Section 701:

                  (1)     the Trustee may rely and shall be protected in acting
                          or refraining from acting upon any resolution,
                          certificate, statement, instrument, opinion, report,
                          notice, request, direction, consent, order, bond,
                          note, or other paper or document believed by it to be
                          genuine and to have been signed or presented by the
                          proper party or parties;

                  (2)     any request or direction of the Company mentioned
                          herein shall be sufficiently evidenced by a Company
                          Request or Company Order and any resolution of the
                          Board of Directors may be sufficiently evidenced by a
                          Board Resolution;

                  (3)     whenever in the administration of this Indenture the
                          Trustee shall deem it desirable that a matter be
                          proved or established prior to taking, suffering or
                          omitting any action hereunder, the Trustee (unless
                          other evidence be herein specifically prescribed) may,
                          in the absence of bad faith on its part, rely upon an
                          Officers' Certificate;

                  (4)     the Trustee may consult with counsel and the written
                          advice of such counsel or any Opinion of Counsel shall
                          be full and complete authorization and protection in
                          respect of any action taken, suffered or omitted by it
                          hereunder in good faith and in reliance thereon;

                  (5)     the Trustee shall be under no obligation to exercise
                          any of the rights or powers vested in it by this
                          Indenture at the request or direction of any of the
                          Debentureholders pursuant to this Indenture, unless
                          such Debentureholders shall have offered to the
                          Trustee reasonable security or indemnity against the
                          costs, expenses and liabilities which might be
                          incurred by it in compliance with such request or
                          direction;

                  (6)     the Trustee shall not be bound to make any
                          investigation into the facts or matters stated in any
                          resolution, certificate, statement, instrument,
                          opinion, report, notice, request, direction, consent,
                          order, bond, note, or other paper or document, but the
                          Trustee, in its discretion, may make such further
                          inquiry or investigation into such facts or matters as
                          it may see fit, and if the Trustee shall determine to
                          make such further inquiry or investigation, it shall
                          be entitled to examine the books, records and premises
                          of the Company, personally or by agent or attorney;
                          and

                  (7)     the Trustee may execute any of the trusts or powers
                          hereunder or perform any duties hereunder either
                          directly or by or through agents or attorneys

                                       45
<PAGE>

                           and the Trustee shall not be responsible for any
                           misconduct or negligence on the part of any agent or
                           attorney appointed with due care by it hereunder.

         Section 704. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein, and in the Debentures, except the Trustee's
certificates of authentication thereof, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the use
or application by the Company of Debentures or the proceeds of the Debentures.

         Section 705. May Hold Debentures. The Trustee, any Authenticating
Agent, Paying Agent, Debenture Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Debentures and, subject to Sections 708 and 713, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Debenture Registrar or such other agent.

         Section 706. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.

         Section 707. Compensation and Reimbursement. The Company agrees:

                  (1)      to pay to the Trustee from time to time reasonable
                           compensation for all services rendered by it
                           hereunder (which compensation shall not be limited
                           by any provision of law in regard to the
                           compensation of a trustee of an express trust);

                  (2)      except as otherwise expressly provided herein, to
                           reimburse the Trustee upon its request for all
                           reasonable expenses, disbursements and advances
                           incurred or made by the Trustee in accordance with
                           any provision of this Indenture (including the
                           reasonable compensation and the expenses and
                           disbursements of its agents and counsel), except any
                           such expense, disbursement or advance as may be
                           attributable to its negligence or bad faith; and

                  (3)      to indemnify the Trustee for, and to hold it harmless
                           against, any loss, liability or expense incurred
                           without negligence or bad faith on its part, arising
                           out of or in connection with the acceptance or
                           administration of this trust, including the costs and
                           expenses of defending itself against any claim or
                           liability in connection with the exercise or
                           performance of any of its powers or duties hereunder.

                                       46
<PAGE>

                  As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, premium (if any) or
interest on particular Debentures.

                  The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.

         Section 708. Disqualification; Conflicting Interests If the Trustee has
or shall acquire any conflicting interest, as defined in TIA Section 310(b), it
shall, within the period required by TIA Section 310(b) after ascertaining that
it has such conflicting interest, either eliminate such conflicting interest or
resign in the manner and with the effect specified in TIA Section 310(b). The
Trustee shall otherwise comply with the provisions of TIA Section 310(b).

         Section 709. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America or of any state,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus (together with its parent) of at least $5,000,000, and
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. This Indenture shall always
have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and
(5). The Trustee is subject to TIA Section 310(b). If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.

         Section 710. Resignation and Removal; Appointment of Successor.

                  (a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 711.

                  (b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

                  (c) The Trustee may be removed at any time by act of the
Holders of a majority in principal amount of the Outstanding Debentures,
delivered to the Trustee and to the Company.

                  (d) If at any time:

                                       47
<PAGE>

                           (1)      the Trustee shall fail to comply with
                                    Section 708(a) after written request
                                    therefor by the Company or by any
                                    Debentureholder who has been a bona fide
                                    Holder of a Debenture for at least six
                                    months, or

                           (2)      the Trustee shall cease to be eligible under
                                    Section 709 and shall fail to resign after
                                    written request therefor by the Company or
                                    by any such Debentureholder, or

                           (3)      the Trustee shall become incapable of acting
                                    or shall be adjudged a bankrupt or insolvent
                                    or a receiver of the Trustee or of its
                                    property shall be appointed or any public
                                    officer shall take charge or control of the
                                    Trustee or of its property or affairs for
                                    the purpose of rehabilitation, conservation
                                    or liquidation;

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 614, any Debentureholder who has been a bona
fide Holder of a Debenture for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

                  (e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Debentures delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Debentureholders and accepted appointment in the manner
hereinafter provided, any Debentureholder who has been a bona fide Holder of a
Debenture for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first class mail, postage prepaid, to the
Holders of Debentures as their names and addresses appear in the Debenture
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.

         Section 711. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the

                                       48
<PAGE>

retiring Trustee; but on request of the Company or the successor Trustee,
such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its lien, if any, provided for in Section
707. Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts.

                  No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

         Section 712. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.

         Section 713. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.

         Section 714. Appointment of Authenticating Agent. At any time when any
of the Debentures remain outstanding the Trustee may appoint an Authenticating
Agent or Agents which shall be authorized to act on behalf of the Trustee to
authenticate Debentures, and Debentures so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Debentures by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $5,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 714, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth

                                       49
<PAGE>

in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 714, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 714.

                  The Trustee hereby appoints the Bank as its initial
Authenticating Agent hereunder. The Authenticating Agent may also serve as
Equity Contract Agent.

                  Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 714, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.

                  An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time cancel the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a cancellation, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 714, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Debenture Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent
herein. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section 714.

                  The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 707.

                  If an appointment is made pursuant to this Section 714, the
Debentures may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:

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

                                    THE HUNTINGTON NATIONAL BANK,
                                    as Trustee

                                    By:     FIRST BANK,
                                            as Authenticating Agent

                                            By:
                                               ---------------------------------
                                                     Authorized Officer

                                       50
<PAGE>

                                  ARTICLE EIGHT

                           DEBENTUREHOLDERS' LISTS AND
                         REPORTS BY TRUSTEE AND COMPANY

         Section 801. Company to Furnish Trustee Names and Addresses of
Debentureholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least seven Business Days before each Interest Payment Date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes, and the Company shall otherwise comply with
TIA Section 312(a).

         Section 802. Preservation of Information; Communications to
Debentureholders. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a).
Holders may communicate pursuant to TIA Section 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Debenture Registrar and anyone else shall have the protection of
TIA Section 312(c).

         Section 803. Reports by Trustee.

                  (a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Debentures remain
outstanding, the Trustee shall mail to the Holders of the Debentures a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).

                  (b) A copy of each report at the time of its mailing to the
Holders of Debentures shall be mailed to the Company. The Company shall promptly
notify the Trustee when the Debentures are listed on any stock exchange.

         Section 804. Reports by Company. The Company will:

                  (1)      At any time the Company is not required to file
                           information, documents or reports with the Commission
                           pursuant to either Section 13 or Section 15(d) of the
                           Securities Exchange Act of 1934, file with the
                           Trustee, in

                                       51
<PAGE>

                           accordance with rules and regulations prescribed from
                           time to time by the Commission, and at the times
                           required thereunder to be filed, such of the
                           supplementary and periodic information, documents and
                           reports which may be required pursuant to Section 13
                           of the Securities Exchange Act of 1934 in respect of
                           a security listed and registered on a national
                           securities exchange as may be prescribed from time to
                           time in such rules and regulations;

                  (2)      Transmit by mail to all Debentureholders, as their
                           names and addresses appear in the Debenture Register,
                           (A) within 30 days after the filing thereof with the
                           Trustee, copies of any information, documents and
                           reports required to be filed by the Company pursuant
                           to paragraph (1) and (B) copies of any reports or
                           other communications sent by the Company to holders
                           of its Common Stock, at the same time such reports or
                           other communications are sent to holders of Common
                           Stock;

                  (3)      Transmit promptly to any Debenture holder upon
                           request a copy of any filing which the Company is
                           required to file and has filed with the Commission
                           pursuant to Section 13 or Section 15(d) of the
                           Securities Exchange Act of 1934; and.

                  (4)      File with the Trustee the statement required by
                           Section 1106 when required thereby.

                                  ARTICLE NINE

                  CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

         Section 901. Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or convey
or transfer its properties and assets substantially as an entirety to any
Person, unless:

                  (1)        The corporation formed by such consolidation or
                             into which the Company is merged or the Person
                             which acquires by conveyance or transfer the
                             properties and assets of the Company substantially
                             as an entirety shall be a corporation organized and
                             existing under the laws of the United States of
                             America or any State or the District of Columbia,
                             and shall expressly assume, by an indenture
                             supplemental hereto, executed and delivered to the
                             Trustee, in form satisfactory to the Trustee, the
                             due and punctual payment of the principal of,
                             premium (if any) and interest on all the Debentures
                             and the performance of every covenant of this
                             Indenture, the Equity Contracts and the Master
                             Equity Contract on the part of the Company to be
                             performed or observed;

                                       52
<PAGE>

                  (2)      Immediately after giving effect to such transaction,
                           no Default or Event of Default, and no event which,
                           after notice or lapse of time, or both, would become
                           a Default or Event of Default, shall have happened
                           and be continuing; and

                  (3)      The company has delivered to the Trustee an Officers'
                           Certificate and an Opinion of Counsel each stating
                           that such consolidation, merger, conveyance or
                           transfer and such supplemental indenture comply with
                           this Article and that all conditions precedent herein
                           provided for relating to such transaction have been
                           complied with.

         Section 902. Successor Corporation Substituted. Upon any consolidation
or merger, or any conveyance or transfer of the properties and assets of the
Company substantially as an entirety in accordance with Section 901, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance or transfer is made shall succeed to and be
substituted for, and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein; and in the event of any such conveyance or
transfer, the Company (which term shall for this purpose mean the Person named
as the "Company" in the first paragraph of this Indenture or any successor
corporation which shall theretofore have become such in the manner prescribed in
this Article) shall be discharged from all liability under this Indenture and in
respect of the Debentures and may be dissolved and liquidated.

                                   ARTICLE TEN

                             SUPPLEMENTAL INDENTURES

         Section 1001. Supplemental Indentures without Consent of
Debentureholders. Without the consent of the Holders of any Debentures, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:

                  (1)      To evidence the succession of another corporation to
                           the Company, and the assumption by any such successor
                           of the covenants of the Company herein and in the
                           Debentures contained;

                  (2)      To add to the covenants of the Company, for the
                           benefit of the Holders of the Debentures, or to
                           surrender any right or power herein conferred upon
                           the Company; or

                  (3)      To cure any ambiguity, to correct or supplement any
                           provision herein which may be inconsistent with any
                           other provision herein, or to make any other
                           provisions with respect to matters or questions
                           arising under this

                                       53
<PAGE>

                           Indenture which shall not be inconsistent with the
                           provisions of this Indenture, provided such action
                           shall not adversely affect the interests of the
                           Holders of the Debentures.

         Section 1002. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than 66-2/3% in principal amount of the
Outstanding Debentures, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of the Debentures under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby:

                  (1)      Change the Stated Maturity of the principal of, or
                           any installment of interest on, any Debenture or
                           reduce the principal amount thereof or the interest
                           thereon or any premium payable on the redemption
                           thereof, or change any place of payment where, or the
                           coin or currency in which any Debenture, premium (if
                           any) thereon or the interest thereon is payable or
                           impair the right to institute suit for the
                           enforcement of any such payment on or after the
                           Stated Maturity thereof (or, in the case of
                           redemption, on or after the Redemption Date) or
                           modify the provisions of the Indenture with respect
                           to the subordination of the Debentures in a manner
                           adverse to the Holders; or

                  (2)      Reduce the percentage in principal amount of the
                           Outstanding Debentures, the consent of whose Holders
                           is required for any such supplemental indenture, or
                           the consent of whose Holders is required for any
                           waiver (of compliance with certain provisions of this
                           Indenture or certain defaults hereunder or their
                           consequences) provided for in this Indenture; or

                  (3)      Modify any of the provisions of this Section or
                           Section 613, except to increase any such percentage
                           or to provide that certain other provisions of this
                           Indenture cannot be modified or waived without the
                           consent of the Holder of each Debenture affected
                           thereby; or

                  (4)      Adversely affect the right to exchange Commonly
                           Registered Debentures for Unrestricted Debentures as
                           provided in the Commonly Registered Debentures or in
                           Article Thirteen; or

                  (5)      Adversely affect the right to exchange Unrestricted
                           Debentures for Commonly Registered Debentures as
                           provided in the Unrestricted Debentures or in Article
                           Fourteen.

                                       54
<PAGE>

                  It shall not be necessary for any Act of Debentureholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

         Section 1003. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture the Trustee shall be entitled to receive, and (subject to Section 701)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

         Section 1004. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Debentures theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

         Section 1005. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Debentures
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Debentures.

                                 ARTICLE ELEVEN

                                    COVENANTS

         Section 1101. Payment of Principal, Premium and Interest. The Company
will duly and punctually pay or cause to be paid the principal of, premium (if
any) and interest on the Debentures in accordance with the terms of the
Debentures and of this Indenture. Notwithstanding the foregoing provisions of
this Section 1101, if on or prior to the Stated Maturity expressed in the
Commonly Registered Debentures the Company shall have elected to exercise its
right to offset against its obligation to pay the principal amount of any one or
more Commonly Registered Debentures as provided in the form of Commonly
Registered Debenture set forth in Section 202, the provisions of this Section
1101 shall not apply with respect to any such amount so offset.

         Section 1102. Maintenance of Office or Agency. The Company will
maintain an office or agency in the City of Columbus, Ohio, where Debentures may
be presented or surrendered for

                                       55
<PAGE>

payment and an office or agency in Greenwood, Indiana, where Debentures may be
surrendered for transfer or exchange, where Commonly Registered Debentures may
be surrendered in exchange for Unrestricted Debentures and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served. Until otherwise designated by the Company in a written notice to
the Trustee, such agency for the purpose of presentation or surrender for
payment shall be the corporate trust office of the Trustee, in its capacity as
Paying Agent, and such agency for all other purposes shall be the principal
office of the Bank in the City of Greenwood, Indiana, at which, at any
particular time, its corporate trust business is administered. The Company will
give prompt written notice to the Trustee of any change in the location of such
office or agency. If at any time the Company shall fail to maintain such office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all such presentations, surrenders, notices and
demands.

                  In addition to such office or agency, the Company may from
time to time designate one or more other offices or agencies where Debentures
may be presented for any or all of such purposes specified above in this Section
and may constitute and appoint one or more Paying Agents for the payment of such
Debentures, in one or more other cities, and may from time to time rescind such
designations and appointments; provided, however, that if at any time the
Trustee is not appointed as a Paying Agent, the Company shall maintain an office
and agency in the City of Greenwood, Indiana for such purposes.

         Section 1103. Money for Debenture Payments to be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of, premium (if any) or interest on any of the
Debentures, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium (if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.

                  Whenever the Company shall have one or more Paying Agents, it
will, on or prior to each due date of the principal of, premium (if any) or
interest on any Debentures, deposit with a Paying Agent a sum sufficient to pay
the principal, premium, (if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
(if any) or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.

                  The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:

                  (1)      Hold all sums held by it for the payment of the
                           principal of premium (if any) or interest on the
                           Debentures in trust for the benefit of the Persons
                           entitled thereto until such sums shall be paid to
                           such Persons or otherwise disposed of as herein
                           provided;

                                       56
<PAGE>

                  (2)      Give the Trustee prompt written notice of any default
                           by the Company (or any other obligor upon the
                           Debentures) in the making of any payment of
                           principal, premium (if any) or interest; and

                  (3)      At any time during the continuance of any such
                           default upon the written request of the Trustee,
                           forthwith pay to the Trustee all sums so held in
                           trust by such Paying Agent.

                  The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose pay, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

                  Any money deposited with the Trustee or any Paying Agent or
then held by the Company in trust for the payment of the principal of, premium
(if any) or interest on any Debenture and remaining unclaimed for three years
after such principal, premium (if any) or interest has become due and payable,
shall be paid to the Company on Company request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debenture
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
the City of Indianapolis, Indiana, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

                  The provisions of this Section 1103 are subject to the
provisions of the last sentence of Section 1101.

         Section 1104. Corporate Existence. So long as any of the Debentures
shall be Outstanding, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and will comply with all laws applicable to it; provided, however, that nothing
in this Section shall prevent (i) any consolidation, merger or conveyance or
transfer of the properties of the Company substantially as an entirety as
permitted by Article Nine, or (ii) the dissolution and liquidation of the
Company after any such conveyance or transfer. The Company may omit in any
particular instance to comply with any covenant or condition set forth in this
Section if before the time for such compliance the Holders of at least 66-2/3%
in principal amount of the Debentures at the time Outstanding, shall, by act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such

                                       57
<PAGE>

covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.

         Section 1105. Restrictions on Disposition of Capital Stock of Major
Subsidiaries. So long as any of the Debentures shall be Outstanding, the Company
will not create any security interest in more than 20% of the shares of Capital
Stock of any Major Subsidiary, or permit more than 20% of such shares (exclusive
of Directors' qualifying shares) to be held directly or indirectly by any Person
other than the Company or a corporation which is wholly-owned (except for
Directors' qualifying shares) by the Company.

         Section 1106. Statement as to Compliance. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the President, or any Executive, Senior or other Vice
President and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, stating, as to each signer thereof, that:

                  (1)      A review of the activities of the Company during such
                           year and of performance under this Indenture has been
                           made under his supervision; and

                  (2)      To the best of his knowledge, based on such review,
                           the Company has fulfilled all its obligations under
                           this Indenture throughout such year, or, if there has
                           been a default in the fulfillment of any such
                           obligation, specifying each such default known to him
                           and the nature and status thereof.

                                 ARTICLE TWELVE

                            REDEMPTION OF DEBENTURES

         Section 1201. Conditions; Redemption Price. The Company may, at its
option, redeem the Debentures, in whole but not in part, at any time prior to
Maturity (a) if such redemption is made either (i) out of the proceeds of sale
of common stock or perpetual preferred stock or other equity securities of the
Company qualifying as regulatory capital pursuant to criteria established by the
Federal Reserve Board or (ii) with the approval of the Federal Reserve Board;
and (b) if at the time of mailing of the notice of redemption the Company is not
in default in the payment of any Senior Indebtedness and at such time redemption
of the Debentures would not result in a default in any covenant contained in any
indenture or other instrument pursuant to which Senior Indebtedness is
outstanding. Such redemption shall be at a Redemption Price which shall be the
principal amount of each Debenture plus a Redemption Premium on such principal
amount equal to the percentage of such principal amount then applicable under
the following schedule:

                  If the Redemption Date is during the 12 months' period
beginning July 1,

                                       58
<PAGE>

<Table>
<Caption>
                                                                 Redemption
                  Year                                             Premium
                  ----                                           ----------
<S>                                                             <C>

                  2002................................................8%
                  2003................................................7%
                  2004................................................6%
                  2005................................................5%
                  2006................................................4%
                  2007................................................3%
                  2008................................................2%
                  2009................................................1%
</Table>

; provided, however, that if the Debentures are redeemed prior to July 1, 2010,
but after the occurrence of a Adverse Tax Determination, or an Adverse Capital
Determination, the Redemption Premium shall be one percent (1%). The Debentures
may be redeemed without any Redemption Premium at any time on or after July 1,
2010. Upon any redemption, interest accrued from the most recent Interest
Payment Date to the Redemption Date will be paid along with the Redemption
Price.

         Section 1202. Notice of Redemption. In case the Company shall desire to
exercise its right to redeem the Debentures pursuant to Section 1201, notice of
such redemption shall be given to the holders of the Debentures to be redeemed
as hereinafter in this Section 1202 provided. Such notice shall be given by the
Company or, at the Company's direction, by the Trustee in the name and at the
expense of the Company.

                  Notice of redemption shall be given by mailing to holders of
the Debentures a notice of such redemption by first-class mail, postage prepaid,
not less than thirty (30) nor more than sixty (60) days prior to the Redemption
Date, to their last addresses as they shall appear upon the Debenture Register.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice.
In any case, failure duly to give notice by mail, or any defect in the notice,
to the Holder of any Debenture shall not affect the validity of the proceedings
for the redemption of any other Debenture.

                  Each such notice shall specify the Redemption Date, the place
of redemption and the Redemption Price at which the Debentures are to be
redeemed, and shall state that the Debentures shall become due and payable on
the Redemption Date, that payment will be made upon presentation and surrender
of the Debentures, that from and after the Redemption Date interest thereon will
cease to accrue and that interest accrued to the Redemption Date will be paid as
specified in such notice.

                  At least one business day before the Redemption Date specified
in the notice of redemption given as provided in this Section 1202, the Company
will deposit with the Trustee or with the office or agency to be maintained by
the Company as provided in Section 1102 an

                                       59
<PAGE>

amount of money sufficient to redeem on such date all the Debentures at the
Redemption Price, together (except if the Redemption Date is an Interest Payment
Date) with accrued interest to the Redemption Date.

                  The Company covenants and agrees, in connection with any
redemption of the Debentures pursuant to this Article, to provide the Trustee
with such lists of holders of Debentures and such other information and
materials as, and at such times as, the Trustee may reasonably request.

         Section 1203. Payment of Debentures on Redemption. If notice of
redemption shall have been given as provided in Section 1201, the Debentures
shall become due and payable on the Redemption Date and at the place stated in
such notice at the Redemption Price, together with accrued and unpaid interest
to the Redemption Date, and on and after such Redemption Date, provided that the
Company shall have deposited with the Trustee or with the office or agency to be
maintained by the Company as provided in Section 1102 cash sufficient for the
redemption thereof which shall then be held in trust, interest on the Debentures
shall cease to accrue. On presentation and surrender of the Debentures at the
place of payment specified in such notice, the Debentures shall be paid and
redeemed at the Redemption Price, together with accrued and unpaid interest
thereon to the Redemption Date. Installments of interest whose Stated Maturity
is on or prior to the Redemption Date shall continue to be payable to the
Holders of the Debentures on the relevant Regular Record Dates according to
their terms and the provisions of Section 307 of this Indenture. If any
Debenture called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium (if any) shall, until paid, bear interest
from the Redemption Date at the rate borne by the Debenture.

                                ARTICLE THIRTEEN

                   EXCHANGE OF COMMONLY REGISTERED DEBENTURES
                           FOR UNRESTRICTED DEBENTURES

         Section 1301. Exchange Privilege.

                  (a) Subject to the provisions of Section 305, and subject to
and upon compliance with the provisions of the form of the Commonly Registered
Debenture set forth in Section 202 and of this Article Thirteen, the Holder of
any Commonly Registered Debenture shall have the right, at his option, at any
time prior to January 1, 2011, to exchange the principal amount of any such
Commonly Registered Debenture, or any portion of such principal amount which is
$1,000 or an integral multiple thereof, for an Unrestricted Debenture or
Unrestricted Debentures in an aggregate principal amount equal to the principal
amount or portion thereof of the Commonly Registered Debenture to be so
exchanged, by surrender of the Commonly Registered Debenture to be so exchanged
in whole or in part (such surrender to be made in the manner provided in Section
1302 and in compliance with the provisions of the Commonly Registered Equity
Contract referred to on the face of such Commonly Registered Debenture and of
the Master Equity Contract).

                                       60
<PAGE>

                  (b) Such Commonly Registered Debenture so surrendered shall be
accompanied by a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with the issuance of any Unrestricted
Debenture in a name other than that of such Holder.

                  (c) Notwithstanding the foregoing, in any case in which the
purchase price under a Commonly Registered Equity Contract shall have been paid
on or after January 1, 2011, in whole or in part, in any manner other than by
surrender of the Commonly Registered Debenture which refers to such Commonly
Registered Equity Contract on the face thereof or by exercise of the Company's
right of offset as provided in the form of Commonly Registered Debenture set
forth in Section 202, the Holder of such Commonly Registered Debenture shall
thereafter be entitled to exchange such Commonly Registered Debenture for an
Unrestricted Debenture or Unrestricted Debentures of authorized denominations in
an aggregate principal amount equal to the amount so paid.

                  (d) In any case in which the aggregate purchase obligation
under a Commonly Registered Equity Contract shall have been paid prior to
January 1, 2011, in whole or in part, in any manner other than by surrender of
the Commonly Registered Debenture which refers to such Commonly Registered
Equity Contract on the face thereof, the Holder of such Commonly Registered
Debenture shall thereafter be entitled to exchange such Commonly Registered
Debenture for an Unrestricted Debenture or Unrestricted Debentures in an
aggregate principal amount equal to the amount so paid, and, if such aggregate
purchase obligation shall not be paid in full, for a Commonly Registered
Debenture in a principal amount equal to the remaining aggregate purchase
obligation under such Commonly Registered Equity Contract. No exchange of a
Commonly Registered Debenture for an Unrestricted Debenture or Debentures may be
made after the Company shall have given notice of redemption of the Debentures
as provided in Section 1202.

         Section 1302. Manner of Exercise of Exchange Privilege. In order to
exchange any Commonly Registered Debenture, in whole or in part, for an
Unrestricted Debenture or Unrestricted Debentures, the Holder of such Commonly
Registered Debenture shall surrender such Commonly Registered Debenture at the
office of the Equity Contract Agent in the City of Greenwood, Indiana, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by the
Holder thereof or his attorney duly authorized in writing, and any instruments
or notices as shall be required pursuant to the provisions of this Indenture,
together with the Commonly Registered Equity Contract referred to on the face of
such Commonly Registered Debenture, and except in the case of an exchange
pursuant to Section 1301(c), an executed collateral agreement in the form set
forth on the reverse of such Commonly Registered Equity Contract (or separate
written collateral agreement satisfactory to the Company), and the Collateral
(as defined in the Master Equity Contract) referred to in such collateral
agreement which shall be of the kind and value required by Article VII of the
Master Equity Contract. As promptly as practicable after surrender of such
Commonly Registered Debenture, and any such written instrument of transfer, by
the Equity Contract Agent and upon compliance with the provisions of such
Commonly Registered Debenture, with the foregoing provisions of this Article
Thirteen and with the provisions of the Master Equity Contract, the Company
shall cause to be delivered to the Equity

                                       61
<PAGE>

Contract Agent, (i) an Unrestricted Debenture or Unrestricted Debentures in the
aggregate principal amount issuable upon the exchange of such Commonly
Registered Debenture or portion thereof in accordance with the provisions of
this Article Thirteen and (ii) a new Commonly Registered Debenture or Commonly
Registered Debentures in authorized denominations in an aggregate principal
amount equal to the unexchanged portion of the principal amount of the Commonly
Registered Debenture surrendered for exchange. Subject to the provisions of this
Section and of Sections 305 and 1301, each exchange shall be deemed to have been
effected on the date on which such Commonly Registered Debenture shall have been
surrendered and all applicable provisions of Section 305, of this Article
Thirteen and of the Master Equity Contract shall have been complied with, as
aforesaid, and the Person or Persons in whose name or names any Unrestricted
Debenture or Unrestricted Debentures shall be issued upon such exchange shall be
deemed to have become on said date the Holder or Holders thereof. No adjustment
shall be made for interest accrued on any Commonly Registered Debenture or
portion thereof that shall be exchanged or on any Unrestricted Debenture or
Unrestricted Debentures that shall be issuable upon the exchange of such
Commonly Registered Debenture or portion thereof.

         Section 1303. Conversion of Commonly Registered Debentures upon
Cancellation of Equity Contracts. Notwithstanding the provisions of Section 305
and the foregoing provisions of this Article Thirteen, upon any cancellation of
the Equity Contracts pursuant to Section 2.06 of the Master Equity Contract,
each Commonly Registered Debenture shall be deemed to be converted into an
Unrestricted Debenture of like unpaid principal amount and registered in the
name of the Holder of such Commonly Registered Debenture.

                                ARTICLE FOURTEEN

                     EXCHANGE OF UNRESTRICTED DEBENTURES FOR
                         COMMONLY REGISTERED DEBENTURES

         Section 1401. Exchange Privilege. Subject to the provisions of Section
305, and subject to and upon compliance with the provisions of the form of the
Unrestricted Debenture set forth in Section 204 and of this Article Fourteen,
the Holder of any Unrestricted Debenture shall have the right, at his option, at
any time prior to January 1, 2011, to exchange the principal amount of any such
Unrestricted Debenture, or any portion of such principal amount which is $1,000
or an integral multiple thereof, for a Commonly Registered Debenture or Commonly
Registered Debentures in an aggregate principal amount equal to the principal
amount or portion thereof of the Unrestricted Debenture to be so exchanged, by
surrender of the Unrestricted Debenture to be so exchanged in whole or in part
(such surrender to be made in the manner provided in Section 1402 and in
compliance with the provisions of the Master Equity Contract). Such Unrestricted
Debenture so surrendered shall be accompanied by a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with the
issuance of any Commonly Registered Debenture in a name other than that of such
Holder.

                                       62
<PAGE>

         Section 1402. Manner of Exercise of Exchange Privilege. In order to
exchange any Unrestricted Debenture, in whole or in part, for a Commonly
Registered Debenture or Commonly Registered Debentures, the Holder of such
Unrestricted Debenture shall surrender such Unrestricted Debenture at the office
of the Equity Contract Agent in the City of Greenwood, Indiana, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Debenture Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing, and any instruments or notices which
shall be required pursuant to the provisions of this Indenture, together with
(i) a Collateralized Equity Contract or Collateralized Equity Contracts with an
aggregate purchase obligation equal to the principal amount of such Unrestricted
Debenture, and (ii) an executed acceptance agreement in the form of the
acceptance set forth on the reverse of such Collateralized Equity Contract (or
separate written acceptance agreement satisfactory to the Company). As promptly
as practicable after surrender of such Unrestricted Debenture and any such
written instrument of transfer by the Equity Contract Agent, and upon compliance
with the provisions of such Unrestricted Debenture, with the foregoing
provisions of this Article Fourteen and with the provisions of the Master Equity
Contract, the Company shall cause to be delivered to the Equity Contract Agent
(i) a Commonly Registered Debenture or Commonly Registered Debentures in the
aggregate principal amount issuable upon the exchange of such Unrestricted
Debenture or portion thereof in accordance with the provisions of this Article
Fourteen and (ii) a new Unrestricted Debenture or Unrestricted Debentures in
authorized denominations in an aggregate principal amount equal to the
unexchanged portion of the principal amount of the Unrestricted Debenture
surrendered for exchange. Each Commonly Registered Debenture so issued upon
exchange of such Unrestricted Debenture shall refer, on the face thereof (by
letters and numbers), to a Commonly Registered Equity Contract representing an
aggregate purchase obligation for shares of Common Stock equal to the principal
amount of such Commonly Registered Debenture. Such Commonly Registered Debenture
shall be registered in the name of the obligor under and registered owner of
such Commonly Registered Equity Contract as requested by the Equity Contract
Agent. Subject to the provisions of this Section and of Sections 305 and 1401,
each exchange shall be deemed to have been effected on the date on which such
Unrestricted Debenture shall have been surrendered and all the applicable
provisions of Section 305, of this Article Fourteen and of the Master Equity
Contract shall have been complied with, as aforesaid, and the Person or Persons
in whose name or names any Commonly Registered Debenture or Commonly Registered
Debentures shall be issued upon such exchange shall be deemed to have become on
said date the Holder or Holders thereof. No adjustment shall be made for
interest accrued on any Unrestricted Debenture or portion thereof that shall be
exchanged or on any Commonly Registered Debenture or Commonly Registered
Debentures that shall be issuable upon the exchange of such Unrestricted
Debenture or portion thereof.

                                       63
<PAGE>

                  This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts share together constitute but one and the same instrument.

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

                                              FIRST SHARES BANCORP, INC.

                                              By:
                                                 -------------------------------
                                                  Jerry R. Engle
                                                  President

Attest:

---------------------------
Kimberly B. Kling
Secretary

                                              THE HUNTINGTON NATIONAL BANK

                                              By:
                                                 -------------------------------
                                                  Cheri Scott-Geraci
                                                  Vice President

Attest:

---------------------------
Assistant Secretary

                                       64
<PAGE>

STATE OF INDIANA          )
                          )  SS:
COUNTY OF JOHNSON         )

         On the ______ day of ____________, 2002, before me personally came
Jerry R. Engle, to me known, who, being by me duly sworn, did depose and say
that he is President of First Shares Bancorp, Inc., one of the corporations
described in and which executed the foregoing instrument; and that he signed his
name thereto by authority of the Board of Directors of said corporation.

                                                 -------------------------------
                                                     Notary Public
My County of Residence:
                                                 -------------------------------
-----------------------                              Printed

My Commission Expires:

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

                                       65
<PAGE>

STATE OF OHIO             )
                          )  SS:
COUNTY OF HAMILTON        )

                  On the ______ day of ____________, 2002, before me personally
came Cheri Scott-Geraci, by me known, who, being by me duly sworn, did depose
and say that she is Vice President of The Huntington National Bank, one of the
corporations described in and which executed the foregoing instrument; and that
she signed her name thereto by authority of the Board of Directors of said bank.

                                                 -------------------------------
                                                     Notary Public
My County of Residence:
                                                 -------------------------------
-----------------------                              Printed

My Commission Expires:

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

                                       66

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