LAKELAND FINANCIAL CORP, S-3, 1997-08-01

LAKELAND FINANCIAL CORP
S-3, 1997-08-01
STATE COMMERCIAL BANKS

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<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1997

REGISTRATION NO. 333-
REGISTRATION NO. 333- -01

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

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
----------------------------

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
----------------------------

<TABLE>
<S> <C>
LAKELAND FINANCIAL CORPORATION LAKELAND CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)

INDIANA DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
35-1559596 35-2021126
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>

202 EAST CENTER STREET, WARSAW, INDIANA 46581 (219) 267-6144

(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

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

R. DOUGLAS GRANT

CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER

LAKELAND FINANCIAL CORPORATION

202 EAST CENTER STREET

WARSAW, INDIANA 46581

(219) 267-6144

(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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

WITH COPIES TO:

THOMAS C. ERB, ESQ. DENIS P. MCCUSKER, ESQ.
LEWIS, RICE & FINGERSH, L.C. BRYAN CAVE LLP
500 NORTH BROADWAY, SUITE 2000 211 NORTH BROADWAY, SUITE 3600
ST. LOUIS, MISSOURI 63102 ST. LOUIS, MISSOURI 63102-2750
(314) 444-7600 (314) 259-2000

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

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

<TABLE>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Securities of Lakeland
Capital Trust<F1>................ 2,000,000<F1> $10.00 $20,000,000.00<F1> $6,061.00<F2>
- ---------------------------------------------------------------------------------------------------------------------------------
Subordinated Debentures of Lakeland
Financial Corporation<F3>........ <F3><F4>
- ---------------------------------------------------------------------------------------------------------------------------------
Guarantee of Lakeland Financial
Corporation, with respect to
Preferred Securities<F4>......... <F4>
=================================================================================================================================
<FN>
<F1>Includes 200,000 Preferred Securities which may be sold by Lakeland Capital
Trust to cover over-allotments.
<F2>The registration fee is calculated in accordance with Rule 457(n) under the
Securities Act of 1933, as amended.
<F3>The Subordinated Debentures will be purchased by Lakeland Capital Trust
with the proceeds of the sale of the Preferred Securities. Such securities
may later be distributed for no additional consideration to the holders of
the Preferred Securities of Lakeland Capital Trust upon its dissolution and
the distribution of its assets.
<F4>This Registration Statement is deemed to cover the Subordinated Debentures
of Lakeland Financial Corporation, the rights of holders of Subordinated
Debentures of Lakeland Financial Corporation under the Indenture, and the
rights of holders of the Preferred Securities under the Trust Agreement,
the Guarantee and the Expense Agreement entered into by Lakeland Financial
Corporation. No separate consideration will be received for the Guarantee.
</TABLE>

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
===============================================================================

<PAGE> 2
*******************************************************************************
*INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
*REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE *
*SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY *
*OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT *
*BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR *
*THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE *
*SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE *
*UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF *
*ANY SUCH STATE. *
*******************************************************************************

SUBJECT TO COMPLETION, DATED AUGUST 1, 1997

PROSPECTUS

1,800,000 PREFERRED SECURITIES

LAKELAND CAPITAL TRUST [LOGO]

% CUMULATIVE TRUST PREFERRED SECURITIES

(LIQUIDATION AMOUNT $10 PER PREFERRED SECURITY)

GUARANTEED, AS DESCRIBED HEREIN, BY

LAKELAND FINANCIAL CORPORATION

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

$18,000,000 % SUBORDINATED DEBENTURES OF

LAKELAND FINANCIAL CORPORATION

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

The % Cumulative Trust Preferred Securities (the "Preferred
Securities") offered hereby represent preferred undivided beneficial interests
in the assets of Lakeland Capital Trust, a statutory business trust created
under the laws of the State of Delaware ("Lakeland Trust"). Lakeland
Financial Corporation, an Indiana corporation (the "Company"), will own all
the common securities (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities") representing undivided
beneficial interests in the assets of Lakeland Trust.

(continued on next page)

Application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market under the symbol
"LKFNP."

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

SEE "RISK FACTORS" COMMENCING ON PAGE 8 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
----------------------------

THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS OR DEPOSIT ACCOUNTS,
ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR NON-BANKING
AFFILIATE OF THE COMPANY (EXCEPT TO THE EXTENT THAT PREFERRED
SECURITIES ARE GUARANTEED BY THE COMPANY AS DESCRIBED HEREIN),
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY AND INVOLVE INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

<TABLE>
=========================================================================================================
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC COMMISSION<F1> LAKELAND TRUST<F2>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security.................. $10.00 <F2> $10.00
- ---------------------------------------------------------------------------------------------------------
Total<F3>............................... $18,000,000 <F2> $18,000,000
=========================================================================================================
<FN>
<F1>Lakeland Trust and the Company have each agreed to indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."

<F2>In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debentures, the Company has
agreed to pay the Underwriter as compensation for its arranging the
investment therein of such proceeds $ per Preferred Security, or $ in the
aggregate ($ if the over-allotment option is exercised in full). See
"Underwriting." The Company has also agreed to pay the expenses of the
offering estimated to be $ .

<F3>Lakeland Trust has granted the Underwriter an option exercisable within 30
days from the date of this Prospectus to purchase up to 200,000 additional
Preferred Securities on the same terms and conditions set forth above to
cover over-allotments, if any. If all such additional Preferred Securities
are purchased, the total Price to Public and Proceeds to Lakeland Trust
will be $20,000,000.
</TABLE>

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

The Preferred Securities are offered by the Underwriter subject to receipt
and acceptance by it, prior sale and the Underwriter's right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of the Preferred Securities will be made
on or about , 1997.

STIFEL, NICOLAUS & COMPANY

INCORPORATED

, 1997

<PAGE> 3
(continued from previous page)

State Street Bank and Trust Company is the Property Trustee (as defined
herein) of Lakeland Trust. Lakeland Trust exists for the purpose of issuing the
Preferred Securities and investing the proceeds thereof in an equivalent amount
of % Subordinated Debentures (the "Subordinated Debentures") of the
Company. The Subordinated Debentures will mature on September 30, 2027, which
date may be (i) shortened to a date not earlier than September 30, 2002, or
(ii) extended to a date not later than September 30, 2036, in each case if
certain conditions are met (including, in the case of shortening the Stated
Maturity (as defined herein), the Company having received prior approval of the
Board of Governors of the Federal Reserve System (the "Federal Reserve") to
do so if then required under applicable capital guidelines or policies of the
Federal Reserve). The Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the Common Securities. See
"Description of the Preferred Securities--Subordination of Common
Securities."

Holders of Preferred Securities are entitled to receive preferential
cumulative cash distributions (the "Distributions") from Lakeland Trust, at
the annual rate of % of the liquidation amount of $10 per Preferred
Security (the "Liquidation Amount"), accruing from the date of original
issuance and payable quarterly in arrears on the last day of March, June,
September and December of each year, commencing September 30, 1997. The Company
has the right, so long as no Debenture Event of Default (as defined herein) has
occurred and is continuing, to defer payment of interest on the Subordinated
Debentures at any time or from time to time for a period not to exceed 20
consecutive calendar quarters with respect to each deferral period (each, an
"Extended Interest Payment Period"); provided that no Extended Interest
Payment Period may extend beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any such Extended Interest Payment Period
and the payment of all amounts then due, the Company may elect to begin a new
Extended Interest Payment Period subject to the requirements set forth herein.
If interest payments on the Subordinated Debentures are so deferred,
Distributions on the Preferred Securities will also be deferred, and the
Company will not be permitted, subject to certain exceptions described herein,
to declare or pay any cash distributions with respect to its capital stock or
debt securities that rank pari passu with or junior to the Subordinated
Debentures. WHILE THE COMPANY INTENDS TO TAKE THE POSITION THAT THE
SUBORDINATED DEBENTURES WILL NOT BE DEEMED TO BE ISSUED WITH ORIGINAL ISSUE
DISCOUNT ("OID"), DURING AN EXTENDED INTEREST PAYMENT PERIOD, INTEREST ON THE
SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND THE AMOUNT OF
DISTRIBUTIONS TO WHICH HOLDERS OF THE PREFERRED SECURITIES ARE ENTITLED WILL
ACCUMULATE) AT THE RATE OF % PER ANNUM, COMPOUNDED QUARTERLY, AND HOLDERS
OF THE PREFERRED SECURITIES WILL BE REQUIRED TO INCLUDE INTEREST INCOME AS OID
IN THEIR GROSS INCOME FOR UNITED STATES FEDERAL INCOME TAX PURPOSES IN ADVANCE
OF RECEIPT OF THE CASH DISTRIBUTIONS WITH RESPECT TO SUCH DEFERRED INTEREST
PAYMENTS. A HOLDER OF PREFERRED SECURITIES WHO DISPOSES OF ITS PREFERRED
SECURITIES BETWEEN RECORD DATES FOR PAYMENTS OF DISTRIBUTIONS (AND CONSEQUENTLY
DOES NOT RECEIVE A DISTRIBUTION FROM LAKELAND TRUST FOR THE PERIOD PRIOR TO
SUCH DISPOSITION) WILL NEVERTHELESS BE REQUIRED TO INCLUDE ACCRUED BUT UNPAID
INTEREST OR OID, IF ANY, ON THE SUBORDINATED DEBENTURES THROUGH THE DATE OF
DISPOSITION IN INCOME AS ORDINARY INCOME AND TO ADD THE AMOUNT OF ANY ACCRUED
OID TO ITS ADJUSTED TAX BASIS IN ITS PRO RATA SHARE OF THE UNDERLYING
SUBORDINATED DEBENTURES DEEMED DISPOSED OF. See "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period," "Certain
Federal Income Tax Consequences--Potential Extension of Interest Payment Period
and Original Issue Discount" and "--Disposition of Preferred Securities."

The Company and Lakeland Trust believe that, taken together, the
obligations of the Company under the Guarantee, the Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement (each as
defined herein) provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of all of the obligations of
Lakeland Trust under the Preferred Securities. See "Relationship Among the
Preferred Securities, the Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee of the Company guarantees the payment
of Distributions and payments on liquidation or redemption of the Preferred
Securities, but only in each case to the extent of funds held by Lakeland
Trust, as described herein. See "Description of the Guarantee--General." If
the Company does not make interest payments on the Subordinated Debentures held
by Lakeland Trust, Lakeland Trust will have insufficient funds to pay
Distributions on the Preferred Securities. The Guarantee does not cover
payments of Distributions when Lakeland Trust does not have sufficient funds to
pay such Distributions. In such event, a holder of Preferred Securities may
institute a legal proceeding directly against the Company pursuant to the terms
of the Indenture to enforce payments of amounts equal to such Distributions to
such holder. See "Description of the Subordinated Debentures--Enforcement of
Certain Rights by Holders of the Preferred Securities." The obligations of the
Company under the Guarantee and the Preferred Securities are subordinate and
junior in right of payment to all Senior Debt, Subordinated Debt and Additional
Senior Obligations

(continued on next page)

<PAGE> 4
(continued from previous page)

(each as defined herein) of the Company. The Subordinated Debentures are
unsecured obligations of the Company and are subordinated to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company.

The Preferred Securities are subject to mandatory redemption, in whole or
in part, upon repayment of the Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if then required under
applicable capital guidelines or policies of the Federal Reserve, the
Subordinated Debentures are redeemable prior to maturity at the option of the
Company (i) on or after September 30, 2002, in whole at any time or in part
from time to time, or (ii) at any time, in whole (but not in part), within 180
days following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event (each as defined herein), in each case at a redemption
price equal to the accrued and unpaid interest on the Subordinated Debentures
so redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof. See "Description of the Preferred Securities--Redemption."

The Company has the right at any time to dissolve, wind-up or terminate
Lakeland Trust subject to the Company having received prior approval of the
Federal Reserve to do so if then required under applicable capital guidelines
or policies of the Federal Reserve. In the event of the voluntary or
involuntary dissolution, winding up or termination of Lakeland Trust, after
satisfaction of liabilities to creditors of Lakeland Trust as required by
applicable law, the holders of Preferred Securities will be entitled to receive
a Liquidation Amount of $10 per Preferred Security, plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
Subordinated Debenture having an aggregate principal amount equal to the
Liquidation Amount of such Preferred Securities (and carrying with it
accumulated interest in an amount equal to the accumulated and unpaid
Distributions then due on such Preferred Securities), subject to certain
exceptions. See "Description of the Preferred Securities--Redemption" and
"--Liquidation Distribution Upon Termination."

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

The Company will provide Quarterly Reports containing unaudited financial
statements to the holders of Preferred Securities if such reports are furnished
to the holders of the Company's common stock, and Annual Reports containing
financial statements audited by the Company's independent auditors. The Company
will also furnish Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q free of charge to holders of Preferred Securities who so request in
writing addressed to the Secretary of the Company.

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES. SUCH TRANSACTIONS MAY INCLUDE OVERALLOTMENT, STABILIZING
TRANSACTIONS, THE PURCHASE OF PREFERRED SECURITIES TO COVER SHORT POSITIONS AND
THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF SUCH ACTIVITIES, SEE
"UNDERWRITING." SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

<PAGE> 5
[MAP]

<PAGE> 6
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere (or incorporated by reference) in this
Prospectus. Unless otherwise indicated, the information in this Prospectus
assumes that the Underwriter's over-allotment option will not be exercised.
Prospective investors should carefully consider the information set forth under
the heading "Risk Factors."

THE COMPANY

GENERAL

Lakeland Financial Corporation ("the Company") is a one-bank holding
company that operates through Lake City Bank (the "Bank"), with its
headquarters in Warsaw, Indiana. The Bank is a community bank, with 33 branches
in nine counties in north central Indiana, primarily in non-metropolitan areas.
The Company's stockholders' equity increased by 91% between January 1, 1992 and
June 30, 1997, and net income grew at a compounded annual rate of 21.9% during
the same period. At June 30, 1997, the Company had assets of $687.5 million, net
loans of $407.2 million, deposits of $526.0 million and total stockholders'
equity of $45.3 million.

The Bank's goal is to have the look and feel of a local community bank, but
have the technical sophistication to develop and maintain commercial customers
whose needs can be accommodated under the Bank's lending limit policy, which
currently is $4.5 million.

The principal executive office of the Company is located at 202 East Center
Street, Warsaw, Indiana 46581 and its telephone number is (219) 267-6144.

<TABLE>
FINANCIAL SUMMARY

SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C>
Net income........................ $ 4,027 $ 3,218 $ 6,444 $ 5,645 $ 5,126 $ 4,235 $ 3,359

Stockholders' equity.............. 45,339 39,009 42,043 36,754 29,889 27,912 23,750

Return on average assets.......... 1.22% 1.06% 1.07% 1.05% 1.10% 1.11% 0.97%

Return on average equity.......... 18.53% 16.88% 16.50% 17.06% 17.73% 16.51% 15.08%
</TABLE>

BUSINESS OBJECTIVES AND STRATEGY

The Company's primary objectives are to continue growth in earnings and
stockholders' equity, return on assets and return on equity. Strategies to
accomplish these objectives include:

* INCREASING ITS MARKET SHARE AND EXPANDING ITS MARKET AREA THROUGH
EXPANSION AND ACQUISITIONS

Since 1992 the Company has added 13 branches, of which 3 were
acquisitions and 10 were started de novo. The Company recently announced
the execution of definitive agreements to purchase seven branch offices in
seven north central Indiana communities, and expects that a portion of the
proceeds from this offering will be used to fund costs of those
transactions. See ``--Recent Developments,'' and ``Use of Proceeds.'' The
Company estimates that its deposit market share in the nine counties which
comprise its primary market area was 9.5% at the end of 1996, and believes
that it can increase this market share through additional bank
acquisitions, branch purchases and de novo establishment of branches.

Management also intends to explore opportunities to expand the
Company's geographic market area into contiguous counties in north central
and north east Indiana, while continuing its focus on non-metropolitan
areas.

* UTILIZING TECHNOLOGY TO OFFER MORE SERVICES TO CUSTOMERS.

The Company has introduced ``home banking'' which allows retail
customers to conduct banking transactions 24 hours a day through
touch-tone telephones, and has also opened a ``call center'' with
expanded hours
2

<PAGE> 7
allowing customers to conduct business by telephone. The Company's optical
storage and communications systems allow the branch locations immediate
access to centrally stored customer information when needed, including
images of all processed checks. The Company intends to continue to
introduce proven technologies to serve its customers better, without
incurring the expense and risk of independently developing new banking
technology.

* EFFICIENT MANAGEMENT OF STAFF AND OPERATIONS

The Company will continue to devote substantial efforts to efficient
and effective management of staff and operations, and to standardize and
centralize operations where appropriate. The Company recognizes that,
while individualized customer service will always be at the local level,
centralization and careful management of back office and administrative
operations is required in order to benefit from economies of scale as the
Company continues to grow and expand.

* CONTINUING EMPHASIS ON INDIVIDUALIZED CUSTOMER SERVICE

The Company will continue to seek and train employees who are highly
skilled, knowledgeable and motivated to properly serve its customers.

* CONTINUING GROWTH OF THE LOAN PORTFOLIO WHILE MAINTAINING ASSET QUALITY

As the Company continues to establish itself as a leading commercial
lender in its markets, it intends to maintain the lending standards,
centralized loan review and administration systems which have allowed it
to maintain its average annual ratio of net loan losses to average loans
at 0.12% for the five-year period from 1992 through 1996, which
management of the Company believes is low relative to the loan loss
experience of other similarly situated lending institutions.

RECENT DEVELOPMENTS

On July 28, 1997, the Bank entered into an agreement to purchase selected
assets and assume all of the deposits of the branch office of NBD Bank, N.A.
located in Huntington, Indiana (the "Proposed NBD Branch Purchase"). On July
31, 1997, the Bank entered into an agreement to purchase selected assets and
assume all of the deposits of the six branch offices of KeyCorp located in
north central Indiana (the "Proposed KeyCorp Branch Purchases", and together
with the Proposed NBD Branch Purchase, the "Proposed Branch Purchases"). The
Proposed Branch Purchases will include approximately $24 million of loans and
$95 million of deposits. Consummation of the Proposed Branch Purchases is
subject to receipt of regulatory approvals and satisfaction of certain other
conditions, including an increase in the Company's Tier 1 capital (which would
be provided through the issuance of the Preferred Securities). Neither of the
Proposed Branch Purchases is conditioned upon the consummation of the other.
The Company expects to complete the Proposed Branch Purchases in the fourth
quarter of 1997. See "Use of Proceeds," "Capitalization", and "Pro Forma
Condensed Consolidated Balance Sheet."

OWNERSHIP

As of July 18, 1997, the directors and executive officers of the Company
and their immediate families owned approximately 4.9% of the Company's common
stock and the Lakeland Financial Corporation 401(k) Plan owned approximately
11.1% of the Company's outstanding common stock.

<PAGE> 8
LAKELAND TRUST

Lakeland Trust is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement, dated as of July 24, 1997, executed by the
Company, as depositor, and the trustees of Lakeland Trust (the "Trustees"),
and (ii) a certificate of trust filed with the Delaware Secretary of State on
July 24, 1997. The initial trust agreement will be amended and restated in its
entirety (as so amended and restated, the "Trust Agreement") substantially in
the form filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. The Trust Agreement will be qualified as an indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Upon issuance of the Preferred Securities, the purchasers thereof will
own all of the Preferred Securities. The Company will acquire all of the Common
Securities which will represent an aggregate liquidation amount equal to at
least 3% of the total capital of Lakeland Trust. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and during the continuance of an
Event of Default (as defined herein) under the Trust Agreement resulting from a
Debenture Event of Default, the rights of the Company as holder of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Preferred Securities. See "Description of the Preferred
Securities--Subordination of Common Securities." Lakeland Trust exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in the assets of Lakeland Trust, (ii) investing the gross
proceeds of the Trust Securities in the Subordinated Debentures issued by the
Company, and (iii) engaging in only those other activities necessary,
advisable, or incidental thereto. The Subordinated Debentures and payments
thereunder will be the only assets of Lakeland Trust and payments under the
Subordinated Debentures will be the only revenue of Lakeland Trust. Lakeland
Trust has a term of 55 years, but may terminate earlier as provided in the
Trust Agreement. The principal executive office of Lakeland Trust is 202 East
Center Street, Warsaw, Indiana 46581, and its telephone number is (219)
267-6144.

The number of Trustees will, pursuant to the Trust Agreement, initially be
five. Three of the Trustees (the "Administrative Trustees") will be persons
who are employees or officers of, or who are affiliated with, the Company. The
fourth trustee will be a financial institution that is unaffiliated with the
Company, which trustee will serve as institutional trustee under the Trust
Agreement and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). State Street
Bank and Trust Company, a trust company chartered and organized under the laws
of the Commonwealth of Massachusetts, will be the Property Trustee until
removed or replaced by the holder of the Common Securities. For purposes of
compliance with the provisions of the Trust Indenture Act, State Street Bank
and Trust Company will also act as trustee (the "Guarantee Trustee") under
the Guarantee and as Debenture Trustee (as defined herein) under the Indenture.
The fifth trustee will be an entity that maintains its principal place of
business in the State of Delaware (the "Delaware Trustee"). Wilmington Trust
Company, a Delaware chartered trust company, will act as Delaware Trustee.

The Property Trustee will hold title to the Subordinated Debentures for the
benefit of the holders of the Trust Securities and in such capacity will have
the power to exercise all rights, powers and privileges under the Indenture.
The Property Trustee will also maintain exclusive control of a segregated
non-interest-bearing bank account (the "Property Account") to hold all
payments made in respect of the Subordinated Debentures for the benefit of the
holders of the Trust Securities. The Property Trustee will make payments of
Distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities. The Company, as the holder of all the Common Securities,
will have the right to appoint, remove or replace any Trustee and to increase
or decrease the number of Trustees. The Company will pay all fees and expenses
related to Lakeland Trust and the offering of the Trust Securities.

The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."

<PAGE> 9
THE OFFERING

<TABLE>
<S> <C>
Securities Offered............ 1,800,000 Preferred Securities having a Liquidation Amount of $10 per
Preferred Security. The Preferred Securities represent preferred
undivided beneficial interests in the assets of Lakeland Trust, which
will consist solely of the Subordinated Debentures and payments
thereunder. Lakeland Trust has granted the Underwriter an option,
exercisable within 30 days after the date of this Prospectus, to
purchase up to an additional 200,000 Preferred Securities at the
initial offering price, solely to cover over-allotments, if any.

Distributions................. The Distributions payable on each Preferred Security will be fixed at
a rate per annum of % of the Liquidation Amount of $10 per Preferred
Security, will be cumulative, will accrue from , 1997, the date
of issuance of the Preferred Securities, and will be payable quarterly
in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing September 30, 1997. See "Description of the
Preferred Securities--Distributions--Payment of Distributions."

Option to Extend Interest
Payment Period.............. The Company has the right, at any time, so long as no Debenture Event
of Default has occurred and is continuing, to defer payments of
interest on the Subordinated Debentures for a period not exceeding 20
consecutive calendar quarters; provided, that no Extended Interest
Payment Period may extend beyond the Stated Maturity of the
Subordinated Debentures. As a consequence of the extension by the
Company of the interest payment period, quarterly Distributions on the
Preferred Securities will be deferred (though such Distributions would
continue to accrue with interest thereon compounded quarterly, since
interest will continue to accrue and compound on the Subordinated
Debentures) during any such Extended Interest Payment Period. During
an Extended Interest Payment Period, the Company will be prohibited,
subject to certain exceptions described herein, from declaring or
paying any cash distributions with respect to its capital stock or
debt securities that rank pari passu with or junior to the
Subordinated Debentures. Upon the termination of any Extended Interest
Payment Period and the payment of all amounts then due, the Company
may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. See "Description of the Preferred Securities--
Distributions--Extension Period" and "Description of the
Subordinated Debentures--Option to Extend Interest Payment Period."

Should an Extended Interest Payment Period occur, holders of Preferred
Securities will be required to include deferred interest income in
their gross income for United States federal income tax purposes in
advance of receipt of the cash distributions with respect to such
deferred interest payments. See "Certain Federal Income Tax
Consequences--Potential Extension of Interest Payment Period and
Original Issue Discount."

Early Redemption.............. The Preferred Securities are subject to mandatory redemption, in whole
or in part, upon repayment of the Subordinated Debentures at maturity
or their earlier redemption. Subject to Federal Reserve approval, if
then required under applicable capital guidelines or policies of the
Federal Reserve, the Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after September 30,
2002, in whole at any time or in part from time to time, or (ii) at
any time, in whole (but not in part), within 180 days following the
occurrence of a Tax Event, a Capital

<PAGE> 10

Treatment Event or an Investment Company Event, in each case at the
redemption price equal to 100% of the principal amount of the Subordi-
nated Debentures, together with any accrued but unpaid interest to the
date fixed for redemption. See "Description of the Subordinated
Debentures--
Redemption."

Distribution of Subordinated
Debentures.................. The Company has the right at any time to terminate Lakeland Trust and
cause the Subordinated Debentures to be distributed to holders of
Preferred Securities in liquidation of Lakeland Trust, subject to the
Company having received prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or policies of
the Federal Reserve. See "Description of the Preferred
Securities--Redemption" and "Description of the Preferred
Securities--Liquidation Distribution Upon Termination."

Guarantee..................... The Company has guaranteed the payment of Distributions and payments
on liquidation or redemption of the Preferred Securities, but only in
each case to the extent of funds held by Lakeland Trust, as described
herein. The Company and Lakeland Trust believe that, taken together,
the obligations of the Company under the Guarantee, the Trust
Agreement, the Subordinated Debentures, the Indenture and the Expense
Agreement provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of all of the
obligations of Lakeland Trust under the Preferred Securities. The
obligations of the Company under the Guarantee and the Preferred
Securities are subordinate and junior in right of payment to all
Senior Debt, Subordinated Debt and Additional Senior Obligations of
the Company. If the Company does not make principal or interest
payments on the Subordinated Debentures, Lakeland Trust will not have
sufficient funds to make distributions on the Preferred Securities; in
which event, the Guarantee will not apply to such Distributions until
Lakeland Trust has sufficient funds available therefor. See
"Description of the Guarantee."

Voting Rights................. The holders of the Preferred Securities will have no voting rights
except in limited circumstances. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement."

Use of Proceeds............... The proceeds from the sale of the Preferred Securities offered hereby
will be used by Lakeland Trust to purchase the Subordinated Debentures
issued by the Company. The Company intends to use approximately $12.25 million
of the net proceeds from the sale of the Subordinated Debentures to fund the Proposed
Branch Purchases. The Company intends to use the remaining net proceeds from
the sale of the Subordinated Debentures for general corporate purposes
including, without limitation, the making of investments in or possibly
acquiring businesses which enhance the Company's long-term growth or
improve or expand the Company's products, services or markets, the funding
of investments in or extensions of credit to the Company's subsidiary and
the repurchase of common stock. Pending their application for any or all of such
purposes, the net proceeds may be invested in investment grade financial
instruments. See "--The Company--Recent Developments" and "Use of Proceeds."

Nasdaq National Market
Symbol...................... Application has been made to have the Preferred Securities approved
for quotation on The Nasdaq Stock Market's National Market under the
symbol "LKFNP."
</TABLE>

<PAGE> 11
SUMMARY CONSOLIDATED FINANCIAL DATA

The consolidated financial data below summarizes historical consolidated
financial information of the Company for the periods indicated and should be
read in conjunction with the financial statements and other information
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, which is incorporated by reference in this Prospectus. The
unaudited consolidated financial data below for the interim periods indicated
has been derived from, and should be read in conjunction with, the Company's
Quarterly Report on Form 10-Q for the six-month period ended June 30, 1997,
which is incorporated by reference in this Prospectus. See "Available
Information" and "Incorporation of Certain Documents by Reference." All
adjustments considered necessary for a fair presentation have, in the opinion
of management, been included in the unaudited interim data. Interim results for
the six months ended June 30, 1997 are not necessarily indicative of results
which may be expected for future periods, including the year ending December
31, 1997.

<TABLE>
<CAPTION>
JUNE 30,
(UNAUDITED) YEARS ENDED DECEMBER 31,
--------------------- ------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED RESULTS OF OPERATIONS:

Interest income................ $ 25,580 $ 22,201 $ 45,941 $ 41,944 $ 33,556 $ 27,463 $ 27,500

Interest expense............... 13,246 11,449 23,737 21,642 14,887 12,022 13,622
-------- -------- -------- -------- -------- -------- --------
Net interest income............ 12,334 10,752 22,204 20,302 18,669 15,441 13,878

Provision for loan losses...... 120 60 120 120 795 790 1,340
-------- -------- -------- -------- -------- -------- --------
Net interest income after
provision for loan losses.... 12,214 10,692 22,084 20,182 17,874 14,651 12,538

Noninterest income............. 3,485 2,831 5,799 4,771 4,368 3,808 3,415

Noninterest expense............ 9,481 8,497 17,935 16,244 14,092 12,378 10,832
-------- -------- -------- -------- -------- -------- --------
Income before income tax
expense...................... 6,218 5,026 9,948 8,709 8,150 6,081 5,121

Income tax expense............. 2,191 1,808 3,504 3,064 3,024 2,171 1,762
-------- -------- -------- -------- -------- -------- --------
Net income before cumulative
effect of accounting
change....................... 4,027 3,218 6,444 5,645 5,126 3,910 3,359

Cumulative effect of accounting
change....................... -- -- -- -- -- 325 --
-------- -------- -------- -------- -------- -------- --------
Net income..................... $ 4,027 $ 3,218 $ 6,444 $ 5,645 $ 5,126 $ 4,235 $ 3,359
======== ======== ======== ======== ======== ======== ========
PER SHARE DATA:<F1>

Net income:

Earnings per common
share.................... $ 1.39 $ 1.11 $ 2.22 $ 1.96 $ 1.78 $ 1.47 $ 1.17

Cash dividends declared.... 0.30 0.22 0.46 0.37 0.30 0.25 0.21

Book value................. 15.60 13.47 14.51 12.78 10.39 9.70 8.26

Dividend payout ratio...... 21.58% 19.82% 20.72% 18.88% 16.85% 17.01% 17.95%

SELECTED BALANCE SHEET DATA:

Assets......................... $687,515 $613,827 $656,551 $568,579 $496,963 $449,954 $362,497

Securities<F2>................. 212,371 203,510 207,116 196,008 169,752 160,703 101,952

Loans and leases............... 412,483 349,516 382,265 327,617 287,956 260,185 234,202

Allowance for loan and lease
losses....................... 5,301 5,365 5,306 5,472 4,866 4,010 3,095

Deposits....................... 525,998 468,283 496,553 431,934 396,740 370,032 284,308

Long term debt................. 25,383 19,432 23,531 17,432 17,432 9,300 8,000

Stockholders' equity........... 45,339 39,009 42,043 36,754 29,889 27,912 23,750

PERFORMANCE RATIOS:

Return on average equity....... 18.53% 16.88% 16.50% 17.06% 17.73% 16.51% 15.08%

Return on average assets....... 1.22% 1.11% 1.07% 1.05% 1.10% 1.11% 0.97%

Net interest margin (fully
taxable equivalent).......... 4.11% 4.10% 4.10% 4.22% 4.43% 4.50% 4.43%

ASSET QUALITY RATIOS:

Allowance for loan losses to
loans........................ 1.29% 1.53% 1.39% 1.67% 1.69% 1.54% 1.32%

Non-performing loans to total
loans........................ 0.61% 0.55% 0.49% 0.66% 0.53% 0.25% 0.13%

Net loan losses to average
loans........................ 0.06% 0.10% 0.08% 0.08% (0.02%) 0.05% 0.40%

CAPITAL RATIOS:

Average equity to average
assets....................... 6.47% 6.49% 6.46% 6.18% 6.19% 6.71% 6.41%

Tier 1 risk-based capital
ratio........................ 10.01% 10.09% 9.94% 10.13% 10.07% 9.75% 9.30%

Total risk-based capital
ratio........................ 11.19% 11.34% 11.19% 11.38% 11.33% 11.00% 10.53%

Leverage ratio................. 6.51% 6.29% 6.29% 6.31% 6.27% 5.99% 6.38%

RATIO OF EARNINGS TO FIXED
CHARGES:<F3>

Including interest on
deposits..................... 1.47x 1.44x 1.42x 1.40x 1.55x 1.53x 1.38x

Excluding interest on
deposits..................... 2.96x 3.08x 2.87x 2.82x 3.93x 4.33x 3.79x

<FN>
- ----------
<F1>Per share data has been adjusted to give retroactive effect to a 2-for-1
stock split April 30, 1996.

<F2>Includes market value adjustment on available-for-sale securities.

<F3>Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense, amortization of debt issuance costs
and the interest component of rent expense. The Company does not currently
have any preferred stock outstanding.
</TABLE>

<PAGE> 12
RISK FACTORS

Prospective investors should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors before purchasing the Preferred Securities offered
hereby. Prospective investors should note, in particular, that this Prospectus
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and
that actual results could differ materially from those contemplated by such
statements. Prospective investors should also refer to the factors discussed
under "Forward Looking Statements" set forth in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, which is incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."
These considerations are not intended to represent a complete list of the
general or specific risks that may affect the Preferred Securities, the
Subordinated Debentures, the Company or Lakeland Trust. It should be recognized
that other risks may be significant, now or in the future, and the risks set
forth below may affect the Preferred Securities, the Subordinated Debentures,
the Company or Lakeland Trust to a greater extent than indicated.

RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES

The obligations of the Company under the Guarantee issued for the benefit
of the holders of Preferred Securities and under the Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all Senior
Debt, Subordinated Debt and Additional Senior Obligations of the Company. At
June 30, 1997, the Company had no Senior Debt, Subordinated Debt or
Additional Senior Obligations outstanding. Because the Company is a holding
company, the right of the Company to participate in any distribution of assets
of the Bank upon the Bank's liquidation or reorganization or otherwise (and
thus the ability of holders of the Preferred Securities to benefit indirectly
from such distribution) is subject to the prior claims of creditors of the
Bank, except to the extent that the Company may itself be recognized as a
creditor of the Bank. At June 30, 1997, the Bank had long-term debt of
approximately $25.4 million. The Subordinated Debentures, therefore, will be
effectively subordinated to all existing and future liabilities of the Bank
and holders of Subordinated Debentures and Preferred Securities should look
only to the assets of the Company for payments on the Subordinated Debentures.
Neither the Indenture, the Guarantee nor the Trust Agreement places any
limitation on the amount of secured or unsecured debt, including Senior Debt,
Subordinated Debt and Additional Senior Obligations, that may be incurred by
the Company. See "Description of the Guarantee--Status of the Guarantee" and
"Description of the Subordinated Debentures--Subordination."

The ability of Lakeland Trust to pay amounts due on the Preferred Securities
is solely dependent upon the Company making payments on the Subordinated
Debentures as and when required.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES

The Company has the right under the Indenture, so long as no Debenture
Event of Default has occurred and is continuing, to defer the payment of
interest on the Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive calendar quarters with respect to each
Extended Interest Payment Period; provided that no Extended Interest Payment
Period may extend beyond the Stated Maturity of the Subordinated Debentures. As
a consequence of any such deferral, quarterly Distributions on the Preferred
Securities by Lakeland Trust will be deferred (and the amount of Distributions
to which holders of the Preferred Securities are entitled will accumulate
additional Distributions thereon at the rate of % per annum, compounded
quarterly from the relevant payment date for such Distributions) during any
such Extended Interest Payment Period. During any such Extended Interest
Payment Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company's capital stock (other than (a) dividends
or distributions in common stock of the Company, any declaration of a non-cash
dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, and (b) purchases of common
stock of the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees), (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Subordinated Debentures (provided that this restriction will not prohibit
payments under the Guarantee), or (iii) redeem, purchase or acquire less than
all of the

<PAGE> 13
Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further defer the payment of interest; provided that no Extended Interest
Payment Period may exceed 20 consecutive calendar quarters or extend beyond the
Stated Maturity of the Subordinated Debentures. Upon the termination of any
Extended Interest Payment Period and the payment of all interest then accrued
and unpaid (together with interest thereon at the annual rate of % compounded
quarterly, to the extent permitted by applicable law), the Company may elect to
begin a new Extended Interest Payment Period, subject to the above
requirements. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extended Interest Payment Period.
See "Description of the Preferred Securities--Distributions--Extension
Period" and "Description of the Subordinated Debentures--Option to Extend
Interest Payment Period."

The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. Should an Extended Interest Payment Period occur,
however, each holder of Preferred Securities will be required to accrue and
recognize income (in the form of OID) in respect of its pro rata share of the
interest accruing on the Subordinated Debentures held by Lakeland Trust for
federal income tax purposes. A holder of Preferred Securities must, as a
result, include such income in gross income for United States federal income
tax purposes in advance of the receipt of cash, and will not receive the cash
related to such income from Lakeland Trust if the holder disposes of the
Preferred Securities prior to the record date for the payment of the related
Distributions. See "Certain Federal Income Tax Consequences--Potential
Extension of Interest Payment Period and Original Issue Discount."

Should the Company elect to exercise its right to defer payments of
interest on the Subordinated Debentures in the future, the market price of the
Preferred Securities is likely to be adversely affected. A holder that disposes
of its Preferred Securities during an Extended Interest Payment Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Preferred Securities. As a result of the existence of the
Company's right to defer interest payments, the market price of the Preferred
Securities may be more volatile than the market prices of other securities on
which original issue discount accrues that are not subject to such optional
deferrals.

TAX EVENT, CAPITAL TREATMENT EVENT OR INVESTMENT COMPANY EVENT; REDEMPTION

The Company has the right to redeem the Subordinated Debentures in whole
(but not in part) within 180 days following the occurrence of a Tax Event, a
Capital Treatment Event or an Investment Company Event (whether occurring
before or after September 30, 2002), and, therefore, cause a mandatory
redemption of the Preferred Securities. The exercise of such right is subject
to the Company having received prior approval of the Federal Reserve to do so
if then required under applicable capital guidelines or policies of the Federal
Reserve.

"Tax Event" means the receipt by Lakeland Trust of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) Lakeland Trust is, or will be within 90 days of the
date of such opinion, subject to United States federal income tax with respect
to income received or accrued on the Subordinated Debentures, (ii) interest
payable by the Company on the Subordinated Debentures is not, or, within 90
days of such opinion, will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes, or (iii) Lakeland Trust
is, or will be within 90 days of the date of the opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges. The
Company must request and receive an opinion with regard to such matters within
a reasonable period of time after it becomes aware of the possible occurrence
of any of the events described in clauses (i) through (iii) above.

<PAGE> 14
an insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.

"Investment Company Event" means the receipt by Lakeland Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, Lakeland Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), which change becomes effective on or after the date of original
issuance of the Preferred Securities.

SHORTENING OR EXTENSION OF STATED MATURITY OF SUBORDINATED DEBENTURES

The Company has the right, at any time, to shorten the maturity of the
Subordinated Debentures to a date not earlier than September 30, 2002. The
exercise of such right is subject to the Company having received prior approval
of the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve. The Company also has the right to extend the
maturity of the Subordinated Debentures (whether or not Lakeland Trust is
terminated and the Subordinated Debentures are distributed to holders of the
Preferred Securities) to a date no later than September 30, 2036, a date
approximately 39 years after the initial issuance of the Preferred Securities.
Such right may only be exercised, however, if at the time such election is made
and at the time of such extension (i) the Company is not in bankruptcy,
otherwise insolvent or in liquidation, (ii) the Company is not in default in
the payment of any interest or principal on the Subordinated Debentures, and
(iii) Lakeland Trust is not in arrears on payments of Distributions on the
Preferred Securities and no deferred Distributions are accumulated. See
"Description of the Subordinated Debentures--General."

RIGHTS UNDER THE GUARANTEE

The Guarantee guarantees to the holders of the Preferred Securities, to the
extent not paid by Lakeland Trust, (i) any accrued and unpaid Distributions
required to be paid on the Preferred Securities, to the extent that Lakeland
Trust has funds available therefor at such time, (ii) the Redemption Price (as
defined herein) with respect to any Preferred Securities called for redemption,
to the extent that Lakeland Trust has funds available therefor at such time,
and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of Lakeland Trust (other than in connection with the distribution
of Subordinated Debentures to the holders of Preferred Securities or a
redemption of all of the Preferred Securities), the lesser of (a) the amount of
the Liquidation Distribution (as defined herein), to the extent Lakeland Trust
has funds available therefor at such time, and (b) the amount of assets of
Lakeland Trust remaining available for distribution to holders of the Preferred
Securities in liquidation of Lakeland Trust. The holders of not less than a
majority in Liquidation Amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of the Guarantee or to direct the
exercise of any trust power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of the Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against Lakeland Trust,
the Guarantee Trustee or any other Person (as defined in the Guarantee). If the
Company were to default on its obligation to pay amounts payable under the
Subordinated Debentures, Lakeland Trust would lack funds for the payment of
Distributions or amounts payable on redemption of the Preferred Securities or
otherwise, and, in such event, holders of Preferred Securities would not be
able to rely upon the Guarantee for such amounts. In the event, however, that a
Debenture Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest on or principal of
the Subordinated Debentures on the payment date on which such payment is due
and payable, then a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such holder (a "Direct Action"). The exercise by the Company of
its right, as described herein, to defer the payment of interest on the
Subordinated Debentures does not constitute a Debenture Event of Default. In
connection with such Direct Action, the Company will have a right of set-off
under the Indenture to the extent of any payment made by the Company to such
holder of Preferred Securities in the Direct Action. Except as described
herein, holders of Preferred Securities will not be able to exercise directly
any other remedy available to the holders of the Subordinated Debentures or

<PAGE> 15
assert directly any other rights in respect of the Subordinated Debentures. See
"Description of the Subordinated Debentures--Enforcement of Certain Rights by
Holders of Preferred Securities," "Description of the Subordinated
Debentures--Debenture Events of Default" and "Description of the Guarantee."
The Trust Agreement provides that each holder of Preferred Securities by
acceptance thereof agrees to the provisions of the Guarantee and the Indenture.

NO VOTING RIGHTS EXCEPT IN LIMITED CIRCUMSTANCES

Holders of Preferred Securities will have no voting rights except in
limited circumstances relating only to the modification of the Preferred
Securities and the exercise of the rights of Lakeland Trust as holder of the
Subordinated Debentures and the Guarantee. Holders of Preferred Securities will
not be entitled to vote to appoint, remove or replace the Property Trustee or
the Delaware Trustee, as such voting rights are vested exclusively in the
holder of the Common Securities (except upon the occurrence of certain events
described herein). The Property Trustee, the Administrative Trustees and the
Company may amend the Trust Agreement without the consent of holders of
Preferred Securities to ensure that Lakeland Trust will be classified for
United States federal income tax purposes as a grantor trust even if such
action adversely affects the interests of such holders. See "Description of
the Preferred Securities--Voting Rights; Amendment of Trust Agreement" and
"Description of the Preferred Securities
- --Removal of Lakeland Trust Trustees."

PROPOSED TAX LEGISLATION

On March 19, 1996, President Clinton proposed certain tax law changes that
would, among other things, generally deny corporate issuers a deduction for
interest in respect of certain debt obligations issued on or after December 7,
1995 (the "Administration's 1996 Tax Proposals") if such debt obligations (i)
had a weighted average maturity in excess of 40 years, or (ii) had a maximum
term in excess of 20 years and were not shown as indebtedness on the issuer's
applicable consolidated balance sheet. Neither the Administration's 1996 Tax
Proposals nor similar legislation was enacted during the 104th Congress. On
February 6, 1997, President Clinton released the administration's proposed
fiscal year 1998 budget (the "Administration's 1997 Tax Proposals" and,
together with the Administration's 1996 Tax Proposals, the "Administration's
Proposals") which also included provisions that would, among other things,
generally deny corporate issuers a deduction for interest or OID in respect of
certain debt obligations if such debt obligations have a maximum weighted
average maturity of more than 40 years (including rights to extend, renew or
relend) or have a maximum term in excess of 15 years and are not shown as
indebtedness on the issuer's applicable consolidated balance sheet. The United
States Treasury Department's summary of the Administration's 1997 Tax Proposals
states that the above provisions regarding the deduction of interest would
generally be effective for obligations issued on or after the date of "first
Congressional committee action" with respect to the Administration's 1997 Tax
Proposals. On June 9, 1997 Chairman Bill Archer released his proposed budget
revenue reconciliation provisions, which the House Ways and Means Committee
began to markup on June 11, 1997 and which did not include the above provisions
from the Administration's Tax Proposals. On July 31, 1997, Congress passed the
Revenue Reconciliation Act of 1997 ("Act") which does not contain the above
described interest deduction provisions. However, there can be no assurance
that the Act will be finally enacted in its current form. Nor can there be any
assurance that other legislation enacted after the date hereof will not
otherwise adversely affect the ability of the Company to deduct the interest
payable on the Subordinated Debentures. Consequently, there can be no assurance
that a Tax Event will not occur. A Tax Event would permit the Company, upon
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, to cause a redemption of the
Preferred Securities before, as well as after, September 30, 2002. See
"Description of the Subordinated Debentures--Redemption" and "Description of
the Preferred Securities--Redemption--Tax Event Redemption, Capital Treatment
Event Redemption or Investment Company Event Redemption" and "Certain Federal
Income Tax Consequences--Effect of Proposed Changes in Tax Laws."

<PAGE> 16
REDEMPTION; EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES

The Company has the right at any time to dissolve, wind-up or terminate
Lakeland Trust and cause the Subordinated Debentures to be distributed to the
holders of the Preferred Securities in exchange therefor in liquidation of
Lakeland Trust. The exercise of such right is subject to the Company having
received prior approval of the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve. The Company
will have the right, in certain circumstances, to redeem the Subordinated
Debentures in whole or in part, in lieu of a distribution of the Subordinated
Debentures by Lakeland Trust, in which event Lakeland Trust will redeem the
Trust Securities on a pro rata basis to the same extent as the Subordinated
Debentures are redeemed by the Company. Any such distribution or redemption
prior to the Stated Maturity will be subject to prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of the
Federal Reserve. See "Description of the Preferred Securities--Redemption--Tax
Event Redemption, Capital Treatment Event Redemption or Investment Company
Event Redemption."

Under current United States federal income tax law, a distribution of
Subordinated Debentures upon the dissolution of Lakeland Trust would not be a
taxable event to holders of the Preferred Securities. If, however, Lakeland
Trust were to be recharacterized as an association taxable as a corporation
at the time of the dissolution of Lakeland Trust, the distribution of the
Subordinated Debentures may constitute a taxable event to holders of Preferred
Securities. Moreover, upon the occurrence of a Tax Event, a dissolution of
Lakeland Trust in which holders of the Preferred Securities receive cash may be
a taxable event to such holders. See "Certain Federal Income Tax
Consequences--Receipt of Subordinated Debentures or Cash Upon Liquidation of
Lakeland Trust."

There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities upon a dissolution or liquidation of Lakeland Trust.
The Preferred Securities or the Subordinated Debentures, may, therefore, trade
at a discount to the price that the investor paid to purchase the Preferred
Securities offered hereby. Because holders of Preferred Securities may receive
Subordinated Debentures, prospective purchasers of Preferred Securities are
also making an investment decision with regard to the Subordinated Debentures
and should carefully review all the information regarding the Subordinated
Debentures contained herein.

If the Subordinated Debentures are distributed to the holders of Preferred
Securities upon the liquidation of Lakeland Trust, the Company will use its
best efforts to list the Subordinated Debentures on The Nasdaq Stock Market's
National Market or such stock exchanges, if any, on which the Preferred
Securities are then listed.

TRADING PRICE; ABSENCE OF PRIOR PUBLIC MARKET FOR THE PREFERRED SECURITIES

The Preferred Securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder of Preferred Securities that disposes of its
Preferred Securities between record dates for payments of Distributions (and
consequently does not receive a Distribution from Lakeland Trust for the period
prior to such disposition) will nevertheless be required to include accrued but
unpaid interest (or OID) on the Subordinated Debentures through the date of
disposition in income as ordinary income and to add the amount of any accrued
OID to its adjusted tax basis in its pro rata share of the underlying
Subordinated Debentures deemed disposed of. Such holder will recognize a
capital loss to the extent the selling price (which may not fully reflect the
value of accrued but unpaid interest) is less than its adjusted tax basis
(which will include all accrued OID). Subject to certain limited exceptions,
capital losses cannot be applied to offset ordinary income for United States
federal income tax purposes. See "Certain Federal Income Tax
Consequences--Disposition of Preferred Securities."

There is no current public market for the Preferred Securities. Although
application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market, there can be no
assurance that an active public market will develop for the Preferred
Securities or that, if such market develops, the market price will equal or
exceed the public offering price set forth on the cover page of this
Prospectus. The public offering price for the Preferred Securities has been
determined through negotiations between the Company and the Underwriter. Prices
for the Preferred Securities will be determined in the marketplace and may be
influenced by many factors, including prevailing interest rates, the liquidity
of the market for the Preferred Securities, investor perceptions of the Company
and general industry and economic conditions.

<PAGE> 17
PREFERRED SECURITIES ARE NOT INSURED

The Preferred Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
or by any other governmental agency.

USE OF PROCEEDS

Lakeland Trust will use the gross proceeds received from the sale of the
Preferred Securities to purchase Subordinated Debentures from the Company. The
Company intends to use approximately $12.25 million of the net proceeds from
the sale of the Subordinated Debentures to fund the Proposed Branch Purchases.
The Company intends to use the remaining net proceeds from the sale of the
Subordinated Debentures for general corporate purposes including, without
limitation, the making of investments in or possibly acquiring businesses which
enhance the Company's long-term growth or improve or expand the Company's
products, services or markets, the funding of investments in or extensions of
credit to the Company's subsidiaries and the repurchase of common stock.
Pending their application for any or all of such purposes, the net proceeds may
be invested in investment grade financial instruments. See "Prospectus
Summary--The Company--Recent Developments."

MARKET FOR THE PREFERRED SECURITIES

Application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market under the symbol
"LKFNP." Although Stifel, Nicolaus & Company, Incorporated has informed the
Company that it presently intends to make a market in the Preferred Securities,
there can be no assurance that an active and liquid trading market will develop
or, if developed, that such a market will continue. The offering price and
distribution rate have been determined by negotiations among representatives of
the Company and the Underwriter, and the offering price of the Preferred
Securities may not be indicative of the market price following the offering.
See "Underwriting." Application also has been made to have the Company's
common stock approved for quotation on The Nasdaq Stock Market's National
Market under the symbol "LKFN."

ACCOUNTING TREATMENT

Lakeland Trust will be treated, for financial reporting purposes, as a
subsidiary of the Company and, accordingly, the accounts of Lakeland Trust will
be included in the consolidated financial statements of the Company. The
Preferred Securities will be presented as a separate line item as long-term
debt in the consolidated balance sheet of the Company under the caption
"Guaranteed Preferred Beneficial Interests in Company's Subordinated
Debentures," and appropriate disclosures about the Preferred Securities, the
Guarantee and the Subordinated Debentures will be included in the notes to
consolidated financial statements. The Company will record Distributions
payable on the Preferred Securities as an expense in its consolidated
statements of income for financial reporting purposes.

All reports of the Company filed under the Exchange Act while the Preferred
Securities are outstanding will (a) present the Trust Securities issued by
Lakeland Trust on the balance sheet as long-term debt under a separate
line-item entitled "Guaranteed Preferred Beneficial Interests in Company's
Subordinated Debentures," (b) include in a footnote to the financial statements
disclosure that the sole assets of Lakeland Trust are the Subordinated
Debentures (including the outstanding principal amount, interest rate and
maturity date of such Subordinated Debentures) and payments thereunder, and (c)
include in an audited footnote to the financial statements disclosure that the
Company owns all of the Common Securities of Lakeland Trust, the sole assets of
Lakeland Trust are the Subordinated Debentures, and the back-up obligations, in
the aggregate, constitute a full and unconditional guarantee by the Company of
the obligations of Lakeland Trust under the Preferred Securities.

<PAGE> 18
CAPITALIZATION

The following table sets forth (i) the unaudited consolidated
capitalization of the Company at June 30, 1997, (ii) the unaudited
consolidated capitalization of the Company giving effect to the issuance of the
Preferred Securities hereby offered by Lakeland Capital and the receipt by the
Company of the net proceeds from the corresponding sale of the Subordinated
Debentures to Lakeland Capital (the "Offering"), and (iii) the unaudited
consolidated capitalization of the Company giving effect to the Offering
and the Proposed Branch Purchases, as if each such transaction had been
consummated on June 30, 1997, and assuming the Underwriter's over-allotment
option was not exercised.

<TABLE>
<CAPTION>
JUNE 30, 1997
--------------------------------------------------
AS ADJUSTED
FOR OFFERING
AS ADJUSTED AND PROPOSED
ACTUAL FOR OFFERING BRANCH PURCHASES
------- ------------ ------------------
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C>
LONG-TERM DEBT:

Notes payable................................. $25,383 $25,383 $25,383

Guaranteed preferred beneficial interests in
the Company's Subordinated Debentures....... -- 18,000 18,000
------- ------- -------

Total long-term debt...................... 25,383 43,383 43,383

STOCKHOLDERS' EQUITY:

Common stock, stated value $.50 per share;
10,000,000 shares authorized; 2,906,992
shares issued; 2,902,502 shares outstanding. 1,453 1,453 1,453

Additional paid-in capital.................... 8,537 8,537 8,537

Retained earnings............................. 35,122 35,122 35,122

Cost of common stock in treasury; 4,490
shares...................................... (143) (143) (143)

Unrealized appreciation on available-for-sale
securities.................................. 370 370 370
------- ------- -------

Total stockholders' equity................ 45,339 45,339 45,339

CAPITAL RATIOS:

Stockholders' equity to total assets.......... 6.59% 6.43% 5.66%<F4>

Leverage ratio<F1><F2>........................ 6.51% 8.47% 5.98%<F4>

Risk-based capital ratios<F2><F3>

Tier 1 capital to risk-weighted assets.... 10.01% 12.84% 9.75%<F4>

Total risk-based capital to risk-weighted
assets.................................. 11.19% 13.97% 10.83%<F4>

<FN>
- --------
<F1>The leverage ratio is Tier 1 capital divided by average quarterly assets,
after deducting intangible assets and net deferred tax assets in excess of
regulatory limits.

<F2>The capital ratios are computed including the total estimated net proceeds
from the sale of the Preferred Securities, in a manner consistent with
Federal Reserve calculation guidelines.

<F3>Federal Reserve guidelines for calculation of Tier 1 capital to
risk-weighted assets limits the amount of cumulative preferred stock which
can be included in Tier 1 capital to 25% of total Tier 1 capital.
Approximately $15.044 million of the aggregate amount of the Preferred
Securities offered hereby will be included as Tier 1 capital for the
Company.

<F4>The capital ratios, as adjusted for the Offering and the Proposed Branch
Purchases, reflect the addition of (i) $95 million of assets, (ii)
intangibles created in connection with the acquisitions, and (iii) $23
million of risk-weighted assets.
</TABLE>

<PAGE> 19
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

The following pro forma condensed consolidated balance sheet and
explanatory notes set forth (i) the unaudited condensed consolidated balance
sheet of the Company at June 30, 1997, (ii) pro forma adjustments giving
effect to the Offering, (iii) pro forma adjustments giving effect to the
Proposed Branch Purchases and (iv) resulting pro forma condensed consolidated
balance sheet giving effect to the Offering and the Proposed Branch Purchases,
as if each such transaction had been consummated on June 30, 1997, and
assuming the Underwriter's over-allotment option was not exercised.

<TABLE>
LAKELAND FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997

(DOLLARS IN THOUSANDS)
<CAPTION>
PRO FORMA
CONSOLIDATED
PRO FORMA AS ADJUSTED FOR
PRO FORMA ADJUSTMENTS OFFERING AND
ADJUSTMENTS FOR PROPOSED PROPOSED BRANCH
ACTUAL FOR OFFERING BRANCH PURCHASES PURCHASES
------ ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
ASSETS:
Cash and cash equivalents.................... $ 38,397 $17,030<F1> $57,163<F2> $112,590
Securities available-for-sale................ 79,690 79,690
Securities held-to-maturity.................. 132,681 132,681
Loans, net of allowance for loan losses...... 408,108 23,982<F3> 432,090
Premises and equipment....................... 17,604 1,956<F4> 19,560
Other assets and intangibles................. 11,035 970<F1> 12,259<F5> 24,264
-------- ------- ------- --------
TOTAL ASSETS............................. $687,515 $18,000 $95,360 $800,875
======== ======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits..................................... $525,998 $ $94,923<F6> $620,921
Short-term borrowings........................ 84,703 437<F6> 85,140
Long-term debt............................... 25,383 18,000<F1> 43,383
Other liabilities............................ 6,092 6,092
-------- ------- ------- --------
TOTAL LIABILITIES........................ 642,176 18,000 95,360 755,536
Stockholders' equity......................... 45,339 45,339
-------- ------- ------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY................................. $687,515 $18,000 $95,360 $800,875
======== ======= ======= ========

See Notes to Pro Forma Condensed Consolidated Balance Sheet on the following page.

</TABLE>

15
<PAGE> 20
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

The pro forma condensed consolidated balance sheet should be read in
conjunction with the following notes. The amounts shown for the pro forma
adjustments for purchases and assumptions of assets and liabilities have
been derived from information provided by the respective selling parties. These
items are subject to adjustment to reflect the Company's estimate of fair
market value at closing.

The Proposed Branch Purchases are not considered to be acquisitions of a
business since, among other things, approximately 60% of the $95.36 million
in assets received will be in the form of cash and only a relatively small
portion of the assets will be in the form of loans. The future earnings
from the assets acquired will be primarily dependent on the effective use of
the cash and, thus, historical operating results of the branches acquired may
not be indicative of future results. Accordingly, only summarized information
regarding the effect of the acquisitions on the balance sheet is presented.

[FN]

<F1>The Company will incur $18 million in long-term debt in connection with the
Offering. The expenses of the Offering, including the Underwriter's
compensation, are estimated to be $970,000. See ``Use of Proceeds'' and
"Capitalization".

<F2>Represents funds to be received from the respective selling parties for
assumption of net liabilities upon consummation of the Proposed Branch
Purchases.

<F3>Net loans expected to be purchased in the Proposed Branch Purchases are
summarized below as of April 30, 1997 for the Proposed NBD Branch Purchase
and as of May 31, 1997 for the Proposed KeyCorp Branch Purchases.

<TABLE>
<CAPTION>
(IN 000'S)
----------
<S> <C>
Commercial loans........................ $ 3,935
Real estate loans....................... 8,711
Consumer loans.......................... 10,895
Lines of credit......................... 441
-------
Total loans......................... $23,982
=======
</TABLE>

[FN]

<F4>The values of the premises and equipment to be acquired upon consummation of
the Proposed Branch Purchases are based upon appraised values or estimated
values provided by the respective selling parties.

<F5>The intangibles resulting from the Proposed Branch Purchases are expected
to be approximately $12.25 million, subject to adjustment based on the
Company's estimates of the fair market value of assets to be purchased and
the liabilities to be assumed.

<F6>The deposits and repurchase agreements expected to be assumed in the
Proposed Branch Purchases are summarized below as of April 30, 1997 for
the Proposed NBD Branch Purchase and as of May 31, 1997 for the Proposed
KeyCorp Branch Purchases.

<TABLE>
<CAPTION>
(IN 000'S)
----------
<S> <C>
Demand deposit accounts................. $12,255
Savings and transaction accounts........ 26,307
Certificates of deposit................. 56,361
Repurchase agreements................... 437
-------
Total deposits and repurchase
agreements........................ $95,360
=======
</TABLE>

16
<PAGE> 21
DESCRIPTION OF THE PREFERRED SECURITIES

The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Property Trustee, State Street Bank and Trust Company,
will act as indenture trustee for the Preferred Securities under the Trust
Agreement for purposes of complying with the provisions of the Trust Indenture
Act. The terms of the Preferred Securities will include those stated in the
Trust Agreement and those made part of the Trust Agreement by the Trust
Indenture Act. The following summary of the material terms and provisions of
the Preferred Securities and the Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Trust Agreement, the Trust Act, and the Trust Indenture Act. Wherever
particular defined terms of the Trust Agreement are referred to, but not
defined, herein such defined terms are incorporated herein by reference. The
form of the Trust Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.

GENERAL

Pursuant to the terms of the Trust Agreement, the Trustees, on behalf of
Lakeland Trust, will issue the Trust Securities. All of the Common Securities
will be owned by the Company. The Preferred Securities will represent preferred
undivided beneficial interests in the assets of Lakeland Trust and the holders
thereof will be entitled to a preference in certain circumstances with respect
to Distributions and amounts payable on redemption or liquidation over the
Common Securities, as well as other benefits as described in the Trust
Agreement. The Trust Agreement does not permit the issuance by Lakeland Trust
of any securities other than the Trust Securities or the incurrence of any
indebtedness by Lakeland Trust.

The Preferred Securities will rank pari passu, and payments will be made
thereon pro rata based on the Liquidation Amount thereof, with the Common
Securities, except as described under "--Subordination of Common Securities."
Legal title to the Subordinated Debentures will be held by the Property Trustee
in trust for the benefit of the holders of the Trust Securities. The Guarantee
executed by the Company for the benefit of the holders of the Preferred
Securities will be a guarantee on a subordinated basis with respect to the
Preferred Securities, but will not guarantee payment of Distributions or
amounts payable on redemption or liquidation of such Preferred Securities when
Lakeland Trust does not have funds on hand available to make such payments.
State Street Bank and Trust Company, as Guarantee Trustee, will hold the
Guarantee for the benefit of the holders of the Preferred Securities. See
"Description of the Guarantee."

DISTRIBUTIONS

PAYMENT OF DISTRIBUTIONS. Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $10,
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, to the holders of the Preferred Securities on the relevant record
dates (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). The record date will be the 15th day of
the month in which the relevant Distribution Date occurs. Distributions will
accumulate from , 1997, the date of original issuance. The first
Distribution Date for the Preferred Securities will be September 30, 1997. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Preferred Securities is not a Business Day,
then payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional
Distributions, interest or other payment in respect of any such delay) with the
same force and effect as if made on the date such payment was originally
payable. "Business Day" means any day other than a Saturday or a Sunday, a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.

EXTENSION PERIOD. The Company has the right under the Indenture, so long as
no Debenture Event of Default has occurred and is continuing, to defer the
payment of interest on the Subordinated Debentures at any time, or from time to
time (each, an "Extended Interest Payment Period"), which, if exercised,
would defer quarterly Distributions on the Preferred Securities during any such
Extended Interest Payment Period. Distributions to which holders of the
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate per annum of % thereof, compounded quarterly from the
relevant Distribution Date. "Distributions," as used herein, includes any

<PAGE> 22
such additional Distributions. The right to defer the payment of interest on
the Subordinated Debentures is limited, however, to a period, in each instance,
not exceeding 20 consecutive calendar quarters and no Extended Interest Payment
Period may extend beyond the Stated Maturity of the Subordinated Debentures.
During any such Extended Interest Payment Period, the Company may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock (other than (a) dividends or distributions in common stock of the
Company, and declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (b) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees), (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Subordinated Debentures (provided
that this restriction will not prohibit payments under the Guarantee), or (iii)
redeem, purchase or acquire less than all of the Subordinated Debentures or any
of the Preferred Securities. Prior to the termination of any such Extended
Interest Payment Period, the Company may further defer the payment of interest;
provided that such Extended Interest Payment Period may not exceed 20
consecutive calendar quarters or extend beyond the Stated Maturity of the
Subordinated Debentures. Upon the termination of any such Extended Interest
Payment Period and the payment of all amounts then due, the Company may elect
to begin a new Extended Interest Payment Period, subject to the above
requirements. Subject to the foregoing, there is no limitation on the number of
times that the Company may elect to begin an Extended Interest Payment Period.

The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.

SOURCE OF DISTRIBUTIONS. The funds of Lakeland Trust available for
distribution to holders of its Preferred Securities will be limited to payments
under the Subordinated Debentures in which Lakeland Trust will invest the
proceeds from the issuance and sale of its Trust Securities. See "Description
of the Subordinated Debentures." Distributions will be paid through the
Property Trustee who will hold amounts received in respect of the Subordinated
Debentures in the Property Account for the benefit of the holders of the Trust
Securities. If the Company does not make interest payments on the Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Preferred Securities. The payment of Distributions (if and
to the extent Lakeland Trust has funds legally available for the payment of
such Distributions and cash sufficient to make such payments) is guaranteed by
the Company. See "Description of the Guarantee." Distributions on the
Preferred Securities will be payable to the holders thereof as they appear on
the register of holders of the Preferred Securities on the relevant record
dates, which will be the 15th day of the month in which the relevant
Distribution Date occurs.

REDEMPTION

GENERAL. The Subordinated Debentures will mature on September 30, 2027. The
Company will have the right to redeem the Subordinated Debentures (i) on or
after September 30, 2002, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), within 180 days following the
occurrence of a Tax Event, a Capital Treatment Event or an Investment Company
Event, in each case subject to receipt of prior approval by the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve. The Company is prohibited from purchasing the Subordinated Debentures,
in whole or in part, from the Trust until after September 30, 2002. See
"Description of the Subordinated Debentures--General."

MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in part,
of any Subordinated Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption will be applied by the Property Trustee to redeem a Like Amount (as
defined herein) of the Trust Securities, upon not less than 30 nor more than 60
days notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption
Date"). See "Description of the Subordinated Debentures--Redemption." If
less than all of the Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption will be
allocated to the redemption of the Trust Securities pro rata.

<PAGE> 23
DISTRIBUTION OF SUBORDINATED DEBENTURES. Subject to the Company having
received prior approval of the Federal Reserve if so required under applicable
capital guidelines or policies of the Federal Reserve, the Company will have
the right at any time to dissolve, wind-up or terminate Lakeland Trust and,
after satisfaction of the liabilities of creditors of Lakeland Trust as
provided by applicable law, cause the Subordinated Debentures to be distributed
to the holders of Trust Securities in liquidation of Lakeland Trust. See
"--Liquidation Distribution Upon Termination."

TAX EVENT REDEMPTION, CAPITAL TREATMENT EVENT REDEMPTION OR INVESTMENT
COMPANY EVENT REDEMPTION. If a Tax Event, a Capital Treatment Event or an
Investment Company Event in respect of the Trust Securities occurs and is
continuing, the Company has the right to redeem the Subordinated Debentures in
whole (but not in part) and thereby cause a mandatory redemption of such Trust
Securities in whole (but not in part) at the Redemption Price within 180 days
following the occurrence of such Tax Event, Capital Treatment Event or
Investment Company Event. In the event a Tax Event, a Capital Treatment Event
or an Investment Company Event has occurred with respect to the Trust
Securities and the Company does not elect to redeem the Subordinated Debentures
and thereby cause a mandatory redemption of such Trust Securities or to
liquidate Lakeland Trust and cause the Subordinated Debentures to be
distributed to holders of such Trust Securities in liquidation of Lakeland
Trust as described below under "--Liquidation Distribution Upon Termination,"
such Preferred Securities will remain outstanding and an Additional Payment (as
defined herein) may be payable on the Subordinated Debentures.

"Additional Payment" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by Lakeland Trust
on the outstanding Trust Securities will not be reduced as a result of any
additional taxes, duties and other governmental charges to which Lakeland Trust
has become subject as a result of a Tax Event.

"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to that portion of the
principal amount of Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture, which will be used to pay the Redemption Price
of such Trust Securities, and (ii) with respect to a distribution of
Subordinated Debentures to holders of Trust Securities in connection with a
dissolution or liquidation of Lakeland Trust, Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Subordinated Debentures are distributed. Each Subordinated
Debenture distributed pursuant to clause (ii) above will carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Subordinated Debentures.

"Liquidation Amount" means the stated amount of $10 per Trust Security.

After the liquidation date fixed for any distribution of Subordinated
Debentures for Preferred Securities (i) such Preferred Securities will no
longer be deemed to be outstanding, and (ii) any certificates representing
Preferred Securities will be deemed to represent the Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Preferred
Securities, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on the Preferred Securities, until such
certificates are presented to the Administrative Trustees or their agent for
transfer or reissuance.

There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of Lakeland Trust
were to occur. The Preferred Securities that an investor may purchase, or the
Subordinated Debentures that an investor may receive on dissolution and
liquidation of Lakeland Trust, may, therefore, trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.

REDEMPTION PROCEDURES

Preferred Securities redeemed on each Redemption Date will be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Subordinated Debentures. Redemptions of the Preferred
Securities will be made and the Redemption Price will be payable on each
Redemption Date only to the extent that Lakeland Trust has funds on hand
available for the payment of such Redemption Price. See "--Subordination of
Common Securities."

If Lakeland Trust gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, eastern standard time, on the Redemption Date,
to the extent funds are available, the Property Trustee will deposit

<PAGE> 24
irrevocably with the paying agent for the Preferred Securities funds sufficient
to pay the aggregate Redemption Price and will give the paying agent for the
Preferred Securities irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Preferred
Securities called for redemption will be payable to the holders of such
Preferred Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption will have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any additional Distribution, interest or other
payment in respect of any such delay) with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
Preferred Securities called for redemption is improperly withheld or refused
and not paid either by Lakeland Trust, or by the Company pursuant to the
Guarantee, Distributions on such Preferred Securities will continue to accrue
at the then applicable rate, from the Redemption Date originally established by
Lakeland Trust for such Preferred Securities to the date such Redemption Price
is actually paid, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price. See
"Description of the Guarantee."

Subject to applicable law (including, without limitation, United States
federal securities law), and further provided that the Company has not and is
not continuing its right to defer interest payments, the Company or its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.

Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities will
be made to the applicable recordholders thereof as they appear on the register
for the Preferred Securities on the relevant record date, which date will be
the date 15 calendar days prior to the Redemption Date or liquidation date, as
applicable.

If less than all of the Trust Securities are to be redeemed on a Redemption
Date, then the aggregate Liquidation Amount of such Trust Securities to be
redeemed will be allocated pro rata to the Trust Securities based upon the
relative Liquidation Amounts of such classes. The particular Preferred
Securities to be redeemed will be selected by the Property Trustee from the
outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee deems fair and appropriate and which may provide
for the selection for redemption of portions (equal to $10 or an integral
multiple of $10 in excess thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than $10. The Property Trustee will
promptly notify the registrar for the Preferred Securities in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of the Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities will relate to the portion of the aggregate Liquidation Amount of
Preferred Securities which has been or is to be redeemed.

Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the redemption price on the Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Subordinated Debentures
or portions thereof (and Distributions will cease to accrue on the related
Preferred Securities or portions thereof) called for redemption.

SUBORDINATION OF COMMON SECURITIES

Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, will be made pro rata based on
the Liquidation Amount of the Preferred Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default has occurred and is continuing, no payment of any
Distribution on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, will be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the

<PAGE> 25
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all of the outstanding Preferred Securities
then called for redemption, shall have been made or provided for, and all funds
available to the Property Trustee will first be applied to the payment in full
in cash of all Distributions on, or Redemption Price of, the Preferred
Securities then due and payable.

In the case of any Event of Default resulting from a Debenture Event of
Default, the Company as holder of the Common Securities will be deemed to have
waived any right to act with respect to any such Event of Default under the
Trust Agreement until the effect of all such Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated. Until
any such Events of Default under the Trust Agreement with respect to the
Preferred Securities has been so cured, waived or otherwise eliminated, the
Property Trustee will act solely on behalf of the holders of the Preferred
Securities and not on behalf of the Company, as holder of the Common
Securities, and only the holders of the Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.

LIQUIDATION DISTRIBUTION UPON TERMINATION

The Company will have the right at any time to dissolve, wind-up or
terminate Lakeland Trust and cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities. Such right is subject,
however, to the Company having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies of the Federal
Reserve.

Pursuant to the Trust Agreement, Lakeland Trust will automatically
terminate upon expiration of its term and will terminate earlier on the first
to occur of (i) certain events of bankruptcy, dissolution or liquidation of the
Company, (ii) the distribution of a Like Amount of the Subordinated Debentures
to the holders of its Trust Securities, if the Company, as depositor, has given
written direction to the Property Trustee to terminate Lakeland Trust (which
direction is optional and wholly within the discretion of the Company, as
depositor), (iii) redemption of all of the Preferred Securities as described
under "--Redemption--Mandatory Redemption," and (iv) the entry of an order
for the dissolution of Lakeland Trust by a court of competent jurisdiction.

If an early termination occurs as described in clause (i), (ii) or (iv) of
the preceding paragraph, Lakeland Trust will be liquidated by the Trustees as
expeditiously as the Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of Lakeland Trust as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such holders will be entitled to
receive out of the assets of Lakeland Trust available for distribution to
holders, after satisfaction of liabilities to creditors of Lakeland Trust as
provided by applicable law, an amount equal to, in the case of holders of
Preferred Securities, the aggregate of the Liquidation Amount plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid
only in part because Lakeland Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by Lakeland Trust on the Preferred Securities will be paid on a pro rata basis.
The Company, as the holder of the Common Securities, will be entitled to
receive distributions upon any such liquidation pro rata with the holders of
the Preferred Securities, except that, if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities. See "--Subordination of Common Securities."

Under current United States federal income tax law and interpretations and
assuming, as expected, that Lakeland Trust is treated as a grantor trust, a
distribution of the Subordinated Debentures should not be a taxable event to
holders of the Preferred Securities. Should there be a change in law, a change
in legal interpretation, a Tax Event or other circumstances, however, the
distribution could be a taxable event to holders of the Preferred Securities.
See "Certain Federal Income Tax Consequences--Receipt of Subordinated
Debentures or Cash Upon Liquidation of Lakeland Trust." If the Company elects
neither to redeem the Subordinated Debentures prior to maturity nor to
liquidate Lakeland Trust and distribute the Subordinated Debentures to holders
of the Preferred Securities, the Preferred Securities will remain outstanding
until the repayment of the Subordinated Debentures.

If the Company elects to liquidate Lakeland Trust and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred
Securities in liquidation of Lakeland Trust, the Company will continue to have

<PAGE> 26
the right to shorten or extend the maturity of such Subordinated Debentures,
subject to certain conditions. See "Description of the Subordinated
Debentures--General."

LIQUIDATION VALUE

The amount of the Liquidation Distribution payable on the Preferred
Securities in the event of any liquidation of Lakeland Trust is $10 per
Preferred Security plus accrued and unpaid Distributions thereon to the date of
payment, which may be in the form of a distribution of such amount in
Subordinated Debentures, subject to certain exceptions. See "--Liquidation
Distribution Upon Termination."

EVENTS OF DEFAULT; NOTICE

Any one of the following events constitutes an event of default under the
Trust Agreement (an "Event of Default") with respect to the Preferred
Securities (whatever the reason for such Event of Default and whether voluntary
or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(i) the occurrence of a Debenture Event of Default (see "Description
of the Subordinated Debentures--Debenture Events of Default"); or

(ii) default by Lakeland Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period
of 30 days; or

(iii) default by Lakeland Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or

(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Trust Agreement (other than
a covenant or warranty a default in the performance of which or the breach
of which is dealt with in clauses (ii) or (iii) above), and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Trustee(s) by the holders of at
least 25% in aggregate Liquidation Amount of the outstanding Preferred
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" under the Trust Agreement; or

(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.

Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee will transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as depositor, unless such Event of
Default has been cured or waived. The Company, as depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.

If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities will have a preference over the Common Securities upon
termination of Lakeland Trust. See "--Liquidation Distribution Upon
Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.

REMOVAL OF LAKELAND TRUST TRUSTEES

Unless a Debenture Event of Default has occurred and is continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If a
Debenture Event of Default has occurred and is continuing, the Property Trustee
and the Delaware Trustee may be removed at such time by the holders of a
majority in Liquidation Amount of the outstanding Preferred Securities. In no
event, however, will the holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee will be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.

<PAGE> 27
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE

Unless an Event of Default has occurred and is continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property (as defined
in the Trust Agreement) may at the time be located, the Company, as the holder
of the Common Securities, will have power to appoint one or more Persons (as
defined in the Trust Agreement) either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such Trust Property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the Trust Agreement. In case a
Debenture Event of Default has occurred and is continuing, the Property Trustee
alone will have power to make such appointment.

MERGER OR CONSOLIDATION OF TRUSTEES

Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Trustee is a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Trustee, will be the successor of such Trustee under the Trust Agreement,
provided such Person is otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF LAKELAND TRUST

Lakeland Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described below. Lakeland
Trust may, at the request of the Company, with the consent of the
Administrative Trustees and without the consent of the holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either
(a) expressly assumes all of the obligations of Lakeland Trust with respect to
the Preferred Securities, or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
the Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Company expressly
appoints a trustee of such successor entity possessing the same powers and
duties as the Property Trustee in its capacity as the holder of the
Subordinated Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed (including, if applicable, The Nasdaq Stock Market's
National Market), if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, (v) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Company has received an opinion from independent counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither Lakeland Trust nor such successor entity will be required to register
as an "investment company" under the Investment Company Act, and (vi) the
Company owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, Lakeland Trust will not, except with the consent of holders of
100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other Person or
permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause Lakeland Trust or the successor
entity to be classified as other than a grantor trust for United States federal
income tax purposes.

<PAGE> 28
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT

Except as provided below and under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by the Trust
Act and the Trust Agreement, the holders of the Preferred Securities will have
no voting rights.

The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) with respect to acceptance of
appointment by a successor trustee, (ii) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement (provided such amendment is not
inconsistent with the other provisions of the Trust Agreement), (iii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as is necessary to ensure that Lakeland Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that Lakeland Trust will not
be required to register as an "investment company" under the Investment
Company Act, or (iv) to reduce or increase the Liquidation Amount per Trust
Security and simultaneously to increase or decrease the number of Trust
Securities issued and outstanding solely for the purpose of maintaining the
eligibility of the Preferred Securities for listing or quotation on any
national securities exchange or other organization on which the Preferred
Securities are then listed or quoted (including, if applicable, The Nasdaq
Stock Market's National Market); provided, however, that in the case of clause
(ii), such action may not adversely affect in any material respect the
interests of any holder of Trust Securities and that, in the case of clause
(iv), the aggregate Liquidation Amount of the Trust Securities outstanding,
upon completion of any such reduction, must be the same as the aggregate
Liquidation Amount of the Trust Securities outstanding immediately prior to any
such reduction, and any amendments of such Trust Agreement will become
effective when notice thereof is given to the holders of Trust Securities (or,
in the case of an amendment pursuant to clause (iv), as of the date specified
in the notice). The Trust Agreement may be amended by the Trustees and the
Company with (i) the consent of holders representing not less than a majority
in the aggregate Liquidation Amount of the outstanding Trust Securities, and
(ii) receipt by the Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the status of Lakeland Trust as a grantor
trust for United States federal income tax purposes or its exemption from
status as an "investment company" under the Investment Company Act.
Notwithstanding anything in this paragraph to the contrary, without the consent
of each holder of Trust Securities, the Trust Agreement may not be amended to
(a) change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made
in respect of the Trust Securities as of a specified date, or (b) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.

The Trustees will not, so long as any Subordinated Debentures are held by
the Property Trustee, (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures will be due and payable, or (iv)
consent to any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent is required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Preferred Securities; provided, however,
that where a consent under the Indenture requires the consent of each holder of
Subordinated Debentures affected thereby, no such consent will be given by the
Property Trustee without the prior consent of each holder of the Preferred
Securities. The Trustees may not revoke any action previously authorized or
approved by a vote of the holders of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The Property
Trustee will notify each holder of Preferred Securities of any notice of
default with respect to the Subordinated Debentures. In addition to obtaining
the foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Trustees must obtain an opinion of
counsel experienced in such matters to the effect that Lakeland Trust will not
be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.

Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written

<PAGE> 29
consent of such holders is to be taken, to be given to each holder of record of
Preferred Securities in the manner set forth in the Trust Agreement.

No vote or consent of the holders of Preferred Securities will be required
for Lakeland Trust to redeem and cancel its Preferred Securities in accordance
with the Trust Agreement.

Notwithstanding the fact that holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee will, for purposes of such vote or
consent, be treated as if they were not outstanding.

PAYMENT AND PAYING AGENT

Payments in respect of the Preferred Securities will be made by check
mailed to the address of the holder entitled thereto as such address will
appear on the register of holders of the Preferred Securities. The paying agent
for the Preferred Securities will initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Company. In the event that the Property Trustee
no longer is the paying agent for the Preferred Securities, the Administrative
Trustees will appoint a successor (which must be a bank or trust company
acceptable to the Administrative Trustees and the Company) to act as paying
agent.

REGISTRAR AND TRANSFER AGENT

The Property Trustee will act as the registrar and the transfer agent for
the Preferred Securities. Registration of transfers of Preferred Securities
will be effected without charge by or on behalf of Lakeland Trust, but upon
payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. Lakeland Trust will not be required
to register or cause to be registered the transfer of Preferred Securities
after such Preferred Securities have been called for redemption.

INFORMATION CONCERNING THE PROPERTY TRUSTEE

The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the Trust Agreement and, after such Event of
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the Trust Agreement or is unsure of the application of any provision of the
Trust Agreement, and the matter is not one on which holders of Preferred
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee will take such action as is directed by the Company and if not so
directed, will take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for
its own bad faith, negligence or willful misconduct.

MISCELLANEOUS

The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate Lakeland Trust in such a way that Lakeland Trust will
not be deemed to be an "investment company" required to be registered under
the Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. The Company and the Administrative
Trustees are authorized, in this connection, to take any action, not
inconsistent with applicable law, the certificate of trust of Lakeland Trust or
the Trust Agreement, that the Company and the Administrative Trustees determine
in their discretion to be necessary or desirable for such purposes.

Holders of the Preferred Securities have no preemptive or similar rights.

The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.

<PAGE> 30
DESCRIPTION OF THE SUBORDINATED DEBENTURES

Concurrently with the issuance of the Preferred Securities, Lakeland Trust
will invest the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in the Subordinated Debentures issued by the
Company. The Subordinated Debentures will be issued as unsecured debt under the
Indenture, to be dated as of , 1997 (the "Indenture"), between the
Company and State Street Bank and Trust Company as trustee (the "Debenture
Trustee"). The Indenture will be qualified as an indenture under the Trust
Indenture Act. The following summary of the material terms and provisions of
the Subordinated Debentures and the Indenture does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, the
Indenture and to the Trust Indenture Act. Wherever particular defined terms of
the Indenture are referred to, but not defined herein, such defined terms are
incorporated herein by reference. The form of the Indenture has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.

GENERAL

The Subordinated Debentures will be limited in aggregate principal amount
to approximately $18,556,710 (or up to $20,618,560 if the option described
under the heading "Underwriting" is exercised by the Underwriter), such
amount being the sum of the aggregate stated Liquidation Amount of the Trust
Securities. The Subordinated Debentures will bear interest at the annual rate
of % of the principal amount thereof, payable quarterly in arrears on March
31, June 30, September 30, and December 31 of each year (each, an "Interest
Payment Date") beginning September 30, 1997, to the Person (as defined in the
Indenture) in whose name each Subordinated Debenture is registered, subject to
certain exceptions, at the close of business on the fifteenth day of the last
month of the calendar quarter. It is anticipated that, until the liquidation,
if any, of Lakeland Trust, the Subordinated Debentures will be held in the name
of the Property Trustee in trust for the benefit of the holders of the
Preferred Securities. The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on the Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with the same force and
effect as if made on the date such payment was originally due and payable.
Accrued interest that is not paid on the applicable Interest Payment Date will
bear additional interest on the amount thereof (to the extent permitted by law)
at the rate per annum of % thereof, compounded quarterly. The term
"interest," as used herein, includes quarterly interest payments, interest on
quarterly interest payments not paid on the applicable Interest Payment Date
and Additional Payment, as applicable.

The Subordinated Debentures will mature on September 30, 2027 (such date,
as it may be shortened or extended as hereinafter described, the "Stated
Maturity"). Such date may be shortened at any time by the Company to any date
not earlier than September 30, 2002, subject to the Company having received
prior approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended
at any time at the election of the Company but in no event to a date later than
September 30, 2036, provided that at the time such election is made and at the
time of extension (i) the Company is not in bankruptcy, otherwise insolvent or
in liquidation, (ii) the Company is not in default in the payment of any
interest or principal on the Subordinated Debentures, and (iii) Lakeland Trust
is not in arrears on payments of Distributions on the Preferred Securities and
no deferred Distributions are accumulated. In the event that the Company elects
to shorten or extend the Stated Maturity of the Subordinated Debentures, it
will give notice thereof to the Debenture Trustee, Lakeland Trust and to the
holders of the Subordinated Debentures no more than 180 days and no less than
90 days prior to the effectiveness thereof. The Company will not have the right
to purchase the Subordinated Debentures, in whole or in part, from Lakeland
Trust until after September 30, 2002, unless a Tax Event, a Capital Treatment
Event or an Investment Company Event has occurred and is continuing.

The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt, Subordinated Debt and
Additional Senior Obligations of the Company. Because the Company is a holding
company, the right of the Company to participate in any distribution of assets
of the Bank, upon the Bank's liquidation or reorganization or otherwise (and
thus the ability of holders of the Subordinated Debentures to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of the Bank, except to the extent that the Company may itself be recognized as
a creditor of the Bank. The Subordinated Debentures will, therefore, be
effectively subordinated to all existing and future liabilities of the Bank,
and holders of Subordinated Debentures should look only to the assets of the
Company for payments on the Subordinated Debentures. The Indenture does not

<PAGE> 31
limit the incurrence or issuance of other secured or unsecured debt of the
Company, including Senior Debt, Subordinated Debt and Additional Senior
Obligations, whether under the Indenture or any existing indenture or other
indenture that the Company may enter into in the future or otherwise. See
"--Subordination."

The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.

OPTION TO EXTEND INTEREST PAYMENT PERIOD

The Company has the right under the Indenture at any time during the term
of the Subordinated Debentures, so long as no Debenture Event of Default has
occurred and is continuing, to defer the payment of interest at any time, or
from time to time (each, an "Extended Interest Payment Period"). The right to
defer the payment of interest on the Subordinated Debentures is limited,
however, to a period, in each instance, not exceeding 20 consecutive calendar
quarters and no Extended Interest Payment Period may extend beyond the Stated
Maturity of the Subordinated Debentures. At the end of each Extended Interest
Payment Period, the Company must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of %, compounded
quarterly, to the extent permitted by applicable law). During an Extended
Interest Payment Period, interest will continue to accrue and holders of
Subordinated Debentures (or the holders of Preferred Securities if such
securities are then outstanding) will be required to accrue and recognize
income for United States federal income tax purposes. See "Certain Federal
Income Tax Consequences--Potential Extension of Interest Payment Period and
Original Issue Discount."

During any such Extended Interest Payment Period, the Company may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's capital
stock (other than (a) dividends or distributions in common stock of the
Company, any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (b) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees), (ii) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu with or junior in interest to the Subordinated Debentures or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
or junior in interest to the Subordinated Debentures (other than payments under
the Guarantee), or (iii) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Securities. Prior to the
termination of any such Extended Interest Payment Period, the Company may
further defer the payment of interest; provided that no Extended Interest
Payment Period may exceed 20 consecutive calendar quarters or extend beyond the
Stated Maturity of the Subordinated Debentures. Upon the termination of any
such Extended Interest Payment Period and the payment of all amounts then due
on any Interest Payment Date, the Company may elect to begin a new Extended
Interest Payment Period subject to the above requirements. No interest will be
due and payable during an Extended Interest Payment Period, except at the end
thereof. The Company has no present intention of exercising its rights to defer
payments of interest on the Subordinated Debentures. The Company must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of such Extended Interest Payment Period at least two Business
Days prior to the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities would have been payable except for the
election to begin such Extended Interest Payment Period, or (ii) the date
Lakeland Trust is required to give notice of the record date, or the date such
Distributions are payable, to The Nasdaq Stock Market's National Market (or
other applicable self-regulatory organization) or to holders of the Preferred
Securities, but in any event at least one Business Day before such record date.
Subject to the foregoing, there is no limitation on the number of times that
the Company may elect to begin an Extended Interest Payment Period.

ADDITIONAL SUMS

If Lakeland Trust or the Property Trustee is required to pay any additional
taxes, duties or other governmental charges as a result of the occurrence of a
Tax Event, the Company will pay to the recordholders of the Subordinated
Debentures as additional amounts (referred to herein as "Additional Payment")
on the Subordinated Debentures such additional amounts as may be required so
that the net amounts received and retained by Lakeland Trust

<PAGE> 32
after paying any such additional taxes, duties or other governmental charges
will not be less than the amounts Lakeland Trust would have received had such
additional taxes, duties or other governmental charges not been imposed.

REDEMPTION

The Company will have the right to redeem the Subordinated Debentures prior
to maturity (i) on or after September 30, 2002, in whole at any time or in part
from time to time, or (ii) at any time in whole (but not in part), within 180
days following the occurrence of a Tax Event, a Capital Treatment Event or an
Investment Company Event, in each case at a redemption price equal to the
accrued and unpaid interest on the Subordinated Debentures so redeemed to the
date fixed for redemption, plus 100% of the principal amount thereof. Any such
redemption prior to the Stated Maturity will be subject to prior approval of
the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.

"Tax Event" means the receipt by Lakeland Trust of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) interest payable by the Company on the Subordinated
Debentures is not, or within 90 days of the date of such opinion will not be,
deductible by the Company, in whole or in part, for United States federal
income tax purposes, (ii) Lakeland Trust is, or will be within 90 days after
the date of such opinion of counsel, subject to United States federal income
tax with respect to income received or accrued on the Subordinated Debentures,
or (iii) Lakeland Trust is, or will be within 90 days after the date of such
opinion of counsel, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges. The Company must request and
receive an opinion with regard to such matters within a reasonable period of
time after it becomes aware of the possible occurrence of any of the events
described in clauses (i) through (iii) above.

"Capital Treatment Event" means the receipt by Lakeland Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such proposed change,
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk of impairment of the Company's ability to treat the
aggregate Liquidation Amount of the Preferred Securities (or any substantial
portion thereof) as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company.

"Investment Company Event" means the receipt by Lakeland Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, Lakeland Trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act, which change becomes effective on or after the date
of original issuance of the Preferred Securities.

Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Subordinated Debentures to
be redeemed at its registered address. Unless the Company defaults in payment
of the redemption price for the Subordinated Debentures, on and after the
redemption date interest will cease to accrue on such Subordinated Debentures
or portions thereof called for redemption.

The Subordinated Debentures will not be subject to any sinking fund.

DISTRIBUTION UPON LIQUIDATION

As described under "Description of the Preferred Securities--Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of Lakeland Trust, the Subordinated Debentures may be distributed
to the holders of the Preferred Securities in liquidation of Lakeland Trust
after satisfaction of liabilities to creditors of Lakeland Trust as provided by
applicable law. Any such distribution will be subject to receipt of prior

<PAGE> 33
approval by the Federal Reserve if then required under applicable policies or
guidelines of the Federal Reserve. If the Subordinated Debentures are
distributed to the holders of Preferred Securities upon the liquidation of
Lakeland Trust, the Company will use its best efforts to list the Subordinated
Debentures on The Nasdaq Stock Market's National Market or such stock
exchanges, if any, on which the Preferred Securities are then listed. There can
be no assurance as to the market price of any Subordinated Debentures that may
be distributed to the holders of Preferred Securities.

RESTRICTIONS ON CERTAIN PAYMENTS

If at any time (i) there has occurred a Debenture Event of Default, (ii)
the Company is in default with respect to its obligations under the Guarantee,
or (iii) the Company has given notice of its election of an Extended Interest
Payment Period as provided in the Indenture with respect to the Subordinated
Debentures and has not rescinded such notice, or such Extended Interest Payment
Period, or any extension thereof, is continuing, the Company will not (1)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Company's capital
stock (other than (a) dividends or distributions in common stock of the
Company, any declaration of a non-cash dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, and (b) purchases of common stock of the Company related to
the rights under any of the Company's benefit plans for its directors, officers
or employees), (2) make any payment of principal, interest or premium, if any,
on or repay or repurchase or redeem any debt securities of the Company that
rank pari passu with or junior in interest to the Subordinated Debentures or
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any subsidiary of the Company if such guarantee ranks pari
passu or junior in interest to the Subordinated Debentures (other than payments
under the Guarantee), or (3) redeem, purchase or acquire less than all of the
Subordinated Debentures or any of the Preferred Stock.

SUBORDINATION

The Indenture provides that the Subordinated Debentures issued thereunder
are subordinated and junior in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceedings of the Company, the holders of Senior Debt, Subordinated
Debt and Additional Senior Obligations of the Company will first be entitled to
receive payment in full of principal of (and premium, if any) and interest, if
any, on such Senior Debt, Subordinated Debt and Additional Senior Obligations
of the Company before the holders of Subordinated Debentures will be entitled
to receive or retain any payment in respect of the principal of or interest on
the Subordinated Debentures.

In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company outstanding at the time of such acceleration
will first be entitled to receive payment in full of all amounts due thereon
(including any amounts due upon acceleration) before the holders of the
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the principal of or interest on the Subordinated Debentures.

No payments on account of principal or interest in respect of the
Subordinated Debentures may be made if there has occurred and is continuing a
default in any payment with respect to Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company or an event of default with
respect to any Senior Debt, Subordinated Debt or Additional Senior Obligations
of the Company resulting in the acceleration of the maturity thereof, or if any
judicial proceeding is pending with respect to any such default.

"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed, (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person, (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business), (v) every capital

<PAGE> 34
lease obligation of such Person, and (vi) and every obligation of the type
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable, directly or indirectly, as obligor or otherwise.

"Senior Debt" means, with respect to the Company, the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt, whether incurred on or prior to the date of the Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debentures
or to other Debt which is pari passu with, or subordinated to, the Subordinated
Debentures; provided, however, that Senior Debt will not be deemed to include
(i) any Debt of the Company which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, (the "Bankruptcy Code"), was without recourse to the Company, (ii)
any Debt of the Company to any of its subsidiaries, (iii) any Debt to any
employee of the Company, (iv) any Debt which by its terms is subordinated to
trade accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Subordinated Debentures as a result of the subordination
provisions of the Indenture would be greater than they otherwise would have
been as a result of any obligation of such holders to pay amounts over to the
obligees on such trade accounts payable or accrued liabilities arising in the
ordinary course of business as a result of subordination provisions to which
such Debt is subject, and (v) Debt which constitutes Subordinated Debt.

"Subordinated Debt" means, with respect to the Company, the principal of
(and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not such claim for post-petition interest is allowed
in such proceeding), on Debt, whether incurred on or prior to the date of the
Indenture or thereafter incurred, which is by its terms expressly provided to
be junior and subordinate to other Debt of the Company (other than the
Subordinated Debentures).

"Additional Senior Obligations" means, with respect to the Company, all
indebtedness, whether incurred on or prior to the date of the Indenture or
thereafter incurred, for claims in respect of derivative products such as
interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that Additional Senior Obligations do not
include claims in respect of Senior Debt or Subordinated Debt or obligations
which, by their terms, are expressly stated to be not superior in right of
payment to the Subordinated Debentures or to rank pari passu in right of
payment with the Subordinated Debentures. "Claim," as used herein, has the
meaning assigned thereto in Section 101(4) of the Bankruptcy Code.

The Indenture places no limitation on the amount of additional Senior Debt,
Subordinated Debt or Additional Senior Obligations that may be incurred by the
Company. The Company expects from time to time to incur indebtedness
constituting Senior Debt, Subordinated Debt and Additional Senior Obligations.
As of June 30, 1997, the Company had no Senior Debt, Subordinated Debt
or Additional Senior Obligations outstanding. Because the Company is a holding
company, the Subordinated Debentures are effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, including
obligations to depositors of the Bank. At June 30, 1997, the Bank had
long-term debt of approximately $25.4 million.

PAYMENT AND PAYING AGENTS

Payment of principal of and any interest on the Subordinated Debentures
will be made at the office of the Debenture Trustee in Boston, Massachusetts,
except that, at the option of the Company, payment of any interest may be made
(i) by check mailed to the address of the Person entitled thereto as such
address appears in the register of holders of the Subordinated Debentures, or
(ii) by transfer to an account maintained by the Person entitled thereto as
specified in the register of holders of the Subordinated Debentures, provided
that proper transfer instructions have been received by the regular record
date. Payment of any interest on Subordinated Debentures will be made to the
Person in whose name such Subordinated Debenture is registered at the close of
business on the regular record date for such interest, except in the case of
defaulted interest. The Company may at any time designate additional paying
agents for the Subordinated Debentures or rescind the designation of any paying
agent for the Subordinated Debentures; however, the Company will at all times
be required to maintain a paying agent in each place of payment for the
Subordinated Debentures.

<PAGE> 35
Any moneys deposited with the Debenture Trustee or any paying agent for the
Subordinated Debentures, or then held by the Company in trust, for the payment
of the principal of or interest on the Subordinated Debentures and remaining
unclaimed for two years after such principal or interest has become due and
payable will be repaid to the Company on May 31 of each year or (if then held
in trust by the Company) will be discharged from such trust and the holder of
such Subordinated Debenture will thereafter look, as a general unsecured
creditor, only to the Company for payment thereof.

REGISTRAR AND TRANSFER AGENT

The Debenture Trustee will act as the registrar and the transfer agent for
the Subordinated Debentures. Subordinated Debentures may be presented for
registration of transfer (with the form of transfer endorsed thereon, or a
satisfactory written instrument of transfer, duly executed), at the office of
the registrar in Boston, Massachusetts. The Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts. The Company may at any time
designate additional transfer agents with respect to the Subordinated
Debentures. In the event of any redemption, neither the Company nor the
Debenture Trustee will be required to (i) issue, register the transfer of or
exchange Subordinated Debentures during a period beginning at the opening of
business 15 days before the day of selection for redemption of Subordinated
Debentures and ending at the close of business on the day of mailing of the
relevant notice of redemption, or (ii) transfer or exchange any Subordinated
Debentures so selected for redemption, except, in the case of any Subordinated
Debentures being redeemed in part, any portion thereof not to be redeemed.

MODIFICATION OF INDENTURE

The Company and the Debenture Trustee may, from time to time without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The
Indenture contains provisions permitting the Company and the Debenture Trustee,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Subordinated Debentures, to modify the Indenture; provided,
that no such modification may, without the consent of the holder of each
outstanding Subordinated Debenture affected by such proposed modification, (i)
extend the fixed maturity of the Subordinated Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or (ii) reduce the percentage of principal amount of
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture; provided that so long as any of the
Preferred Securities remain outstanding, no such modification may be made that
requires the consent of the holders of the Subordinated Debentures, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default may be effective, without the prior consent of the holders of at least
a majority of the aggregate Liquidation Amount of the Preferred Securities and
that if the consent of the holder of each Subordinated Debenture is required,
such modification will not be effective until each holder to Trust Securities
has consented thereto.

DEBENTURE EVENTS OF DEFAULT

The Indenture provides that any one or more of the following described
events with respect to the Subordinated Debentures that has occurred and is
continuing constitutes an event of default (each, a "Debenture Event of
Default") with respect to the Subordinated Debentures:

(i) failure for 30 days to pay any interest on the Subordinated
Debentures when due (subject to the deferral of any due date in the case of
an Extended Interest Payment Period); or

(ii) failure to pay any principal of the Subordinated Debentures when
due whether at maturity, upon redemption, or by declaration or otherwise;
or

(iii) failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or

(iv) certain events of bankruptcy, insolvency or reorganization of the
Company.

<PAGE> 36
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee.
The Debenture Trustee, or the holders of not less than 25% in aggregate
outstanding principal amount of the Subordinated Debentures, may declare the
principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the non-payment of the principal of the Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities will have such right.

The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.

If a Debenture Event of Default has occurred and is continuing, the
Property Trustee will have the right to declare the principal of and the
interest on such Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Subordinated Debentures.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES

If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest on or
principal of the Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Preferred Securities may institute
a legal proceeding directly against the Company for enforcement of payment to
such holder of the principal of or interest on such Subordinated Debentures
having a principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities of such holder (a "Direct Action"). In connection with
such Direct Action, the Company will have a right of set-off under the
Indenture to the extent of any payment made by the Company to such holder of
Preferred Securities in the Direct Action. The Company may not amend the
Indenture to remove the foregoing right to bring a Direct Action without the
prior written consent of the holders of all of the Preferred Securities. If the
right to bring a Direct Action is removed, Lakeland Trust may become subject to
the reporting obligations under the Exchange Act.

The holders of the Preferred Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Subordinated Debentures unless there has been
an Event of Default under the Trust Agreement. See "Description of the
Preferred Securities--Events of Default; Notice."

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS

The Company may not consolidate with or merge into any other Person or
convey or transfer its properties and assets substantially as an entirety to
any Person, and any Person may not consolidate with or merge into the Company
or sell, convey, transfer or otherwise dispose of its properties and assets
substantially as an entirety to the Company, unless (i) in the event the
Company consolidates with or merges into another Person or conveys or transfers
its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes by
supplemental indenture the Company's obligations on the Subordinated Debentures
issued under the Indenture, (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time
or both, would become a Debenture Event of Default, has occurred and is
continuing, and (iii) certain other conditions as prescribed in the Indenture
are met.

SATISFACTION AND DISCHARGE

The Indenture will cease to be of further effect (except as to the
Company's obligations to pay certain sums due pursuant to the Indenture and to
provide certain officers' certificates and opinions of counsel described
therein) and the Company will be deemed to have satisfied and discharged the
Indenture when, among other things, all Subordinated Debentures not previously
delivered to the Debenture Trustee for cancellation (i) have become due and
payable, or (ii) will become due and payable at their Stated Maturity within
one year or are to be called for

<PAGE> 37
redemption within one year, and the Company deposits or causes to be deposited
with the Debenture Trustee trust funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and interest to the date of the deposit or to
the Stated Maturity or redemption date, as the case may be.

GOVERNING LAW

The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of Indiana.

INFORMATION CONCERNING THE DEBENTURE TRUSTEE

The Debenture Trustee has and is subject to all of the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Debenture Trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.

MISCELLANEOUS

The Company has agreed, pursuant to the Indenture, for so long as Trust
Securities remain outstanding, (i) to maintain directly or indirectly 100%
ownership of the Common Securities of Lakeland Trust (provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities), (ii) not to voluntarily
terminate, wind up or liquidate Lakeland Trust, except upon prior approval of
the Federal Reserve if then so required under applicable capital guidelines or
policies of the Federal Reserve, and (a) in connection with a distribution of
Subordinated Debentures to the holders of the Preferred Securities in
liquidation of Lakeland Trust, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Trust Agreement, to cause Lakeland Trust to remain classified as a grantor
trust and not as an association taxable as a corporation for United States
federal income tax purposes.

<PAGE> 38
DESCRIPTION OF THE GUARANTEE

The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred
Securities. The Guarantee will be qualified as an indenture under the Trust
Indenture Act. The Guarantee Trustee, State Street Bank and Trust Company, will
act as indenture trustee under the Guarantee for purposes of complying with the
provisions of the Trust Indenture Act and will hold the Guarantee for the
benefit of the holders of the Preferred Securities. The following summary of
the material terms and provisions of the Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of the Guarantee and the Trust Indenture Act. Wherever
particular defined terms of the Guarantee are referred to, but not defined
herein, such defined terms are incorporated herein by reference. The form of
the Guarantee has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.

GENERAL

The Company will, pursuant to the Guarantee, irrevocably agree to pay in
full on a subordinated basis, to the extent set forth therein, the Guarantee
Payments (as defined below) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that
Lakeland Trust may have or assert other than the defense of payment. The
following payments with respect to the Preferred Securities, to the extent not
paid by or on behalf of Lakeland Trust (the "Guarantee Payments"), will be
subject to the Guarantee: (i) any accrued and unpaid Distributions required to
be paid on the Preferred Securities, to the extent that Lakeland Trust has
funds available therefor at such time, (ii) the Redemption Price with respect
to any Preferred Securities called for redemption to the extent that Lakeland
Trust has funds available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of Lakeland Trust (other
than in connection with the distribution of Subordinated Debentures to the
holders of Preferred Securities or a redemption of all of the Preferred
Securities), the lesser of (a) the amount of the Liquidation Distribution, to
the extent Lakeland Trust has funds available therefor at such time, and (b)
the amount of assets of Lakeland Trust remaining available for distribution to
holders of Preferred Securities in liquidation of Lakeland Trust. The
obligation of the Company to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Company to the holders of the
Preferred Securities or by causing Lakeland Trust to pay such amounts to such
holders.

The Guarantee will not apply to any payment of Distributions except to the
extent Lakeland Trust has funds available therefor. If the Company does not
make interest payments on the Subordinated Debentures held by Lakeland Trust,
Lakeland Trust will not pay Distributions on the Preferred Securities and will
not have funds legally available therefor.

STATUS OF THE GUARANTEE

The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company in the same
manner as the Subordinated Debentures. The Guarantee does not place a
limitation on the amount of additional Senior Debt, Subordinated Debt or
Additional Senior Obligations that may be incurred by the Company. The Company
expects from time to time to incur additional indebtedness constituting Senior
Debt, Subordinated Debt and Additional Senior Obligations.

The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other Person). The Guarantee will
not be discharged except by payment of the Guarantee Payments in full to the
extent not paid by Lakeland Trust or upon distribution of the Subordinated
Debentures to the holders of the Preferred Securities. Because the Company is a
holding company, the right of the Company to participate in any distribution of
assets of the Bank upon the Bank's liquidation or reorganization or otherwise
is subject to the prior claims of creditors of the Bank, except to the extent
the Company may itself be recognized as a creditor of the Bank. The Company's
obligations under the Guarantee, therefore, will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and
claimants should look only to the assets of the Company for payments
thereunder.

<PAGE> 39
AMENDMENTS AND ASSIGNMENT

Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate Liquidation Amount of
the outstanding Preferred Securities. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in the Guarantee will bind the successors, assigns,
receivers, trustees and representatives of the Company and will inure to the
benefit of the holders of the Preferred Securities then outstanding.

EVENTS OF DEFAULT

An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.

Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against Lakeland Trust, the Guarantee
Trustee or any other Person.

The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.

INFORMATION CONCERNING THE GUARANTEE TRUSTEE

The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to such provisions, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities, unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.

TERMINATION OF THE GUARANTEE

The Guarantee will terminate and be of no further force and effect upon (a)
full payment of the Redemption Price of the Preferred Securities, (b) full
payment of the amounts payable upon liquidation of Lakeland Trust, or (c)
distribution of the Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the Preferred Securities must
restore payment of any sums paid under such Preferred Securities or the
Guarantee.

GOVERNING LAW

The Guarantee will be governed by and construed in accordance with the laws
of the State of Indiana.

EXPENSE AGREEMENT

The Company will, pursuant to the Agreement as to Expenses and Liabilities
entered into by it under the Trust Agreement (the "Expense Agreement"),
irrevocably and unconditionally guarantee to each person or entity to whom
Lakeland Trust becomes indebted or liable, the full payment of any costs,
expenses or liabilities of Lakeland Trust, other than obligations of Lakeland
Trust to pay to the holders of the Preferred Securities or other similar
interests in Lakeland Trust of the amounts due such holders pursuant to the
terms of the Preferred Securities or such other similar interests, as the case
may be. Third party creditors of Lakeland Trust may proceed directly against
the Company under the Expense Agreement, regardless of whether such creditors
had notice of the Expense Agreement.

<PAGE> 40
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES AND THE GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the Preferred Securities
(to the extent Lakeland Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of the Guarantee." The Company and Lakeland
Trust believe that, taken together, the obligations of the Company under the
Subordinated Debentures, the Indenture, the Trust Agreement, the Expense
Agreement, and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee, on a subordinated basis, of payment of Distributions
and other amounts due on the Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the obligations of Lakeland Trust under the
Preferred Securities. If and to the extent that the Company does not make
payments on the Subordinated Debentures, Lakeland Trust will not pay
Distributions or other amounts due on the Preferred Securities. The Guarantee
does not cover payment of Distributions when Lakeland Trust does not have
sufficient funds to pay such Distributions. In such event, the remedy of a
holder of Preferred Securities is to institute a legal proceeding directly
against the Company for enforcement of payment of such Distributions to such
holder. The obligations of the Company under the Guarantee are subordinate and
junior in right of payment to all Senior Debt, Subordinated Debt and Additional
Senior Obligations of the Company.

SUFFICIENCY OF PAYMENTS

As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of the Subordinated Debentures will
be equal to the sum of the aggregate stated Liquidation Amount of the Trust
Securities, (ii) the interest rate and interest and other payment dates on the
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Preferred Securities, (iii) the Company will pay
for all and any costs, expenses and liabilities of Lakeland Trust (except the
obligations of Lakeland Trust to holders of the Preferred Securities), and (iv)
the Trust Agreement further provides that Lakeland Trust will not engage in any
activity that is not consistent with the limited purposes of Lakeland Trust.

ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES

A holder of any Preferred Security may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee, Lakeland
Trust or any other Person. A default or event of default under any Senior Debt,
Subordinated Debt or Additional Senior Obligations of the Company would not
constitute a default or Event of Default. In the event, however, of payment
defaults under, or acceleration of, Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company, the subordination provisions of
the Indenture provide that no payments may be made in respect of the
Subordinated Debentures until such Senior Debt, Subordinated Debt or Additional
Senior Obligations has been paid in full or any payment default thereunder has
been cured or waived. Failure to make required payments on the Subordinated
Debentures would constitute an Event of Default.

LIMITED PURPOSE OF LAKELAND TRUST

The Preferred Securities evidence a preferred undivided beneficial interest
in the assets of Lakeland Trust. Lakeland Trust exists for the sole purpose of
issuing the Trust Securities and investing the proceeds thereof in Subordinated
Debentures. A principal difference between the rights of a holder of a
Preferred Security and the rights of a holder of a Subordinated Debenture is
that a holder of a Subordinated Debenture is entitled to receive from the
Company the principal amount of and interest accrued on Subordinated Debentures
held, while a holder of Preferred Securities is entitled to receive
Distributions from Lakeland Trust (or from the Company under the Guarantee) if
and to the extent Lakeland Trust has funds available for the payment of such
Distributions.

<PAGE> 41
RIGHTS UPON TERMINATION

Upon any voluntary or involuntary termination, winding-up or liquidation of
Lakeland Trust involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by Lakeland Trust, the Liquidation Distribution in cash. See "Description
of the Preferred Securities--Liquidation Distribution Upon Termination." Upon
any voluntary or involuntary liquidation or bankruptcy of the Company, the
Property Trustee, as holder of the Subordinated Debentures, would be a
subordinated creditor of the Company, subordinated in right of payment to all
Senior Debt, Subordinated Debt and Additional Senior Obligations of the Company
(as set forth in the Indenture), but entitled to receive payment in full of
principal and interest before any stockholders of the Company receive payments
or distributions. Since the Company is the guarantor under the Guarantee and
has agreed to pay for all costs, expenses and liabilities of Lakeland Trust
(other than the obligations of Lakeland Trust to the holders of its Preferred
Securities), the positions of a holder of the Preferred Securities and a holder
of the Subordinated Debentures relative to other creditors and to stockholders
of the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

GENERAL

The following is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
which has been passed upon by Lewis, Rice & Fingersh, L.C., special counsel to
the Company insofar as it relates to matters of law and legal conclusions. The
conclusions expressed herein are based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), regulations thereunder and
current administrative rulings and court decisions, all of which are subject to
change at any time, with possible retroactive effect. Subsequent changes may
cause tax consequences to vary substantially from the consequences described
below. Furthermore, the authorities on which the following summary is based are
subject to various interpretations, and it is therefore possible that the
United States federal income tax treatment of the purchase, ownership, and
disposition of Preferred Securities may differ from the treatment described
below.

No attempt has been made in the following discussion to comment upon all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and
who acquire Preferred Securities on their original issue at their offering
price and hold Preferred Securities as capital assets. The discussion has only
limited application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address all the tax consequences that may be
relevant to holders who may be subject to special tax treatment, such as, for
example, banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors, or persons that will hold the Preferred Securities as a position in
a "straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. The following summary also does not address the tax consequences
to persons that have a functional currency other than the United States dollar
or the tax consequences to stockholders, partners or beneficiaries of a holder
of Preferred Securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the Preferred
Securities. Accordingly, each prospective investor should consult, and should
rely exclusively on, such investor's own tax advisors in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of Preferred Securities.

CLASSIFICATION OF THE SUBORDINATED DEBENTURES

The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a
Preferred Security, each holder covenants to treat the Subordinated Debentures
as indebtedness and the Preferred Securities as evidence of an indirect
beneficial ownership interest in the Subordinated Debentures. No assurance can
be given, however, that such position of the Company will not be challenged by
the Internal Revenue Service or, if challenged, that such a challenge will not
be successful. The remainder of this discussion assumes that the Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company.

<PAGE> 42
CLASSIFICATION OF LAKELAND TRUST

Under current law and assuming full compliance with the terms of the Trust
Agreement and Indenture (and certain other documents described herein),
Lakeland Trust will be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Preferred Securities generally will be treated as owning an undivided
beneficial interest in the Subordinated Debentures, and each holder will be
required to include in his gross income any OID accrued with respect to his
allocable share of the Subordinated Debentures whether or not cash is actually
distributed to such holder.

POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT

Under recently issued Treasury regulations (the "Regulations"), a debt
instrument will be deemed to be issued with OID if there is more than a
"remote" contingency that periodic stated interest payments due on the
instrument will not be timely paid. Because the exercise by the Company of its
option to defer the payment of stated interest on the Subordinated Debentures
would prevent the Company from declaring dividends on any class of equity, the
Company believes that the likelihood of its exercising the option is "remote"
within the meaning of the Regulations. As a result, the Company intends to take
the position that the Subordinated Debentures will not be deemed to be issued
with OID. Accordingly, based on this position, stated interest payments on the
Subordinated Debentures will be includible in the ordinary income of a holder
at the time that such payments are paid or accrued in accordance with the
holder's regular method of accounting. Because the Regulations have not yet
been addressed in any published rulings or other published interpretations
issued by the Internal Revenue Service, it is possible that the Internal
Revenue Service could take a position contrary to the position taken by the
Company.

If the Company were to exercise its option to defer the payment of stated
interest on the Subordinated Debentures, the Subordinated Debentures would be
treated, solely for purposes of the OID rules, as being "re-issued" at such
time with OID. The amount of interest income includible in the taxable income
of a holder of the Subordinated Debentures would be determined on the basis of
a constant yield method over the remaining term of the instrument regardless of
the holder's method of tax accounting and the actual receipt of future payments
of stated interest on the Subordinated Debentures would no longer be separately
reported as taxable income. Consequently, a holder of Preferred Securities
would be required to include OID in ordinary income, on a current basis, over
the period that the instrument is held even though the Company would not be
making any actual cash payments during the Extended Interest Payment Period.
The amount of OID that would accrue, in the aggregate, during the Extended
Interest Payment Period would be approximately equal to the amount of the cash
payment due at the end of such period. Moreover, under the Regulations, if the
option to defer the payment of interest income with respect to the Subordinated
Debentures was determined not to be "remote," the Subordinated Debentures
would be treated as having been originally issued with OID. In such event, all
of a holder's taxable interest income would be accounted for as OID and any OID
included in income would increase the holder's adjusted tax basis in the
Subordinated Debentures and the holder's actual receipt of interest payments
would reduce such basis.

Because income on the Preferred Securities will constitute interest income
for United States federal income tax purposes, corporate holders of Preferred
Securities will not be entitled to claim a dividends received deduction in
respect of such income.

MARKET DISCOUNT AND ACQUISITION PREMIUM

Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interests in the Subordinated Debentures with "market
discount" or "acquisition premium" as such phrases are defined for United
States federal income tax purposes. Such holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Preferred Securities.

RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF LAKELAND TRUST

Under certain circumstances, as described under "Description of the
Preferred Securities--Redemption" and "--Liquidation Distribution Upon
Termination," the Subordinated Debentures may be distributed to holders of
Preferred Securities upon a liquidation of Lakeland Trust. Under current United
States federal income tax law, such a

<PAGE> 43
distribution would be treated as a nontaxable event to each such holder and
would result in such holder having an adjusted tax basis in the Subordinated
Debentures received in the liquidation equal to such holder's adjusted tax
basis in the Preferred Securities immediately before the distribution. A
holder's holding period in the Subordinated Debentures so received in
liquidation of Lakeland Trust would include the period for which such holder
held the Preferred Securities.

If, however, a Tax Event occurs which results in Lakeland Trust being
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to holders of the Preferred Securities. Under
certain circumstances described herein, the Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed Preferred Securities, and a holder would recognize
gain or loss as if the holder sold such Preferred Securities for cash. See
"Description of the Preferred Securities--Redemption" and "--Liquidation
Distribution Upon Termination."

DISPOSITION OF PREFERRED SECURITIES

Upon the sale of the Preferred Securities, a holder will recognize a gain
or loss in an amount equal to the difference between his adjusted tax basis in
the Preferred Securities and the amount realized in the sale (except to the
extent of any amount received in respect of accrued but unpaid interest not
previously included in income). A holder's adjusted tax basis in the Preferred
Securities generally will be its initial purchase price increased by OID (if
any) previously includible in the holder's gross income to the date of
disposition and decreased by payments (if any) received on the Preferred
Securities in respect of OID to the date of disposition. Such gain or loss
generally will be a capital gain or loss and will be a long-term capital gain
or loss if the Preferred Securities have been held for more than one year at
the time of sale.

The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest (or OID if the Subordinated
Debentures are treated as having been issued, or reissued, with OID) with
respect to the underlying Subordinated Debentures. A holder who disposes of his
Preferred Securities between record payment dates will be required to include
in ordinary income any portion of the amount realized that is attributable to
accrued but unpaid interest (or OID, if any) to the extent not previously
included in income on the holder's pro rata share of the underlying
Subordinated Debentures during the taxable year of sale through the date of
disposition. To the extent that the amount realized in the sale is less than
the holder's adjusted tax basis, a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.

EFFECT OF PROPOSED CHANGES IN TAX LAWS

<PAGE> 44
However, there can be no assurance that the Act will be finally enacted
in its current form. Nor can there be any assurance that other legislation
enacted after the date hereof will not otherwise adversely affect the ability
of the Company to deduct the interest payable on the Subordinated Debentures.
Consequently, there can be no assurance that a Tax Event will not occur. A Tax
Event would permit the Company, upon approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal
Reserve, to cause a redemption of the Preferred Securities before, as well as
after, September 30, 2002. See "Description of the Subordinated Debentures--
Redemption" and "Description of the Preferred Securities--Redemption--Tax
Event Redemption, Capital Treatment Event Redemption or Investment Company
Event Redemption."

BACKUP WITHHOLDING AND INFORMATION REPORTING

The amount of interest paid on the Preferred Securities held of record by
individual citizens or residents of the United States, or certain trusts,
estates, and partnerships, will be reported to the Internal Revenue Service on
Forms 1099, which forms should be mailed to such holders of Preferred
Securities by January 31 following each calendar year. Payments, including
interest, made on, and proceeds from the sale of, the Preferred Securities may
be subject to a "backup" withholding tax (currently at 31%) unless the holder
complies with certain identification and other requirements. Any amounts
withheld under the backup withholding rules may be allowed as a credit against
the holder's United States federal income tax liability, provided the required
information is provided to the Internal Revenue Service.

THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF PREFERRED
SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.

ERISA CONSIDERATIONS

Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
("Plans"), generally may purchase Preferred Securities, subject to the
investing fiduciary's determination that the investment in Preferred Securities
satisfies ERISA's fiduciary standards and other requirements applicable to
investments by the Plan.

In any case, the Company and/or any of its affiliates may be considered a
"party in interest" (within the meaning of ERISA) or a "disqualified
person" (within the meaning of Section 4975 of the Code) with respect to
certain plans (generally, Plans maintained or sponsored by, or contributed to
by, any such persons with respect to which the Company or an affiliate is a
fiduciary or Plans for which the Company or an affiliate provides services).
The acquisition and ownership of Preferred Securities by a Plan (or by an
individual retirement arrangement or other Plans described in Section
4975(e)(1) of the Code) with respect to which the Company or any of its
affiliates is considered a party in interest or a disqualified person may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Preferred Securities are acquired pursuant to and in
accordance with an applicable exemption.

As a result, Plans with respect to which the Company or any of its
affiliates is a party in interest or a disqualified person should not acquire
Preferred Securities unless such Preferred Securities are acquired pursuant to
and in accordance with an applicable exemption. Any other Plans or other
entities whose assets include Plan assets subject to ERISA or Section 4975 of
the Code proposing to acquire Preferred Securities should consult with their
own counsel.

<PAGE> 45
UNDERWRITING

Stifel, Nicolaus & Company, Incorporated, the Underwriter, has agreed,
subject to the terms and conditions set forth in the Underwriting Agreement,
the form of which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part, to purchase 1,800,000 Preferred Securities from
Lakeland Trust. The Underwriter has agreed in the Underwriting Agreement,
subject to the terms and conditions set forth therein, to purchase all the
Preferred Securities offered hereby if any of the Preferred Securities are
purchased.

The Underwriter has advised Lakeland Trust that it proposes initially to
offer the Preferred Securities to the public at the public offering price set
forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of $ per Preferred Security. The
Underwriter may allow, and such dealers may reallow, a discount not in excess
of $ per Preferred Security to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed. Because the National Association of Securities Dealers, Inc.
("NASD") is expected to view the Preferred Securities as interests in a
direct participation program, the offering of the Preferred Securities is being
made in compliance with the applicable provisions of Rule 2810 of the NASD's
Conduct Rules.

In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures of the Company,
the Underwriting Agreement provides that the Company will pay as compensation
to the Underwriter arranging the investment therein of such proceeds $ per
Preferred Security (or $ in the aggregate) for the accounts of the
Underwriter.

Lakeland Trust has granted the Underwriter an option to purchase up to an
additional 200,000 Preferred Securities at the initial public offering price.
Such option, which expires 30 days from the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Underwriter
exercises its option to purchase additional Preferred Securities, Lakeland
Trust will issue and sell to the Company additional Common Securities in such
aggregate Liquidation Amount as is required for the Company to continue to hold
Common Securities in an aggregate Liquidation Amount equal to at least 3% of
the total capital of Lakeland Trust and the Company will issue and sell to
Lakeland Trust Subordinated Debentures in an aggregate principal amount equal
to the total aggregate Liquidation Amount of the additional Preferred
Securities being purchased pursuant to the option.

Application has been made to have the Preferred Securities approved for
quotation on The Nasdaq Stock Market's National Market. The Underwriter has
advised Lakeland Trust that it presently intends to make a market in the
Preferred Securities after the commencement of trading on The Nasdaq Stock
Market's National Market, but no assurances can be made as to the liquidity of
such Preferred Securities or that an active and liquid trading market will
develop or, if developed, that it will continue. The offering price and
distribution rate have been determined by negotiations among representatives of
the Company and the Underwriter, and the offering price of the Preferred
Securities may not be indicative of the market price following the offering.
The Underwriter will have no obligation to make a market in the Preferred
Securities, however, and may cease market-making activities, if commenced, at
any time.

Lakeland Trust and the Company have agreed to indemnify the Underwriter
against, or contribute to payments that the Underwriter may be required to make
in respect of, certain liabilities, including liabilities under the Securities
Act.

In order to facilitate the offering of the Preferred Securities, the
Underwriter may engage in transactions that stabilize, maintain or otherwise
affect the price of the Preferred Securities. Specifically, the Underwriter may
over-allot in connection with the offering, creating a short position in the
Preferred Securities for its own account. In addition, to cover over-allotments
or to stabilize the price of the Preferred Securities, the Underwriter may bid
for, and purchase, the Preferred Securities in the open market. The Underwriter
may reclaim selling concessions allowed to a dealer for distributing the
Preferred Securities in the offering, if the Underwriter repurchases previously
distributed Preferred Securities in transactions to cover short positions in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Preferred Securities above independent
market levels. The Underwriter is not required to engage in these activities,
and may end any of these activities at any time.

<PAGE> 46
VALIDITY OF SECURITIES

Certain matters of Delaware law relating to the validity of the Preferred
Securities, the enforceability of the Trust Agreement and the formation of
Lakeland Trust will be passed upon by Richards, Layton & Finger, special
Delaware counsel to the Company and Lakeland Trust. Certain legal matters for
the Company and Lakeland Trust, including the validity of the Guarantee and the
Subordinated Debentures, will be passed upon for the Company and Lakeland Trust
by Lewis, Rice & Fingersh, L.C., St. Louis, Missouri, counsel to the Company
and Lakeland Trust. Certain legal matters will be passed upon for the
Underwriter by Bryan Cave LLP, St. Louis, Missouri. Counsel for the Company,
Lakeland Trust and the Underwriter will rely on the opinion of Richards, Layton
& Finger as to matters of Delaware law. Certain matters relating to United
States federal income tax considerations will be passed upon for the Company by
Lewis, Rice & Fingersh, L.C.

EXPERTS

The audited consolidated financial statements of the Company and its
subsidiaries incorporated herein by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 have been audited by Crowe,
Chizek and Company LLP, independent certified public accountants, as stated in
their report, which report is incorporated herein by reference and has been so
incorporated in reliance on the report having been given upon the authority of
said firm as experts in accounting and auditing.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, previously filed by the Company with the
Securities and Exchange Commission pursuant to Section 13 of the Exchange Act,
are incorporated herein by reference:

(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996; and

(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997.

All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Preferred Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO TERRY M. WHITE, EXECUTIVE VICE PRESIDENT, SECRETARY AND TREASURER,
LAKELAND FINANCIAL CORPORATION, 202 EAST CENTER STREET, WARSAW, INDIANA 46581.
TELEPHONE REQUESTS MAY BE DIRECTED TO (219) 267-6144.

<PAGE> 47
AVAILABLE INFORMATION

This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company and Lakeland Trust with the Commission under
the Securities Act, with respect to the Preferred Securities, the Subordinated
Debentures and the Guarantee. This Prospectus does not contain all of the
information set forth in such Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission,
although it does include a summary of the material terms of the Trust
Agreement, the Indenture and the Guarantee. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company, Lakeland Trust, the Preferred
Securities, the Subordinated Debentures and the Guarantee. Any statements
contained herein concerning the provisions of any document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission or
incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified
in its entirety by such reference.

The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Lakeland Trust is not currently subject to the
information reporting requirements of the Exchange Act and, although Lakeland
Trust will become subject to such requirements upon the effectiveness of the
Registration Statement, it is not expected that Lakeland Trust will be filing
separate reports under the Exchange Act. The Company's reports, proxy
statements and other information can be inspected and copied at the following
public reference facilities maintained by the Commission: 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York, New
York 10048; and the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material may also be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, upon payment of prescribed rates. The
Commission maintains in Internet web site that contains reports, proxy and
information statements and other information regarding issuers who file
electronically with the Commission. The address of that site is
http://www.sec.gov.

No separate financial statements of Lakeland Trust have been included
herein. The Company does not consider that such financial statements would be
material to holders of Preferred Securities because (i) all of the voting
securities of Lakeland Trust will be owned by the Company, a reporting company
under the Exchange Act, (ii) Lakeland Trust has no independent operations but
exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of Lakeland Trust and investing the proceeds
thereof in Subordinated Debentures issued by the Company, and (iii) the
obligations of the Company described herein to provide certain indemnities in
respect of and be responsible for certain costs, expenses, debts and
liabilities of Lakeland Trust under the Indenture and pursuant to the Trust
Agreement, the guarantee issued by the Company with respect to the Preferred
Securities, the Subordinated Debentures purchased by Lakeland Trust and the
related Indenture, taken together, constitute, in the belief of the Company and
Lakeland Trust, a full and unconditional guarantee of payments due on the
Preferred Securities. See "Description of the Subordinated Debentures" and
"Description of the Guarantee."

<PAGE> 48
- ------------------------------------------------------------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................... 2

Summary Consolidated Financial Data........................................ 7

Risk Factors............................................................... 8

Use of Proceeds............................................................ 13

Market for the Preferred Securities........................................ 13

Accounting Treatment....................................................... 13

Capitalization............................................................. 14

Pro Forma Condensed Consolidated Balance Sheet............................. 15

Description of the Preferred Securities.................................... 17

Description of the Subordinated Debentures................................. 26

Description of the Guarantee............................................... 34

Relationship Among the Preferred Securities, the Subordinated Debentures
and the Guarantee........................................................ 36

Certain Federal Income Tax Consequences.................................... 37

ERISA Considerations....................................................... 40

Underwriting............................................................... 41

Validity of Securities..................................................... 42

Experts.................................................................... 42

Incorporation of Certain Documents by Reference............................ 42

Available Information...................................................... 43
</TABLE>

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY LAKELAND
FINANCIAL CORPORATION, LAKELAND CAPITAL TRUST OR THE UNDERWRITER. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF LAKELAND FINANCIAL CORPORATION SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.

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

1,800,000 PREFERRED SECURITIES

LAKELAND
CAPITAL TRUST

% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $10 PER PREFERRED SECURITY)
GUARANTEED, AS DESCRIBED HEREIN, BY

[LOGO]

LAKELAND
FINANCIAL CORPORATION

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

$18,000,000
% SUBORDINATED DEBENTURES
OF
LAKELAND
FINANCIAL CORPORATION

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

Prospectus
, 1997
------------------------

STIFEL, NICOLAUS & COMPANY
INCORPORATED

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

<PAGE> 49
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14--OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
SEC Registration Fee....................................................... $ 6,061

NASD Filing Fee............................................................ 2,500

Nasdaq Listing Fee......................................................... 15,000

Blue Sky Qualification Fees and Expenses................................... 3,000

Accounting Fees and Expenses............................................... 25,000

Legal Fees and Expenses.................................................... 100,000

Trustees' Fees and Expenses................................................ 20,000

Printing and Engraving Expenses............................................ 35,000

Transfer and Registrar Fees................................................ 5,000

Miscellaneous.............................................................. 38,439
--------

Total.................................................................. $250,000
========
</TABLE>

ITEM 15--INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 23-1-37-9 of the Indiana Business Corporation Law (the "Indiana
Law") provides for "mandatory indemnification," unless limited by the
articles of incorporation, by a corporation against reasonable expenses
incurred by a director who is wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party by reason of
the director being or having been a director of the corporation. Section
23-1-37-10 of the Indiana Law states that a corporation may, in advance of the
final disposition of a proceeding, reimburse reasonable expenses incurred by a
director who is a party to a proceeding if the director furnishes the
corporation with a written affirmation of the director's good faith belief that
the director has met the standard of conduct required by Section 23-1-37-8 of
the Indiana Law, that the director will repay the advance if it is ultimately
determined that he did not meet the standard of conduct required by Section
23-1-37-8 of the Indiana Law, and that those making the decision to reimburse
the director determine that the facts then known would not preclude
indemnification under the Indiana Law.

The Company's Articles of Incorporation and Bylaws extend indemnification
rights to its directors and officers to the fullest extent authorized by the
Indiana Law. In addition, the Articles of Incorporation and Bylaws permit the
Company to maintain insurance to protect itself and any of its directors,
officers or representatives against any liability asserted against such person
and incurred in any such capacity or arising out of such status whether or not
the Company would have the power to indemnify such person under the Indiana
Law.

II-1

<PAGE> 50
ITEM 16--EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

1.1 Form of Underwriting Agreement.

4.1 Form of Indenture.

4.2 Form of Subordinated Debenture (included as an exhibit of
Exhibit 4.1).

4.3 Certificate of Trust of Lakeland Capital Trust.

4.4 Trust Agreement of Lakeland Capital Trust.

4.5 Form of Amended and Restated Trust Agreement.

4.6 Form of Preferred Security Certificate (included as an exhibit
to Exhibit 4.5).

4.7 Form of Preferred Securities Guarantee Agreement.

4.8 Form of Agreement as to Expenses and Liabilities (included as
an exhibit to Exhibit 4.5).

5.1 Opinion of Lewis, Rice & Fingersh, L.C., as to the validity of
the issuance of the Subordinated Debentures.

5.2 Opinion of Richards, Layton & Finger, special Delaware
counsel, as to the legality of the Preferred Securities.

8.1 Opinion of Lewis, Rice & Fingersh, L.C., as to certain federal
income tax matters.

12.1 Statements Regarding Computation of Ratio of Earnings to
Fixed Charges.

23.1 Consent of Crowe, Chizek and Company LLP, Independent
Accountants.

23.2 Consent of Lewis, Rice & Fingersh, L.C. (included in their
opinions filed herewith as Exhibits 5.1 and 8.1).

23.3 Consent of Richards, Layton & Finger (included in their
opinion filed herewith as Exhibit 5.2).

24.1 Power of Attorney (included on the signature page).

25.1 Form T-1 Statement of Eligibility of State Street Bank and
Trust Company to act as trustee under the Indenture.

25.2 Form T-1 Statement of Eligibility of State Street Bank and
Trust Company to act as trustee under the Amended and
Restated Trust Agreement.

25.3 Form T-1 Statement of Eligibility of State Street Bank and
Trust Company to act as trustee under the Preferred
Securities Guarantee Agreement.

(b) Financial Statement Schedules--Not applicable as all required
information is contained in the financial statements and the notes thereto or
in the selected financial data.

ITEM 17--UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the provisions described under
"Item 15--Indemnification of Directors and Officers" above, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

The Company hereby undertakes that: (1) For purposes of determining any
liability under the Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and (2) For
the purpose of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2

<PAGE> 51

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Warsaw, Indiana on July 31, 1997.

LAKELAND FINANCIAL CORPORATION

By: /s/ R. DOUGLAS GRANT
------------------------------------
R. Douglas Grant
Chairman of the Board, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, the undersigned
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Warsaw, Indiana on July 31, 1997.

LAKELAND CAPITAL TRUST

By: /s/ R. DOUGLAS GRANT
------------------------------------
R. Douglas Grant, Trustee

By: /s/ TERRY M. WHITE
------------------------------------
Terry M. White, Trustee

By: /s/ WALTER L. WELDY
------------------------------------
Walter L. Weldy, Trustee

II-3

<PAGE> 52
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints R. Douglas Grant, Terry M. White, Walter L.
Weldy and Paul S. Siebenmorgen and each of them (with full power to each of
them to act alone), his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement, including any
Registration Statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file
the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

/s/ R. DOUGLAS GRANT Chairman of the Board, President and Chief Executive July 31, 1997
- --------------------------------------- Officer (Principal Executive Officer)
R. Douglas Grant

/s/ TERRY M. WHITE Secretary and Treasurer (Principal July 31, 1997
- --------------------------------------- Financial and Accounting Officer)
Terry M. White

/s/ ANNA K. DUFFIN Director July 31, 1997
- ---------------------------------------
Anna K. Duffin

Director , 1997
- ---------------------------------------
Eddie Creighton

/s/ L. CRAIG FULMER Director July 31, 1997
- ---------------------------------------
L. Craig Fulmer

/s/ JERRY L. HELVEY Director July 31, 1997
- ---------------------------------------
Jerry L. Helvey

/s/ KEVIN L. LAMBRIGHT Director July 31, 1997
- ---------------------------------------
Kevin L. Lambright

/s/ ALLAN J. LUDWIG Director July 31, 1997
- ---------------------------------------
Allan J. Ludwig

/s/ J. ALAN MORGAN Director July 31, 1997
- ---------------------------------------
J. Alan Morgan

/s/ RICHARD L. PLETCHER Director July 31, 1997
- ---------------------------------------
Richard L. Pletcher

/s/ JOSEPH P. PROUT Director July 31, 1997
- ---------------------------------------
Joseph P. Prout

Director , 1997
- ---------------------------------------
Terry L. Tucker

/s/ G. L. WHITE Director July 31, 1997
- ---------------------------------------
G. L. White
</TABLE>

II-4

<PAGE> 53
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- ---------------------------------------------------------------------------------------

<S> <C>
1.1 Form of Underwriting Agreement.

4.1 Form of Indenture.

4.2 Form of Subordinated Debenture (included as an exhibit to Exhibit 4.1).

4.3 Certificate of Trust of Lakeland Capital Trust.

4.4 Trust Agreement of Lakeland Capital Trust.

4.5 Form of Amended and Restated Trust Agreement.

4.6 Form of Preferred Security Certificate (included as an exhibit to Exhibit 4.5).

4.7 Form of Preferred Securities Guarantee Agreement.

4.8 Form of Agreement as to Expenses and Liabilities (included as an exhibit to
Exhibit 4.5).

5.1 Opinion of Lewis, Rice & Fingersh, L.C., as to the validity of the issuance of
the Subordinated Debentures.

5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to the
legality of the Preferred Securities.

8.1 Opinion of Lewis, Rice & Fingersh, L.C., as to certain federal income tax
matters.

12.1 Statements Regarding Computation of Ratio of Earnings to Fixed Charges.

23.1 Consent of Crowe, Chizek and Company LLP, Independent Accountants.

23.2 Consent of Lewis, Rice & Fingersh, L.C. (included in their opinions filed
herewith as Exhibits 5.1 and 8.1).

23.3 Consent of Richards, Layton & Finger (included in their opinion filed herewith
as Exhibit 5.2).

24.1 Power of Attorney (included on the signature page).

25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under the Indenture.

25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under the Amended and Restated Trust Agreement.

25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust Company to act
as trustee under the Preferred Securities Guarantee Agreement.
</TABLE>

II-5

<PAGE> 1

1,800,000 Preferred Securities
Lakeland Capital Trust

-----% Cumulative Trust Preferred Securities
(Liquidation Amount of $10 per Preferred Security)

UNDERWRITING AGREEMENT
----------------------

-----------------, 1997

STIFEL, NICOLAUS & COMPANY, INCORPORATED 500 North Broadway St. Louis,
Missouri 63102

Dear Ladies and Gentlemen:

Lakeland Financial Corporation, an Indiana corporation (the
"Company"), and its financing subsidiary, Lakeland Capital Trust, a
Delaware business trust (the "Trust," and hereinafter together with the
Company, the "Offerors"), propose that the Trust issue and sell to Stifel,
Nicolaus & Company, Incorporated (sometimes referred to herein as the
"Underwriter"), pursuant to the terms of this Agreement, 1,800,000 of the
Trust's ------% Cumulative Trust Preferred Securities, with a liquidation
amount of $10.00 per preferred security (the "Preferred Securities"), to be
issued under the Trust Agreement (as hereinafter defined), the terms of
which are more fully described in the Prospectus (as hereinafter defined).
The aforementioned 1,800,000 Preferred Securities to be sold to the
Underwriter are herein called the "Firm Preferred Securities." Solely for
the purpose of covering over-allotments in the sale of the Firm Preferred
Securities, the Offerors further propose that the Trust issue and sell to
the Underwriter, at its option, up to an additional 200,000 Preferred
Securities (the "Option Preferred Securities") upon exercise of the
over-allotment option granted in Section 1 hereof. The Firm Preferred
Securities and any Option Preferred Securities are herein collectively
referred to as the "Designated Preferred Securities."

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

1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED
---------------------------------------------------
SECURITIES; DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
- ----------------------------------------------------------

(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein
set forth, the Offerors hereby agree that the Trust shall issue and sell to
the Underwriter and the Underwriter agrees to purchase from the Trust, at a
purchase price of $10.00 per share (the "Purchase Price"), the Firm Preferred
Securities. Because the proceeds from the sale of the Firm Preferred
Securities will be used to purchase from the Company its Debentures (as
hereinafter defined and as described in the Prospectus), the Company shall pay
to the Underwriter a commission of $------ per Firm Preferred Security
purchased (the "Firm Preferred Securities Commission").

In addition, on the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions
herein set forth, the Trust hereby grants to the

1
<PAGE> 2

Underwriter an option to purchase all or any portion of the 200,000 Option
Preferred Securities, and upon the exercise of such option in accordance with
this Section 1, the Offerors hereby agree that the Trust shall issue and sell
to the Underwriter all or any portion of the Option Preferred Securities at
the same Purchase Price per share paid for the Firm Preferred Securities.
Because the proceeds from the sale of the Option Preferred Securities
will be used to purchase from the Company its Debentures, the Company
shall pay to the Underwriter a commission of $------ per Option Preferred
Security for each Option Preferred Security purchased (the "Option
Preferred Securities Commission"). The option hereby granted (the
"Option") shall expire 30 days after the date upon which the Registration
Statement (as hereinafter defined) becomes effective and may be
exercised only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Firm
Preferred Securities. The Option may be exercised in whole or in part at
any time (but not more than once) by the Underwriter giving notice
(confirmed in writing) to the Trust setting forth the number of Option
Preferred Securities as to which the Underwriter is exercising the Option
and the time, date and place for payment and delivery of certificates for
such Option Preferred Securities. Such time and date of payment and
delivery for the Option Preferred Securities (the "Option Closing Date")
shall be determined by the Underwriter, but shall not be earlier than two
nor later than five business days after the exercise of such Option, nor in
any event prior to the Closing Date (as hereinafter defined). The Option
Closing Date may be the same as the Closing Date.

Payment of the Purchase Price and the Firm Preferred
Securities Commission and delivery of certificates for the Firm Preferred
Securities shall be made at the Underwriter's offices, located at 500
North Broadway, St. Louis, Missouri 63102, or such other place as shall be
agreed to by the Underwriter and the Offerors, at 10:00 a.m., St. Louis
time, on --------------, 1997, or at such other time not more than five full
business days thereafter as the Offerors and the Underwriter shall
determine (the "Closing Date"). If the Underwriter exercises the option to
purchase any or all of the Option Preferred Securities, payment of the
Purchase Price and Option Preferred Securities Commission and delivery
of certificates for such Option Preferred Securities shall be made on the
Option Closing Date at the Underwriter's offices, or at such other place as
the Offerors and the Underwriter shall determine. Such payments shall be
made to an account designated by the Trust by wire transfer or certified
or bank cashier's check, in same day funds, in the amount of the Purchase
Price therefor, against delivery by or on behalf of the Trust to the
Underwriter of certificates for the Designated Preferred Securities to be
purchased by the Underwriter.

The Agreement contained herein with respect to the timing
of the Closing Date and Option Closing Date is intended to, and does,
constitute an express agreement, as described in Rule 15c6-[1(c)/1(a)]
and (d) promulgated under the 1934 Act (as defined herein), for a
settlement date other than [FOUR/THREE] business days after the date of
the contract.

Certificates for Designated Preferred Securities to be
purchased by the Underwriter shall be delivered by the Offerors in fully
registered form in such authorized denominations and registered in such
names as the Underwriter shall request in writing not later than 12:00
noon, St. Louis time, two business days prior to the Closing Date and, if
applicable, the Option Closing Date. Certificates for Designated Preferred
Securities to be purchased by the Underwriter shall be made available by
the Offerors to the Underwriter for inspection, checking and packaging at
such office as the Underwriter may designate in writing not later than
1:00 p.m., St. Louis time, on the last business day prior to the Closing Date
and, if applicable, on the last business day prior to the Option Closing
Date.

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

(b) The Offerors propose that the Trust issue the
Designated Preferred Securities

2
<PAGE> 3

pursuant to an Amended and Restated Trust Agreement among State Street Bank
and Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware
Trustee, the Administrative Trustees named therein (collectively, the
"Trustees"), and the Company, in substantially the form heretofore delivered
to the Underwriter, said Agreement being hereinafter referred to as the "Trust
Agreement." In connection with the issuance of the Designated Preferred
Securities, the Company proposes (i) to issue its Subordinated Debentures
(the "Debentures") pursuant to an Indenture, to be dated as of --------------,
1997, between the Company and State Street Bank and Trust Company, as
Trustee (the "Indenture"), and (ii) to guarantee certain payments on the
Designated Preferred Securities pursuant to a Guarantee Agreement
between the Company and State Street Bank and Trust Company, as
guarantee trustee (the "Guarantee"), to the extent described therein.

2. REPRESENTATIONS AND WARRANTIES.
------------------------------

(a) The Offerors jointly and severally represent and
warrant to, and agree with, the Underwriter that:

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

(ii) The Offerors have prepared and filed with the
Commission a registration statement on Form S-3 (File Numbers 333
_______ and 333 _____-01) for the registration of the Designated
Preferred Securities, the Guarantee and $20,000,000 aggregate
principal amount of Debentures under the Securities Act of 1933, as
amended (the "1933 Act"), including the related prospectus subject
to completion, and one or more amendments to such registration
statement may have been so filed, in each case in conformity in all
material respects with the requirements of the 1933 Act, the rules
and regulations promulgated thereunder (the "1933 Act Regulations")
and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations thereunder. Copies
of such registration statement, including any amendments thereto,
each Preliminary Prospectus (as defined herein) contained therein
and the exhibits, financial statements and schedules to such
registration statement, as finally amended and revised, have
heretofore been delivered by the Offerors to the Underwriter.
After the execution of this Agreement, the Offerors will file with
the Commission (A) if such registration statement, as it may have
been amended, has been declared by the Commission to be effective
under the 1933 Act, a prospectus in the form most recently included
in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement),
with such changes or insertions as are required by Rule 430A of the
1933 Act Regulations ("Rule 430A") or permitted by Rule 424(b) of
the 1933 Act Regulations ("Rule 424(b)") and as have been provided
to and not objected to by the Underwriter prior to (or as are
agreed to by the Underwriter subsequent to) the execution of this
Agreement, or (B) if such registration statement, as it may have
been amended, has not been declared by the Commission to be
effective under the 1933 Act, an amendment to such registration
statement, including a form of final prospectus, necessary to
permit such registration statement to become effective, a copy of
which amendment has been furnished to and not objected to by the
Underwriter prior to (or is agreed to by the Underwriter subsequent
to) the execution of this Agreement. As used in this Agreement,
the term "Registration Statement" means such registration
statement, as amended at the time when it was or is declared
effective under the 1933 Act, including (1) all financial schedules
and

3
<PAGE> 4

exhibits thereto, (2) all documents (or portions thereof)
incorporated by reference therein filed under the 1934 Act, and (3)
any information omitted therefrom pursuant to Rule 430A and included
in the Prospectus (as hereinafter defined); the term "Preliminary
Prospectus" means each prospectus subject to completion filed with
such registration statement or any amendment thereto including all
documents (or portions thereof) incorporated by reference therein
under the 1934 Act (including the prospectus subject to completion,
if any, included In the Registration Statement and each prospectus
filed pursuant to Rule 424(a) under the 1933 Act); and the term
"Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 424(b)(1) or (4) or, if no prospectus is required
to be filed pursuant to Rule 424(b)(1) or (4), the prospectus
included in the Registration Statement, in each case including the
financial schedules and all documents (or portions thereof)
incorporated by reference therein under the 1934 Act. The date on
which the Registration Statement becomes effective is hereinafter
referred to as the "Effective Date."

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

(iv) No order preventing or suspending the use of
any Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) has been issued by the Commission,
nor has the Commission, to the knowledge of the Offerors,
threatened to issue such an order or instituted proceedings for that
purpose. Each Preliminary Prospectus, at the time of filing
thereof, (A) complied in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and (B)
did not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that this
-------- -------
representation and warranty does not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by the Underwriter expressly
for inclusion in the Prospectus beneath the heading "Underwriting"
and the last sentence on the cover page of the Prospectus (such
information referred to herein as the "Underwriter's Information").

(v) At the Effective Date and at all times
subsequent thereto, up to and including the Closing Date and, if
applicable, the Option Closing Date, the Registration Statement and
any post-effective amendment thereto (A) complied and will comply in
all material respects with the requirements of the 1933 Act, the
1933 Act Regulations and the Trust Indenture Act (and the rules and
regulations thereunder) and (B) did not and will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. At the Effective Date and at
all times when the Prospectus is required to be delivered in
connection with offers and sales of Designated Preferred
Securities, including, without limitation, the Closing Date and, if
applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations
and the Trust Indenture Act (and the rules and regulations
thereunder) and (B) did not contain and will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the

4
<PAGE> 5

statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that
-------- -------
this representation and warranty does not apply to the Underwriter's
Information.

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

(B) The Trust has been duly created and is
validly existing as a statutory business trust in good standing
under the Delaware Business Trust Act with the power and authority
(trust and other) to own its property and conduct its business as
described in the Registration Statement and Prospectus, to issue
and sell its common securities (the "Common Securities") to the
Company pursuant to the Trust Agreement, to issue and sell the
Designated Preferred Securities, to enter into and perform its
obligations under this Agreement and to consummate the
transactions herein contemplated; the Trust has no subsidiaries
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or the
ownership of its property requires such qualification, except to
the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Trust;
the Trust has conducted and will conduct no business other than
the transactions contemplated by this Agreement and described in
the Prospectus; the Trust is not a party to or bound by any
agreement or instrument other than this Agreement, the Trust
Agreement and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement and the Trust
Agreement and described in the Prospectus; the Trust is not a
party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Closing Date or any Option
Closing Date will not be, to the knowledge of the Offerors,
classified as an association taxable as a corporation for
United States federal income tax purposes; and the Trust is,
and as of the Closing Date or any Option Closing Date will be,
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.

(vii) The Company has two (2) subsidiaries,
the Trust and Lake City Bank (the "Bank"; and together with the
Trust, the "Subsidiaries"). The Company does not own or control,
directly or indirectly, more than 5% of any class of equity
security of any corporation, association or other entity other
than the Subsidiaries. Each Subsidiary is a bank, corporation or
business trust duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation. Each such Subsidiary has full corporate and other
power and authority to own, lease and operate its properties and
to conduct its business as described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and
as currently being conducted. The deposit accounts of the Bank
are insured by the Bank Insurance Fund administered by the Federal
Deposit Insurance Corporation (the "FDIC") up to the maximum
amount provided by law; and no proceedings for the modification,
termination or revocation of any such insurance are pending or, to
the knowledge of the Offerors, threatened.

(viii) The Company and each of the Subsidiaries is
duly qualified to transact business as a foreign corporation and
is in good standing in each other jurisdiction in which it owns or
leases property or conducts its business so as to require such
qualification and in which the failure to so qualify would,
individually or in the aggregate, have a material

5
<PAGE> 6

adverse effect on the condition (financial or otherwise),
earnings, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis. All of
the issued and outstanding shares of capital stock of the
Subsidiaries (A) have been duly authorized and are validly
issued, (B) are fully paid and nonassessable except to the extent
such shares may be deemed assessable under 12 U.S.C. Section 55 or
12 U.S.C. Section 1831o, and (C) except as disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), are directly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, restriction upon voting or transfer, preemptive
rights, claim or equity. Except as disclosed in the Prospectus,
there are no outstanding rights, warrants or options to acquire or
instruments convertible into or exchangeable for any capital stock
or equity securities of the Offerors or the Subsidiaries.

(ix) The capital stock of the Company and the
equity securities of the Trust conform to the description thereof
contained in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The outstanding
shares of capital stock and equity securities of each Offeror have
been duly authorized and validly issued and are fully paid and
nonassessable, and no such shares were issued in violation of the
preemptive or similar rights of any security holder of an Offeror;
no person has any preemptive or similar right to purchase any
shares of capital stock or equity securities of the Offerors.
Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there
are no outstanding rights, options or warrants to acquire any
securities of the Offerors, and there are no outstanding
securities convertible into or exchangeable for any such
securities and no restrictions upon the voting or transfer of any
capital stock of the Company or equity securities of the Trust
pursuant to the Company's corporate charter or bylaws, the Trust
Agreement or any agreement or other instrument to which an Offeror
is a party or by which an Offeror is bound.

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

(B) The Debentures have been duly and
validly authorized, and, when duly and validly executed,
authenticated and issued as provided in the Indenture and delivered
to the Trust pursuant to the Trust Agreement, will constitute valid
and legally binding obligations of the Company entitled to the
benefits of the Indenture and will conform to the description
thereof contained in the Prospectus.

(C) The Guarantee has been duly and
validly authorized, and, when duly and validly executed and
delivered to the guarantee trustee for the benefit of the Trust,
will constitute a valid and legally binding obligation of the
Company and will conform to the

6
<PAGE> 7

description thereof contained in the Prospectus.

(D) The Agreement as to Expenses and
Liabilities between the Company and the Trust (the "Expense
Agreement") has been duly and validly authorized, and, when duly
and validly executed and delivered by the Company, will constitute
a valid and legally binding obligation of the Company and will
conform to the description thereof contained in the Prospectus.

(xi) The Offerors and the Subsidiaries have
complied in all material respects with all federal, state and local
statutes, regulations, ordinances and rules applicable to the
ownership and operation of their properties or the conduct of their
businesses as described in and contemplated by the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and as currently
being conducted.

(xii) The Offerors and the Subsidiaries have all
material permits, easements, consents, licenses, franchises and
other governmental and regulatory authorizations from all
appropriate federal, state, local or other public authorities
("Permits") as are necessary to own and lease their properties and
conduct their businesses in the manner described in and
contemplated by the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted in all material
respects. All such Permits are in full force and effect and each
of the Offerors and the Subsidiaries are in all material respects
complying therewith, and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or will result in any other material
impairment of the rights of the holder of any such Permit, subject
in each case to such qualification as may be adequately disclosed
in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus). Such Permits contain no
restrictions that would materially impair the ability of the
Company or the Subsidiaries to conduct their businesses in the
manner consistent with their past practices. Neither the Offerors
nor any of the Subsidiaries has received notice or otherwise has
knowledge of any proceeding or action relating to the revocation
or modification of any such Permit.

(xiii) Neither of the Offerors nor any of the
Subsidiaries is in breach or violation of its corporate charter,
by-laws or other governing documents (including without
limitation, the Trust Agreement) in any material respect. Neither
of the Offerors nor any of the Subsidiaries is, and to the
knowledge of the Offerors no other party is, in violation, breach
or default (with or without notice or lapse of time or both) in
the performance or observance of any term, covenant, agreement,
obligation, representation, warranty or condition contained in (A)
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or
any of its properties may be bound, which breach, violation or
default could have material adverse consequences to the Offerors
and the Subsidiaries on a consolidated basis, and to the knowledge
of the Offerors, no other party has asserted that the Offerors or
any of the Subsidiaries is in such violation, breach or default,
or (B) except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), any order, decree, judgment, rule or regulation of
any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties
the breach, violation or default of which could have a material
adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects, or results of operations of the
Offerors and the Subsidiaries on a consolidated basis.

7
<PAGE> 8

(xiv) The execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated by this Agreement, the Trust Agreement, the
Registration Statement and the Prospectus (or, if the Prospectus
in not in existence, the most recent Preliminary Prospectus) do
not and will not conflict with, result in the creation or
imposition of any material lien, claim, charge, encumbrance or
restriction upon any property or assets of the Offerors or the
Subsidiaries or the Designated Preferred Securities pursuant to,
constitute a breach or violation of, or constitute a default
under, with or without notice or lapse of time or both, any of the
terms, provisions or conditions of the charter or by-laws of the
Company or the Subsidiaries, the Trust Agreement, the Guarantee,
the Indenture, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease, franchise, license, Permit
or any other agreement or instrument to which the Offerors or the
Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or any order, decree, judgment,
rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign,
having jurisdiction over the Offerors or the Subsidiaries or
any of their respective properties which conflict, creation,
imposition, breach, violation or default would have either singly
or in the aggregate a material adverse effect on the condition,
financial or otherwise, earnings, affairs, business, prospects or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis. No authorization, approval, consent or order
of or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions
contemplated by this Agreement, the Trust Agreement, the
Indenture, the Guarantee, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act,
the Trust Indenture Act and from the Nasdaq Stock Market's
National Market relating to the listing of the Designated
Preferred Securities, and such as may be required under state
securities laws or Interpretations or Rules of the National
Association of Securities Dealers, Inc. ("NASD") in connection with
the purchase and distribution of the Designated Preferred
Securities by the Underwriter.

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

(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title
to all personal property owned by them and material to their
business, in each case free and clear of all security interests,
liens, mortgages, pledges, encumbrances, restrictions, claims,
equities and other defects except such as are referred to in the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) or such as do not materially affect
the value of such property in the aggregate and do not materially
interfere with the use made or proposed to be made of such

8
<PAGE> 9

property; and all of the leases under which the Company or the
Subsidiaries hold real or personal property are valid, existing and
enforceable leases and in full force and effect with such exceptions
as are not material and do not materially interfere with the use
made or proposed to be made of such real or personal property, and
neither the Company nor any of the Subsidiaries is in default in any
material respect of any of the terms or provisions of any leases.

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

(xviii) The consolidated financial statements,
including the notes thereto, included by incorporation by reference
or otherwise in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) with respect to the Company and the Subsidiaries,
comply in all material respects with the 1933 Act and the 1933 Act
Regulations and present fairly the consolidated financial position
of the Company and the Subsidiaries as of the dates indicated and
the consolidated results of operations, cash flows and
shareholders' equity of the Company and the Subsidiaries for the
periods specified and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis. The selected and summary consolidated financial data
concerning the Offerors and the Subsidiaries included in the
Registration Statement and the Prospectus (or such Preliminary
Prospectus) comply in all material respects with the 1933 Act and
the 1933 Act Regulations, present fairly the information set forth
therein, and have been compiled on a basis consistent with that of
the consolidated financial statements of the Offerors and the
Subsidiaries in the Registration Statement and the Prospectus (or
such Preliminary Prospectus). The other financial, statistical
and numerical information included in the Registration Statement
and the Prospectus (or such Preliminary Prospectus) complies in
all material respects with the 1933 Act and the 1933 Act
Regulations, presents fairly the information shown therein, and to
the extent applicable has been compiled on a basis consistent with
the consolidated financial statements of the Company and the
Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus).

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

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

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

(C) neither of the Offerors nor any of the
Subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any material

9
<PAGE> 10

transactions, other than in the ordinary course of business
which is material to the condition (financial or otherwise),
earnings, business, prospects or results of operations of the
Offerors and the Subsidiaries on a consolidated basis;

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

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

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

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

(xxii) Neither of the Offerors has taken, directly
or indirectly, any action designed to result in or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Offerors to facilitate the sale or resale of the
Designated Preferred Securities, and neither of the Offerors is
aware of any such action taken or to be taken by any affiliate of
the Offerors.

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

(xxiv) Except as adequately disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), no labor dispute

10
<PAGE> 11

involving the Company or the Subsidiaries exists or, to the
knowledge of the Offerors, is imminent which might be expected to
have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis or which is required to be disclosed in the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus). Neither the Company nor any of the Subsidiaries have
received notice of any existing or threatened labor dispute by the
employees of any of its principal suppliers, customers or
contractors which might be expected to have a material adverse
effect on the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the
Company and the Subsidiaries on a consolidated basis.

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

(xxvi) Each of the material contracts, agreements
and instruments described or referred to in the Registration
Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and each
contract, agreement and instrument filed as an exhibit to the
Registration Statement is in full force and effect and is the
legal, valid and binding agreement of the Offerors or the
Subsidiaries, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally. Except as disclosed in the
Prospectus (or such Preliminary Prospectus), to the knowledge of
the Offerors, no other party to any such agreement is (with or
without notice or lapse of time or both) in breach or default in
any material respect thereunder.

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

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

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

(xxx) Except as described in or contemplated by the
Prospectus (or, if the

11
<PAGE> 12

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

(xxxi) Neither of the Offerors is an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended (the "Investment Company Act").

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

3. OFFERING BY THE UNDERWRITER. After the Registration
---------------------------
Statement becomes effective or, if the Registration Statement is already
effective, after this Agreement becomes effective, the Underwriter
proposes to offer the Firm Preferred Securities for sale to the public upon
the terms and conditions set forth in the Prospectus. The Underwriter
may from time to time thereafter reduce the public offering price and
change the other selling terms, provided the proceeds to the Trust shall
not be reduced as a result of such reduction or change. Because the
National Association of Securities Dealers, Inc. ("NASD") is expected to
view the Preferred Securities as interests in a direct participation
program, the offering of the Preferred Securities is being made in
compliance with the applicable provisions of Rule 2810 of the NASD's
Conduct Rules.

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

4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors
---------------------------------
jointly and severally covenant with the Underwriter as follows:

(a) The Offerors shall use their best efforts to cause
the Registration Statement and any amendments thereto, if not effective at the
time of execution of this Agreement, to become effective as promptly as
possible. If the Registration Statement has become or becomes effective
pursuant to Rule 430A and information has been omitted therefrom in reliance
on Rule 430A, then the Offerors will prepare and file in accordance with Rule
430A and Rule 424(b) copies of the Prospectus or, if required by Rule 430A, a
post-effective amendment to the Registration Statement (including the
Prospectus) containing all information so omitted and will provide evidence
satisfactory to the Underwriter of such timely filing.

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

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

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

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<PAGE> 13

relating to the Registration Statement or the Prospectus;

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

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

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

(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Offerors shall comply to the best of
their ability with the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations so as to permit the completion of
the distribution of the Designated Preferred Securities as contemplated
herein and in the Trust Agreement and the Prospectus. The Offerors shall
not file any amendment to the registration statement as originally filed
or to the Registration Statement and shall not file any amendment thereto
or make any amendment or supplement to any Preliminary Prospectus or to
the Prospectus of which the Underwriter shall not previously have been
advised in writing and provided a copy a reasonable time prior to the
proposed filings thereof or to which the Underwriter or its counsel shall
object. If it is necessary, in the Company's reasonable opinion or in the
reasonable opinion of the Company's counsel, to amend or supplement the
Registration Statement or the Prospectus in connection with the
distribution of the Designated Preferred Securities, the Offerors shall
forthwith amend or supplement the Registration Statement or the
Prospectus, as the case may be, by preparing and filing with the
Commission (provided the Underwriter or its counsel does not reasonably
object), and furnishing to the Underwriter, such number of copies as the
Underwriter may reasonably request of an amendment or amendments of,
or a supplement or supplements to, the Registration Statement or the
Prospectus, as the case may be (in form and substance reasonably
satisfactory to the Underwriter and its counsel). If any event shall occur
as a result of which it is necessary to amend or supplement the
Prospectus to correct an untrue statement of a material fact or to include
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for any
reason it is necessary at any time to amend or supplement the Prospectus
to comply with the 1933 Act and the 1933 Act Regulations, the Offerors
shall, subject to the second sentence of this subsection (d), forthwith
amend or supplement the Prospectus by preparing and filing with the
Commission, and furnishing to the Underwriter, such number of copies as
the Underwriter may reasonably request of an amendment or amendments
of, or a supplement or supplements to, the Prospectus (in form and
substance satisfactory to the Underwriter and its counsel) so that, as so
amended or supplemented, the Prospectus shall not contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.

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<PAGE> 14

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

(f) The Offerors shall make generally available to their
security holders in the manner contemplated by Rule 158 of the 1933 Act
Regulations and furnish to the Underwriter as soon as practicable, but in
any event not later than 16 months after the Effective Date, a
consolidated earnings statement of the Offerors conforming with the
requirements of Section 11(a) of the 1933 Act and Rule 158.

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

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

(i) For a period of 30 days from the Effective Date, the
Offerors shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any Designated Preferred Securities other
than pursuant to this Agreement, any other beneficial interests in the
assets of the Trust or any securities of the Trust or the Company that are
substantially similar to the Designated Preferred Securities or the
Debentures, including any guarantee of such beneficial interests or
substantially similar securities, or securities convertible into or
exchangeable for or that represent the right to receive any such beneficial
interest or substantially similar securities without the Underwriter's
prior written consent.

(j) The Offerors shall use their best efforts to cause
the Designated Preferred Securities to become quoted on the Nasdaq Stock
Market's National Market, or in lieu thereof a national securities exchange,
and to remain so quoted for at least five years from the Effective Date or
for such shorter period as may be specified in a written consent of the
Underwriter, provided this shall not prevent the Company from redeeming
the Designated Preferred Securities pursuant to the terms of the Trust
Agreement. If the Designated Preferred Securities are exchanged for
Debentures, the Company will use its best efforts to have the Debentures
promptly listed on the Nasdaq Stock Market's National Market or other
organization on which the Designated Preferred Securities are then listed,
and to have the Debentures promptly registered under the 1934 Act.

(k) Subsequent to the date of this Agreement and
through the date which is the later of (i) the day following the date on
which the Underwriter's option to purchase the Option Preferred
Securities shall expire or (ii) the day following the Option Closing Date
with respect to any

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<PAGE> 15

Option Preferred Securities that the Underwriter shall elect to purchase,
except as described in or contemplated by the Prospectus, neither the Offerors
nor any of the Subsidiaries shall take any action (or refrain from taking any
action) which will result in the Offerors or the Subsidiaries incurring any
material liability or obligation, direct or contingent, or enter into any
material transaction, except in the ordinary course of business, and there
will not be any material change in the financial position, capital stock, or
any material increase in long-term debt, obligations under capital leases or
short-term borrowings of the Offerors and the Subsidiaries on a consolidated
basis.

(l) The Offerors shall not take, directly or indirectly,
any action designed to result in or which has constituted or which might
reasonably be expected to (i) cause or result in stabilization or
manipulation of the price of any security of the Offerors to facilitate the
sale or resale of the Designated Preferred Securities or (ii) otherwise
violate the Commission's Regulation M, and the Offerors are not aware of
any such action taken or to be taken by any affiliate of the Offerors.

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

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

(a) the preparation, printing, filing, delivery and
shipping of the initial registration statement, the Preliminary Prospectus
or Prospectuses, the Registration Statement and the Prospectus and any
amendments or supplements thereto, and the printing, delivery and
shipping of this Agreement and any other underwriting documents
(including, without limitation, selected dealers agreements), the
certificates for the Designated Preferred Securities and the Preliminary
and Final Blue Sky Memoranda and any legal investment surveys and any
supplements thereto;

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

(c) all fees and expenses incurred in connection with
the qualification of the Designated Preferred Securities, Debentures and
the Guarantee under the securities or blue sky laws of such jurisdictions
as the Underwriter may request, including all filing fees and fees and
disbursements of counsel to the Underwriter in connection therewith,
including, without limitation, in connection with the preparation of the
Preliminary and Final Blue Sky Memoranda and any legal investment
surveys and any supplements thereto;

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

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

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

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

15
<PAGE> 16

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

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

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

If the sale of Designated Preferred Securities contemplated
by this Agreement is not completed for any reason whatsoever, whether or
not such termination is allowable hereunder, the Company will pay the
Underwriter its accountable out-of-pocket expenses in connection
herewith or in contemplation of the performance of the Underwriter's
obligations hereunder, including without limitation travel expenses,
reasonable fees, expenses and disbursements of counsel or other
out-of-pocket expenses incurred by the Underwriter in connection with
any discussion of the Offering or the contents of the Registration
Statement, any investigation of the Offerors and the Subsidiaries, or any
preparation for the marketing, purchase, sale or delivery of the Designated
Preferred Securities, in each case following presentation of reasonably
detailed invoices therefor.

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

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

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

(b) The Underwriter shall not have advised the Company
at or before the Closing Date (and, if applicable, the Option Closing Date)
that the Registration Statement or any post-effective amendment thereto,
or the Prospectus or any amendment or supplement thereto, contains an
untrue statement of a fact which, in the Underwriter's opinion, is material
or omits to state a fact which, in

16
<PAGE> 17

the Underwriter's opinion, is material and is required to be stated therein or
is necessary to make statements therein (in the case of the Prospectus or any
amendment or supplement thereto, in light of the circumstances under which
they were made) not misleading.

(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Trust Agreement, and the Designated Preferred Securities, and the
authorization and form of the Registration Statement and Prospectus,
other than financial statements and other financial data, and all other
legal matters relating to this Agreement and the transactions
contemplated hereby or by the Trust Agreement shall be satisfactory in
all respects to counsel to the Underwriter, and the Offerors and the
Subsidiaries shall have furnished to such counsel all documents and
information relating thereto that they may reasonably request to enable
them to pass upon such matters.

(d) Lewis, Rice & Fingersh, L.C., counsel to the
Offerors, shall have furnished to the Underwriter its signed opinion, dated
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to counsel to the Underwriter, to the effect that:

(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State
of Indiana, and is duly registered as a bank holding company under
the BHC Act. Each of the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and the
Subsidiaries has full corporate power and authority to own or
lease its properties and to conduct its business as such business
is described in the Prospectus and is currently conducted in all
material respects. To the best of such counsel's knowledge, all
outstanding shares of capital stock of the Subsidiaries have been
duly authorized and validly issued and are fully paid and
nonassessable except to the extent such shares may be deemed
assessable under 12 U.S.C. Section 1831 and, to the best of such
counsel's knowledge, except as disclosed in the Prospectus, there
are no outstanding rights, options or warrants to purchase any
such shares or securities convertible into or exchangeable for any
such shares.

(ii) The capital stock, Debentures and Guarantee
of the Company and the equity securities of the Trust conform to
the description thereof contained in the Prospectus in all
material respects. To the best of such counsel's knowledge, the
capital stock of the Company authorized and issued as of June 30,
1997 is as set forth under the caption "Capitalization" in the
Prospectus has been duly authorized and validly issued, and is
fully paid and nonassessable. To the best of such counsel's
knowledge, there are no outstanding rights, options or warrants to
purchase, no other outstanding securities convertible into or
exchangeable for, and no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or equity
securities of the Trust, except as described in the Prospectus.

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

17
<PAGE> 18

knowledge, any agreement or other instrument to which either
Offeror or any of the Subsidiaries is a party or by which either
Offeror or any of the Subsidiaries may be bound.

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

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

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

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

(viii) To the best of such counsel's knowledge,
neither of the Offerors nor any of the Subsidiaries is in breach
or violation of, or default under, with or without notice or lapse
of time or both, its corporate charter, by-laws or governing
document (including without limitation, the Trust Agreement). The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement
and the Trust Agreement do not and will not conflict with, result
in the creation or imposition of any material lien, claim, charge,
encumbrance or restriction upon any property or assets of the
Offerors or the Subsidiaries or the Designated Preferred
Securities pursuant to, or constitute a material breach or
violation of, or constitute a material default under, with or
without notice or lapse of time or both, any of the terms,
provisions or conditions of the charter, by-laws or governing
document (including without limitation, the Trust Agreement) of
the Offerors or the Subsidiaries, or to the best of such counsel's
knowledge, any material contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, franchise, license
or any other agreement or instrument to which either Offeror or
the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or any order, decree,
judgment, franchise, license, Permit, rule or regulation of
any court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Offerors or the Subsidiaries or any of their
respective properties which, in each case, is material to the
Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing,
registration or qualification with, any person (including, without
limitation, any court, governmental body or authority) is required

18
<PAGE> 19

under Indiana law in connection with the transactions contemplated
by this Agreement in connection with the purchase and distribution
of the Designated Preferred Securities by the Underwriter.

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

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

(xi) No authorization, approval, consent or order
of or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions
contemplated by this Agreement, the Trust Agreement, the
Registration Statement and the Prospectus, except such as have
been obtained under the 1933 Act, the Trust Indenture Act, and
except such as may be required under state securities laws or
Interpretations or Rules of the NASD in connection with the
purchase and distribution of the Designated Preferred Securities
by the Underwriter.

(xii) The Registration Statement and the Prospectus
and any amendments or supplements thereto and any documents
incorporated therein by reference (other than the financial
statements or other financial data included therein or omitted
therefrom and Underwriter's Information, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations
as of their respective dates of effectiveness.

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

(xiv) The statements under the captions
"Description of the Preferred Securities," "Description of the
Subordinated Debentures," "Description of the Guarantee,"
"Relationship Among the Preferred Securities, the Subordinated
Debentures and the Guarantee," "Certain Federal Income Tax
Consequences," "ERISA Considerations" and "General - Supervision
and Regulation" in the Prospectus or incorporated therein by
reference, insofar as such statements constitute a summary of
legal and regulatory matters, documents, instruments or
proceedings referred to therein, are accurate descriptions of the
matters summarized therein in all material respects and fairly
present the information called for with respect to such legal
matters, documents and instruments, other than financial and

19
<PAGE> 20

statistical data, as to which said counsel shall not be required
to express any opinion or belief.

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

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

(xvii) To the best of such counsel's knowledge, (A)
the business and operations of the Offerors and the Subsidiaries
comply in all material respects with all statutes, ordinances,
laws, rules and regulations applicable thereto and which are
material to the Offerors and the Subsidiaries on a consolidated
basis, except in those instances where non-compliance would not
materially impair the ability of the Offerors and the Subsidiaries
to conduct their business; and (B) the Offerors and the
Subsidiaries possess and are operating in all material respects in
compliance with the terms, provisions and conditions of all
Permits that are required to conduct their businesses as described
in the Prospectus and that are material to the Offerors and the
Subsidiaries on a consolidated basis, except in those instances
where the loss thereof or non-compliance therewith would not have
a material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of
the Offerors and the Subsidiaries on a consolidated basis; to the
best of such counsel's knowledge, all such Permits are valid and in
full force and effect, and, to the best of such counsel's knowledge,
no action, suit or proceeding is pending or threatened which may
lead to the revocation, termination, suspension or non-renewal of
any such Permit, except in those instances where the loss thereof or
non-compliance therewith would not materially impair the ability
of the Offerors or the Subsidiaries to conduct their businesses.

In giving the above opinion, such counsel may state that,
insofar as such opinion involves factual matters, they have relied upon
certificates of officers of the Offerors including, without limitation,
certificates as to the identity of any and all material contracts,
indentures, mortgages, deeds of trust, loans or credit agreements, notes,
leases, franchises, licenses or other agreements or instruments, and all
material permits, easements, consents, licenses, franchises and
government regulatory authorizations, for purposes of paragraphs (viii),
(xiii) and (xvii) hereof, and upon certificates of public officials. In giving
such opinion, such counsel may rely upon (A) the opinion of Richards,
Layton and Finger described herein as to matters of Delaware law and (B)
the opinion of Lemon, Armey, Hearn & Leininger as to matters of Indiana
law and certain matters regarding the Company and the Subsidiaries, and
such counsel shall state in its opinion the extent to which it is relying on
the opinion of such Company counsel and that such reliance is, in the view
of such counsel, reasonable under the circumstances.

Such counsel shall also confirm that, in connection with
the preparation of the Registration Statement and Prospectus, such counsel
has participated in conferences with officers and representatives of the
Offerors and with their independent public accountants and with the
Underwriter and its counsel, at which conferences such counsel made
inquiries of such officers, representatives and accountants and discussed
in detail the contents of the Registration Statement and Prospectus and
the documents incorporated therein by reference (without taking further
action to

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<PAGE> 21

verify independently the statements made in the Registration Statement and the
Prospectus, and without assuming responsibility for the accuracy or
completeness of such statements, except to the extent expressly provided
above) and such counsel has no reason to believe (A) that the Registration
Statement or any amendment thereto (except for the financial statements and
related schedules and statistical data included therein or omitted therefrom
or the Underwriter's Information, as to which such counsel need express no
opinion), at the time the Registration Statement or any such amendment became
effective, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (B) that the Prospectus or any amendment or supplement
thereto or the documents incorporated therein by reference (except for the
financial statements and related schedules and statistical data included
therein or omitted therefrom or the Underwriter's Information, as to
which such counsel need express no opinion), at the time the Registration
Statement became effective (or, if the term "Prospectus" refers to the
prospectus first filed pursuant to Rule 424(b) of the 1933 Act
Regulations, at the time the Prospectus was issued), at the time any such
amended or supplemented Prospectus was issued, at the Closing Date and,
if applicable, the Option Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made, or (C) that there is any amendment to the Registration
Statement required to be filed that has not already been filed.

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

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

(ii) The Trust Agreement is a legal, valid and
binding agreement of the Trust and the Trustees, and is
enforceable against the Company, as depositor, and the Trustees,
in accordance with its terms.

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

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

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

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<PAGE> 22

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

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

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

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

(g) On the date of this Agreement and on the Closing
Date (and, if applicable, any Option Closing Date), the Underwriter shall
have received from Crowe, Chizek and Company LLP a letter, dated the
date of this Agreement and the Closing Date (and, if applicable, the Option
Closing Date), respectively, in form and substance satisfactory to the
Underwriter, confirming that they are independent public accountants
with respect to the Company and the Subsidiaries (for purposes of this
Section 6(g) the "Company") within the meaning of the 1933 Act and the
1933 Act Regulations, and stating in effect that:

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

(ii) On the basis of the procedures specified by
the American Institute of Certified Public Accountants as
described in SAS No. 71, "Interim Financial Information,"
inquiries of officials of the Company responsible for financial
and accounting matters, and such other inquiries and procedures as
may be specified in such letter, which procedures do not
constitute an audit in accordance with U.S. generally accepted
auditing standards, nothing came to their attention that caused
them to believe that, if applicable, the unaudited interim
consolidated financial statements of the Company included in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933
Act and 1933 Act Regulations or are not in conformity with U.S.
generally accepted accounting principles applied on a basis
substantially consistent, except as noted in the Registration
Statement, with the basis for the audited consolidated financial
statements of the Company included in the Registration Statement.

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<PAGE> 23

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

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

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

(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (ii) and (iii) above, they
have carried out certain specified procedures, not constituting an
audit in accordance with U.S. generally accepted auditing
standards, with respect to certain amounts, percentages and
financial information specified by the Underwriter which are
derived from the general accounting records and consolidated
financial statements of the Company which appear in the
Registration Statement and have compared such amounts, percentages
and financial information with the accounting records and the
material derived from such records and consolidated financial
statements of the Company and have found them to be in agreement.

In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases as specified in
Clauses (iii)(A) or (iii)(B), above, or any exceptions from such agreement
specified in Clause (iv) above, it shall be a further condition to the
Underwriter's obligations that the Underwriter shall have determined, after
discussions with officers of the Company, responsible for financial and
accounting matters, that such changes, decreases, increases or exceptions as
are set forth in such letters do not (x) reflect a material adverse change in
the items specified in Clause (iii)(A) above as compared with the amounts shown
in the latest unaudited consolidated statement of financial condition of the
Company included in the Registration Statement, (y) reflect a material adverse
change in the items specified in Clause (iii)(B) above as compared with

23
<PAGE> 24

the corresponding periods of the prior year or other period specified by the
Underwriter, or (z) reflect a material change in items specified in Clause
(iv) above from the amounts shown in the Preliminary Prospectus distributed by
the Underwriter in connection with the offering contemplated hereby or from
the amounts shown in the Prospectus.

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

(i) At the Closing Date and, if applicable, the Option
Closing Date, the Underwriter shall have received a certificate of an
authorized representative of the Trust to the effect that to the best of his
or her knowledge based upon a reasonable investigation, the representations
and warranties of the Trust in this Agreement are true and correct as though
made on and as of the Closing Date (and, if applicable, the Option Closing
Date), the Trust has complied with all the agreements and satisfied all
the conditions required by this Agreement to be performed or satisfied by
the Trust on or prior to the Closing Date and since the most recent date as
of which information is given in the Prospectus, except as contemplated
by the Prospectus, the Trust has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business and there has not been
any material adverse change in the condition (financial or otherwise) of
the Trust.

(j) On the Closing Date, the Underwriter shall have
received duly executed counterparts of the Trust Agreement, the Guarantee, the
Indenture and the Expense Agreement.

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

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

All opinions, certificates, letters and other documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Underwriter.

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<PAGE> 25

The Offerors shall furnish the Underwriter with conformed copies of such
opinions, certificates, letters and other documents as the Underwriter shall
reasonably request.

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

7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------

(a) The Offerors agree to jointly and severally indemnify
and hold harmless the Underwriter, each of its directors, officers and agents,
and each person, if any, who controls the Underwriter within the meaning
of the 1933 Act, against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation and reasonable
attorney fees and expenses), joint or several, arising out of or based (i)
upon any untrue statement or alleged untrue statement of a material fact
made by the Company or the Trust contained in Section 2(a) of this
Agreement (or any certificate delivered by the Company or the Trust
pursuant to Sections 6(h), 6(i) or 6(l) hereof) or the registration
statement as originally filed or the Registration Statement, any
Preliminary Prospectus or the Prospectus, or in any amendment or
supplement thereto, (ii) upon any blue sky application or other document
executed by the Company or the Trust specifically for that purpose or
based upon written information furnished by the Company or the Trust
filed in any state or other jurisdiction in order to qualify any of the
Designated Preferred Securities under the securities laws thereof (any
such application, document or information being hereinafter referred to as
a "Blue Sky Application"), (iii) any omission or alleged omission to state a
material fact in the registration statement as originally filed or the
Registration Statement, the Preliminary Prospectus or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application
required to be stated therein or necessary to make the statements therein
not misleading, and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
attorney fees), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus, or in any amendment or
supplement thereto, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iv) the
enforcement of this indemnification provision or the contribution
provisions of Section 7(d); and shall reimburse each such indemnified
party for any reasonable legal or other expenses as incurred, but in no
event less frequently than 30 days after each invoice is submitted,
incurred by them in connection with investigating or defending against or
appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which
case such payments shall be promptly refunded; provided, however, that
-----------------
the Offerors shall not be liable in any such case to the extent, but only to
the extent, that any such losses, claims, damages, liabilities and expenses
arise out of or are based upon any untrue statement or omission or
allegation thereof that has been made therein or omitted therefrom in
reliance upon and in conformity with the Underwriter's Information;
provided, that the indemnification contained in this paragraph with
- --------
respect to any Preliminary Prospectus shall not inure to the benefit of the
Underwriter (or of any person controlling the Underwriter) to the extent
any such losses, claims, damages, liabilities or expenses directly results
from the fact that the Underwriter sold Designated Preferred Securities
to a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been
furnished to the Underwriter in sufficient time to distribute same with or
prior to the written confirmation of the sale involved), if required by law,
and if such loss, claim, damage, liability or expense would not have arisen
but for the failure to give or send such person such document. The
foregoing indemnity agreement is in addition to any liability

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<PAGE> 26

the Company or the Trust may otherwise have to any such indemnified party.

(b) The Underwriter agrees to indemnify and hold harmless
each Offeror, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls an Offeror
within the meaning of the 1933 Act, to the same extent as required by the
foregoing indemnity from the Company to the Underwriter, but only with
respect to the Underwriter's Information or information related to the
Underwriter furnished in writing to an Offeror through the Underwriter by
or on its behalf expressly for use in a Blue Sky Application. The foregoing
indemnity agreement is in addition to any liability which the Underwriter
may otherwise have to any such indemnified party.

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

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

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<PAGE> 27

compromise or consent shall not alter the right of any indemnified party or
controlling person to indemnification or contribution as provided in this
Agreement.

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

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

(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Offerors set
forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter or by or on behalf
of the Offerors, or such directors, trustees or officers (or any person
controlling an Offeror), (ii) acceptance of any Designated Preferred

27
<PAGE> 28

Securities and payment therefor hereunder and (iii) any termination of
this Agreement. A successor of the Underwriter or of an Offeror, such
directors, trustees or officers (or of any person controlling the
Underwriter or an Offeror) shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 7.

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

8. TERMINATION. The Underwriter shall have the right to
-----------
terminate this Agreement at any time at or prior to the Closing Date or,
with respect to the Underwriter's obligation to purchase the Option
Preferred Securities, at any time at or prior to the Option Closing Date,
without liability on the part of the Underwriter to the Offerors, if:

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

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

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

(d) There has occurred any outbreak of hostilities or
other calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in the
Underwriter's reasonable judgment, impracticable to market the
Designated Preferred Securities or enforce contracts for the sale of the
Designated Preferred Securities;

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

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

(g) Any action shall have been taken by any government in
respect of its monetary affairs which, in the Underwriter's reasonable
judgment, has a material adverse effect on the United States securities
markets.

The Offerors shall have the right to terminate this Agreement
at any time at or prior to the Closing Date or, with respect to the sale of
the Option Preferred Securities, at any time at or prior to the Option
Closing Date, if a Tax Event or a Capital Treatment Event, as such terms
are defined in the Registration Statement, shall have occurred.

28
<PAGE> 29

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

9. EFFECTIVE DATE OF AGREEMENT. If the Registration
---------------------------
Statement is not effective at the time of execution of this Agreement,
this Agreement shall become effective on the Effective Date at the time
the Commission declares the Registration Statement effective. The
Company shall immediately notify the Underwriter when the Registration
Statement becomes effective.

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

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

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

11. NOTICES. Except as otherwise provided in this Agreement, all
-------
notices and other communications hereunder shall be in writing and shall
be deemed to have been duly given if delivered by hand, mailed by
registered or certified mail, return receipt requested, or transmitted by
any standard form of telecommunication and confirmed. Notices to either
Offeror shall be sent to 202 East Center Street, P.O. Box 1387, Warsaw,
Indiana 46581-1387, Attention: R. Douglas Grant (with a copy to Lewis,
Rice & Fingersh, L.C., 500 North Broadway, Suite 2000, St. Louis, Missouri
63102, Attention: Thomas C. Erb, Esq.; and to Lemon, Armey, Hearn &
Leininger, 210 North Buffalo Street, P.O. Box 770, Warsaw, Indiana
46581-0770, Attention: Michael E. Armey, Esq.); and notices to the
Underwriter shall be sent to Stifel, Nicolaus & Company, Incorporated,
500 North Broadway, Suite 1500, St. Louis, Missouri 63102, Attention:
Rick E. Maples (with a copy to Bryan Cave LLP, One Metropolitan Square,
211 North Broadway, Suite 3600, St. Louis, Missouri 63102, Attention:
Denis P. McCusker, Esq.).

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

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

14. COUNTERPARTS. This Agreement may be executed in one or
------------
more counterparts, and when a counterpart has been executed by each
party hereto all such counterparts taken together shall

29
<PAGE> 30

constitute one and the same Agreement.

30
<PAGE> 31

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

Very truly yours,

LAKELAND FINANCIAL CORPORATION

By:--------------------------------------------
R. Douglas Grant President and Chairman
of the Board

LAKELAND CAPITAL TRUST

By:--------------------------------------------
R. Douglas Grant Administrative Trustee

CONFIRMED AND ACCEPTED, as of -------- ---, 1997.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

By:-----------------------------------------
Rick E. Maples Senior Vice President

<PAGE> 1
======================================================================

LAKELAND FINANCIAL CORPORATION

AND

STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE

INDENTURE

-----% SUBORDINATED DEBENTURES DUE 2027

DATED AS OF ----------, 1997.

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

<PAGE> 2

<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE I.
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions of Terms. . . . . . . . . . . . . 1

ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF DEBENTURES. . . . . . . . . . . . 8
Section 2.1. Designation and Principal Amount. . . . . . . 8
Section 2.2. Maturity. . . . . . . . . . . . . . . . . . . 8
Section 2.3. Form and Payment. . . . . . . . . . . . . . . 9
Section 2.4. [Intentionally Omitted] . . . . . . . . . . . 10
Section 2.5. Interest. . . . . . . . . . . . . . . . . . . 10
Section 2.6. Execution and Authentications . . . . . . . . 10
Section 2.7. Registration of Transfer and Exchange . . . . 11
Section 2.8. Temporary Debentures. . . . . . . . . . . . . 12
Section 2.9. Mutilated, Destroyed, Lost or Stolen
Debentures. . . . . . . . . . . . . . . . . . 12
Section 2.10. Cancellation. . . . . . . . . . . . . . . . . 13
Section 2.11. Benefit of Indenture. . . . . . . . . . . . . 13
Section 2.12. Authentication Agent. . . . . . . . . . . . . 13

ARTICLE III.
REDEMPTION OF DEBENTURES . . . . . . . . . . . . . . . . . . . 14
Section 3.1. Redemption. . . . . . . . . . . . . . . . . . 14
Section 3.2. Special Event Redemption. . . . . . . . . . . 14
Section 3.3. Optional Redemption by Company. . . . . . . . 15
Section 3.4. Notice of Redemption. . . . . . . . . . . . . 15
Section 3.5. Payment Upon Redemption . . . . . . . . . . . 16
Section 3.6. No Sinking Fund . . . . . . . . . . . . . . . 16

ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . . 16
Section 4.1. Extension of Interest Payment Period. . . . . 16
Section 4.2. Notice of Extension . . . . . . . . . . . . . 17
Section 4.3. Limitation on Transactions. . . . . . . . . . 17

ARTICLE V.
PARTICULAR COVENANTS OF COMPANY. . . . . . . . . . . . . . . . 18
Section 5.1. Payment of Principal and Interest . . . . . . 18
Section 5.2. Maintenance of Agency . . . . . . . . . . . . 18
Section 5.3. Paying Agents . . . . . . . . . . . . . . . . 18
Section 5.4. Appointment to Fill Vacancy in Office of
Trustee . . . . . . . . . . . . . . . . . . . 19
Section 5.5. Compliance with Consolidation Provisions. . . 19
Section 5.6. Limitation on Transactions. . . . . . . . . . 19
Section 5.7. Covenants as to the Trust . . . . . . . . . . 20

i
<PAGE> 3
Section 5.8. Covenants as to Purchases . . . . . . . . . . 20

ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY COMPANY AND TRUSTEE . . . . . . . . . . . . . . . . . . . . 20
Section 6.1. Company to Furnish Trustee Names and
Addresses of Debentureholders . . . . . . . . 20
Section 6.2. Preservation of Information
Communications with Debentureholders. . . . . 21
Section 6.3. Reports by Company. . . . . . . . . . . . . . 21
Section 6.4. Reports by Trustee. . . . . . . . . . . . . . 22

ARTICLE VII.
REMEDIES OF TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 22
Section 7.1. Events of Default . . . . . . . . . . . . . . 22
Section 7.2. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . 23
Section 7.3. Application of Moneys Collected . . . . . . . 25
Section 7.4. Limitation on Suits . . . . . . . . . . . . . 25
Section 7.5. Rights and Remedies Cumulative; Delay or
Omission not Waiver . . . . . . . . . . . . . 26
Section 7.6. Control by Debentureholders . . . . . . . . . 26
Section 7.7. Undertaking to Pay Costs. . . . . . . . . . . 27

ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE . . . . . . . . . . . . . 27
Section 8.1. Form of Debenture . . . . . . . . . . . . . . 27
Section 8.2. Original Issue of Debentures. . . . . . . . . 27

ARTICLE IX.
CONCERNING TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.1. Certain Duties and Responsibilities of
Trustee . . . . . . . . . . . . . . . . . . . 27
Section 9.2. Notice of Defaults. . . . . . . . . . . . . . 28
Section 9.3. Certain Rights of Trustee . . . . . . . . . . 29
Section 9.4. Trustee Not Responsible for Recitals,
etc.. . . . . . . . . . . . . . . . . . . . . 30
Section 9.5. May Hold Debentures . . . . . . . . . . . . . 30
Section 9.6. Moneys Held in Trust. . . . . . . . . . . . . 30
Section 9.7. Compensation and Reimbursement. . . . . . . . 30
Section 9.8. Reliance on Officers' Certificate . . . . . . 31
Section 9.9. Disqualification: Conflicting Interests. . . 31
Section 9.10. Corporate Trustee Required; Eligibility . . . 31
Section 9.11. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . 32
Section 9.12. Acceptance of Appointment by Successor. . . . 33
Section 9.13. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . 33
Section 9.14. Preferential Collection of Claims
Against the Company . . . . . . . . . . . . . 33

ARTICLE X.
CONCERNING DEBENTUREHOLDERS. . . . . . . . . . . . . . . . . . 34
Section 10.1. Evidence of Action by Holders . . . . . . . . 34
Section 10.2. Proof of Execution by Debentureholders. . . . 34

ii
<PAGE> 4
Section 10.3. Who May be Deemed Owners. . . . . . . . . . . 34
Section 10.4. Certain Debentures Owned by Company
Disregarded . . . . . . . . . . . . . . . . . 35
Section 10.5. Actions Binding on Future
Debentureholders. . . . . . . . . . . . . . . 35

ARTICLE XI.
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . 35
Section 11.1. Supplemental Indentures Without the
Consent of Debentureholders . . . . . . . . . 35
Section 11.2. Supplemental Indentures with Consent of
Debentureholders. . . . . . . . . . . . . . . 36
Section 11.3. Effect of Supplemental Indentures . . . . . . 37
Section 11.4. Debentures Affected by Supplemental
Indentures. . . . . . . . . . . . . . . . . . 37
Section 11.5. Execution of Supplemental Indentures. . . . . 37

ARTICLE XII.
SUCCESSOR CORPORATION. . . . . . . . . . . . . . . . . . . . . 38
Section 12.1. Company May Consolidate, etc. . . . . . . . . 38
Section 12.2. Successor Corporation Substituted . . . . . . 38
Section 12.3. Evidence of Consolidation, etc. to
Trustee . . . . . . . . . . . . . . . . . . . 39

ARTICLE XIII.
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . 39
Section 13.1. Satisfaction and Discharge of Indenture . . . 39
Section 13.2. Discharge of Obligations. . . . . . . . . . . 39
Section 13.3. Deposited Moneys to be Held in Trust. . . . . 40
Section 13.4. Payment of Monies Held by Paying Agents . . . 40
Section 13.5. Repayment to Company. . . . . . . . . . . . . 40

ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 14.1. No Recourse . . . . . . . . . . . . . . . . . 40

ARTICLE XV.
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 41
Section 15.1. Effect on Successors and Assigns. . . . . . . 41
Section 15.2. Actions by Successor. . . . . . . . . . . . . 41
Section 15.3. Surrender of Company Powers . . . . . . . . . 41
Section 15.4. Notices . . . . . . . . . . . . . . . . . . . 41
Section 15.5. Governing Law . . . . . . . . . . . . . . . . 41
Section 15.6. Treatment of Debentures as Debt . . . . . . . 41
Section 15.7. Compliance Certificates and Opinions. . . . . 42
Section 15.8. Payments on Business Days . . . . . . . . . . 42
Section 15.9. Conflict with Trust Indenture Act . . . . . . 42
Section 15.10. Counterparts. . . . . . . . . . . . . . . . . 42
Section 15.11. Separability. . . . . . . . . . . . . . . . . 42
Section 15.12. Assignment . . . . . . . . . . . . . . . . . 43
Section 15.13. Acknowledgment of Rights; Right of
Setoff . . . . . . . . . . . . . . . . . . . 43

iii
<PAGE> 5

ARTICLE XVI.
SUBORDINATION OF DEBENTURES. . . . . . . . . . . . . . . . . . 43
Section 16.1. Agreement to Subordinate. . . . . . . . . . . 43
Section 16.2. Default on Senior Debt, Subordinated
Debt or Additional Senior Obligations . . . . 43
Section 16.3. Liquidation; Dissolution; Bankruptcy. . . . . 44
Section 16.4. Subrogation . . . . . . . . . . . . . . . . . 45
Section 16.5. Trustee to Effectuate Subordination . . . . . 46
Section 16.6. Notice by Company . . . . . . . . . . . . . . 46
Section 16.7. Rights of Trustee; Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . 47
Section 16.8. Subordination may not be Impaired . . . . . . 47
</TABLE>

iv
<PAGE> 6
<TABLE>
CROSS REFERENCE TABLE

<CAPTION>
SECTION OF TRUST
INDENTURE ACT OF SECTION OF
1939, AS AMENDED INDENTURE
---------------- ----------
<S> <C>
310(a). . . . . . . . . . . . . . . . . . . . . . . . . .9.10
310(b). . . . . . . . . . . . . . . . . . . . . . . 9.9, 9.11
310(c). . . . . . . . . . . . . . . . . . . . .Not Applicable
311(a). . . . . . . . . . . . . . . . . . . . . . . . . .9.14
311(b). . . . . . . . . . . . . . . . . . . . . . . . . .9.14
311(c). . . . . . . . . . . . . . . . . . . . .Not Applicable
312(a). . . . . . . . . . . . . . . . . . . . . . 6.1, 6.2(a)
312(b). . . . . . . . . . . . . . . . . . . . . . . . .6.2(c)
312(c). . . . . . . . . . . . . . . . . . . . . . . . .6.2(c)
313(a). . . . . . . . . . . . . . . . . . . . . . . . .6.4(a)
313(b). . . . . . . . . . . . . . . . . . . . . . . . .6.4(b)
313(c). . . . . . . . . . . . . . . . . . . . .6.4(a), 6.4(b)
313(d). . . . . . . . . . . . . . . . . . . . . . . . .6.4(c)
314(a). . . . . . . . . . . . . . . . . . . . . . . . .6.3(a)
314(b). . . . . . . . . . . . . . . . . . . . .Not Applicable
314(c). . . . . . . . . . . . . . . . . . . . . . . . . .15.7
314(d). . . . . . . . . . . . . . . . . . . . .Not Applicable
314(e). . . . . . . . . . . . . . . . . . . . . . . . . .15.7
314(f). . . . . . . . . . . . . . . . . . . . .Not Applicable
315(a). . . . . . . . . . . . . . . . . . . . . . 9.1(a), 9.3
315(b). . . . . . . . . . . . . . . . . . . . . . . . . . 9.2
315(c). . . . . . . . . . . . . . . . . . . . . . . . .9.1(a)
315(d). . . . . . . . . . . . . . . . . . . . . . . . .9.1(b)
315(e). . . . . . . . . . . . . . . . . . . . . . . . . . 7.7
316(a). . . . . . . . . . . . . . . . . . . . . . . .1.1, 7.6
316(b). . . . . . . . . . . . . . . . . . . . . . . . .7.4(b)
316(c). . . . . . . . . . . . . . . . . . . . . . . . 10.1(b)
317(a). . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
317(b). . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
318(a). . . . . . . . . . . . . . . . . . . . . . . . . .15.9
</TABLE>
Note: This Cross-Reference Table does not
constitute part of this Indenture and shall
not affect the interpretation of any of its
terms or provisions.

v
<PAGE> 7
INDENTURE

INDENTURE, dated as of -------------, 1997, between LAKELAND
FINANCIAL CORPORATION, an Indiana corporation (the "Company"), and
STATE STREET BANK AND TRUST COMPANY, a trust company duly organized
and existing under the laws of the Commonwealth of Massachusetts,
as trustee (the "Trustee");

RECITALS

WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of securities to be known as its ----%
Subordinated Debentures due 2027 (hereinafter referred to as the
"Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as
provided in this Indenture;

WHEREAS, Lakeland Capital Trust, a Delaware statutory business
trust (the "Trust"), has offered to the public up to
$20,000,000 aggregate liquidation amount of its Preferred
Securities (as defined herein) and proposes to invest the proceeds
from such offering, together with the proceeds of the issuance and
sale by the Trust to the Company of up to $618,560 aggregate
liquidation amount of its Common Securities (as defined herein), in
up to $20,618,560 aggregate principal amount of the Debentures; and

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

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

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

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

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

ARTICLE I.
DEFINITIONS

SECTION 1.1. DEFINITIONS OF TERMS.

The terms defined in this Section 1.1 (except as in this
Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Section 1.1 and shall include the plural as well
as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the
Trust Indenture Act defined in the Securities Act (except

<PAGE> 8
as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms
in the Trust Indenture Act and in the Securities Act as in force at
the date of the execution of this instrument. All accounting terms
used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with Generally Accepted
Accounting Principles.

"Accelerated Maturity Date" means if the Company elects to
accelerate the Maturity Date in accordance with Section 2.2(c), the
date selected by the Company which is prior to the Scheduled
Maturity Date, but is after September 30, 2002.

"Additional Payments" shall have the meaning set forth in
Section 2.5.

"Additional Senior Obligations" means all indebtedness of the
Company whether incurred on or prior to the date of this Indenture
or thereafter incurred, for claims in respect of derivative
products such as interest and foreign exchange rate contracts,
commodity contracts and similar arrangements; provided, however,
that Additional Senior Obligations does not include claims in
respect of Senior Debt or Subordinated Debt or obligations which,
by their terms, are expressly stated to be not superior in right of
payment to the Debentures or to rank pari passu in right of payment
with the Debentures. For purposes of this definition, "claim"
shall have the meaning assigned thereto in Section 101(4) of the
United States Bankruptcy Code of 1978, as amended.

"Administrative Trustees" shall have the meaning set forth in
the Trust Agreement.

"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with
power to vote 10% or more of the outstanding voting securities or
other ownership interests of the specified Person; (b) any Person
10% or more of whose outstanding voting securities or other
ownership interests are directly or indirectly owned, controlled or
held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common
control with the specified Person; (d) a partnership in which the
specified Person is a general partner; (e) any officer or director
of the specified Person; and (f) if the specified Person is an
individual, any entity of which the specified Person is an officer,
director or general partner.

"Authenticating Agent" means an authenticating agent with
respect to the Debentures appointed by the Trustee pursuant to
Section 2.12.

"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.

"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee of such 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.

"Business Day" means, with respect to the Debentures, any day
other than a Saturday or a Sunday or a day on which federal or
state banking institutions in the Borough of Manhattan, The City of
New York, are authorized or required by law, executive order or
regulation to close, or a day on which the Corporate Trust Office
of the Trustee or the Property Trustee is closed for business.

2
<PAGE> 9

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

"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer, the principal
accounting officer, the treasurer or any vice president of the
Company. The Certificate need not comply with the provisions of
Section 15.7.

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

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

"Common Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with the Preferred
Securities; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment
in respect of (i) distributions, and (ii) payments upon
liquidation, redemption and otherwise, are subordinated to the
rights of holders of Preferred Securities.

"Company" means Lakeland Financial Corporation, a corporation
duly organized and existing under the laws of the State of Indiana,
and, subject to the provisions of Article XII, shall also include
its successors and assigns.

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

"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall
be principally administered, which office at the date hereof is
located at Two International Place, 4th Floor, Boston Massachusetts
02110, Attention: Corporate Trust Department.

"Coupon Rate" shall have the meaning set forth in Section 2.5.

"Custodian" means any receiver, trustee, assignee, liquidator,
or similar official under any Bankruptcy Law.

"Debentures" shall have the meaning set forth in the Recitals
hereto.

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"Debentureholder," "holder of Debentures," "registered
holder," or other similar term, means the Person or Persons in
whose name or names a particular Debenture shall be registered on
the books of the Company or the Trustee kept for that purpose in
accordance with the terms of this Indenture.

"Debenture Register" shall have the meaning set forth in
Section 2.7(b).

"Debenture Registrar" shall have the meaning set forth in
Section 2.7(b).

"Debt" means with respect to any Person, whether recourse is
to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including
obligations incurred in connection with the acquisition of
property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account
of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in
the ordinary course of business); (v) every capital lease
obligation of such Person; and (vi) and every obligation of the
type referred to in clauses (i) through (v) of another Person and
all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable,
directly or indirectly, as obligor or otherwise.

"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.

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

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

"Distribution" shall have the meaning set forth in the Trust
Agreement.

"Event of Default" means, with respect to the Debentures, any
event specified in Section 7.1, which has continued for the period
of time, if any, and after the giving of the notice, if any,
therein designated.

"Exchange Act," means the Securities Exchange Act of 1934, as
amended, as in effect at the date of execution of this instrument.

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

"Extended Maturity Date" means if the Company elects to extend
the Maturity Date in accordance with Section 2.2(b), the date
selected by the Company which is after the Scheduled Maturity Date
but before September 30, 2036.

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

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"Generally Accepted Accounting Principles" means such
accounting principles as are generally accepted at the time of any
computation required hereunder.

"Governmental Obligations" means securities that are
(i) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged; or
(ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America,
the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depositary receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such Governmental Obligation or a
specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of
the holder of such depositary receipt; provided, however, that
(except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
depositary receipt from any amount received by the custodian in
respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced
by such depositary receipt.

"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.

"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 in accordance with the
terms hereof.

"Interest Payment Date," shall have the meaning set forth in
Section 2.5.

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

"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized
tax and securities law practice, to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be
considered an "investment company" that is required to be
registered under the Investment Company Act, which Change in 1940
Act Law becomes effective on or after the date of original issuance
of the Preferred Securities under the Trust Agreement.

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

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

"Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary of the Company that is
delivered to the Trustee in accordance with the terms hereof. Each
such certificate shall include the statements provided for in
Section 15.7, if and to the extent required by the provisions
thereof.

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"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be an employee of or counsel for the Company, that
is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in
Section 15.7, if and to the extent required by the provisions
thereof.

"Outstanding," when used with reference to the Debentures,
means, subject to the provisions of Section 10.4, as of any
particular time, all Debentures theretofore authenticated and
delivered by the Trustee under this Indenture, except
(a) Debentures theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Debentures
or portions thereof for the payment or redemption of which moneys
or Governmental Obligations in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own paying
agent); provided, however, that if such Debentures or portions of
such Debentures are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as in Article III
provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and (c) Debentures in lieu of or in
substitution for which other Debentures shall have been
authenticated and delivered pursuant to the terms of Section 2.7.

"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.3.

"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization or
government or any agency or political subdivision thereof.

"Predecessor 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
2.9 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.

"Preferred Securities" means undivided beneficial interests in
the assets of the Trust which rank pari passu with Common
Securities issued by the Trust; provided, however, that upon the
occurrence of an Event of Default, the rights of holders of Common
Securities to payment in respect of (i) distributions, and
(ii) payments upon liquidation, redemption and otherwise, are
subordinated to the rights of holders of Preferred Securities.

"Preferred Securities Guarantee" means any guarantee that the
Company may enter into with the Trustee or other Persons that
operate directly or indirectly for the benefit of holders of
Preferred Securities.

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

"Responsible Officer" when used with respect to the Trustee
means the Chairman of the Board of Directors, the President, any
Vice President, the Secretary, the Treasurer, any trust officer,
any corporate 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 or her knowledge of and familiarity with
the particular subject.

"Scheduled Maturity Date" means September 30, 2027.

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<PAGE> 13

"Securities Act," means the Securities Act of 1933, as
amended, as in effect at the date of execution of this instrument.

"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating
to the Company whether or not such claim for post-petition interest
is allowed in such proceeding), on Debt, whether incurred on or
prior to the date of this Indenture or thereafter incurred, unless,
in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligations
are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures;
provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Company which when incurred and without respect
to any election under section 1111(b) of the United States
Bankruptcy Code of 1978, as amended, was without recourse to the
Company; (ii) any Debt of the Company to any of its subsidiaries;
(iii) Debt to any employee of the Company; (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the
holders of the Debentures as a result of the subordination
provisions of this Indenture would be greater than they otherwise
would have been as a result of any obligation of such holders to
pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as
a result of subordination provisions to which such Debt is subject;
and (v) Debt which constitutes Subordinated Debt.

"Senior Indebtedness" shall have the meaning set forth in
Section 16.1.

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

"Subordinated Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization
relating to the Company whether or not such claim for post-petition
interest is allowed in such proceeding), on Debt, whether incurred
on or prior to the date of this Indenture or thereafter incurred,
which is by its terms expressly provided to be junior and
subordinate to other Debt of the Company (other than the
Debentures).

"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock
shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries; (ii) any general partnership, joint
venture, trust or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be
owned by such Person, or by one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; and (iii) any
limited partnership of which such Person or any of its Subsidiaries
is a general partner.

"Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized tax and
securities practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date
of issuance of the Preferred Securities under the Trust Agreement,
there is more than an insubstantial risk that (i) the Trust is, or
shall be within 90 days after the date of such Opinion of

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<PAGE> 14
Counsel, subject to United States federal income tax with respect to
income received or accrued on the Debentures; (ii) interest payable
by the Company on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, shall not be, deductible by the
Company, in whole or in part, for United States federal income tax
purposes; or (iii) the Trust is, or shall be within 90 days after
the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties, assessments or other
governmental charges. The Trust or the Company shall request and
receive such Opinion of Counsel with regard to such matters within
a reasonable period of time after the Trust or the Company shall
have become aware of any of the events described in clauses (i)
through (iii) above.

"Trust" means Lakeland Capital Trust, a Delaware statutory
business trust.

"Trust Agreement" means the Amended and Restated Trust
Agreement, dated ----------------, 1997, of the Trust.

"Trustee" means State Street Bank and Trust Company and,
subject to the provisions of Article IX, shall also include its
successors and assigns, and, if at any time there is more than one
Person acting in such capacity hereunder, "Trustee" shall mean each
such Person.

"Trust Indenture Act," means the Trust Indenture Act of 1939,
as amended, subject to the provisions of Sections 11.1, 11.2, and
12.1, as in effect at the date of execution of this instrument.

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

"Voting Stock," as applied to stock of any Person, means
shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary
voting power for the election of a majority of the directors (or
the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by
reason of the occurrence of a contingency.

ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS
REGISTRATION AND EXCHANGE OF DEBENTURES

SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.

There is hereby authorized Debentures designated the "------%
Subordinated Debentures due 2027," limited in aggregate principal
amount to $20,618,560, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of
Debentures pursuant to Section 2.6.

SECTION 2.2. MATURITY.

(a) The Maturity Date shall be either:

(i) the Scheduled Maturity Date; or

(ii) if the Company elects to extend the Maturity
Date beyond the Scheduled Maturity Date in
accordance with Section 2.2(b), the Extended
Maturity Date; or

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<PAGE> 15
(iii) if the Company elects to accelerate the
Maturity Date to be a date prior to the
Scheduled Maturity Date in accordance with
Section 2.2(c), the Accelerated Maturity Date.

(b) the Company may at any time before the day which is 90
days before the Scheduled Maturity Date, elect to extend
the Maturity Date to the Extended Maturity Date, provided
that the Company has received the prior approval of the
Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve and further
provided that the following conditions in this
Section 2.2(b) are satisfied both at the date the Company
gives notice in accordance with Section 2.2(d) of its
election to extend the Maturity Date and at the Scheduled
Maturity Date:

(i) the Company is not in bankruptcy, otherwise
insolvent or in liquidation;

(ii) the Company is not in default in the payment
of interest or principal on the Debentures;
and

(iii) the Trust is not in arrears on payments of
Distributions on the Trust Securities issued
by it and no deferred Distributions are
accumulated.

(c) the Company may at any time before the day which is 90
days before the Scheduled Maturity Date and after
September 30, 2002, elect to shorten the Maturity Date
only once to the Accelerated Maturity Date provided that
the Company has received the prior approval of the
Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve.

(d) if the Company elects to extend the Maturity Date in
accordance with Section 2.2(b), the Company shall give
notice to the registered holders of the Debentures, the
Property Trustee and the Trust of the extension of the
Maturity Date and the Extended Maturity Date at least 90
days and no more than 180 days before the Scheduled
Maturity Date.

(e) if the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(c), the Company shall give
notice to the registered holders of the Debentures, the
Property Trustee and the Trust of the acceleration of the
Maturity Date and the Accelerated Maturity Date at least
90 days and no more than 180 days before the Accelerated
Maturity Date.

SECTION 2.3. FORM AND PAYMENT.

The Debentures shall be issued in fully registered
certificated form without interest coupons. Principal and interest
on the Debentures issued in certificated form shall be payable, the
transfer of such Debentures shall be registrable and such
Debentures shall be exchangeable for Debentures bearing identical
terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the
option of the Company by check mailed to the holder at such address
as shall appear in the Debenture Register or by wire transfer to an
account maintained by the holder as specified in the Debenture
Register, provided that the holder provides proper transfer
instructions by the regular record date. Notwithstanding the
foregoing, so long as the holder of any Debentures is the Property
Trustee, the payment of the principal of and interest (including
Compounded Interest and

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<PAGE> 16
Additional Payments, if any) on such Debentures held by the Property
Trustee shall be made at such place and to such account as may be
designated by the Property Trustee.

SECTION 2.4. [INTENTIONALLY OMITTED].

SECTION 2.5. INTEREST.

(a) Each Debenture shall bear interest at the rate of ------%
per annum (the "Coupon Rate") from the original date of issuance
until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject
to the provisions of Article IV) quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date," commencing on September 30, 1997), to the
Person in whose name such Debenture or any Predecessor Debenture is
registered, at the close of business on the regular record date for
such interest installment, which shall be the fifteenth day of the
last month of the calendar quarter.

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

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

SECTION 2.6. EXECUTION AND AUTHENTICATIONS.

(a) The Debentures shall be signed on behalf of the Company
by its Chief Executive Officer, President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. Signatures may be in the form of
a manual or facsimile signature. The Company may use the facsimile
signature of any Person who shall have been a Chief Executive
Officer, President or Vice President thereof, or of any Person who
shall have been a Secretary or Assistant Secretary thereof,
notwithstanding the fact that at the time the Debentures shall be
authenticated and delivered or disposed of such Person shall have
ceased to be the Chief Executive Officer, President or a Vice
President, or the Secretary or an Assistant Secretary of the
Company. The seal of the Company may be in the form of a facsimile
of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures. The Debentures may contain such
notations, legends or endorsements required by law, stock exchange
rule or usage. Each Debenture shall be dated the date of its
authentication by the Trustee.

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<PAGE> 17

(b) A Debenture shall not be valid until manually
authenticated by an authorized signatory of the Trustee, or by an
Authenticating Agent. Such signature shall be conclusive evidence
that the Debenture so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits
of this Indenture.

(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures
executed by the Company to the Trustee for authentication, together
with a written order of the Company for the authentication and
delivery of such Debentures signed by its Chief Executive Officer,
President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with such written order
shall authenticate and deliver such Debentures.

(d) In authenticating such Debentures and accepting the
additional responsibilities under this Indenture in relation to
such Debentures, the Trustee shall be entitled to receive, and
(subject to Section 9.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the form and terms thereof have
been established in conformity with the provisions of this
Indenture.

(e) The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this
Indenture shall affect the Trustee's own rights, duties or
immunities under the Debentures and this Indenture or otherwise in
a manner that is not reasonably acceptable to the Trustee.

SECTION 2.7. REGISTRATION OF TRANSFER AND EXCHANGE.

(a) Debentures may be exchanged upon presentation thereof at
the office or agency of the Company designated for such purpose, or
at the office of the Debenture Registrar, for other Debentures and
for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in
relation thereto, all as provided in this Section 2.7. In respect
of any Debentures so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency
shall deliver in exchange therefor the Debenture or Debentures that
the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.

(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose, or at the office of
the Debenture Registrar, or such other location designated by the
Company a register or registers (herein referred to as the
"Debenture Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article II
provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of
registering Debentures and transfer of Debentures as herein
provided shall initially be the Trustee and thereafter as may be
appointed by the Company as authorized by Board Resolution (the
"Debenture Registrar"). Upon surrender for transfer of any
Debenture at the office or agency of the Company designated for
such purpose, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in the name of
the transferee or transferees a new Debenture or Debentures for a
like aggregate principal amount. All Debentures presented or
surrendered for exchange or registration of transfer, as provided
in this Section 2.7, shall be accompanied (if so required by the
Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the
Debenture Registrar, duly executed by the registered holder or by
such holder's duly authorized attorney in writing.

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<PAGE> 18

(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new Debentures
in case of partial redemption, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge
in relation thereto, other than exchanges pursuant to Section 2.8,
Section 3.5(b) and Section 11.4 not involving any transfer.

(d) The Company shall not be required (i) to issue, exchange
or register the transfer of any Debentures during a period
beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding
Debentures and ending at the close of business on the day of such
mailing; nor (ii) to register the transfer of or exchange any
Debentures or portions thereof called for redemption.

SECTION 2.8. TEMPORARY DEBENTURES.

Pending the preparation of definitive Debentures, the Company
may execute, and the Trustee shall authenticate and deliver,
temporary Debentures (printed, lithographed, or typewritten). Such
temporary Debentures shall be substantially in the form of the
definitive Debentures in lieu of which they are issued, but with
such omissions, insertions and variations as may be appropriate for
temporary Debentures, all as may be determined by the Company.
Every temporary Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the
definitive Debentures. Without unnecessary delay the Company shall
execute and shall furnish definitive Debentures and thereupon any
or all temporary Debentures may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the
Company designated for the purpose, and the Trustee shall
authenticate and such office or agency shall deliver in exchange
for such temporary Debentures an equal aggregate principal amount
of definitive Debentures, unless the Company advises the Trustee to
the effect that definitive Debentures need not be executed and
furnished until further notice from the Company. Until so
exchanged, the temporary Debentures shall be entitled to the same
benefits under this Indenture as definitive Debentures
authenticated and delivered hereunder.

SECTION 2.9. MUTILATED, DESTROYED, LOST OR STOLEN
DEBENTURES.

(a) In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company
(subject to the next succeeding sentence) shall execute, and upon
the Company's request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Debenture bearing a number not
contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the
Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company
and the Trustee such security or indemnity as may be required by
them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the
Company and the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the
ownership thereof. The Trustee may authenticate any such
substituted Debenture and deliver the same upon the written request
or authorization of the Chairman, President or any Vice-President
and the Treasurer or any Assistant Treasurer of the Company. Upon
the issuance of any substituted Debenture, 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. In case any Debenture that has matured or is
about to mature shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture,
pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Debenture) if the applicant for
such payment

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shall furnish to the Company and the Trustee such security or
indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the
Company and the Trustee of the destruction, loss or theft of such
Debenture and of the ownership thereof.

(b) Every replacement Debenture issued pursuant to the
provisions of this Section 2.9 shall constitute an additional
contractual obligation of the Company whether or not the mutilated,
destroyed, lost or stolen Debenture shall be found at any time, or
be 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. All Debentures shall be
held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debentures, and shall
preclude (to the extent lawful) any and all other rights or
remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their
surrender.

SECTION 2.10. CANCELLATION.

All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if
surrendered to the Company or any paying agent, be delivered to the
Trustee for cancellation, or, if surrendered to the Trustee, shall
be canceled by it, and no Debentures shall be issued in lieu
thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company at the
time of such surrender, the Trustee shall deliver to the Company
canceled Debentures held by the Trustee. In the absence of such
request the Trustee may dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate
of disposition to the Company. If the Company shall otherwise
acquire any of the Debentures, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.

SECTION 2.11. BENEFIT OF INDENTURE.

Nothing in this Indenture or in the Debentures, express or
implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Debentures (and,
with respect to the provisions of Article XVI, the holders of
Senior Indebtedness) any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Debentures (and, with respect to
the provisions of Article XVI, the holders of Senior Indebtedness).

SECTION 2.12. AUTHENTICATION AGENT.

(a) So long as any of the Debentures remain Outstanding there
may be an Authenticating Agent for any or all such Debentures,
which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the
Trustee to authenticate Debentures issued upon exchange, transfer
or partial redemption thereof, 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. All references in this Indenture to the
authentication of Debentures by the Trustee shall be deemed to
include authentication by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall
be a corporation that has a combined capital and surplus, as most
recently reported or determined by it, sufficient under the laws of
any jurisdiction under which it is

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organized or in which it is doing business to conduct a trust
business, and that is otherwise authorized under such laws to conduct
such business and is subject to supervision or examination by federal
or state authorities. If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall
resign immediately.

(b) Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the
Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible
successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder as if originally named as an
Authenticating Agent pursuant hereto.

ARTICLE III.
REDEMPTION OF DEBENTURES

SECTION 3.1. REDEMPTION.

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

SECTION 3.2. SPECIAL EVENT REDEMPTION.

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

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SECTION 3.3. OPTIONAL REDEMPTION BY COMPANY.

(a) Subject to the provisions of Section 3.3(b), except as
otherwise may be specified in this Indenture, the Company shall
have the right to redeem the Debentures, in whole or in part, from
time to time, on or after September 30, 2002, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption.
Any redemption pursuant to this Section 3.3(a) shall be made upon
not less than 30 days nor more than 60 days notice to the holder of
the Debentures, at the Redemption Price. If the Debentures are
only partially redeemed pursuant to this Section 3.3, the
Debentures shall be redeemed pro rata or by lot or in such other
manner as the Trustee shall deem appropriate and fair in its
discretion. The Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to pay
the Redemption Price by 10:00 a.m., New York time, on the date such
Redemption Price is to be paid.

(b) If a partial redemption of the Debentures would result in
the delisting of the Preferred Securities issued by the Trust from
The Nasdaq Stock Market's National Market or any comparable level
or successor listing or any national securities exchange or other
organization on which the Preferred Securities are then listed or
quoted, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.

SECTION 3.4. NOTICE OF REDEMPTION.

(a) In case the Company shall desire to exercise such right
to redeem all or, as the case may be, a portion of the Debentures
in accordance with the right reserved so to do, the Company shall,
or shall cause the Trustee to upon receipt of 45 days' written
notice from the Company (which notice shall, in the event of a
partial redemption, include a representation to the effect that
such partial redemption shall not result in the delisting of the
Preferred Securities as described in Section 3.3(b) above), give
notice of such redemption to holders of the Debentures to be
redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before
the date fixed for redemption to such holders at their last
addresses as they shall appear upon the Debenture Register unless
a shorter period is specified in the Debentures to be redeemed.
Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly
to give such notice to the holder of any Debenture designated for
redemption in whole or in part, or any defect in the notice, shall
not affect the validity of the proceedings for the redemption of
any other Debentures. In the case of any redemption of Debentures
prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with any such restriction. Each
such notice of redemption shall specify the date fixed for
redemption and the Redemption Price and shall state that payment of
the Redemption Price shall be made at the Corporate Trust Office,
upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption shall be paid as specified
in said notice and that from and after said date interest shall
cease to accrue. If less than all the Debentures are to be
redeemed, the notice to the holders of the Debentures shall specify
the particular Debentures to be redeemed. If the Debentures are to
be redeemed in part only, the notice shall state the portion of the
principal amount thereof to be redeemed and shall state that on and
after the redemption date, upon surrender of such Debenture, a new
Debenture or Debentures in principal amount equal to the unredeemed
portion thereof shall be issued.

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<PAGE> 22

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

SECTION 3.5. PAYMENT UPON REDEMPTION.

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

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

SECTION 3.6. NO SINKING FUND.

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

ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD

SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.

So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest by
extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive

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<PAGE> 23
quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and
payable; provided that no Extended Interest Payment Period may extend
beyond the Maturity Date. Interest, the payment of which has been
deferred because of the extension of the interest payment period
pursuant to this Section 4.1, shall bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended
Interest Payment Period (the "Compounded Interest"). At the end of
the Extended Interest Payment Period, the Company shall calculate
(and deliver such calculation to the Trustee) and pay all interest
accrued and unpaid on the Debentures, including any Additional
Payments and Compounded Interest (together, the "Deferred
Payments") that shall be payable to the holders of the Debentures
in whose names the Debentures are registered in the Debenture
Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such
period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the Maturity Date of the Debentures. Upon the
termination of any Extended Interest Payment Period and upon the
payment of all Deferred Payments then due, the Company may commence
a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof, but
the Company may prepay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period.

SECTION 4.2. NOTICE OF EXTENSION.

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

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

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

SECTION 4.3. LIMITATION ON TRANSACTIONS.

If (i) the Company shall exercise its right to defer payment
of interest as provided in Section 4.1; or (ii) there shall have
occurred any Event of Default, then (a) the Company shall not
declare or pay any dividend or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) dividends or distributions
in common stock of the Company, or any declaration of a non-cash
dividend in connection with the implementation of a shareholders'
rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any

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<PAGE> 24
such rights pursuant thereto, and (ii) purchases of common stock of
the Company related to the rights under any of the Company's benefit
plans for its directors, officers or employees); (b) the Company
shall not make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the
Company which rank pari passu with or junior in interest to the
Debentures; provided, however, that notwithstanding the foregoing the
Company may make payments pursuant to its obligations under the
Preferred Securities Guarantee; and (c) the Company shall not redeem,
purchase or acquire less than all of the outstanding Debentures or
any of the Preferred Securities.

ARTICLE V.
PARTICULAR COVENANTS OF COMPANY

SECTION 5.1. PAYMENT OF PRINCIPAL AND INTEREST.

The Company shall duly and punctually pay or cause to be paid
the principal of and interest on the Debentures at the time and
place and in the manner provided herein. Each such payment of the
principal of or interest on the Debentures shall relate only to the
Debentures, shall not be combined with any other payment of the
principal of or interest on any other obligation of the Company,
and shall be clearly and unmistakably identified as pertaining to
the Debentures.

SECTION 5.2. MAINTENANCE OF AGENCY.

So long as any of the Debentures remain Outstanding, the
Company shall maintain an office or agency at such location or
locations as may be designated as provided in this Section 5.2,
where (i) Debentures may be presented for payment; (ii) Debentures
may be presented as hereinabove authorized for registration of
transfer and exchange; and (iii) notices and demands to or upon the
Company in respect of the Debentures and this Indenture may be
given or served, such designation to continue with respect to such
office or agency until the Company shall, by written notice signed
by its President or a Vice President and delivered to the Trustee,
designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all
such presentations, notices and demands. The Company shall give
the Trustee prompt written notice of any such designation or
rescission thereof.

SECTION 5.3. PAYING AGENTS.

(a) The Trustee shall act as the Paying Agent. If the
Company shall appoint one or more paying agents for the Debentures,
other than the Trustee, the Company shall cause each such paying
agent to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions
of this Section 5.3:

(i) that it shall hold all sums held by it as such agent
for the payment of the principal of or interest on the
Debentures (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust
for the benefit of the Persons entitled thereto;

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<PAGE> 25

(ii) that it shall give the Trustee notice of any
failure by the Company (or by any other obligor of such
Debentures) to make any payment of the principal of or
interest on the Debentures when the same shall be due and
payable;

(iii) that it shall, at any time during the continuance
of any failure referred to in the preceding paragraph (a)(ii)
above, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent;
and

(iv) that it shall perform all other duties of Paying
Agent as set forth in this Indenture.

(b) If the Company shall act as its own Paying Agent with
respect to the Debentures, it shall on or before each due date of
the principal of or interest on such Debentures, set aside,
segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay such principal or interest so
becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall
promptly notify the Trustee of such action, or any failure (by it
or any other obligor on such Debentures) to take such action.
Whenever the Company shall have one or more Paying Agents for the
Debentures, it shall, prior to each due date of the principal of or
interest on any Debentures, deposit with the Paying Agent a sum
sufficient to pay the principal or interest so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to
such principal or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of this
action or failure so to act.

(c) Notwithstanding anything in this Section 5.3 to the
contrary, (i) the agreement to hold sums in trust as provided in
this Section 5.3 is subject to the provisions of Section 13.3 and
13.4; and (ii) 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 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 terms and
conditions 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.

SECTION 5.4. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.

The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, shall appoint, in the manner provided in
Section 9.10, a Trustee, so that there shall at all times be a
Trustee hereunder.

SECTION 5.5. COMPLIANCE WITH CONSOLIDATION PROVISIONS.

The Company shall not, while any of the Debentures remain
outstanding, consolidate with, or merge into, or merge into itself,
or sell or convey all or substantially all of its property to any
other company unless the provisions of Article XII hereof are
complied with.

SECTION 5.6. LIMITATION ON TRANSACTIONS.

If Debentures are issued to the Trust or a trustee of the
Trust in connection with the issuance of Trust Securities by the
Trust and (i) there shall have occurred any event that would
constitute an Event of Default; (ii) the Company shall be in
default with respect to its payment of any obligations under the

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<PAGE> 26
Preferred Securities Guarantee relating to the Trust; or (iii) the
Company shall have given notice of its election to defer payments
of interest on such Debentures by extending the interest payment
period as provided in this Indenture and such period, or any
extension thereof, shall be continuing, then (a) the Company shall
not declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its capital stock (other than (i) dividends or distributions
in common stock of the Company, or any declaration of a non-cash
dividend in connection with the implementation of a shareholders'
rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant
thereto, and (ii) purchases of common stock of the Company related
to the rights under any of the Company's benefit plans for its
directors, officers or employees); (b) the Company shall not make
any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company
which rank pari passu with or junior in interest to the Debentures;
provided, however, that the Company may make payments pursuant to
its obligations under the Preferred Securities Guarantee; and
(c) the Company shall not redeem, purchase or acquire less than all
of the outstanding Debentures or any of the Preferred Securities.

SECTION 5.7. COVENANTS AS TO THE TRUST.

For so long as the Trust Securities of the Trust remain
outstanding, the Company shall (i) maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however,
that any permitted successor of the Company under this Indenture
may succeed to the Company's ownership of the Common Securities;
(ii) not voluntarily terminate, wind up or liquidate the Trust,
except upon prior approval of the Federal Reserve if then so
required under applicable capital guidelines or policies of the
Federal Reserve and use its reasonable efforts to cause the Trust
(a) to remain a business trust, except in connection with a
distribution of Debentures, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement; and (b) to
otherwise continue not to be treated as an association taxable as
a corporation or partnership for United States federal income tax
purposes; and (iii) use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an individual
beneficial interest in the Debentures. In connection with the
distribution of the Debentures to the holders of the Preferred
Securities issued by the Trust upon a Dissolution Event, the
Company shall use its best efforts to list such Debentures on The
Nasdaq Stock Market's National Market or on such other exchange as
the Preferred Securities are then listed.

SECTION 5.8. COVENANTS AS TO PURCHASES.

Except upon the exercise by the Company of its right to redeem
the Debentures pursuant to Section 3.2 upon the occurrence and
continuation of a Special Event, the Company shall not purchase any
Debentures, in whole or in part, from the Trust prior to September
30, 2002.

ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS
BY COMPANY AND TRUSTEE

SECTION 6.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.

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The Company shall furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as
described in Section 2.5) a list, in such form as the Trustee may
reasonably require, of the names and addresses of the holders of
the Debentures as of such regular record date, provided that the
Company shall not be obligated to furnish or cause to furnish such
list at any time that the list shall not differ in any respect from
the most recent list furnished to the Trustee by the Company (in
the event the Company fails to provide such list on a quarterly
basis, the Trustee shall be entitled to rely on the most recent
list provided by the Company); and (b) at such other times as the
Trustee may request in writing within 30 days after the receipt by
the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that, in either case, no such list
need be furnished if the Trustee shall be the Debenture Registrar.

SECTION 6.2. PRESERVATION OF INFORMATION COMMUNICATIONS WITH
DEBENTUREHOLDERS.

(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and
addresses of the holders of Debentures contained in the most recent
list furnished to it as provided in Section 6.1 and as to the names
and addresses of holders of Debentures received by the Trustee in
its capacity as Debenture Registrar for the Debentures (if acting
in such capacity).

(b) The Trustee may destroy any list furnished to it as
provided in Section 6.1 upon receipt of a new list so furnished.

(c) Debentureholders may communicate as provided in Section
312(b) of the Trust Indenture Act with other Debentureholders with
respect to their rights under this Indenture or under the
Debentures.

SECTION 6.3. REPORTS BY COMPANY.

(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to
either of such sections, then to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act 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.

(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by
the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.

(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service that provides for evidence of receipt, to the
Debentureholders, as their names and addresses appear upon the
Debenture Register, within 30 days after the filing thereof with

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<PAGE> 28
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section 6.3 as may be required by
rules and regulations prescribed from time to time by the
Commission.

SECTION 6.4. REPORTS BY TRUSTEE.

(a) On or before July 15 in each year in which any of the
Debentures are Outstanding, the Trustee shall transmit by mail,
first class postage prepaid, to the Debentureholders, as their
names and addresses appear upon the Debenture Register, a brief
report dated as of the preceding May 15, if and to the extent
required under Section 313(a) of the Trust Indenture Act.

(b) The Trustee shall comply with Section 313(b) and 313(c)
of the Trust Indenture Act.

(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Debentures are
listed (if so listed) and also with the Commission. The Company
agrees to notify the Trustee when any Debentures become listed on
any stock exchange.

ARTICLE VII.
REMEDIES OF TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT

SECTION 7.1. EVENTS OF DEFAULT.

(a) Whenever used herein with respect to the Debentures,
"Event of Default" means any one or more of the following events
that has occurred and is continuing:

(i) the Company defaults in the payment of any
installment of interest upon any of the Debentures, as and
when the same shall become due and payable, and continuance of
such default for a period of 30 days; provided, however, that
a valid extension of an interest payment period by the Company
in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this
purpose;

(ii) the Company defaults in the payment of the principal
on the Debentures as and when the same shall become due and
payable whether at maturity, upon redemption, by declaration
or otherwise; provided, however, that a valid extension of the
maturity of such Debentures in accordance with the terms of
this Indenture shall not constitute a default in the payment
of principal;

(iii) the Company fails to observe or perform any other
of its covenants or agreements with respect to the Debentures
for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default" hereunder, shall
have been given to the Company by the Trustee, by registered
or certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Debentures
at the time Outstanding;

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(iv) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents
to the entry of an order for relief against it in an
involuntary case; (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit
of its creditors;

(v) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the
Company in an involuntary case; (ii) appoints a Custodian of
the Company for all or substantially all of its property; or
(iii) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days; or

(vi) the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of
Debentures to holders of Trust Securities in liquidation of
their interests in the Trust; (ii) the redemption of all of
the outstanding Trust Securities of the Trust; or
(iii) certain mergers, consolidations or amalgamations, each
as permitted by the Trust Agreement.

(b) In each and every such case referred to in items (i)
through (vi) of Section 7.1(a), unless the principal of all the
Debentures shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal
amount of the Debentures then Outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by such
Debentureholders) may declare the principal of all the Debentures
to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable,
notwithstanding anything contained in this Indenture or in the
Debentures.

(c) At any time after the principal of the Debentures shall
have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the holders of a majority in
aggregate principal amount of the Debentures then Outstanding
hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the
Debentures and the principal of any and all Debentures that shall
have become due otherwise than by acceleration (with interest upon
such principal, and upon overdue installments of interest, at the
rate per annum expressed in the Debentures to the date of such
payment or deposit) and the amount payable to the Trustee under
Section 9.7; and (ii) any and all Events of Default under this
Indenture, other than the nonpayment of principal on Debentures
that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 7.6. No such rescission
and annulment shall extend to or shall affect any subsequent
default or impair any right consequent thereon.

(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures under this Indenture and such
proceedings shall have been discontinued or abandoned because of
such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such
case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue
as though no such proceedings had been taken.

SECTION 7.2. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.

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(a) The Company covenants that (1) in case it shall default
in the payment of any installment of interest on any of the
Debentures, and such default shall have continued for a period of
90 Business Days; or (2) in case it shall default in the payment of
the principal of any of the Debentures when the same shall have
become due and payable, whether upon maturity of the Debentures or
upon redemption or upon declaration or otherwise, then, upon demand
of the Trustee, the Company shall pay to the Trustee, for the
benefit of the holders of the Debentures, the whole amount that
then shall have been become due and payable on all such Debentures
for principal or interest, or both, as the case may be, with
interest upon the overdue principal and (if the Debentures are held
by the Trust or a trustee of the Trust, without duplication of any
other amounts paid by the Trust or trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed in
the Debentures; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection,
and the amount payable to the Trustee under Section 9.7.

(b) If the Company shall fail to pay such amounts set forth
in Section 7.2(a) forthwith upon such demand, the Trustee, in its
own name and as trustee of an express trust, shall be entitled and
empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against
the Company or other obligor upon the Debentures and collect the
moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or other obligor upon the
Debentures, wherever situated.

(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition
or judicial proceedings affecting the Company or the creditors or
property thereof, the Trustee shall have power to intervene in such
proceedings and take any action therein that may be permitted by
the court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of the Debentures allowed
for the entire amount due and payable by the Company under this
Indenture at the date of institution of such proceedings and for
any additional amount that may become due and payable by the
Company after such date, and to collect and receive any moneys or
other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to
the Trustee under Section 9.7; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by
each of the holders of the Debentures to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to such Debentureholders, to pay
to the Trustee any amount due it under Section 9.7.

(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Debentures, may be enforced by the Trustee without the possession
of any of such Debentures, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or
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 payment to the Trustee of any amounts
due under Section 9.7, be for the ratable benefit of the holders of
the Debentures. In case of an Event of Default hereunder, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of
the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law. Nothing contained herein shall be deemed to
authorize the

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<PAGE> 31
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 7.3. APPLICATION OF MONEYS COLLECTED.

Any moneys collected by the Trustee pursuant to this Article
VII with respect to the Debentures shall be applied in the
following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal or
interest, upon presentation of the Debentures, and notation thereon
of the payment, if only partially paid, and upon surrender thereof
if fully paid:

FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Trustee under
Section 9.7;

SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XVI; and

THIRD: To the payment of the amounts then due and unpaid
upon the Debentures for principal 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 and interest, respectively.

SECTION 7.4. LIMITATION ON SUITS.

(a) Except as provided in section 15.13 hereof, no holder of
any Debenture shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to
this Indenture or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless (i) such holder previously
shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof with respect to the
Debentures specifying such Event of Default, as hereinbefore
provided; (ii) the holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding shall have made
written request upon the Trustee to institute such action, suit or
proceeding in its own name as trustee hereunder; (iii) such holder
or holders shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (iv) the Trustee
for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or
proceeding; and (v) during such 60 day period, the holders of a
majority in principal amount of the Debentures do not give the
Trustee a direction inconsistent with the request.

(b) Notwithstanding anything contained herein to the contrary
or any other provisions of this Indenture, the right of any holder
of the Debentures to receive payment of the principal of and
interest on the Debentures, as therein provided, on or after the
respective due dates expressed in such Debenture (or in the case of
redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the
consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and
holder of every Debenture with every other such taker and holder
and the Trustee, that no one or more holders of Debentures shall
have any right in any manner whatsoever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the
rights of the

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<PAGE> 32
holders of any other of such Debentures, or to obtain or seek to
obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders
of Debentures. For the protection and enforcement of the provisions
of this Section 7.4, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in
equity.

SECTION 7.5. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION
NOT WAIVER.

(a) Except as otherwise provided in Section 2.9, all powers
and remedies given by this Article VII to the Trustee or to the
Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Debentures, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such Debentures.

(b) No delay or omission of the Trustee or of any holder of
any of the Debentures to exercise any right or power accruing upon
any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject
to the provisions of Section 7.4, every power and remedy given by
this Article VII or by law to the Trustee or the Debentureholders
may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Debentureholders.

SECTION 7.6. CONTROL BY DEBENTUREHOLDERS.

The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with
Section 10.4, 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, however, that such direction shall not be in conflict
with any rule of law or with this Indenture. Subject to the
provisions of Section 9.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee,
determine that the proceeding so directed would involve the Trustee
in personal liability. The holders of a majority in aggregate
principal amount of the Debentures at the time Outstanding affected
thereby, determined in accordance with Section 10.4, may on behalf
of the holders of all of the Debentures waive any past default in
the performance of any of the covenants contained herein and its
consequences, except (i) a default in the payment of the principal
of or interest on any of the Debentures as and when the same shall
become due by the terms of such Debentures otherwise than by
acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and
principal has been deposited with the Trustee (in accordance with
Section 7.1(c)); (ii) a default in the covenants contained in
Section 5.6; or (iii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the
holder of each Outstanding Debenture affected; provided, however,
that if the Debentures are held by the Trust or a trustee of the
Trust, such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation preference
of Trust Securities of the Trust shall have consented to such
waiver or modification to such waiver; provided further, that if
the consent of the holder of each Outstanding Debenture is
required, such waiver shall not be effective until each holder of
the Trust Securities of the Trust shall have consented to such
waiver. Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of

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<PAGE> 33
the Debentures shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

SECTION 7.7. UNDERTAKING TO PAY COSTS.

All parties to this Indenture agree, and each holder of any
Debentures by such holder's 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 7.7 shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Debentureholder, or group of
Debentureholders holding more than 10% in aggregate principal
amount of the Outstanding Debentures, or to any suit instituted by
any Debentureholder for the enforcement of the payment of the
principal of or interest on the Debentures, on or after the
respective due dates expressed in such Debenture or established
pursuant to this Indenture.

ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE

SECTION 8.1. FORM OF DEBENTURE.

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

SECTION 8.2. ORIGINAL ISSUE OF DEBENTURES.

Debentures in the aggregate principal amount of $18,556,710
may, upon execution of this Indenture, be executed by the Company
and delivered to the Trustee for authentication. If the
Underwriters exercise their Option and there is an Option Closing
Date (as such terms are defined in the Underwriting Agreement,
dated -----------, 1997, by and among the Company, the Trust and
Stifel Nicolaus & Company, Incorporated) then, on such Option
Closing Date, Debentures in the additional aggregate principal
amount of up to $2,061,850 may be executed by the Company and
delivered to the Trustee for authentication. In either such event,
the Trustee shall thereupon authenticate and deliver said
Debentures to or upon the written order of the Company, signed by
its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any
further action by the Company.

ARTICLE IX.
CONCERNING TRUSTEE

SECTION 9.1. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.

(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform with respect to the Debentures
such duties

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<PAGE> 34
and only such duties as are specifically set forth in this Indenture,
and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default has occurred that has not
been cured or waived, 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.

(b) 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) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:

(i) the duties and obligations of the Trustee shall
with respect to the Debentures be determined solely by
the express provisions of this Indenture, and the Trustee
shall not be liable with respect to the Debentures except
for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this
Indenture against the Trustee; and

(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to the Debentures
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
any 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 that 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;

(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, 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 not less than
a majority in principal amount of the Debentures at the time
Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the Debentures;
and

(4) none of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or
adequate indemnity against such risk is not reasonably assured
to it.

SECTION 9.2. NOTICE OF DEFAULTS.

Within 90 days after actual knowledge by a Responsible Officer
of the Trustee of the occurrence of any default hereunder with
respect to the Debentures, the Trustee shall transmit by mail to
all holders of the Debentures, as their names and addresses appear
in the Debenture Register, notice of such default, unless such
default shall have been cured or waived; provided, however, that,
except in the case of a

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<PAGE> 35
default in the payment of the principal or interest (including any
Additional Payments) 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 the directors and/or
Responsible Officers of the Trustee determines in good faith that the
withholding of such notice is in the interests of the holders of such
Debentures; and provided, further, that in the case of any default of
the character specified in section 7.1(a)(iii), no such notice to
holders of Debentures need be sent until at least 30 days after the
occurrence thereof. For the purposes of this Section 9.2, the term
"default" means any event which is, or after notice or lapse of time
or both, would become, an Event of Default with respect to the
Debentures.

SECTION 9.3. CERTAIN RIGHTS OF TRUSTEE.

Except as otherwise provided in Section 9.1:

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

(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
thereof (unless other evidence in respect thereof is specifically
prescribed herein);

(c) The Trustee shall not be deemed to have knowledge of a
default or an Event of Default, other than an Event of Default
specified in Section 7.1(a)(i) or (ii), unless and until it
receives written notification of such Event of Default from the
Company or by holders of at least 25% of the aggregate principal
amount of the Debentures at the time Outstanding;

(d) 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 or suffered or omitted hereunder in good faith and in
reliance thereon;

(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Debentureholders,
pursuant to the provisions of this Indenture, unless such
Debentureholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or
waived) to exercise with respect to the Debentures such of the
rights and powers vested in it by this Indenture, and to 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;

(f) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;

(g) 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, consent,
order,

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<PAGE> 36
approval, bond, security, or other papers or documents, unless
requested in writing so to do by the holders of not less than a
majority in principal amount of the Outstanding Debentures
(determined as provided in Section 10.4); provided, however, that
if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and

(h) 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 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 9.4. TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.

(a) The Recitals contained herein and in the Debentures shall
be taken as the statements of the Company, and the Trustee assumes
no responsibility for the correctness of the same.

(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.

(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the
proceeds of such Debentures, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision of
this Indenture, or for the use or application of any moneys
received by any paying agent other than the Trustee.

SECTION 9.5. MAY HOLD DEBENTURES.

The Trustee or any Paying Agent or Debenture Registrar for the
Debentures, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have
if it were not Trustee, Paying Agent or Debenture Registrar.

SECTION 9.6. MONEYS HELD IN TRUST.

Subject to the provisions of Section 13.5, all moneys received
by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but
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 moneys received by it hereunder except such as it
may agree with the Company to pay thereon.

SECTION 9.7. COMPENSATION AND REIMBURSEMENT.

(a) The Company covenants and agrees to pay to the Trustee,
and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), as the Company
and the Trustee may from time to time agree in writing, for all
services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and, except as

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otherwise expressly provided herein, the Company shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any
such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the
Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and
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 of liability in the premises.

(b) The obligations of the Company under this Section 9.7 to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular
Debentures.

SECTION 9.8. RELIANCE ON OFFICERS' CERTIFICATE.

Except as otherwise provided in Section 9.1, whenever in the
administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate
delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to
be taken by it under the provisions of this Indenture upon the
faith thereof.

SECTION 9.9. DISQUALIFICATION: CONFLICTING INTERESTS.

If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act,
the Trustee and the Company shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.

SECTION 9.10. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

There shall at all times be a Trustee with respect to the
Debentures issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the
United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or other Person
permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and subject to
supervision or examination by federal, state, territorial, or
District of Columbia 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 9.10, 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. The Company may not, nor may any Person
directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. In case at any time
the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.10, the Trustee shall resign
immediately in the manner and with the effect specified in Section
9.11.

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SECTION 9.11. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) The Trustee or any successor hereafter appointed, may at
any time resign by giving written notice thereof to the Company and
by transmitting notice of resignation by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee
with respect to Debentures by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy
to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of
a successor trustee with respect to Debentures, or any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months may, subject to the provisions
of Section 9.11, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, appoint a successor
trustee.

(b) In case at any time any one of the following shall occur

(i) the Trustee shall fail to comply with the provisions
of Section 9.9 after written request therefor by the Company
or by any Debentureholder who has been a bona fide holder of
a Debenture or Debentures for at least six months; or

(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.10 and shall fail
to resign after written request therefor by the Company or by
any such Debentureholder; or

(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or commence a
voluntary bankruptcy proceeding, or a receiver of the Trustee
or of its property shall be appointed or consented to, 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, the
Company may remove the Trustee with respect to all Debentures
and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to
the provisions of Section 9.9, unless the Trustee's duty to
resign is stayed as provided herein, any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for
at least six months may, on behalf of that holder and all
others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.

(c) The holders of a majority in aggregate principal amount
of the Debentures at the time Outstanding may at any time remove
the Trustee by so notifying the Trustee and the Company and may
appoint a successor Trustee with the consent of the Company.

(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures pursuant to
any of the provisions of this Section 9.11 shall become effective
upon acceptance of appointment by the successor trustee as provided
in Section 9.12.

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(e) Any successor trustee appointed pursuant to this Section
9.11 may be appointed with respect to the Debentures, and at any
time there shall be only one Trustee with respect to the
Debentures.

SECTION 9.12. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

(a) In case of the appointment hereunder of a successor
trustee with respect to the Debentures, every successor trustee so
appointed 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 retiring Trustee; but, on
the 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.

(b) Upon request of any 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 referred to in Section 9.12(a).

(c) 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 IX.

(d) Upon acceptance of appointment by a successor trustee as
provided in this Section 9.12, the Company shall transmit notice of
the succession of such trustee hereunder by mail, first class
postage prepaid, to the Debentureholders, as their names and
addresses appear upon the Debenture Register. If the Company fails
to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.

SECTION 9.13. 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 the
corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 9.9 and eligible under
the provisions of Section 9.10, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. 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 9.14. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY.

The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in
Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the
Trust Indenture Act to the extent included therein.

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ARTICLE X.
CONCERNING DEBENTUREHOLDERS

SECTION 10.1. EVIDENCE OF ACTION BY HOLDERS.

(a) Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate
principal amount of the Debentures may take any action (including
the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that
at the time of taking any such action the holders of such majority
or specified percentage have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed
by such holders of Debentures in Person or by agent or proxy
appointed in writing.

(b) If the Company shall solicit from the Debentureholders
any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as
evidenced by an Officers' Certificate, fix in advance a record date
for the determination of Debentureholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver
or other action, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action
may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record
date shall be deemed to be Debentureholders for the purposes of
determining whether Debentureholders of the requisite proportion of
Outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding
Debentures shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

SECTION 10.2. PROOF OF EXECUTION BY DEBENTUREHOLDERS.

Subject to the provisions of Section 9.1, proof of the
execution of any instrument by a Debentureholder (such proof shall
not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Debentures shall be sufficient
if made in the following manner:

(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee.

(b) The ownership of Debentures shall be proved by the
Debenture Register of such Debentures or by a certificate of the
Debenture Registrar thereof.

(c) The Trustee may require such additional proof of any
matter referred to in this Section 10.2 as it shall deem necessary.

SECTION 10.3. WHO MAY BE DEEMED OWNERS.

Prior to the due presentment for registration of transfer of
any Debenture, the Company, the Trustee, any Paying Agent, any
Authenticating Agent and any Debenture Registrar may deem and treat
the Person in whose name such Debenture shall be registered upon
the books of the Company as the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding

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any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment
of or on account of the principal of and interest on such Debenture
(subject to Section 2.3) and for all other purposes; and neither
the Company nor the Trustee nor any Paying Agent nor any
Authenticating Agent nor any Debenture Registrar shall be affected
by any notice to the contrary.

SECTION 10.4. CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.

In determining whether the holders of the requisite aggregate
principal amount of Debentures have concurred in any direction,
consent or waiver under this Indenture, the Debentures that are
owned by the Company or any other obligor on the Debentures or by
any Person directly or indirectly controlling or controlled by or
under common control with the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be Outstanding
for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Debentures
that the Trustee actually knows are so owned shall be so
disregarded. The Debentures so owned that have been pledged in
good faith may be regarded as Outstanding for the purposes of this
Section 10.4, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case
of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee.

SECTION 10.5. ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.

At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 10.1, of the taking of any action
by the holders of the majority or percentage in aggregate principal
amount of the Debentures specified in this Indenture in connection
with such action, any holder of a Debenture that is shown by the
evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in Section 10.2,
revoke such action so far as concerns such Debenture. Except as
aforesaid any such action taken by the holder of any Debenture
shall be conclusive and binding upon such holder and upon all
future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or
in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture. Any action taken by
the holders of the majority or percentage in aggregate principal
amount of the Debentures specified in this Indenture in connection
with such action shall be conclusively binding upon the Company,
the Trustee and the holders of all the Debentures.

ARTICLE XI.
SUPPLEMENTAL INDENTURES

SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
DEBENTUREHOLDERS.

In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect), without the consent of the
Debentureholders, for one or more of the following purposes:

(a) to cure any ambiguity, defect, or inconsistency herein or
in the Debentures;

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(b) to comply with Article X;

(d) to add to the covenants of the Company for the benefit of
the holders of all or any of the Debentures or to surrender any
right or power herein conferred upon the Company;

(e) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or
purposes of issue, authentication, and delivery of Debentures, as
herein set forth;

(f) to make any change that does not adversely affect the
rights of any Debentureholder in any material respect;

(g) to provide for the issuance of and establish the form and
terms and conditions of the Debentures, to establish the form of
any certifications required to be furnished pursuant to the terms
of this Indenture or of the Debentures, or to add to the rights of
the holders of the Debentures;

(h) qualify or maintain the qualification of this Indenture
under the Trust Indenture Act; or

(i) to evidence a consolidation or merger involving the
Company as permitted under Section 21.1.

The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any
such supplemental indenture that affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise. Any
supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time
Outstanding, notwithstanding any of the provisions of Section 11.2.

SECTION 11.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF
DEBENTUREHOLDERS.

With the consent (evidenced as provided in Section 10.1) of
the holders of not less than a majority in aggregate principal
amount of the Debentures at the time Outstanding, the Company, when
authorized by Board Resolutions, and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of any supplemental indenture
or of modifying in any manner not covered by Section 11.1 the
rights of the holders of the Debentures under this Indenture;
provided, however, that no such supplemental indenture shall
without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of
any Debentures, reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, without the
consent of the holder of each Debenture so affected; or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture; provided
further, that if the Debentures are held by the Trust or a trustee
of the Trust, such supplemental indenture shall not be effective
until the holders of a majority in liquidation preference of Trust
Securities of the Trust shall have consented to such supplemental
indenture; provided further, that if the consent of the holder of
each Outstanding Debenture is required, such supplemental indenture
shall not be effective until

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each holder of the Trust Securities of the Trust shall have consented
to such supplemental indenture. It shall not be necessary for the
consent of the Debentureholders affected thereby under this Section
11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURES.

Upon the execution of any supplemental indenture pursuant to
the provisions of this Article XI, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the
holders of Debentures shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

SECTION 11.4. DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.

Debentures affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article XI, may bear a notation
in form approved by the Company, provided such form meets the
requirements of any exchange upon which the Debentures may be
listed, 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 Board of Directors of
the Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the
Debentures then Outstanding.

SECTION 11.5. EXECUTION OF SUPPLEMENTAL INDENTURES.

(a) Upon the request of the Company, accompanied by its Board
Resolutions authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the
consent of Debentureholders required to consent thereto as
aforesaid, the Trustee shall join with the Company in the execution
of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such
supplemental indenture. The Trustee, subject to the provisions of
Sections 9.1, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this
Article XI is authorized or permitted by, and conforms to, the
terms of this Article XI and that it is proper for the Trustee
under the provisions of this Article XI to join in the execution
thereof.

(b) Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of
this Section 11.5, the Trustee shall transmit by mail, first class
postage prepaid, a notice, setting forth in general terms the
substance of such supplemental indenture, to the Debentureholders
as their names and addresses appear upon the Debenture Register.
Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.

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ARTICLE XII.
SUCCESSOR CORPORATION

SECTION 12.1. COMPANY MAY CONSOLIDATE, ETC.

Nothing contained in this Indenture or in any of the
Debentures shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not
affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company, as the case may be,
or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition
of the property of the Company, as the case may be, or its
successor or successors as an entirety, or substantially as an
entirety, to any other corporation (whether or not affiliated with
the Company, as the case may be, or its successor or successors)
authorized to acquire and operate the same; provided, however, that
the Company hereby covenants and agrees that, (i) upon any such
consolidation, merger, sale, conveyance, transfer or other
disposition, the due and punctual payment, in the case of the
Company, of the principal of and interest on all of the Debentures,
according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to
be kept or performed by the Company as the case may be, shall be
expressly assumed, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act, as then in effect)
satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which
the Company, as the case may be, shall have been merged, or by the
entity which shall have acquired such property; (ii) in case the
Company consolidates with or merges into another Person or conveys
or transfers its properties and assets substantially as an entirety
to any Person, the successor Person is organized under the laws of
the United States or any state or the District of Columbia; and
(iii) immediately after giving effect thereto, no Event of Default,
and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing.

SECTION 12.2. SUCCESSOR CORPORATION SUBSTITUTED.

(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption
by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and
interest on all of the Debentures Outstanding and the due and
punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company such successor corporation
shall succeed to and be substituted for the Company, with the same
effect as if it had been named as the Company herein, and thereupon
the predecessor corporation shall be relieved of all obligations
and covenants under this Indenture and the Debentures.

(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.

(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property
of any other Person (whether or not affiliated with the Company).

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SECTION 12.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

The Trustee, subject to the provisions of Section 9.1, may
receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions of
this Article XII.

ARTICLE XIII.
SATISFACTION AND DISCHARGE

SECTION 13.1. SATISFACTION AND DISCHARGE OF INDENTURE.

If at any time: (a) the Company shall have delivered to the
Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that shall have been destroyed, lost or
stolen and that shall have been replaced or paid as provided in
Section 2.9) and Debentures for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated
and held in trust by the Company (and thereupon repaid to the
Company or discharged from such trust, as provided in Section
13.5); or (b) all such Debentures not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are
by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in moneys or Governmental
Obligations sufficient, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered
to the Trustee, to pay at maturity or upon redemption all
Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due
to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company; then this Indenture
shall thereupon cease to be of further effect except for the
provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10, that
shall survive until the date of maturity or redemption date, as the
case may be, and Sections 9.6 and 13.5, that shall survive to such
date and thereafter, and the Trustee, on demand of the Company and
at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this
Indenture.

SECTION 13.2. DISCHARGE OF OBLIGATIONS.

If at any time all Debentures not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as
described in Section 13.1 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an
amount of Governmental Obligations sufficient in the opinion of a
nationally recognized certified public accounting firm to pay at
maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal and
interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by
the Company, then after the date such moneys or Governmental
Obligations, as the case may be, are deposited with the Trustee,
the obligations of the Company under this Indenture shall cease to
be of further effect except for the provisions of Sections 2.3,
2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.10 and 13.5 hereof that shall
survive until such Debentures shall mature and be paid.
Thereafter, Sections 9.6 and 13.5 shall survive.

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SECTION 13.3. DEPOSITED MONEYS TO BE HELD IN TRUST.

All monies or Governmental Obligations deposited with the
Trustee pursuant to Sections 13.1 or 13.2 shall be held in trust
and shall be available for payment as due, either directly or
through any Paying Agent (including the Company acting as its own
Paying Agent), to the holders of the Debentures for the payment or
redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.

SECTION 13.4. PAYMENT OF MONIES HELD BY PAYING AGENTS.

In connection with the satisfaction and discharge of this
Indenture, all moneys or Governmental Obligations then held by any
Paying Agent under the provisions of this Indenture shall, upon
demand of the Company, be paid to the Trustee and thereupon such
Paying Agent shall be released from all further liability with
respect to such moneys or Governmental Obligations.

SECTION 13.5. REPAYMENT TO COMPANY.

Any monies or Governmental Obligations deposited with any
Paying Agent or the Trustee, or then held by the Company in trust,
for payment of principal of or interest on the Debentures that are
not applied but remain unclaimed by the holders of such Debentures
for at least two years after the date upon which the principal of
or interest on such Debentures shall have respectively become due
and payable, shall be repaid to the Company, as the case may be, on
May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the Paying Agent and the
Trustee shall be released from all further liability with respect
to such moneys or Governmental Obligations, and the holder of any
of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the
Company for the payment thereof.

ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS

SECTION 14.1. NO RECOURSE.

No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of the Debentures, or for any claim
based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present
or future as such, of the Company or of any predecessor or
successor corporation, either directly or through the Company or
any such predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by,
the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any
of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Debentures
or implied therefrom; and that any and all such personal liability
of every name and nature, either at common law or in equity or by
constitution or statute, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director
as such, because of the creation of the indebtedness hereby
authorized,

40
<PAGE> 47
or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied
therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and
the issuance of such Debentures.

ARTICLE XV.
MISCELLANEOUS PROVISIONS

SECTION 15.1. EFFECT ON SUCCESSORS AND ASSIGNS.

All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall bind
their respective successors and assigns, whether so expressed or
not.

SECTION 15.2. ACTIONS BY SUCCESSOR.

Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board,
committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.

SECTION 15.3. SURRENDER OF COMPANY POWERS.

The Company by instrument in writing executed by appropriate
authority of its Board of Directors and delivered to the Trustee
may surrender any of the powers reserved to the Company, and
thereupon such power so surrendered shall terminate both as to the
Company, as the case may be, and as to any successor corporation.

SECTION 15.4. NOTICES.

Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of
Debentures to or on the Company may be given or served by being
deposited first class postage prepaid in a post-office letterbox
addressed (until another address is filed in writing by the Company
with the Trustee), as follows: c/o Lakeland Financial Corporation,
202 East Center Street, P.O. Box 1387, Warsaw, Indiana 46581-1387,
Attention: Chief Executive Officer. Any notice, election, request
or demand by the Company or any Debentureholder to or upon the
Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.

SECTION 15.5. GOVERNING LAW.

This Indenture and each Debenture shall be deemed to be a
contract made under the internal laws of the State of Indiana and
for all purposes shall be construed in accordance with the laws of
said State.

SECTION 15.6. TREATMENT OF DEBENTURES AS DEBT.

It is intended that the Debentures shall be treated as
indebtedness and not as equity for federal income tax purposes.
The provisions of this Indenture shall be interpreted to further
this intention.

41
<PAGE> 48

SECTION 15.7. COMPLIANCE CERTIFICATES AND OPINIONS.

(a) Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent 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 have been complied with,
except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular
application or demand, no additional certificate or opinion need be
furnished.

(b) Each certificate or opinion of the Company provided for
in this Indenture and delivered to the Trustee with respect to
compliance with a condition or covenant in this Indenture shall
include (1) a statement that the Person making such certificate or
opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as, in the
opinion of such Person, is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and (4) a statement as to whether or not,
in the opinion of such Person, such condition or covenant has been
complied with.

SECTION 15.8. PAYMENTS ON BUSINESS DAYS.

In any case where the date of maturity of interest or
principal of any Debenture or the date of redemption of any
Debenture shall not be a Business Day, then payment of interest or
principal may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue for the period after such
nominal date.

SECTION 15.9. CONFLICT WITH TRUST INDENTURE ACT.

If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.

SECTION 15.10. COUNTERPARTS.

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

SECTION 15.11. SEPARABILITY.

In case any one or more of the provisions contained in this
Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this Indenture or of the Debentures, but this
Indenture and the Debentures shall be construed as if such invalid
or illegal or unenforceable provision had never been contained
herein or therein.

42
<PAGE> 49

SECTION 15.12. ASSIGNMENT.

The Company shall have the right at all times to assign any of
its respective rights or obligations under this Indenture to a
direct or indirect wholly owned Subsidiary of the Company, provided
that, in the event of any such assignment, the Company shall remain
liable for all such obligations. Subject to the foregoing, this
Indenture is binding upon and inures to the benefit of the parties
thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.

SECTION 15.13. ACKNOWLEDGMENT OF RIGHTS; RIGHT OF SETOFF.

(a) The Company acknowledges that, with respect to any
Debentures held by the Trust or a trustee of the Trust, if the
Property Trustee fails to enforce its rights under this Indenture
as the holder of the Debentures held as the assets of the Trust,
any holder of Preferred Securities may institute legal proceedings
directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or
entity. Notwithstanding the foregoing, and notwithstanding the
provisions of Section 7.4(a) hereof, if an Event of Default has
occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the
Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), the
Company acknowledges that a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such
holder of the principal of or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the
Preferred Securities of such holder on or after the respective due
date specified in the Debentures.

(b) Notwithstanding anything to the contrary contained in
this Indenture, the Company shall have the right of setoff any
payment it is otherwise required to make hereunder in respect of
any Trust Securities to the extent that the Company has previously
made, or is concurrently making, a payment to the holder of such
Trust Securities under the Guarantee or in connection with a
proceeding for enforcement of payment of the principal of or
interest on the Debentures directly brought by holders of any Trust
Securities.

ARTICLE XVI.
SUBORDINATION OF DEBENTURES

SECTION 16.1. AGREEMENT TO SUBORDINATE.

The Company covenants and agrees, and each holder of
Debentures issued hereunder by such holder's acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article XVI; and each holder of
a Debenture, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of and
interest on all Debentures issued hereunder shall, to the extent
and in the manner hereinafter set forth, be subordinated and junior
in right of payment to the prior payment in full of all Senior
Debt, Subordinated Debt and Additional Senior Obligations
(collectively, "Senior Indebtedness") to the extent provided
herein, whether outstanding at the date of this Indenture or
thereafter incurred. No provision of this Article XVI shall
prevent the occurrence of any default or Event of Default
hereunder.

SECTION 16.2. DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR
ADDITIONAL SENIOR OBLIGATIONS.

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<PAGE> 50

In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other
payment due on any Senior Indebtedness of the Company, or in the
event that the maturity of any Senior Indebtedness of the Company
has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal
(including redemption payments) of or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the
preceding sentence of this Section 16.2, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee
in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified
in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.

SECTION 16.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.

(a) Upon any payment by the Company or distribution of assets
of the Company of any kind or character, whether in cash, property
or securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due upon all Senior Indebtedness of the
Company shall first be paid in full, or payment thereof provided
for in money in accordance with its terms, before any payment is
made by the Company on account of the principal or interest on the
Debentures; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of
the Debentures or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XVI, shall be
paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Debentures or by the Trustee
under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such
holders on the basis of the respective amounts of Senior
Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay
such Senior Indebtedness in full, in money or money's worth, after
giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness, before any payment or
distribution is made to the holders of Debentures or to the
Trustee.

(b) 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, prohibited by
the foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made
for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been
issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full in
money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.

44
<PAGE> 51

(c) For purposes of this Article XVI, the words "cash,
property or securities" shall not be deemed to include shares of
stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XVI
with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the
time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment; and (ii) the rights of the holders
of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation
upon the terms and conditions provided for in Article XII shall not
be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 16.3 if such other corporation
shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article XII.
Nothing in Section 16.2 or in this Section 16.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to
Section 9.7.

SECTION 16.4. SUBROGATION.

(a) Subject to the payment in full of all Senior Indebtedness
of the Company, the rights of the holders of the Debentures shall
be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property
or securities of the Company, as the case may be, applicable to
such Senior Indebtedness until the principal of and interest on the
Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such
Senior Indebtedness of any cash, property or securities to which
the holders of the Debentures or the Trustee would be entitled
except for the provisions of this Article XVI, and no payment over
pursuant to the provisions of this Article XVI to or for the
benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company,
and the holders of the Debentures, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XVI are and are
intended solely for the purposes of defining the relative rights of
the holders of the Debentures, on the one hand, and the holders of
such Senior Indebtedness on the other hand.

(b) Nothing contained in this Article XVI or elsewhere in
this Indenture or in the Debentures is intended to or shall impair,
as between the Company, its creditors (other than the holders of
Senior Indebtedness of the Company), and the holders of the
Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the
principal of 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 holders of
the Debentures and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness of the Company, as
the case may be, nor shall anything herein or therein prevent the
Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XVI of
the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, as the case may be, received
upon the exercise of any such remedy.

(c) Upon any payment or distribution of assets of the Company
referred to in this Article XVI, the Trustee, subject to the
provisions of Article IX, and the holders of the Debentures shall
be entitled to conclusively rely upon any order or decree made by
any court of competent jurisdiction in which such

45
<PAGE> 52
dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidation trustee, agent or other Person making such payment or
distribution, delivered to the Trustee or to the holders of the
Debentures, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may
be, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto
or to this Article XVI.

SECTION 16.5. TRUSTEE TO EFFECTUATE SUBORDINATION.

Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XVI and appoints the Trustee
such holder's attorney-in-fact for any and all such purposes.

SECTION 16.6. NOTICE BY COMPANY.

(a) The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions
of this Article XVI. Notwithstanding the provisions of this
Article XVI or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debentures pursuant to the provisions
of this Article XVI, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company
or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.1, shall be
entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the
notice provided for in this Section 16.6 at least two Business Days
prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Debenture), then,
anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money
and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.

(b) The Trustee, subject to the provisions of Section 9.1,
shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of
Senior Indebtedness of the Company (or a trustee on behalf of such
holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee on behalf of any such holder
or holders. 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 such Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XVI, the
Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under
this Article XVI, 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.

46
<PAGE> 53

SECTION 16.7. RIGHTS OF TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

(a) The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article XVI in respect of any
Senior Indebtedness at any time held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such
holder. The Trustee's right to compensation and reimbursement of
expenses as set forth in Section 9.7 shall not be subject to the
subordination provisions of this Article XVI.

(b) With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in
this Article XVI, and no implied covenants or obligations with
respect to the holders of such Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Section 9.1, the
Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to holders of
Debentures, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article XVI or otherwise.

SECTION 16.8. SUBORDINATION MAY NOT BE IMPAIRED.

(a) 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
noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
that any such holder may have or otherwise be charged with.

(b) Without in any way limiting the generality of Section
16.8(a), the holders of Senior Indebtedness of the Company may, at
any time and from time to time, without the consent of or notice to
the Trustee or the holders of the Debentures, without incurring
responsibility to the holders of the Debentures and without
impairing or releasing the subordination provided in this Article
XVI or the obligations hereunder of the holders of the Debentures
to the holders of such Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such Senior
Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of
such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.

47
<PAGE> 54

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

LAKELAND FINANCIAL CORPORATION

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

Attest:

- -----------------------------
Name:
------------------------ STATE STREET BANK AND TRUST COMPANY,
as trustee

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

- -----------------------------
Name:
------------------------

48
<PAGE> 55
STATE OF INDIANA )
) ss:
COUNTY OF KOSCIUSKO )

On this ------- day of -------------------------------, 1997,
before me appeared -------------------, to me personally known,
who, being by me duly sworn, did say that he is the
- --------------------------- of LAKELAND FINANCIAL CORPORATION, and
that the seal affixed to said instrument is the corporate seal of
said corporation, and that said instrument was signed and sealed in
behalf of said corporation by authority of its board of directors
and said ------------------------, acknowledged said instrument to
be the free act and deed of said corporation.

In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day and
year last above written.

--------------------------------
Notary Public

[seal] My term expires:
-----------

COMMONWEALTH OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )

On this ------- day of -------------------------------, 1997,
before me appeared ------------------------------, to me personally
known, who, being by me duly sworn, did say that he is the
- ---------------------------- of STATE STREET BANK AND TRUST
COMPANY, and that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument was
signed and sealed in behalf of said corporation by authority of its
board of directors and said ------------------------------,
acknowledged said instrument to be the free act and deed of said
corporation.

In testimony whereof I have hereunto set my hand and affixed
my official seal at my office in said county and state the day and
year last above written.

--------------------------------
Notary Public

[seal] My term expires:
-----------

49
<PAGE> 56
EXHIBIT A
[FORM OF DEBENTURE]
No. 1 $------------------

CUSIP No. ----------

LAKELAND FINANCIAL CORPORATION

----% SUBORDINATED DEBENTURE

DUE SEPTEMBER 30, 2027

Lakeland Financial Corporation, an Indiana corporation (the
"Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby
promises to pay to State Street Bank and Trust Company, as Property
Trustee, or registered assigns, the principal sum of
- ----------------------------------- dollars ($------------) on
September 30, 2027 (the "Stated Maturity"), and to pay interest on
said principal sum from ---------, 1997, or from the most recent
interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on March 31,
June 30, September 30 and December 31 of each year commencing
September 30, 1997, at the rate of -----% per annum until the
principal hereof shall have become due and payable, and on any
overdue principal and (without duplication) on any overdue
installment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of interest for any partial period shall
be computed on the basis of the number of days elapsed in a 360-day
year of twelve 30-day months. In the event that any date on which
interest is payable on this Debenture is not a business day, then
payment of interest payable on such date shall be made on the next
succeeding day that is a Business Day (as defined in the Indenture)
(and without any interest or other payment in respect of any such
delay) with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in
the Indenture, be paid to the person in whose name this Debenture
(or one or more Predecessor Debentures, as defined in the
Indenture) is registered at the close of business on the regular
record date for such interest installment, which shall be the
fifteenth day of the last month of the calendar quarter in which
such Interest Payment Date occurs unless otherwise provided in the
Indenture. The principal of and the interest on this Debenture
shall be payable at the office or agency of the Trustee maintained
for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of
interest may be made at the option of the Company by check mailed
to the registered holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the
holder of this Debenture is the Property Trustee, the payment of
the principal of and interest on this Debenture shall be made at
such place and to such account as may be designated by the Trustee.

The Stated Maturity may be shortened at any time by the
Company to any date not earlier than September 30, 2002, subject to
the Company having received prior approval of the Federal Reserve
if then required under applicable capital guidelines or policies of
the Federal Reserve. Such date may also

Exhibit A-1
<PAGE> 57
be extended at any time at the election of the Company for one or
more periods, but in no event to a date later than September 30,
2036, subject to certain limitations described in the Indenture.

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

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

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

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

Dated ----------, 1997
LAKELAND FINANCIAL CORPORATION

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

- -----------------------------
Name:
------------------------

Exhibit A-2
<PAGE> 58

[FORM OF CERTIFICATE OF AUTHENTICATION]

CERTIFICATE OF AUTHENTICATION

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

Dated:

STATE STREET BANK AND TRUST COMPANY, --------------------------------
as Trustee or Authentication Agent

By By
------------------------------ ------------------------------
Authorized Signatory

Exhibit A-3
<PAGE> 59

----% SUBORDINATED DEBENTURE
(CONTINUED)

This Debenture is one of the subordinated debentures of the
Company (the "Debentures"), all issued or to be issued under and
pursuant to an Indenture dated as of --------, 1997 (the
"Indenture"), duly executed and delivered between the Company and
State Street Bank and Trust Company, as Trustee (the "Trustee"), to
which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the
Debentures. The Debentures are limited in aggregate principal
amount as specified in the Indenture.

Company shall have the right, as set forth in the Indenture,
to redeem this Debenture at the option of the Company, without
premium or penalty, in whole or in part at any time on or after
September 30, 2002 (an "Optional Redemption"), or at any time in
certain circumstances upon the occurrence of a Special Event (as
defined in the Indenture), at a redemption price (the "Redemption
Price") equal to 100% of the principal amount hereof plus any
accrued but unpaid interest hereon, to the date of such redemption.
Any redemption pursuant to this paragraph shall be made upon not
less than 30 days nor more than 60 days notice, at the Redemption
Price. The Redemption Price shall be paid at the time and in the
manner provided therefor in the Indenture. If the Debentures are
only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures shall be redeemed pro rata or by lot or
by any other method utilized by the Trustee as described in the
Indenture. In the event of an Optional Redemption of this
Debenture in part only, a new Debenture or Debentures for the
unredeemed portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

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

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

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

<PAGE> 60

The Company, as further described in the Indenture, shall have
the right at any time during the term of the Debentures and from
time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters (each, an "Extended
Interest Payment Period"), at the end of which period the Company
shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Debentures to the
extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended
Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon
the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest
Payment Period.

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

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

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

The Debentures are issuable only in registered form without
coupons in denominations of $10 and any integral multiple thereof
(or such lesser denomination and any integral multiple thereof as
may be deemed necessary by the Company for the purpose of
maintaining the eligibility of the Debentures for quotation on the
Nasdaq Stock Market's National Market or any successor thereto).

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

<PAGE> 1

CERTIFICATE OF TRUST
OF
LAKELAND CAPITAL TRUST

THIS CERTIFICATE OF TRUST OF LAKELAND CAPITAL TRUST (the
"Trust"), dated July 24, 1997, is being duly executed and filed
by WILMINGTON TRUST COMPANY, a Delaware banking corporation, R.
Douglas Grant, Walter L. Weldy and Terry M. White, each an
individual, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).

1. NAME. The name of the business trust formed hereby is
LAKELAND CAPITAL TRUST.

2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware is Wilmington
Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.

3. EFFECTIVE DATE. This Certificate of Trust shall be
effective on July 24, 1997.

<PAGE> 2
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, has executed this Certificate of Trust as of the
date first above written.

WILMINGTON TRUST COMPANY,
as trustee

By: /s/ Donald G. MacKelcan
----------------------------------------
Donald D. MacKelcan
Assistant Vice President

/s/ R. Douglas Grant
------------------------------------------
R. Douglas Grant
as Trustee

/s/ Walter L. Weldy
------------------------------------------
Walter L. Weldy
as Trustee

/s/ Terry M. White
------------------------------------------
Terry M. White
as Trustee

<PAGE> 1
TRUST AGREEMENT

This TRUST AGREEMENT, dated as of July 24, 1997 (this "Trust
Agreement"), among (i) Lakeland Financial Corporation, an Indiana
corporation (the "Depositor"), (ii) Wilmington Trust Company, a
Delaware banking corporation, as trustee, and (iii) R. Douglas
Grant, Walter L. Weldy and Terry M. White, each an individual, as
trustees (each of such trustees in (ii) and (iii) a "Trustee" and
collectively, the "Trustees"). The Depositor and the Trustees
hereby agree as follows:

1. The trust created hereby (the "Trust") shall be known as
"Lakeland Capital Trust" in which name the Trustees, or the
Depositor to the extent provided herein, may engage in the
transactions contemplated hereby, make and execute contracts, and
sue and be sued.

2. The Depositor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10.00. The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor,
which amount shall constitute the initial trust estate. The
Trustees hereby declare that they will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto
that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Business Trust Act"), and that this document
constitutes the governing instrument of the Trust. The Trustees
are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.

3. The Depositor and the Trustees will enter into an amended
and restated Trust Agreement, satisfactory to each such party and
substantially in the form included as an exhibit to the 1933 Act
Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the issuance
of the Preferred Securities and Common Securities referred to
therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.

4. The Depositor and the Trustees hereby authorize and
direct the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the Registration
Statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments to the
1933 Act Registration Statement, relating to the registration under
the Securities Act of 1933, as amended, (the "1933 Act") of the
Preferred Securities of the Trust (including any registration
statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the 1933 Act), and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement")

<PAGE> 2

(including all pre-effective and post-effective amendments thereto)
relating to the registration of the Preferred Securities of the
Trust under the Securities Exchange Act of 1934, as amended;
(ii) to file with The Nasdaq Stock Market's National Market or a
national stock exchange (each, an "Exchange") and execute on behalf
of the Trust one or more listing applications and all other
applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications, reports,
surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under
the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable;
and (iv) to execute on behalf of the Trust that certain
Underwriting Agreement relating to the Preferred Securities, among
the Trust, the Depositor and the Underwriter named therein,
substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and
regulations of the Commission, an Exchange or state securities or
blue sky laws, to be executed on behalf of the Trust by one or more
of the Trustees, each of the Trustees, in its or his capacity as a
Trustee of the Trust, is hereby authorized and, to the extent so
required, directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being
understood that Wilmington Trust Company in its capacity as a
Trustee of the Trust shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless
required by the rules and regulations of the Commission, the
Exchange or state securities or blue sky laws. In connection with
the filings referred to above, the Depositor and R. Douglas Grant,
Walter L. Weldy and Terry M. White, each as Trustees and not in
their individual capacities, hereby constitutes and appoints R.
Douglas Grant, Walter L. Weldy and Terry M. White, and each of
them, as its true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for the Depositor or
such Trustee or in the Depositor's or such Trustees' name, place
and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and
to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, the Exchange and
administrators of the state securities or blue sky laws, granting
unto said attorneys-in-fact and agents full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and
purposes as the Depositor or such Trustee might or could to in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their respective substitute or
substitutes, shall do or cause to be done by virtue hereof.

5. This Trust Agreement may be executed in one or more
counterparts.

<PAGE> 3

6. The number of Trustees initially shall be four and
thereafter the number of Trustees shall be such number as shall be
fixed from time to time by a written instrument signed by the
Depositor which may increase or decrease the number of Trustees;
provided, however, that to the extent required by the Business
Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable
Delaware law. Subject to the foregoing, the Depositor is entitled
to appoint or remove without cause any Trustee at any time. The
Trustees may resign upon 30 days' prior notice to the Depositor.

7. This Trust Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware (without
regard to conflict of laws of principles).

[Signatures On Next Page]

<PAGE> 4

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

LAKELAND FINANCIAL CORPORATION
as Depositor

By: /s/ R. Douglas Grant
----------------------------------
R. Douglas Grant
President

WILMINGTON TRUST COMPANY
as Trustee

By: /s/ Donald G. MacKelcan
----------------------------------
Donald G. MacKelcan
Assistant Vice President

/s/ R. Douglas Grant
------------------------------------
R. Douglas Grant
as Trustee

/s/ Walter L. Weldy
------------------------------------
Walter L. Weldy
as Trustee

/s/ Terry M. White
------------------------------------
Terry M. White
as Trustee

<PAGE> 1

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

LAKELAND CAPITAL TRUST

AMENDED AND RESTATED

TRUST AGREEMENT

AMONG

LAKELAND FINANCIAL CORPORATION, AS DEPOSITOR

STATE STREET BANK AND TRUST COMPANY, AS PROPERTY TRUSTEE

WILMINGTON TRUST COMPANY, AS DELAWARE TRUSTEE,

AND

THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

DATED AS OF --------, 1997

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

<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINED TERMS 2
Section 101. Definitions 2

ARTICLE II
ESTABLISHMENT OF TRUST 9
Section 201. Name 9
Section 202. Office of Delaware Trustee; Principal Place of Business 9
Section 203. Initial Contribution of Trust Property; Organizational Expenses 9
Section 204. Issuance of Preferred Securities 9
Section 205. Issuance of the Common Securities; Subscription and Purchase of
Debentures 10
Section 206. Declaration of Trust 10
Section 207. Authorization to Enter into Certain Transactions 11
Section 208. Assets of Trust 14
Section 209. Title to Trust Property 14

ARTICLE III
PAYMENT ACCOUNT 14
Section 301. Payment Account 14

ARTICLE IV
DISTRIBUTIONS; REDEMPTION 14
Section 401. Distributions 14
Section 402. Redemption 15
Section 403. Subordination of Common Securities 17
Section 404. Payment Procedures 17
Section 405. Tax Returns and Reports 17
Section 406. Payment of Taxes, Duties, etc. of Trust 18
Section 407. Payments Under Indenture 18

ARTICLE V
TRUST SECURITIES CERTIFICATES 18
Section 501. Initial Ownership 18
Section 502. Trust Securities Certificates 18
Section 503. Execution, Authentication and Delivery of Trust Securities
Certificates 18
Section 504. Registration of Transfer and Exchange of Preferred Securities
Certificates 19
Section 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates 20
Section 506. Persons Deemed Securityholders 20
Section 507. Access to List of Securityholders' Names and Addresses 20
Section 508. Maintenance of Office or Agency 21
Section 509. Appointment of Paying Agent 21
Section 510. Ownership of Common Securities by Depositor 22

i
<PAGE> 3
Section 511. Preferred Securities Certificates 22
Section 512. [Intentionally Omitted] 22
Section 513. [Intentionally Omitted] 22
Section 514. Rights of Securityholders 22

ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING 23
Section 601. Limitations on Voting Rights 23
Section 602. Notice of Meetings 24
Section 603. Meetings of Preferred Securityholders 24
Section 604. Voting Rights 24
Section 605. Proxies, etc. 24
Section 606. Securityholder Action by Written Consent 25
Section 607. Record Date for Voting and Other Purposes 25
Section 608. Acts of Securityholders 25
Section 609. Inspection of Records 26

ARTICLE VII
REPRESENTATIONS AND WARRANTIES 26
Section 701. Representations and Warranties of Bank and Property Trustee 26
Section 702. Representations and Warranties of Delaware Bank and Delaware
Trustee 27
Section 703. Representations and Warranties of Depositor 28

ARTICLE VIII
TRUSTEES 29
Section 801. Certain Duties and Responsibilities 29
Section 802. Certain Notices 30
Section 803. Certain Rights of Property Trustee 30
Section 804. Not Responsible for Recitals or Issuance of Securities 32
Section 805. May Hold Securities 32
Section 806. Compensation; Indemnity; Fees 32
Section 807. Corporate Property Trustee Required; Eligibility of Trustees 33
Section 808. Conflicting Interests 33
Section 809. Co-Trustees and Separate Trustee 34
Section 810. Resignation and Removal; Appointment of Successor 35
Section 811. Acceptance of Appointment by Successor 36
Section 812. Merger, Conversion, Consolidation or Succession to Business 37
Section 813. Preferential Collection of Claims Against Depositor or Trust 37
Section 814. Reports by Property Trustee 37
Section 815. Reports to Property Trustee 37
Section 816. Evidence of Compliance with Conditions Precedent 37
Section 817. Number of Trustees 38
Section 818. Delegation of Power 38
Section 819. Voting 38

ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER 38
Section 901. Termination Upon Expiration Date 38

ii
<PAGE> 4

Section 902. Early Termination 39
Section 903. Termination 39
Section 904. Liquidation 39
Section 905. Mergers, Consolidations, Amalgamations or Replacements of Trust 41

ARTICLE X
MISCELLANEOUS PROVISIONS 41
Section 1001. Limitation of Rights of Securityholders 41
Section 1002. Amendment 42
Section 1003. Separability 43
Section 1004. Governing law 43
Section 1005. Payments Due on Non-Business Day 43
Section 1006. Successors 43
Section 1007. Headings 43
Section 1008. Reports, Notices and Demands 44
Section 1009. Agreement Not to Petition 44
Section 1010. Trust Indenture Act; Conflict with Trust Indenture Act 44
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and Indenture 46

Exhibit A Certificate of Trust
Exhibit B [Intentionally Omitted]
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>

iii
<PAGE> 5
<TABLE>
CROSS-REFERENCE TABLE
<CAPTION>

Section of Section of
Trust Indenture Act Amended and Restated
of 1939, as amended Trust Agreement
- ------------------- ---------------
<S> <C>
310(a)(1) 807
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(a)(4) 814(b)
313(b) 814(b)
313(c) 1008
313(d) 814(c)
314(a) 815
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101, 816
315(a) 801(a), 803(a)
315(b) 802, 1008
315(c) 801(a)
315(d) 801, 803
316(a)(2) Not Applicable
316(b) Not Applicable
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
318(a) 1010

Note: This Cross-Reference Table does not constitute part of this
Agreement and should not affect the interpretation of any of its
terms or provisions.
</TABLE>

iv
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT

AMENDED AND RESTATED TRUST AGREEMENT, dated as of --------, 1997
among (i) LAKELAND FINANCIAL CORPORATION, an Indiana corporation
(including any successors or assigns, the "Depositor"), (ii) STATE STREET
BANK AND TRUST COMPANY, a trust company duly organized and existing under
the laws of the Commonwealth of Massachusetts, as property trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) WILMINGTON TRUST
COMPANY, a Delaware banking corporation duly organized and existing under
the laws of the State of Delaware, as Delaware trustee (the "Delaware
Trustee," and, in its separate corporate capacity and not in its capacity as
Delaware Trustee, the "Delaware Bank") (iv) R. Douglas Grant, an individual,
Walter L. Weldy, an individual, and Terry M. White, an individual, each of
whose address is c/o Lakeland Financial Corporation, 202 East Center Street,
P.O. Box 1387, Warsaw, Indiana 46581-1387 (each an "Administrative Trustee"
and, collectively, the "Administrative Trustees") (the Property Trustee, the
Delaware Trustee and the Administrative Trustees are referred to collectively
as the "Trustees"), and (v) the several Holders (as hereinafter defined).

RECITALS

WHEREAS, the Depositor, the Delaware Trustee, and R. Douglas Grant,
Walter L. Weldy and Terry M. White, each as an Administrative Trustee, have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act (as hereinafter defined) by the entering into of
that certain Trust Agreement, dated as of July 24, 1997 (the "Original Trust
Agreement"), and by the execution and filing by the Delaware Trustee, the
Depositor and the Administrative Trustees with the Secretary of State of the
State of Delaware of the Certificate of Trust, filed on July 24, 1997, the
form of which is attached as Exhibit A; and

WHEREAS, the Depositor, the Delaware Trustee, the Property Trustee and
the Administrative Trustees desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities (as defined herein) by the
Trust (as defined herein) to the Depositor; (ii) the issuance and sale of the
Preferred Securities (as defined herein) by the Trust pursuant to the
Underwriting Agreement (as defined herein); (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures (as defined herein); and (iv) the appointment of the Trustees.

NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of
the other parties and for the benefit of the Securityholders (as defined
herein), hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:

<PAGE> 7
ARTICLE I
DEFINED TERMS

SECTION 101. DEFINITIONS.

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

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

(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and

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

"Act" has the meaning specified in Section 608.

"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.

"Additional Payments" has the meaning specified in Section 1.1 of the
Indenture.

"Administrative Trustee" means each of R. Douglas Grant, Walter L.
Weldy and Terry M. White, solely in his capacity as Administrative Trustee of
the Trust formed and continued hereunder and not in his individual capacity,
or such Administrative Trustee's successor in interest in such capacity, or
any successor trustee appointed as herein provided.

"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10%
or more of the outstanding voting securities or other ownership interests of
the specified Person, any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control
with the specified Person; (d) a partnership in which the specified Person is
a general partner; (e) any officer or director of the specified Person; and
(f) if the specified Person is an individual, any entity of which the
specified Person is an officer, director or general partner.

"Authenticating Agent" means an authenticating agent with respect to
the Preferred Securities appointed by the Property Trustee pursuant to
Section 503.

"Bank" has the meaning specified in the Preamble to this Trust
Agreement.

"Bankruptcy Event" means, with respect to any Person:

2
<PAGE> 8

(a) the entry of a decree or order by a court having jurisdiction in
the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the United States Bankruptcy Code of 1978, as
amended, or any other similar applicable federal or state law, and the
continuance of any such decree or order unvacated and unstayed for a period
of 90 days; or the commencement of an involuntary case under the United
States Bankruptcy Code of 1978, as amended, in respect of such Person, which
shall continue undismissed for a period of 90 days or entry of an order for
relief in such case; or the entry of a decree or order of a court having
jurisdiction in the premises for the appointment on the ground of insolvency
or bankruptcy of a receiver, custodian, liquidator, trustee or assignee in
bankruptcy or insolvency of such Person or of its property, or for the
winding up or liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days; or

(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a
bankruptcy proceeding against it, or the filing by such Person of a petition
or answer or consent seeking liquidation or reorganization under the United
States Bankruptcy Code of 1978, as amended, or other similar applicable
Federal or State law, or the consent by such Person to the filing of any such
petition or to the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or shall make a general
assignment for the benefit of creditors.

"Bankruptcy Laws" has the meaning specified in Section 1009.

"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such committee of the Board
of Directors or officers of the Depositor to which authority to act on behalf
of the Board of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the appropriate
Trustee.

"Business Day" means a day other than a Saturday or Sunday, a day on
which banking institutions in The City of New York are authorized or required
by law, executive order or regulation to remain closed, or a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of
the Debenture Trustee is closed for business.

"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.

"Closing Date" means the date of execution and delivery of this Trust
Agreement.

"Code" means the Internal Revenue Code of 1986, as amended.

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

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<PAGE> 9

"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $10 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as
Exhibit C.

"Corporate Trust Office" means the office at which, at any particular
time, the corporate trust business of the Property Trustee or the Debenture
Trustee, as the case may be, shall be principally administered, which office
at the date hereof, in each such case, is located at Two International Place,
4th Floor, Boston, Massachusetts 02110, Attention: Corporate Trust
Department.

"Debenture Event of Default" means an "Event of Default" as defined in
Section 7.1 of the Indenture.

"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the
Indenture.

"Debenture Trustee" means State Street Bank and Trust Company, a
banking corporation organized under the laws of the Commonwealth of
Massachusetts and any successor thereto, as trustee under the Indenture.

"Debentures" means the $18,556,710 aggregate principal amount (or up to
$20,618,560 aggregate principal amount if the underwriters exercise their
Option and there is an Option Closing Date, as such terms are defined in the
Underwriting Agreement) of the Depositor's ----% Subordinated Debentures due
2027, issued pursuant to the Indenture.

"Delaware Bank" has the meaning specified in the Preamble to this Trust
Agreement.

"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq. as it may be amended
from time to time.

"Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the Preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.

"Depositor" has the meaning specified in the Preamble to this Trust
Agreement.

"Distribution Date" has the meaning specified in Section 401(a).

"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 401.

"Early Termination Event" has the meaning specified in Section 902.

"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law

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<PAGE> 10

or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

(a) the occurrence of a Debenture Event of Default; or

(b) default by the Trust or the Property Trustee in the payment of
any Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or

(c) default by the Trust or the Property Trustee in the payment of
any Redemption Price of any Trust Security when it becomes due and payable;
or

(d) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in this Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c), above) and continuation
of such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.

"Expiration Date" has the meaning specified in Section 901.

"Extended Interest Payment Period" has the meaning specified in
Section 4.1 of the Indenture.

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

"Guarantee" means the Preferred Securities Guarantee Agreement executed
and delivered by the Depositor and State Street Bank and Trust Company, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the holders of the Preferred Securities, as
amended from time to time.

"Indenture" means the Indenture, dated as of ------------, 1997,
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time pertaining to the Debentures of the Depositor.

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

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<PAGE> 11

"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.

"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture and the proceeds of which shall be used to pay the
Redemption Price of such Trust Securities; and (b) with respect to a
distribution of Debentures to Holders of Trust Securities in connection with
a termination or liquidation of the Trust, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities of the Holder
to whom such Debentures are distributed. Each Debenture distributed pursuant
to clause (b) above shall carry with it accumulated interest in an amount
equal to the accumulated and unpaid interest then due on such Debenture.

"Liquidation Amount" means the stated amount of $10 per Trust Security.

"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 904(a).

"Liquidation Distribution" has the meaning specified in Section 904(d).

"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One
of the officers signing an Officers' Certificate given pursuant to
Section 816 shall be the principal executive, financial or accounting officer
of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:

(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;

(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;

(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

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

"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Trust, the Property Trustee, the
Delaware Trustee or the Depositor, and who shall be reasonably acceptable to
the Property Trustee.

"Original Trust Agreement" has the meaning specified in the Recitals to
this Trust Agreement.

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<PAGE> 12

"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, except:

(a) Preferred Securities theretofore canceled by the Property Trustee
or delivered to the Property Trustee for cancellation;

(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Preferred Securities; provided that,
if such Preferred Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Trust Agreement; and

(c) Preferred Securities which have been paid or in exchange for or
in lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 504, 505 and 511; provided, however, that in determining
whether the Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Preferred Securities that such Trustee knows to be so owned shall be so
disregarded; and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more
of the Trustees and/or any such Affiliate. Preferred Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustees the
pledgee's right so to act with respect to such Preferred Securities and that
the Pledgee is not the Depositor or any other Obligor upon the Preferred
Securities or a Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Depositor or any Affiliate
of the Depositor.

"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 509 and shall initially be the Bank.

"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures shall be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with
Sections 401 and 402.

"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization
or government or any agency or political subdivision thereof.

"Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $10 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

"Preferred Securities Certificate", means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.

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<PAGE> 13

"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee," in the Preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as
herein provided.

"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated
maturity of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.

"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, paid by the Depositor upon the
concurrent redemption of a Like Amount of Debentures, allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities.

"Relevant Trustee" shall have the meaning specified in Section 810.

"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 504.

"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business
Trust Act.

"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust Agreement.

"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939, as
amended, is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939 as so
amended.

"Trust Property" means (a) the Debentures; (b) the rights of the
Property Trustee under the Guarantee; (c) any cash on deposit in, or owing
to, the Payment Account; and (d) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed
to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.

"Trust Security" means any one of the Common Securities or the
Preferred Securities.

"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.

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<PAGE> 14

"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.

"Underwriting Agreement" means the Underwriting Agreement, dated as of
- -----------, 1997 among the Trust, the Depositor and the Underwriters named
therein.

ARTICLE II
ESTABLISHMENT OF TRUST

SECTION 201. NAME.

The Trust created and continued hereby shall be known as "Lakeland
Capital Trust," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may engage in
the transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.

SECTION 202. OFFICE OF DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.

The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration,
or such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o Lakeland Financial
Corporation, 202 East Center Street, Warsaw, Indiana 46581-1387.

SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY;
ORGANIZATIONAL EXPENSES.

The Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of
any Trustee, promptly reimburse such Trustee for any such expenses paid by
such Trustee. The Depositor shall make no claim upon the Trust Property for
the payment of such expenses.

SECTION 204. ISSUANCE OF PREFERRED SECURITIES.

On ----------, 1997, the Depositor and an Administrative Trustee, on
behalf of the Trust and pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 502 and deliver
in accordance with the Underwriting Agreement, Preferred Securities
Certificates, registered in the name of the Persons entitled thereto, in an
aggregate amount of 1,800,000 Preferred Securities having an aggregate
Liquidation Amount of $18,000,000 against receipt of the aggregate purchase
price of such Preferred Securities of $18,000,000, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee. If
the underwriters exercise their Option and there is an Option Closing Date
(as such terms are defined in the Underwriting Agreement), then an
Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 502 and deliver in

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<PAGE> 15

accordance with the Underwriting Agreement, additional Preferred Securities
Certificates, registered in the name of the Persons entitled thereto, in an
aggregate amount of up to 200,000 Preferred Securities having an aggregate
Liquidation Amount of up to $2,000,000 against receipt of the aggregate purchase
price of such Preferred Securities equal to the product of $10 multiplied by the
number of Preferred Securities purchased pursuant to the Option which amount
such Administrative Trustee shall promptly deliver to the Property Trustee.

SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION
AND PURCHASE OF DEBENTURES.

(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute
in accordance with Section 502 and deliver to the Depositor, Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of 55,671 Common Securities having an aggregate Liquidation
Amount of $556,710 against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the
Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Property Trustee on behalf of the Trust and
having an aggregate principal amount equal to $18,556,710, and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of
$18,556,710.

(b) If the underwriters exercise the Option and there is an Option
Closing Date, then an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 502 and deliver to the Depositor,
additional Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of up to 6,185 Common Securities having an
aggregate Liquidation Amount of up to $61,850 against payment by the
Depositor of an amount equal to the product of $10 multiplied by the number
of additional Common Securities purchased by the Depositor.
Contemporaneously therewith, an Administrative Trustee, on behalf of the
Trust, shall subscribe to and purchase from the Depositor, Debentures,
registered in the name of the Property Trustee on behalf of the Trust and
having an aggregate principal amount of up to $2,061,850, and, in
satisfaction of the purchase price of such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor an amount equal to the
sum of the amounts received from one of the Administrative Trustees pursuant
to the first sentence of this Section 205(b) and the last sentence of Section
204.

SECTION 206. DECLARATION OF TRUST.

The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures; and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees
of the Trust, to have all the rights, powers and duties to the extent set
forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it shall hold the Trust Property in trust upon
and subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers
and duties set forth herein and in accordance with applicable law with
respect to accomplishing the purposes of the Trust. The Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities, of the Property Trustee or the
Administrative Trustees set forth

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<PAGE> 16

herein. The Delaware Trustee shall be one of the Trustees of the Trust for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Delaware Business Trust Act.

SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN
TRANSACTIONS.

(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth
in paragraph (b) of this Section 207 and Article VIII, and in accordance with
the following provisions (i) and (ii), the Administrative Trustees shall have
the authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Administrative Trustees under
this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:

(i) As among the Trustees, each Administrative Trustee, acting
singly or jointly, shall have the power and authority to act on behalf of the
Trust with respect to the following matters:

(A) the issuance and sale of the Trust Securities;

(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense Agreement and such
other agreements or documents as may be necessary or desirable in connection
with the purposes and function of the Trust;

(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust Agreement as
a trust indenture under the Trust Indenture Act;

(D) assisting in the listing of the Preferred Securities
upon The Nasdaq Stock Market's National Market or such securities exchange or
exchanges as shall be determined by the Depositor and the registration of the
Preferred Securities under the Exchange Act, and the preparation and filing
of all periodic and other reports and other documents pursuant to the
foregoing;

(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this Trust Agreement;

(F) the appointment of a Paying Agent, Authenticating
Agent and Securities Registrar in accordance with this Trust Agreement;

(G) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;

(H) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory business trust
under the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of the
Holders of the Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created; and

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<PAGE> 17

(I) the taking of any action incidental to the foregoing
as the Administrative Trustees may from time to time determine is necessary
or advisable to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of any
such action on any particular Securityholder).

(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:

(A) the establishment of the Payment Account;

(B) the receipt of the Debentures;

(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment Account;

(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities in accordance with the
terms of this Trust Agreement;

(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;

(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;

(G) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;

(H) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust;

(I) after an Event of Default, the taking of any action
incidental to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such action on
any particular Securityholder);

(J) registering transfers of the Trust Securities in
accordance with this Trust Agreement; and

(K) except as otherwise provided in this Section
207(a)(ii), the Property Trustee shall have none of the duties, liabilities,
powers or the authority of the Administrative Trustees set forth in Section
207(a)(i).

(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or

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<PAGE> 18

interests therein, including to Securityholders, except as expressly provided
herein; (iii) take any action that would cause the Trust to fail or cease to
qualify as a "grantor trust" for United States federal income tax purposes; (iv)
incur any indebtedness for borrowed money or issue any other debt; or (v) take
or consent to any action that would result in the placement of a Lien on any of
the Trust Property. The Administrative Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in their
capacity as Securityholders.

(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist
the Trust with respect to, or effect on behalf of the Trust, the following
(and any actions taken by the Depositor in furtherance of the following prior
to the date of this Trust Agreement are hereby ratified and confirmed in all
respects):

(i) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities and the Debentures,
including any amendments thereto;

(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and advise the Trustees of
actions they must take on behalf of the Trust, and prepare for execution and
filing any documents to be executed and filed by the Trust or on behalf of
the Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such States;

(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to The Nasdaq Stock Market's National
Market or a national stock exchange or other organizations for listing upon
notice of issuance of any Preferred Securities and to file or cause an
Administrative Trustee to file thereafter with such exchange or organization
such notifications and documents as may be necessary from time to time;

(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto;

(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and

(vi) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.

(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust shall not be deemed to
be an "investment company" required to be registered under the Investment
Company Act, shall be classified as a "grantor trust" and not as an
association taxable as a corporation for United States federal income tax
purposes and so that the Debentures shall be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this connection,
subject to Section 1002, the Depositor and the Administrative Trustees are
authorized to take any

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<PAGE> 19

action, not inconsistent with applicable law or this Trust Agreement, that each
of the Depositor and the Administrative Trustees determines in their discretion
to be necessary or desirable for such purposes.

SECTION 208. ASSETS OF TRUST.

The assets of the Trust shall consist of the Trust Property.

SECTION 209. TITLE TO TRUST PROPERTY.

Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.

ARTICLE III
PAYMENT ACCOUNT

SECTION 301. PAYMENT ACCOUNT.

(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal
with respect to the Payment Account for the purpose of making deposits and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the
Payment Account shall be held by the Property Trustee in the Payment Account
for the exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments provided
for herein.

(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.

ARTICLE IV
DISTRIBUTIONS; REDEMPTION

SECTION 401. DISTRIBUTIONS.

(a) Distributions on the Trust Securities shall be cumulative, and
shall accumulate whether or not there are funds of the Trust available for
the payment of Distributions. Distributions shall accumulate from
- -------------, 1997, and, except during any Extended Interest Payment Period
with respect to the Debentures, shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing on
September 30, 1997. If any date on which a Distribution is otherwise payable
on the Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay) with
the same force and effect as

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if made on such date (each date on which distributions are payable in accordance
with this Section 401(a), a "Distribution Date").

(b) The Trust Securities represent undivided beneficial interests in
the Trust Property. The Distributions on the Trust Securities shall be at a
rate of ------% per annum of the Liquidation Amount of the Trust Securities.
The amount of Distributions payable for any full period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30 day months. During any
Extended Interest Payment Period with respect to the Debentures,
Distributions on the Preferred Securities shall be deferred for a period
equal to the Extended Interest Payment Period. The amount of Distributions
payable for any period shall include the Additional Amounts, if any.

(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand
and immediately available by 12:30 p.m. on each Distribution Date in the
Payment Account for the payment of such Distributions.

(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record date,
which shall be the 15th day of the month in which the Distribution is
payable.

SECTION 402. REDEMPTION.

(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust shall be required to redeem a Like Amount of Trust
Securities at the Redemption Price.

(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Securities Register. The
Property Trustee shall have no responsibility for the accuracy of any CUSIP
number contained in such notice. All notices of redemption shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the CUSIP number;

(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed; and

(v) that, on the Redemption Date, the Redemption Price shall
become due and payable upon each such Trust Security to be redeemed and that
Distributions thereon shall cease to accumulate on and after said date.

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<PAGE> 21

(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to the
extent that the Trust has immediately available funds then on hand and
available in the Payment Account for the payment of such Redemption Price.

(d) If the Property Trustee gives a notice of redemption in respect
of any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 402(c), the Property Trustee shall
deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and shall give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof upon surrender
of their Preferred Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption shall cease, except the
right of such Securityholders to receive the Redemption Price and any
Distribution payable on or prior to the Redemption Date, but without
interest, and such Trust Securities shall cease to be Outstanding. In the
event that any date on which any Redemption Price is payable is not a
Business Day, then payment of the Redemption Price payable on such date shall
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) with the same force
and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities
shall continue to accumulate, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities
to the date such Redemption Price is actually paid, in which case the actual
payment date shall be the date fixed for redemption for purposes of
calculating the Redemption Price.

(e) Payment of the Redemption Price on the Trust Securities shall be
made to the record holders thereof as they appear on the Securities Register
for the Trust Securities on the relevant record date, which shall be the date
15 days prior to the relevant Redemption Date.

(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously
called for redemption, by such method (including, without limitation, by lot)
as the Property Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the Liquidation Amount
or an integral multiple thereof) of the Liquidation Amount of Preferred
Securities of a denomination larger than such Liquidation Amount. The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of this Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Securities
redeemed or to be

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redeemed only in part, to the portion of the Liquidation Amount of Preferred
Securities which has been or is to be redeemed.

SECTION 403. SUBORDINATION OF COMMON SECURITIES.

(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 402(f), pro rata among the
Common Securities and the Preferred Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment
of any Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred Securities then
called for redemption, shall have been made or provided for, and all funds
immediately available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including Additional Amounts,
if applicable) on, or the Redemption Price of, Preferred Securities then due
and payable.

(b) In the case of the occurrence of any Event of Default resulting
from a Debenture Event of Default, the Holder of Common Securities shall be
deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Preferred Securities shall have been cured,
waived or otherwise eliminated. Until any such Event of Default under this
Trust Agreement with respect to the Preferred Securities shall have been so
cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the Holders of the Preferred Securities and not the Holder of
the Common Securities, and only the Holders of the Preferred Securities shall
have the right to direct the Property Trustee to act on their behalf.

SECTION 404. PAYMENT PROCEDURES.

Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register. Payments in respect of the Common Securities shall be
made in such manner as shall be mutually agreed between the Property Trustee
and the Common Securityholder.

SECTION 405. TAX RETURNS AND REPORTS.

The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local
tax and information returns and reports required to be filed by or in respect
of the Trust. In this regard, the Administrative Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue
Service form required to be filed in respect of the Trust in each taxable
year of the Trust; and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the appropriate Internal Revenue Service
form required to be furnished to such Securityholder or the information
required to

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<PAGE> 23
be provided on such form. The Administrative Trustees shall provide the
Depositor with a copy of all such returns and reports promptly after such filing
or furnishing. The Property Trustee shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.

SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF TRUST.

Upon receipt under the Debentures of Additional Payments, the Property
Trustee, at the direction of an Administrative Trustee or the Depositor,
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United
States or any other taxing authority.

SECTION 407. PAYMENTS UNDER INDENTURE.

Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder has
directly received under the Indenture pursuant to Section 514(b) or (c)
hereof.

ARTICLE V
TRUST SECURITIES CERTIFICATES

SECTION 501. INITIAL OWNERSHIP.

Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and
at any time during which no Trust Securities are outstanding, the Depositor
shall be the sole beneficial owner of the Trust.

SECTION 502. TRUST SECURITIES CERTIFICATES.

The Preferred Securities Certificates shall be issued in minimum
denominations of the Liquidation Amount and integral multiples of such
Liquidation Amount in excess thereof, and the Common Securities Certificates
shall be issued in denominations of the Liquidation Amount and integral
multiples thereof. The Trust Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. Trust Securities Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such
Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to the
rights and subject to the obligations of a Securityholder hereunder, upon due
registration of such Trust Securities Certificate in such transferee's name
pursuant to Sections 504 and 511.

SECTION 503. EXECUTION, AUTHENTICATION AND DELIVERY OF TRUST
SECURITIES CERTIFICATES.

(a) On the Closing Date and on the date on which the Underwriter
exercises the Option, as applicable (the "Option Closing Date"), the
Administrative Trustees shall cause Trust Securities

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Certificates, in an aggregate Liquidation Amount as provided in Sections 204 and
205, to be executed on behalf of the Trust by at least one of the Administrative
Trustees and delivered to or upon the written order of the Depositor, signed by
its Chief Executive Officer, President, any Vice President, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.

(b) A Preferred Securities Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Property Trustee. The signature shall be conclusive evidence that the
Preferred Securities Certificate has been authenticated under this Trust
Agreement. Each Preferred Security Certificate shall be dated the date of
its authentication.

(c) Upon the written order of the Trust signed by the Administrative
Trustee, the Property Trustee shall authenticate and make available for
delivery the Preferred Securities Certificates.

(d) The Property Trustee may appoint an Authenticating Agent
acceptable to the Trust to authenticate the Preferred Securities. An
Authenticating Agent may authenticate the Preferred Securities whenever the
Property Trustee may do so. Each reference in this Trust Agreement to
authentication by the Property Trustee includes authentication by such agent.
An Authenticating Agent has the same rights as the Property Trustee to deal
with the Depositor or the Trust.

SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF
PREFERRED SECURITIES CERTIFICATES.

(a) The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and
exchanges of Preferred Securities Certificates (herein referred to as the
"Securities Register") in which the registrar designated by the Depositor
(the "Securities Registrar"), subject to such reasonable regulations as it
may prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section 510 in
the case of the Common Securities Certificates) and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Securities Registrar.

(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to
Section 508, the Administrative Trustees or any one of them shall execute and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such
Administrative Trustee or Trustees. The Securities Registrar shall not be
required to register the transfer of any Preferred Securities that have been
called for redemption. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates in
authorized denominations of the same class and of a like aggregate
Liquidation Amount upon surrender of the Preferred Securities Certificates to
be exchanged at the office or agency maintained pursuant to Section 508.

(c) Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Property Trustee in accordance with

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<PAGE> 25
its customary practice. The Trust shall not be required to (i) issue, register
the transfer of, or exchange any Preferred Securities during a period beginning
at the opening of business 15 calendar days before the date of mailing of a
notice of redemption of any Preferred Securities called for redemption and
ending at the close of business on the day of such mailing; or (ii) register the
transfer of or exchange any Preferred Securities so selected for redemption,
in whole or in part, except the unredeemed portion of any such Preferred
Securities being redeemed in part.

(d) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but the Securities
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Preferred Securities Certificates.

SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST
SECURITIES CERTIFICATES.

If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate; and (b) there shall be delivered to the Securities
Registrar, the Property Trustee and the Administrative Trustees such security
or indemnity as may be required by them to save each of them harmless, then
in the absence of notice that such Trust Securities Certificate shall have
been acquired by a bona fide purchaser, the Administrative Trustees, or any
one of them, on behalf of the Trust shall execute and make available for
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the issuance of any
new Trust Securities Certificate under this Section 505, the Administrative
Trustees or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section 505 shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.

SECTION 506. PERSONS DEEMED SECURITYHOLDERS.

The Trustees, the Paying Agent and the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered
in the Securities Register as the owner of such Trust Securities Certificate
for the purpose of receiving Distributions and for all other purposes
whatsoever, and neither the Trustees nor the Securities Registrar shall be
bound by any notice to the contrary.

SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND
ADDRESSES.

At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall
furnish or cause to be furnished to the Property Trustee (a) semi-annually on
or before January 15 and July 15 in each year, a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date; and (b) promptly after
receipt by any Administrative Trustee or the Depositor of a request therefor
from the Property Trustee in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, in each case to the
extent such information is in the possession or control of the Administrative
Trustees or the Depositor and is not identical to a

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<PAGE> 26
previously supplied list or has not otherwise been received by the Property
Trustee in its capacity as Securities Registrar. The rights of Securityholders
to communicate with other Securityholders with respect to their rights under
this Trust Agreement or under the Trust Securities, and the corresponding rights
of the Trustee shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was
derived.

SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.

The Administrative Trustees shall maintain in a location or locations
designated by the Administrative Trustees, an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served.
The Administrative Trustees initially designate the Corporate Trust Office of
the Property Trustee, Two International Place, 4th Floor, Boston,
Massachusetts 02110, as the principal corporate trust office for such
purposes. The Administrative Trustees shall give prompt written notice to
the Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.

SECTION 509. APPOINTMENT OF PAYING AGENT.

The Paying Agent shall initially be the Property Trustee, and any
co-paying agent chosen by the Property Trustee, and acceptable to the
Administrative Trustees and the Depositor. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report
the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Trust Agreement in any material respect. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act
be revoked, the Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as Paying Agent
(which shall be a bank or trust company). The Administrative Trustees shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Administrative Trustees to execute and deliver to the Trustees an
instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying
Agent or additional Paying Agent shall hold all sums, if any, held by it for
payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and, upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 801, 803 and 806 shall apply to the Property Trustee
also in its role as Paying Agent, for so long as the Property Trustee shall
act as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Trust Agreement to the Paying
Agent shall include any co-paying agent unless the context requires
otherwise.

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<PAGE> 27

SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.

On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities (other than
a transfer in connection with a merger or consolidation of the Depositor into
another corporation pursuant to Section 12.1 of the Indenture) shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".

SECTION 511. PREFERRED SECURITIES CERTIFICATES.

(a) Each owner shall receive a Preferred Securities Certificate
representing such owner's interest in such Preferred Securities. Upon the
issuance of Preferred Securities Certificates, the Trustees shall recognize
the record holders of the Preferred Securities Certificates as
Securityholders. The Preferred Securities Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.

(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.

SECTION 512. [INTENTIONALLY OMITTED].

SECTION 513. [INTENTIONALLY OMITTED].

SECTION 514. RIGHTS OF SECURITYHOLDERS.

(a) The legal title to the Trust Property is vested exclusively in
the Property Trustee (in its capacity as such) in accordance with
Section 209, and the Securityholders shall not have any right or title
therein other than the undivided beneficial interest in the assets of the
Trust conferred by their Trust Securities and they shall have no right to
call for any partition or division of property, profits or rights of the
Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this
Trust Agreement. The Trust Securities shall have no preemptive or similar
rights. When issued and delivered to Holders of the Preferred Securities
against payment of the purchase price therefor, the Preferred Securities
shall be fully paid and nonassessable interests in the Trust. The Holders of
the Preferred Securities, in their capacities as such, shall be entitled to
the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.

(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders
of not less than 25% in principal amount of the outstanding Debentures fail
to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to
the Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal
and interest on such Debentures shall remain subordinated to the extent
provided in the Indenture.

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<PAGE> 28

(c) For so long as any Preferred Securities remain outstanding, if,
upon a Debenture Event of Default arising from the failure to pay interest or
principal on the Debentures, the Holders of any Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of payment to such Holders of
principal of or interest on the Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holders.

ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 601. LIMITATIONS ON VOTING RIGHTS.

(a) Except as provided in this Section 601, in Sections 514, 810 and
1002 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so
as to constitute the Securityholders from time to time as partners or members
of an association.

(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to such
Debentures; (ii) waive any past default which is waivable under Article VII
of the Indenture; (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable; or
(iv) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, without, in each
case, obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided,
however, that where a consent under the Indenture would require the consent
of each Holder of outstanding Debentures affected thereby, no such consent
shall be given by the Property Trustee without the prior written consent of
each holder of Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Outstanding Preferred Securities, except by a subsequent vote of the Holders
of the Outstanding Preferred Securities. The Property Trustee shall notify
each Holder of the Outstanding Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In
addition to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees shall,
at the expense of the Depositor, obtain an Opinion of Counsel experienced in
such matters to the effect that the Trust shall continue to be classified as
a grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes on account of such action.

(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of
the Preferred Securities, whether by way of amendment to the Trust Agreement
or otherwise; or (ii) the dissolution, winding-up or termination of the
Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class shall be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a majority in

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Liquidation Amount of the Outstanding Preferred Securities. No amendment
to this Trust Agreement may be made if, as a result of such amendment, the
Trust would cease to be classified as a grantor trust or would be classified
as an association taxable as a corporation for United States federal income
tax purposes.

SECTION 602. NOTICE OF MEETINGS.

Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 1008 to each Preferred Securityholder of record,
at his registered address, at least 15 days and not more than 90 days before
the meeting. At any such meeting, any business properly before the meeting
may be so considered whether or not stated in the notice of the meeting. Any
adjourned meeting may be held as adjourned without further notice.

SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS.

(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter in respect of which Preferred Securityholders are entitled
to vote upon the written request of the Preferred Securityholders of 25% of
the Outstanding Preferred Securities (based upon their aggregate Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which the Preferred Securityholders are entitled to
vote.

(b) Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present
in person or by proxy, shall constitute a quorum at any meeting of
Securityholders.

(c) If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding
more than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of
the Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.

SECTION 604. VOTING RIGHTS.

Securityholders shall be entitled to one vote for each dollar value of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote (and such dollar
value shall be $10 per Preferred Security until such time, if any, as the
Liquidation Amount is changed as provided herein).

SECTION 605. PROXIES, ETC.

At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at
which such vote shall be taken. When Trust Securities are held jointly by
several persons, any one of them may vote at any

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meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.

SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.

Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of
all Outstanding Trust Securities (based upon their aggregate Liquidation
Amount) entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing (based upon their aggregate
Liquidation Amount).

SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.

For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any Distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a
date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.

SECTION 608. ACTS OF SECURITYHOLDERS.

(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Securityholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Securityholders in person or by an agent duly appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Securityholders 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 Trust Agreement and
(subject to Section 801) conclusive in favor of the Trustees, if made in the
manner provided in this Section 608.

(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 a certificate of a 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 by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. 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 any Trustee receiving the
same deems sufficient.

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(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind
every future Securityholder of the same Trust Security and the Securityholder
of every Trust Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.

(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount
of such Trust Security or by one or more duly appointed agents each of which
may do so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.

(f) A Securityholder may institute a legal proceeding directly against
the Depositor under the Guarantee to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee
(as defined in the Guarantee), the Trust or any Person.

SECTION 609. INSPECTION OF RECORDS.

Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection and copying by
Securityholders and their authorized representatives during normal business
hours for any purpose reasonably related to such Securityholder's interest as
a Securityholder.

ARTICLE VII
REPRESENTATIONS AND WARRANTIES

SECTION 701. REPRESENTATIONS AND WARRANTIES OF BANK AND
PROPERTY TRUSTEE.

The Bank and the Property Trustee, each severally on behalf of and as
to itself, as of the date hereof, and each successor Property Trustee at the
time of the successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
successor Property Trustee in its separate corporate capacity) hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:

(a) the Bank is a trust company duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts;

(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;

(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally
binding agreement of the Property Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and to general
equity principles;

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(d) the execution, delivery and performance by the Property Trustee
of this Trust Agreement has been duly authorized by all necessary corporate
or other action on the part of the Property Trustee and does not require any
approval of stockholders of the Bank and such execution, delivery and
performance shall not (i) violate the Bank's charter or by-laws; (ii) violate
any provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of, any Lien on any
properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or
instrument to which the Property Trustee or the Bank is a party or by which
it is bound; or (iii) violate any law, governmental rule or regulation of the
United States or the Commonwealth of Massachusetts, as the case may be,
governing the banking or trust powers of the Bank or the Property Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Bank;

(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Property Trustee contemplated herein or therein requires
the consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority or
agency under any existing federal law governing the banking or trust powers
of the Bank or the Property Trustee, as the case may be, under the laws of
the United States or the Commonwealth of Massachusetts; and

(f) there are no proceedings pending or, to the best of the Property
Trustee's knowledge, threatened against or affecting the Bank or the Property
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Property Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.

SECTION 702. REPRESENTATIONS AND WARRANTIES OF DELAWARE BANK
AND DELAWARE TRUSTEE.

The Delaware Bank and the Delaware Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each successor Delaware Trustee
at the time of the successor Delaware Trustee's acceptance of appointment as
Delaware Trustee hereunder (the term "Delaware Bank" being used to refer to
such successor Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Depositor and
the Securityholders that:

(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware;

(b) the Delaware Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally
binding agreement of the Delaware Trustee enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and to general
equity principles;

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(d) the execution, delivery and performance by the Delaware Trustee
of this Trust Agreement has been duly authorized by all necessary corporate
or other action on the part of the Delaware Trustee and does not require any
approval of stockholders of the Delaware Bank and such execution, delivery
and performance shall not (i) violate the Delaware Bank's charter or by-laws;
(ii) violate any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition of, any
Lien on any properties included in the Trust Property pursuant to the
provisions of, any indenture, mortgage, credit agreement, license or other
agreement or instrument to which the Delaware Bank or the Delaware Trustee is
a party or by which it is bound; or (iii) violate any law, governmental rule
or regulation of the United States or the State of Delaware, as the case may
be, governing the banking or trust powers of the Delaware Bank or the
Delaware Trustee (as appropriate in context) or any order, judgment or decree
applicable to the Delaware Bank or the Delaware Trustee;

(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Delaware Trustee contemplated herein or therein requires
the consent or approval of, the giving of notice to, the registration with or
the taking of any other action with respect to any governmental authority or
agency under any existing federal law governing the banking or trust powers
of the Delaware Bank or the Delaware Trustee, as the case may be, under the
laws of the United States or the State of Delaware; and

(f) there are no proceedings pending or, to the best of the Delaware
Trustee's knowledge, threatened against or affecting the Delaware Bank or the
Delaware Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Delaware Trustee to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.

SECTION 703. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.

The Depositor hereby represents and warrants for the benefit of the
Securityholders that:

(a) the Trust Securities Certificates issued on the Closing Date or
the Option Closing Date, if applicable, on behalf of the Trust have been duly
authorized and shall be, as of such date or dates, if applicable, duly and
validly executed, issued and delivered by the Administrative Trustees
pursuant to the terms and provisions of, and in accordance with the
requirements of, this Trust Agreement and the Securityholders shall be, as of
such date or dates, if applicable, entitled to the benefits of this Trust
Agreement; and

(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.

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ARTICLE VIII
TRUSTEES

SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.

(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds
or otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if
they 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. No Administrative Trustee nor the Delaware Trustee shall be
liable for its act or omissions hereunder except as a result of its own gross
negligence or willful misconduct. The Property Trustee's liability shall be
determined under the Trust Indenture Act. Whether or not therein expressly
so provided, every provision of this Trust Agreement relating to the conduct
or affecting the liability of or affording protection to the Trustees shall
be subject to the provisions of this Section 801. To the extent that, at law
or in equity, the Delaware Trustee or an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or
to the Securityholders, the Delaware Trustee or such Administrative Trustee
shall not be liable to the Trust or to any Securityholder for such Trustee's
good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the
duties and liabilities of the Delaware Trustee or the Administrative Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the Delaware
Trustee and the Administrative Trustees, as the case may be.

(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms
hereof. With respect to the relationship of each Securityholder and the
Trustee, each Securityholder, by its acceptance of a Trust Security, agrees
that it shall look solely to the revenue and proceeds from the Trust Property
to the extent legally available for distribution to it as herein provided and
that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 801(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture
Act.

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

(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;

(ii) the Property 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 not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of

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conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;

(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;

(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor and money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Payment Account maintained
by the Property Trustee pursuant to Section 301 and except to the extent
otherwise required by law; and

(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the negligence, default or misconduct of the
Administrative Trustees or the Depositor.

SECTION 802. CERTAIN NOTICES.

(a) Within 5 Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 1008, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
For purposes of this Section 802 the term "Event of Default" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default.

(b) The Administrative Trustees shall transmit to the
Securityholders, in the manner and to the extent provided in Section 1008,
notice of the Depositor's election to begin or further extend an Extended
Interest Payment Period on the Debentures (unless such election shall have
been revoked) within the time specified for transmitting such notice to the
holders of the Debentures pursuant to the Indenture as originally executed.

SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.

Subject to the provisions of Section 801:

(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action;
or (ii) in construing any of the provisions of

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this Trust Agreement the Property Trustee finds the same ambiguous or
inconsistent with other provisions contained herein; or (iii) the Property
Trustee is unsure of the application of any provision of this Trust Agreement,
then, except as to any matter as to which the Preferred Securityholders are
entitled to vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within 10 Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such
notice (which to the extent practicable shall not be less than 2 Business
Days), it may, but shall be under no duty to, take or refrain from taking
such action not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;

(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced
by an Officers' Certificate;

(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered
by the Depositor or the Administrative Trustees;

(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement, any filing under tax or securities laws or any filing
under tax or securities laws) or any rerecording, refiling or reregistration
thereof;

(f) the Property Trustee may consult with counsel of its choice
(which counsel may be counsel to the Depositor or any of its Affiliates) and
the advice of such 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 and, in accordance with such
advice, such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the administration
of this Trust Agreement from any court of competent jurisdiction;

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

(h) the Property 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, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;

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(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to selection
of any agent or attorney appointed by it hereunder;

(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be entitled
to direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action; (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received; and (iii) shall be protected in acting in accordance with such
instructions; and

(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement. No
provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.

SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.

The Recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of
the Debentures.

SECTION 805. MAY HOLD SECURITIES.

Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with
the Trust with the same rights it would have if it were not a Trustee or such
other agent.

SECTION 806. COMPENSATION; INDEMNITY; FEES.

The Depositor agrees:

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

(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Trust Agreement (including the reasonable compensation and

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the expenses and disbursements of its agents and counsel), except any such
expense, disbursements of its agents and counsel), except any such expense,
negligence, bad faith or willful misconduct (or, in the case of the
Administrative Trustees or the Delaware Trustee, any such expense, disbursement
or advance as may be attributable to its, his or her gross negligence, bad faith
or willful misconduct); and

(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims,
liability, penalty 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 Agreement, 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, except any such expense,
disbursement or advance as may be attributable to such Trustee's negligence,
bad faith or willful misconduct (or, in the case of the Administrative
Trustees or the Delaware Trustee, any such expense, disbursement or advance
as may be attributable to its, his or her gross negligence, bad faith or
willful misconduct).

No Trustee may claim any Lien or charge on Trust Property as a result
of any amount due pursuant to this Section 806.

SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.

(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that
is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes
of this Section 807, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section 807, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VIII.

(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.

(c) There shall at all times be a Delaware Trustee with respect to
the Trust Securities. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of
Delaware; or (ii) a legal entity with its principal place of business in the
State of Delaware and that otherwise meets the requirements of applicable
Delaware law that shall act through one or more persons authorized to bind
such entity.

SECTION 808. CONFLICTING INTERESTS.

If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Trust Agreement.

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SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.

(a) Unless an Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of
the Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor
shall for such purpose join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as
separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section 809.
If the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have power
to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section 809 shall either be (i) a natural person who is at
least 21 years of age and a resident of the United States; or (ii) a legal
entity with its principal place of business in the United States that shall
act through one or more persons authorized to bind such entity.

(b) Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power,
any and all such instruments shall, on request, be executed, acknowledged,
and delivered by the Depositor.

(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:

(i) The Trust Securities shall be executed and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or required
to be deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.

(ii) The rights, powers, duties and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act is
to be performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate trustee.

(iii) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 809, and, in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee shall have the power to
accept the resignation of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written request of the
Property Trustee, the Depositor shall join with the Property Trustee in the

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execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be appointed
in the manner provided in this Section 809.

(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.

(v) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.

(vi) Any Act of Holders delivered to the Property Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.

SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

(a) No resignation or removal of any Trustee (the "Relevant Trustee")
and no appointment of a successor Trustee pursuant to this Article VIII shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 811.

(b) Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of
acceptance by the successor Trustee required by Section 811 shall not have
been delivered to the Relevant Trustee within 30 days after the giving of
such notice of resignation, the Relevant Trustee may petition, at the expense
of the Depositor, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee with respect to the Trust Securities.

(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them,
may be removed at such time by Act of the Holders of a majority in
Liquidation Amount of the Preferred Securities, delivered to the Relevant
Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Common Securityholder at any
time.

(d) If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee
for any cause, at a time when no Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to the retiring Trustee, shall promptly appoint a
successor Trustee or Trustees with respect to the Trust Securities and the
Trust, and the successor Trustee shall comply with the applicable
requirements of Section 811. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when
a Debenture Event of Default shall have occurred and is continuing, the
Preferred Securityholders, by Act of the Securityholders of a majority in
Liquidation Amount of the Preferred Securities then Outstanding delivered to
the retiring Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees with respect to the Trust Securities and the Trust, and
such successor Trustee shall comply with the applicable requirements of
Section 811. If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, at a time when a Debenture
Event of Default shall have occurred and be continuing, the Common
Securityholder, by Act of the Common Securityholder delivered to an
Administrative

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Trustee, shall promptly appoint a successor Administrative Trustee or
Administrative Trustees with respect to the Trust Securities and the Trust, and
such successor Administrative Trustee or Administrative Trustees shall comply
with the applicable requirements of Section 811. If no successor Relevant
Trustee with respect to the Trust Securities shall have been so appointed by the
Common Securityholder or the Preferred Securityholders and accepted appointment
in the manner required by Section 811, any Securityholder who has been a
Securityholder of Trust Securities on behalf of himself and all others similarly
situated may petition a court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.

(e) The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 1008 and shall give notice
to the Depositor. Each notice shall include the name of the successor
Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.

(f) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence
or incapacity may be filled by (a) the unanimous act of remaining
Administrative Trustees if there are at least two of them; or (b) otherwise
by the Depositor (with the successor in each case being a Person who
satisfies the eligibility requirement for Administrative Trustees set forth
in Section 807).

SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

(a) In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, the retiring
Relevant Trustee and each successor Relevant Trustee with respect to the
Trust Securities shall execute and deliver an instrument hereto wherein each
successor Relevant Trustee shall accept such appointment and which shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to
the Trust Securities and the Trust and upon the execution and delivery of
such instrument the resignation or removal of the retiring Relevant Trustee
shall become effective to the extent provided therein and each such successor
Relevant Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the Trust; but, on
request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and
the Trust.

(b) Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may
be.

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

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SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.

Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.

SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
DEPOSITOR OR TRUST.

If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon
the Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any
such other obligor).

SECTION 814. REPORTS BY PROPERTY TRUSTEE.

(a) The Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee, its actions under this Trust
Agreement and the property and funds in its possession as Property Trustee as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.

(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with The Nasdaq
Stock Market's National Market, and each national securities exchange or
other organization upon which the Trust Securities are listed, and also with
the Commission and the Depositor.

SECTION 815. REPORTS TO PROPERTY TRUSTEE.

The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by Section 314 of the Trust Indenture Act (if any) and the
compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.

SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT.

Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in
the form of an Officers' Certificate.

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SECTION 817. NUMBER OF TRUSTEES.

(a) The number of Trustees shall be five, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease
the number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same Person.

(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 817(a), or if
the number of Trustees is increased pursuant to Section 817(a), a vacancy
shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 810.

(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 810, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.

SECTION 818. DELEGATION OF POWER.

(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any documents contemplated in
Section 207(a); and

(b) The Administrative Trustees shall have power to delegate from
time to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the Trust
or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of the Trust,
as set forth herein.

SECTION 819. VOTING.

Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by
not less than a majority of the Administrative Trustees, unless there are
only two, in which case both must consent.

ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER

SECTION 901. TERMINATION UPON EXPIRATION DATE.

Unless earlier dissolved, the Trust shall automatically dissolve on
- ---------, 2052 (the "Expiration Date") subject to distribution of the Trust
Property in accordance with Section 904.

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SECTION 902. EARLY TERMINATION.

The first to occur of any of the following events is an "Early
Termination Event:"

(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;

(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is wholly optional and within the
discretion of the Depositor) to dissolve the Trust and distribute the
Debentures to Securityholders in exchange for the Preferred Securities in
accordance with Section 904;

(d) the entrance of an order for dissolution of the Trust by a court
of competent jurisdiction.

SECTION 903. TERMINATION.

The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur
of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 904, or
upon the redemption of all of the Trust Securities pursuant to Section 402,
of all amounts required to be distributed hereunder upon the final payment of
the Trust Securities; (b) the payment of any expenses owed by the Trust;
(c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders; and (d) the filing of a
Certificate of Cancellation by the Administrative Trustee under the Delaware
Business Trust Act.

SECTION 904. LIQUIDATION.

(a) If an Early Termination Event specified in clause (a), (b), or
(d) of Section 902 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Securityholder a Like Amount
of Debentures, subject to Section 904(d). Notice of liquidation shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed
not later than 30 nor more than 60 days prior to the Liquidation Date to each
Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:

(i) state the Liquidation Date;

(ii) state that from and after the Liquidation Date, the Trust
Securities shall no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange shall be deemed to
represent a Like Amount of Debentures; and

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(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or,
if Section 904(d) applies, receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.

(b) Except where Section 902(c) or 904(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment
of a separate exchange agent, shall establish such procedures as it shall
deem appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.

(c) Except where Section 902(c) or 904(d) applies, after the
Liquidation Date, (i) the Trust Securities shall no longer be deemed to be
outstanding; (ii) certificates representing a Like Amount of Debentures shall
be issued to holders of Trust Securities Certificates upon surrender of such
certificates to the Administrative Trustees or their agent for exchange;
(iii) the Depositor shall use its reasonable efforts to have the Debentures
listed on The Nasdaq Stock Market's National Market or on such other
securities exchange or other organization as the Preferred Securities are
then listed or traded; (iv) any Trust Securities Certificates not so
surrendered for exchange shall be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures from
the last Distribution Date on which a Distribution was made on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal
shall be made to holders of Trust Securities Certificates with respect to
such Debentures); and (v) all rights of Securityholders holding Trust
Securities shall cease, except the right of such Securityholders to receive
Debentures upon surrender of Trust Securities Certificates.

(d) In the event that, notwithstanding the other provisions of this
Section 904, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders
shall be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding-up or
termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The holder of the Common
Securities shall be entitled to receive Liquidation Distributions upon any
such dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities.

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SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF TRUST.

The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except
pursuant to this Section 905. At the request of the Depositor, with the
consent of the Administrative Trustees and without the consent of the holders
of the Preferred Securities, the Property Trustee or the Delaware Trustee,
the Trust may merge with or into, consolidate, amalgamate, be replaced by or
convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities; or
(b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise; (ii) the Depositor
expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as the
holder of the Debentures; (iii) the Successor Securities are listed or
traded, or any Successor Securities shall be listed or traded upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any;
(iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect; (v) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in
any material respect; and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust
nor such successor entity shall be required to register as an "investment
company" under the Investment Company Act; and (vi) the Depositor owns all of
the Common Securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the
extent provided by the Guarantee. Notwithstanding the foregoing, the Trust
shall not, except with the consent of holders of 100% in Liquidation Amount
of the Preferred Securities, consolidate, amalgamate, merge with or into, or
be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any other Person
to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or
the successor entity to be classified as other than a grantor trust for
United States federal income tax purposes.

ARTICLE X
MISCELLANEOUS PROVISIONS

SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.

The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or
any Securityholder for such Person to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding-up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

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SECTION 1002. AMENDMENT.

(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders,
(i) as provided in Section 811 with respect to acceptance of appointment by a
successor Trustee; (ii) to cure any ambiguity, correct or supplement any
provision herein or therein which may be inconsistent with any other
provision herein or therein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, that shall not be
inconsistent with the other provisions of this Trust Agreement; (iii) to
modify, eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Trust shall be classified for
United States federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust shall
not be required to register as an "investment company" under the Investment
Company Act or (iv) to reduce or increase the Liquidation Amount per Trust
Security and simultaneously to correspondingly increase or decrease the number
of Trust Securities issued and outstanding solely for the purpose of
maintaining the eligibility of the Preferred Securities for quotation or
listing on any national securities exchange or other organization on which the
Preferred Securities are then quoted or listed (including, if applicable, The
Nasdaq Stock Market's National Market); provided, however, that in the case of
clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder and provided further, that in the case of
clause (iv), the aggregate Liquidation Amount of the Trust Securities
outstanding upon completion of any such reduction must be the same as the
aggregate Liquidation Amount of the Trust Securities outstanding immediately
prior to such reduction, and any amendments of this Trust Agreement shall
become effective when notice thereof is given to the Securityholders (or, in
the case of an amendment pursuant to clause (iv), as of the date specified in
the notice).

(b) Except as provided in Section 601(c) or Section 1002(c) hereof,
any provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding; and (ii) upon receipt by the Trustees of an Opinion of Counsel
to the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment shall not affect the Trust's
status as a grantor trust for United States federal income tax purposes or
the Trust's exemption from status of an "investment company" under the
Investment Company Act.

(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 603 or 606 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date; or (ii) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of
the Securityholders (such consent being obtained in accordance with
Section 603 or 606 hereof), this paragraph (c) of this Section 1002 may not
be amended.

(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption
from status of an "investment company" under the Investment

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Company Act or to fail or cease to be classified as a grantor trust for United
States federal income tax purposes.

(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.

(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.

(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects
its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an
Officers' Certificate stating that any amendment to this Trust Agreement is
in compliance with this Trust Agreement.

SECTION 1003. SEPARABILITY.

In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

SECTION 1004. GOVERNING LAW.

THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES).

SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.

If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date
but may be made on the next succeeding day which is a Business Day, with the
same force and effect as though made on the date fixed for such payment, and
no distribution shall accumulate thereon for the period after such date.

SECTION 1006. SUCCESSORS.

This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant
Trustee(s), including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that
is permitted under Article XII of the Indenture and pursuant to which the
assignee agrees in writing to perform the Depositor's obligations hereunder,
the Depositor shall not assign its obligations hereunder.

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SECTION 1007. HEADINGS.

The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.

SECTION 1008. REPORTS, NOTICES AND DEMANDS.

(a) Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or
served to or upon any Securityholder or the Depositor may be given or served
in writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register; and (ii) in the case of the Common Securityholder or the
Depositor, to Lakeland Financial Corporation, 202 East Center Street, P.O.
Box 1387, Warsaw, Indiana 46581-1387, Attention: Chief Executive Officer,
facsimile no.: (219) 267-4972. Any notice to Preferred Securityholders shall
also be given to such owners as have, within two years preceding the giving
of such notice, filed their names and addresses with the Property Trustee for
that purpose. Such notice, demand or other communication to or upon a
Securityholder shall be deemed to have been sufficiently given or made, for
all purposes, upon hand delivery, mailing or transmission.

(b) Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon the Trust, the Property Trustee or the Administrative Trustees shall be
given in writing addressed (until another address is published by the Trust)
as follows: (i) with respect to the Property Trustee to State Street Bank
and Trust Company, Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department; (ii) with respect to the
Delaware Trustee, to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Administration; and (iii) with respect to the Administrative Trustees,
to them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of Lakeland Capital Trust, c/o Chief Executive
Officer, Lakeland Financial Corporation." Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.

SECTION 1009. AGREEMENT NOT TO PETITION.

Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and 1 day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Trust under any bankruptcy,
insolvency, reorganization or other similar law (including, without
limitation, the United States Bankruptcy Code of 1978, as amended)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 1009, the Property
Trustee agrees, for the benefit of Securityholders, that at the expense of
the Depositor (which expense shall be paid prior to the filing), it shall
file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom. The provisions of this Section 1009 shall survive the termination
of this Trust Agreement.

44
<PAGE> 50

SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST
INDENTURE ACT.

(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.

(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.

(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies
or excludes any provision of the Trust Indenture Act which may be so modified
or excluded, the latter provision shall be deemed to apply to this Trust
Agreement as so modified or to be excluded, as the case may be.

(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.

[Remainder of page intentionally left blank]

45
<PAGE> 51
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT,
GUARANTEE AND INDENTURE.

THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE
AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.

LAKELAND FINANCIAL CORPORATION
as Depositor

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

STATE STREET BANK AND TRUST COMPANY,
as Property Trustee

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

46
<PAGE> 52
WILMINGTON TRUST COMPANY,
as Delaware Trustee

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

-------------------------------------------------
R. Douglas Grant, as Administrative Trustee

-------------------------------------------------
Walter L. Weldy, as Administrative Trustee

-------------------------------------------------
Terry M. White, as Administrative Trustee

47
<PAGE> 53

EXHIBIT A

CERTIFICATE OF TRUST
OF
LAKELAND CAPITAL TRUST

THIS CERTIFICATE OF TRUST OF LAKELAND CAPITAL TRUST (the
"Trust"), dated -------------, 1997, is being duly executed and filed by
WILMINGTON TRUST COMPANY, a Delaware banking corporation, R. Douglas
Grant, Walter L. Weldy and Terry M. White, each an individual, as trustees,
to form a business trust under the Delaware Business Trust Act (12 Del. C.
Section 3801 et seq.).

1. NAME. The name of the business trust formed hereby is LAKELAND
CAPITAL TRUST.

2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.

3. EFFECTIVE DATE. This Certificate of Trust shall be effective on
July ---, 1997.

A-1
<PAGE> 54

IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, has executed this Certificate of Trust as of the date first above
written.

WILMINGTON TRUST COMPANY,
as trustee

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

-------------------------------------------------
R. Douglas Grant
as Trustee

-------------------------------------------------
Walter L. Weldy
as Trustee

-------------------------------------------------
Terry M. White
as Trustee

A-2
<PAGE> 55

EXHIBIT B

[Intentionally Omitted]

<PAGE> 56
EXHIBIT C

THIS CERTIFICATE IS NOT TRANSFERABLE

CERTIFICATE NUMBER 1 NUMBER OF COMMON SECURITIES: -------

CERTIFICATE EVIDENCING COMMON SECURITIES
OF
LAKELAND CAPITAL TRUST

COMMON SECURITIES
(LIQUIDATION AMOUNT $10.00 PER COMMON SECURITY)

LAKELAND CAPITAL TRUST, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
Lakeland Financial Corporation (the "Holder") is the registered owner of
- ------------------------------------------- (-------) common securities (the
"Common Securities") of the Trust representing undivided beneficial interests
in the assets of the Trust and designated the ----% Common Securities
(liquidation amount $10.00 per Common Security). In accordance with Section
510 of the Trust Agreement (as defined below), the Common Securities are not
transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences, and other terms
and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Trust Agreement of the Trust dated as of ---------, 1997, as the
same may be amended from time to time (the "Trust Agreement"), including the
designation of the terms of the Common Securities as set forth therein. The
Trust shall furnish a copy of the Trust Agreement to the Holder without
charge upon written request to the Trust at its principal place of business
or registered office.

Upon receive of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ---- day of -----------, 1997.

LAKELAND CAPITAL TRUST

By
---------------------------------------------
Name
---------------------------------------------
Administrative Trustee

C-1
<PAGE> 57

EXHIBIT D

AGREEMENT AS TO EXPENSES AND LIABILITIES

AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement")
dated as of -------------, 1997, between LAKELAND FINANCIAL CORPORATION,
an Indiana corporation ("the Company"), and LAKELAND CAPITAL TRUST, a
Delaware business trust (the "Trust").

RECITALS

WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, the Company and to issue and
sell up to 2,000,000 -----% Cumulative Trust Preferred Securities (the
"Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of
the Trust dated as of ------------, 1997, as the same may be amended from
time to time (the "Trust Agreement");

WHEREAS, the Company shall directly or indirectly own all of the
Common Securities of the Trust and shall issue the Debentures;

NOW, THEREFORE, in consideration of the purchase by each holder of
the Preferred Securities, which purchase the Company hereby agrees shall
benefit the Company and which purchase the Company acknowledges shall be made
in reliance upon the execution and delivery of this Agreement, the Company,
including in its capacity as holder of the Common Securities, and the Trust
hereby agree as follows:

ARTICLE I

SECTION 1.1. GUARANTEE BY THE COMPANY.

Subject to the terms and conditions hereof, the Company, including in
its capacity as holder of the Common Securities, hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now
or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations (as hereinafter defined)
to such Beneficiaries. As used herein, "Obligations" means any costs,
expenses or liabilities of the Trust other than obligations of the Trust to
pay to holders of any Preferred Securities or other similar interests in the
Trust the amounts due such holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be. This
Agreement is intended to be for the benefit of, and to be enforceable by, all
such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.

SECTION 1.2. TERM OF AGREEMENT.

This Agreement shall terminate and be of no further force and effect
upon the later of (a) the date on which full payment has been made of all
amounts payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise); and (b) the date on which
there are no Beneficiaries remaining; provided, however, that this Agreement
shall continue to be

D-1
<PAGE> 58
effective or shall be reinstated, as the case may be, if at any time any holder
of Preferred Securities or any Beneficiary must restore payment of any sums paid
under the Preferred Securities, under any obligation under the Preferred
Securities Guarantee Agreement dated the date hereof by the Company and State
Street Bank and Trust Company, as guarantee trustee, or under this Agreement for
any reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.

SECTION 1.3. WAIVER OF NOTICE.

The Company hereby waives notice of acceptance of this Agreement and of
any obligation to which it applies or may apply, and the Company hereby
waives presentment, demand for payment, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.

SECTION 1.4. NO IMPAIRMENT.

The obligations, covenants, agreements and duties of the Company under
this Agreement shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

(a) the extension of time for the payment by the Trust of all or any
portion of the obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;

(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Beneficiaries with respect to the Obligations or
any action on the part of the Trust granting indulgence or extension of any
kind; or

(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement composition or readjustment
of debt of, or other similar proceedings affecting, the Trust or any of the
assets of the Trust.

There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, the Company with respect to the happening of any of
the foregoing.

SECTION 1.5. ENFORCEMENT.

A Beneficiary may enforce this Agreement directly against the Company,
and the Company waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against the Company.

D-2
<PAGE> 59

ARTICLE II

SECTION 2.1. BINDING EFFECT.

All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the Beneficiaries.

SECTION 2.2. AMENDMENT.

So long as there remains any Beneficiary or any Preferred Securities
are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Preferred
Securities.

SECTION 2.3. NOTICES.

Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answer back, if sent by telex):

Lakeland Capital Trust
c/o Lakeland Financial Corporation
202 East Center Street
P.O. Box 1387
Warsaw, Indiana 46581-1387
Facsimile No.: (219) 267-4972
Attention: Chief Executive Officer

Lakeland Financial Corporation
202 East Center Street
P.O. Box 1387
Warsaw, Indiana 46581-1387
Facsimile No.: (219) 267-4972
Attention: Chief Executive Officer

SECTION 2.4. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Indiana (without
regard to conflict of laws principles).

D-3
<PAGE> 60

THIS AGREEMENT is executed as of the day and year first above
written.

LAKELAND FINANCIAL CORPORATION

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

LAKELAND CAPITAL TRUST

By:
--------------------------------------------
Name:
--------------------------------------------
Administrative Trustee

D-4
<PAGE> 61
EXHIBIT E

Certificate Number Number of Preferred Securities --------
P-

Certificate Evidencing Preferred Securities
of
Lakeland Capital Trust

----% Cumulative Trust Preferred Securities
(Liquidation Amount $10 per Preferred Security)

CUSIP NO.
Lakeland Capital Trust, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that ----------------
(the "Holder") is the registered owner of ----- preferred securities (the
"Preferred Securities") of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the ----% Cumulative
Trust Preferred Securities (Liquidation Amount $10 per Preferred Security).
The Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer as provided in
Section 504 of the Trust Agreement (as defined herein). The designations,
rights, privileges, restrictions, preferences, and other terms and provisions
of the Preferred Securities are set forth in, and this Certificate and the
Preferred Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Trust dated as of ----------, 1997, as the same may be
amended from time to time (the "Trust Agreement"), including the designation
of the terms of Preferred Securities as set forth therein. The Holder is
entitled to the benefits of the Preferred Securities Guarantee Agreement
entered into by Lakeland Financial Corporation, an Indiana corporation, and
State Street Bank and Trust Company, as guarantee trustee, dated as of
- -------, 1997 (the "Guarantee"), to the extent provided therein. The Trust
shall furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.

Upon receipt of this Certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

Unless the Certificate of Authentication has been manually executed by
the Authentication Agent, this Certificate is not valid or effective.

IN WITNESS WHEREOF, the Administrative Trustees of the Trust have
executed this Certificate as of the date hereof.

E-1
<PAGE> 62

Dated: LAKELAND CAPITAL TRUST

CERTIFICATE OF AUTHENTICATION
This is one of the ------% Cumulative By
Trust Preferred Securities referred to in the -----------------------------
within-mentioned Amended and Restated Trust R. Douglas Grant, Trustee
Agreement.
By
STATE STREET BANK & TRUST COMPANY, -----------------------------
as Authentication Agent and Registrar Walter L. Weldy, Trustee

By
-----------------------------
Terry M. White, Trustee

By
----------------------------------------
Authorized Signature

E-2
<PAGE> 63

[FORM ON REVERSE OF CERTIFICATE]

The Trust will furnish without charge to any registered owner of Preferred
Securities who so requests, a copy of the Trust Agreement and the Guarantee.
Any such request should be in writing and addressed to Lakeland Capital
Trust, c/o Lakeland Financial Corporation, 202 East Center Street, P.O. Box
1387, Warsaw, Indiana 46581-1387 or to the Registrar named on the face of
this Certificate.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -
........Custodian..........
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act..........................
in common (State)
TOD - transfer on death direction in
event of owner's death, UNIF TRF MIN ACT - ......Custodian (until age)..
to person named on face and subject (Cust)
to TOD rules referenced ......under Uniform Transfers
(Minor)
to Minors Act..............
(State)
</TABLE>

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, hereby sell, assign and
--------------------------
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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

Preferred Securities
- ------------------------------------------------------------
represented by the within Certificate, and do hereby irrevocably constitute
and appoint

Attorney
- ------------------------------------------------------------------------
to transfer the said Preferred Securities on the books of the within named Trust
with full power of substitution in the premises.

Dated,
---------------------------

--------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERNATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.

SIGNATURE(S) GUARANTEED:

- -------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

E-3

<PAGE> 1

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

PREFERRED SECURITIES GUARANTEE AGREEMENT

BY AND BETWEEN

LAKELAND FINANCIAL CORPORATION

AND

STATE STREET BANK AND TRUST COMPANY

DATED AS OF -------, 1997

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

<PAGE> 2

<TABLE>
TABLE OF CONTENTS

<CAPTION>
Page No.
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION 1
Section 1.1. Definitions and Interpretation 1

ARTICLE II
TRUST INDENTURE ACT 4
Section 2.1. Trust Indenture Act; Application 4
Section 2.2. Lists of Holders of Securities 4
Section 2.3. Reports by Preferred Guarantee Trustee 5
Section 2.4. Periodic Reports to Preferred Guarantee Trustee 5
Section 2.5. Evidence of Compliance with Conditions Precedent 5
Section 2.6. Events of Default; Waiver 5
Section 2.7. Event of Default; Notice 5
Section 2.8. Conflicting Interests 6

ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE 6
Section 3.1. Powers and Duties of Preferred Guarantee Trustee 6
Section 3.2. Certain Rights of Preferred Guarantee Trustee 7
Section 3.3. Not Responsible for Recitals or Issuance of Guarantee 9

ARTICLE IV
PREFERRED GUARANTEE TRUSTEE 9
Section 4.1. Preferred Guarantee Trustee; Eligibility 9
Section 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustee 9

ARTICLE V
GUARANTEE 10
Section 5.1. Guarantee 10
Section 5.2. Waiver of Notice and Demand 10
Section 5.3. Obligations not Affected 11
Section 5.4. Rights of Holders 12
Section 5.5. Guarantee of Payment. 12
Section 5.6. Subrogation. 12
Section 5.7. Independent Obligations 12

ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION 12
Section 6.1. Limitation of Transactions 12
Section 6.2 Ranking 13

ARTICLE VII
TERMINATION 13
Section 7.1. Termination 13

i
<PAGE> 3
ARTICLE VIII
INDEMNIFICATION 13
Section 8.1. Exculpation 13
Section 8.2. Indemnification 14

ARTICLE IX
MISCELLANEOUS 14
Section 9.1. Successors and Assigns 14
Section 9.2. Amendments 14
Section 9.3. Notices 14
Section 9.4. Benefit 15
Section 9.5. Governing Law 15
</TABLE>

ii
<PAGE> 4

<TABLE>
CROSS REFERENCE TABLE

<CAPTION>
Section of Trust Section of
Indenture Act of Guarantee
1939, as amended Agreement
---------------- ---------
<S> <C>
310(a) 4.1(a)
310(b) 4.1(c), 2.8
310(c) Not Applicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3.1(d)
315(b) 2.7
315(c) 3.1
315(d) 3.1(d)
316(a) 1.1, 2.6, 5.4
316(b) 5.3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1(a)
318(b) 2.1
318(c) 2.1(b)

Note: This Cross-Reference Table does not constitute part of this
Agreement and shall not affect the interpretation of any of its
terms or provisions.
</TABLE>

iii
<PAGE> 5

PREFERRED SECURITIES GUARANTEE AGREEMENT

THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this
"Preferred Securities Guarantee"), dated as of -------, 1997 is executed and
delivered by LAKELAND FINANCIAL CORPORATION, an Indiana corporation (the
"Guarantor"), and STATE STREET BANK AND TRUST COMPANY, a trust company
organized and existing under the laws of the Commonwealth of Massachusetts,
as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Lakeland Capital Trust, a Delaware statutory business
trust (the "Trust").

RECITALS

WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of -------, 1997, among the trustees of the
Trust named therein, the Guarantor, as depositor, and the holders from time
to time of undivided beneficial interests in the assets of the Trust, the
Trust is issuing on the date hereof up to 2,000,000 preferred securities,
having an aggregate liquidation amount of $20,000,000, designated the ----%
Cumulative Trust Preferred Securities (the "Preferred Securities");

WHEREAS, as an incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally
to agree, to the extent set forth in this Preferred Securities Guarantee, to
pay to the Holders of the Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the purchase by each Holder
of Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.

ARTICLE I
DEFINITIONS AND INTERPRETATION

SECTION 1.1. DEFINITIONS AND INTERPRETATION.

In this Preferred Securities Guarantee, unless the context
otherwise requires:

(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;

(b) terms defined in the Trust Agreement as at the date of
execution of this Preferred Securities Guarantee have the same meaning when
used in this Preferred Securities Guarantee;

(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;

<PAGE> 6
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;

(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and

(g) a reference to the singular includes the plural and vice
versa.

"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.

"Business Day" means any day other than a day on which federal or
state banking institutions in New York, New York are authorized or required
by law, executive order or regulation to close or a day on which the
Corporate Trust Office of the Preferred Guarantee Trustee is closed for
business.

"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Preferred Securities Guarantee
is located at Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department.

"Covered Person" means any Holder or beneficial owner of
Preferred Securities.

"Debentures" means the ----% Subordinated Debentures due September
30, 2027, of the Debenture Issuer held by the Property Trustee of the Trust.

"Debenture Issuer" means the Guarantor.

"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.

"Guarantor" means Lakeland Financial Corporation, an Indiana
corporation.

"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Trust: (i) any accrued and unpaid
Distributions that are required to be paid on such Preferred Securities, to
the extent the Trust shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Trust has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Trust, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Trust Agreement), the lesser of (a) the
aggregate of the Liquidation Amount and all accrued and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Trust
shall have funds available therefor (the "Liquidation Distribution"), and
(b) the amount of assets of the Trust remaining available for distribution to
Holders in liquidation of the Trust.

2
<PAGE> 7
"Holder" shall mean any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.

"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.

"Indenture" means the Indenture dated as of -------, 1997 among
the Debenture Issuer and State Street Bank and Trust Company, as trustee, and
any indenture supplemental thereto pursuant to, which ----% Subordinated
Debentures of the Debenture Issuer are to be issued to the Property Trustee
of the Trust.

"Liquidation Distribution" has the meaning provided therefor in
the definition of Guarantee Payments.

"List of Holders" has the meaning set forth in Section 2.2 of this
Preferred Securities Guarantee.

"Majority in Liquidation Amount of the Preferred Securities" means
the holders of more than 50% of the Liquidation Amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all of the Preferred Securities.

"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:

(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition relating
thereto;

(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;

(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

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

"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.

"Preferred Guarantee Trustee" means State Street Bank and Trust
Company, until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms

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of this Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.

"Redemption Price" has the meaning provided therefor in the
definition of Guarantee Payments.

"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Guarantee Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.

"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.

ARTICLE II
TRUST INDENTURE ACT

SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.

(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions.

(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.

SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.

(a) In the event the Preferred Guarantee Trustee is not also the
Securities Registrar, the Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the
Preferred Securities (the "List of Holders") as of such date, (i) within
1 Business Day after January 1 and June 30 of each year, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 15 days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders
given to the Preferred Guarantee Trustee by the Guarantor. The Preferred
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

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(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.

SECTION 2.3. REPORTS BY PREFERRED GUARANTEE TRUSTEE.

On or before July 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

SECTION 2.4. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.

The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of
the Trust Indenture Act.

SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided
for in this Preferred Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.

SECTION 2.6. EVENTS OF DEFAULT; WAIVER.

The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.

SECTION 2.7. EVENT OF DEFAULT; NOTICE.

(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice; provided, that the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.

(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Trust
Agreement shall have obtained actual knowledge.

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SECTION 2.8. CONFLICTING INTERESTS.

The Trust Agreement shall be deemed to be specifically described
in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE

SECTION 3.1. POWERS AND DUTIES OF PREFERRED GUARANTEE TRUSTEE.

(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Preferred Guarantee Trustee.

(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is continuing,
the Preferred Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities.

(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are
specifically set forth in this Preferred Securities Guarantee, and no implied
covenants shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) and is actually known
to a Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Preferred Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.

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

(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:

(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express provisions of
this Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and obligations
as are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee; and

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

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

(iii) the Preferred Guarantee 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 not less than a Majority
in liquidation amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred upon
the Preferred Guarantee Trustee under this Preferred Securities Guarantee;
and

(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such risk
or liability is not reasonably assured to it.

SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.

(a) Subject to the provisions of Section 3.1:

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

(ii) any direction or act of the Guarantor contemplated
by this Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate;

(iii) whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting
any action hereunder, the Preferred Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor;

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(iv) the Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof);

(v) the Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such counsel with respect to
legal matters 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 accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction;

(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Guarantee Trustee
such security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances
as may be requested by the Preferred Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee;

(vii) the Preferred Guarantee 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, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;

(viii) the Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys, and the
Preferred Guarantee 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;

(ix) any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred Securities,
and the signature of the Preferred Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action;

(x) whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount of
the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.

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(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal,
or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Preferred Guarantee Trustee shall be
construed to be a duty.

SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE.

The Recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.

ARTICLE IV
PREFERRED GUARANTEE TRUSTEE

SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.

(a) There shall at all times be a Preferred Guarantee Trustee
which shall:

(i) not be an Affiliate of the Guarantor; and

(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes
of this Section 4.1(a)(ii), 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.

(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).

(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.

(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.

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(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.

(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and the
resigning Preferred Guarantee Trustee.

(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Preferred Guarantee Trustee.

(e) No Preferred Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Preferred Guarantee Trustee.

(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.

ARTICLE V
GUARANTEE

SECTION 5.1. GUARANTEE.

The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.

SECTION 5.2. WAIVER OF NOTICE AND DEMAND.

The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

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SECTION 5.3. OBLIGATIONS NOT AFFECTED.

The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the
following:

(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Trust;

(b) the extension of time for the payment by the Trust of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising
out of, or in connection with, the Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity
date of the Debentures permitted by the Indenture);

(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the Trust granting
indulgence or extension of any kind;

(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust or
any of the assets of the Trust;

(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;

(f) any failure or omission to receive any regulatory approval
or consent required in connection with the Preferred Securities (or the
common equity securities issued by the Trust), including the failure to
receive any approval of the Board of Governors of the Federal Reserve System
required for the redemption of the Preferred Securities;

(g) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

(h) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.

There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

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SECTION 5.4. RIGHTS OF HOLDERS.

(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.

(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Trust, the Preferred Guarantee Trustee or any other Person.

SECTION 5.5. GUARANTEE OF PAYMENT.

This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.

SECTION 5.6. SUBROGATION.

The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Trust in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Preferred Securities Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Preferred Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.

SECTION 5.7. INDEPENDENT OBLIGATIONS.

The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (h), inclusive, of Section 5.3 hereof.

ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1. LIMITATION OF TRANSACTIONS.

So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default under this Preferred Securities
Guarantee, an Event of Default under the Trust Agreement or during an
Extended Interest Payment Period (as defined in the Indenture), then (a) the
Guarantor shall not declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
of its capital stock (other than (i) dividends or distributions in common
stock of the Guarantor or any declaration of a non-cash dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption

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or repurchase of any such rights pursuant thereto, and (ii) purchases of common
stock of the Guarantor related to the rights under any of the Guarantor's
benefit plans for its directors, officers or employees), (b) the Guarantor
shall not make any payment of principal or interest on or repay, repurchase
or redeem any debt securities issued by the Guarantor which rank pari passu
with or junior to the Debentures and (c) the Guarantor shall not redeem,
purchase or acquire less than all of the Outstanding Debentures or any of the
Preferred Securities.

SECTION 6.2 RANKING.

This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor, (ii) pari passu with
the most senior preferred securities or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into
by the Guarantor in respect of any preferred securities or preference stock
of any Affiliate of the Guarantor, and (iii) senior to the Guarantor's common
stock.

ARTICLE VII
TERMINATION

SECTION 7.1. TERMINATION.

This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust, or (iii) distribution of the Debentures to the
Holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1. EXCULPATION.

(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Preferred Securities
Guarantee or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.

(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's

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professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

SECTION 8.2. INDEMNIFICATION.

The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person 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 the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Preferred Securities
Guarantee.

ARTICLE IX
MISCELLANEOUS

SECTION 9.1. SUCCESSORS AND ASSIGNS.

All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.

SECTION 9.2. AMENDMENTS.

Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Preferred Securities Guarantee may only be amended
with the prior approval of the Holders of at least a Majority in liquidation
amount of the Preferred Securities. The provisions of Article VI of the
Trust Agreement with respect to meetings of Holders of the Preferred
Securities apply to the giving of such approval.

SECTION 9.3. NOTICES.

All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by registered or certified mail, as
follows:

(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders
of the Preferred Securities):

State Street Bank and Trust Company
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department

14
<PAGE> 19
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Preferred Securities):

Lakeland Financial Corporation
202 East Center Street
P.O. Box 1387
Warsaw, Indiana 46581-1387
Attention: Chief Executive Officer

All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

SECTION 9.4. BENEFIT.

This Preferred Securities Guarantee is solely for the benefit of
the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.

SECTION 9.5. GOVERNING LAW.

THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
INDIANA.

[Remainder of page intentionally left blank.]

15
<PAGE> 20

This Preferred Securities Guarantee is executed as of the day and
year first above written.

LAKELAND FINANCIAL CORPORATION,
as Guarantor

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

STATE STREET BANK AND TRUST COMPANY,
as Preferred Guarantee Trustee

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

<PAGE> 1
[Letterhead of Lewis, Rice & Fingersh, L.C.]

August 1, 1997

Lakeland Financial Corporation
202 East Center Street
Warsaw, Indiana 46581
Attention: Board of Directors

Lakeland Capital Trust
c/o Lakeland Financial Corporation
202 East Center Street
Warsaw, Indiana 46581
Attention: Administrative Trustees

Gentlemen:

We have acted as special counsel to Lakeland Financial
Corporation, an Indiana corporation (the "Company"), and Lakeland
Capital Trust, a Delaware statutory business trust ("Lakeland
Trust"), in connection with the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") to be filed by
the Company and Lakeland Trust with the Securities and Exchange
Commission (the "SEC") for the purpose of registering under the
Securities Act of 1933, as amended, preferred securities (the
"Preferred Securities") of Lakeland Trust, subordinated debentures
(the "Subordinated Debentures") of the Company and the guarantee of
the Company with respect to the Preferred Securities (the
"Guarantee").

In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
(i) the certificate of trust (the "Certificate of Trust") filed by
Lakeland Trust with the Secretary of State of the State of Delaware
on July 24, 1997; (ii) the Trust Agreement, dated as of July 24,
1997, with respect to Lakeland Trust; (iii) the form of the Amended
and Restated Trust Agreement with respect to Lakeland Trust;
(iv) the form of the Preferred Securities of Lakeland Trust;
(v) the form of the Guarantee between the Company and State Street
Bank and Trust Company, as trustee; (vi) the form of the
Subordinated Debentures; and (vii) the form of the indenture (the
"Indenture"), between the Company and State Street Bank and Trust
Company, as trustee, in each case in the form filed as an exhibit
to the Registration Statement. We have also examined originals or
copies, certified, or otherwise identified to our satisfaction, of
such other documents, certificates, and records as we have deemed
necessary or appropriate as a basis for the opinions set forth
herein.

In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as copies and the authenticity of the originals of such copies. In
examining documents executed by parties other than the Company or
Lakeland Trust, we have assumed that such parties had the power,
corporate or otherwise, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all
requisite action, corporate or otherwise, and execution and
delivery by such parties of such documents and that, except as set
forth in paragraphs (1) and (2) below, such documents constitute
valid and binding obligations of such parties. In addition, we
have assumed that the Amended and Restated Trust Agreement of
Lakeland Trust, the

<PAGE> 2

Preferred Securities of Lakeland Trust, the Guarantee, the Subordinated
Debentures and the Indenture, when executed, will be executed in substantially
the form reviewed by us. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have
relied upon oral or written statements and representations of officers,
trustees, and other representatives of the Company, Lakeland Trust, and
others.

We are members of the bar of the states of Missouri and
Illinois, and we express no opinion as to the laws of any other
jurisdiction.

Based upon and subject to the foregoing and to other
qualifications and limitations set forth herein, we are of the
opinion that:

1. After the Indenture has been duly executed and delivered,
the Subordinated Debentures, when duly executed, delivered,
authenticated and issued in accordance with the Indenture and
delivered and paid for as contemplated by the Registration
Statement, will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now
or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity regardless of whether
enforceability is considered in a proceeding at law or in equity.

2. The Guarantee, when duly executed and delivered by the
parties thereto, will be a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors'
rights generally, and (ii) general principles of equity regardless
of whether enforceability is considered in a proceeding at law or
in equity.

We hereby consent to the reference to us under the caption
"Validity of Securities" in the Prospectus forming a part of the
Registration Statement and to the inclusion of this legal opinion
as an Exhibit to the Registration Statement.

Very truly yours,

/s/ LEWIS, RICE & FINGERSH, L.C.

<PAGE> 1

[LETTERHEAD OF RICHARDS, LAYTON & FINGER]

August 1, 1997

Lakeland Capital Trust
c/o Lakeland Financial Corporation
202 East Center Street
Warsaw, Indiana 46581

Re: Lakeland Capital Trust
----------------------

Ladies and Gentlemen:

We have acted as special Delaware counsel for Lakeland Capital
Trust, a Delaware business trust (the "Trust"), in connection with the
matters set forth herein. At your request, this opinion is being furnished
to you.

For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals
or copies of the following:

(a) The Certificate of Trust of the Trust (the "Certificate"),
as filed in the office of the Secretary of State of the State of Delaware
(the "Secretary of State") on July 24, 1997;

(b) The Trust Agreement of the Trust, dated as of July 24, 1997,
among Lakeland Financial Corporation, an Indiana corporation (the "Company"),
and the trustees of the Trust named therein;

(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a prospectus (the "Prospectus") relating to the
____% Cumulative Trust Preferred Securities of the Trust representing
preferred undivided beneficial interests in the Trust (each, a "Preferred
Security" and collectively, the "Preferred Securities"), as filed by the
Company and the Trust as set forth therein with the Securities and Exchange
Commission on August 1, 1997;

<PAGE> 2

Lakeland Capital Trust
c/o Lakeland Financial Corporation
August 1, 1997
Page 2

(d) A form of Amended and Restated Trust Agreement of the
Trust, to be entered into among the Company, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the Trust (the "Trust Agreement"), attached as an exhibit to the
Registration Statement; and

(e) A Certificate of Good Standing for the Trust, dated
August 1, 1997, obtained from the Secretary of State.

Initially capitalized terms used herein and not otherwise defined
are used as defined in the Trust Agreement.

For purposes of this opinion, we have not reviewed any documents
other than the documents listed above, and we have assumed that there exists
no provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.

With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.

For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in
good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its creation, organization or formation, (iii) the
legal capacity of natural persons who are parties to the documents examined
by us, (iv) that each of the parties to the documents examined by us has the
power and authority to execute and deliver, and to perform its obligations
under, such documents, (v) the due authorization, execution and delivery by all
parties thereto of all documents examined by us, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for the Preferred Security acquired by it,
in accordance with the Trust Agreement and the Prospectus, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Trust Agreement and the

<PAGE> 3

Lakeland Capital Trust
c/o Lakeland Financial Corporation
August 1, 1997
Page 3

Prospectus. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.

This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.

Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:

1. The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust Act,
12 Del. C. Sec. 3801, et seq.
------- -------

2. The Preferred Securities will represent valid and, subject
to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.

3. The Preferred Security Holders, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware. We note that the
Preferred Security Holders may be obligated to make payments as set forth in
the Trust Agreement.

We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission thereunder.
Except as stated above, without our prior written consent, this opinion may
not be furnished or quoted to, or relied upon by, any other Person for any
purpose.

Very truly yours,

/s/ Richards, Layton & Finger

GCK/ks

<PAGE> 1
[Letterhead of Lewis, Rice & Fingersh, L.C.]

August 1, 1997

Lakeland Financial Corporation
202 East Center Street
Warsaw, Indiana 46581
Attention: Board of Directors

Gentlemen:

We have acted as tax counsel to Lakeland Financial Corporation, an
Indiana corporation (the "Company"), in connection with the proposed issuance
of (i) Preferred Securities (the "Preferred Securities") of Lakeland Capital
Trust, a statutory business trust created under the laws of Delaware (the
"Trust"), pursuant to the terms of the Amended and Restated Trust Agreement
between the Company and State Street Bank and Trust Company, as trustee (the
"Trust Agreement"), to be offered in an underwritten public offering,
(ii) Subordinated Debentures (the "Debentures") of the Company pursuant to
the terms of an indenture from the Company to State Street Bank and Trust
Company, as trustee (the "Indenture"), to be sold by the Company to the
Trust, and (iii) the Preferred Securities Guarantee Agreement of the Company
with respect to the Preferred Securities (the "Guarantee") between the
Company and State Street Bank and Trust Company, as trustee. The Preferred
Securities and the Debentures are to be issued as contemplated by the
registration statement on Form S-3 (the "Registration Statement") to be filed
by the Company and the Trust to register the issuance of the Preferred
Securities, the Debentures and the Guarantee under the Securities Act of
1933, as amended (the "Act").

We have examined originals or copies, certified or otherwise identified
to our satisfaction, of documents, corporate records and other instruments as
we have deemed necessary or appropriate for purposes of this opinion
including (i) the Registration Statement, (ii) the Form of Indenture attached
as an exhibit to the Registration Statement, (iii) the Form of the Debentures
attached as an exhibit to the Registration Statement (iv) the Form of Trust
Agreement attached as an exhibit to the Registration Statement, (v) the Form
of Guarantee attached as an exhibit to the Registration Statement, and (vi)
the Form of Preferred Security Certificate attached as an exhibit to the
Registration Statement (collectively the "Documents"). In such examination,
we have assumed the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, the authenticity of the originals of
such latter documents, the genuineness of all signatures and the correctness
of all representations made therein. We have further assumed that there are
no agreements or understandings contemplated therein other than those
contained in the Documents.

Based upon the foregoing, and assuming (i) the final Documents will be
substantially identical to the forms attached as exhibits to the Registration
Statement, and (ii) full compliance with all the terms of the final
Documents, we are of the opinion that the statements contained in the
preliminary prospectus constituting part of the Registration Statement under
the caption "Certain Federal Income Tax Consequences," insofar as such
statements constitute matters of law or legal conclusions, as qualified
therein, constitute an accurate description, in general terms, of the
indicated United States federal income tax consequences to such holders.

<PAGE> 2

The opinion expressed above is based on existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), existing Treasury
regulations, published interpretations of the Code and such Treasury
regulations by the Internal Revenue Service, and existing court decisions,
any of which could be changed at any time. Any such changes may or may not
be retroactively applied. We note that there is no authority directly on
point dealing with securities such as the Preferred Securities or of
transactions of the type described herein. Further, you should be aware that
opinions of counsel are not binding on the Internal Revenue Service or the
courts. We express no opinion as to any matters not specifically covered by
the foregoing opinions or as to the effect on the matters covered by this
opinion of the laws of any other jurisdiction. Additionally, we undertake no
obligation to update this opinion in the event there is either a change in
the legal authorities, in the facts (including the taking of any action by
any party to any of the transactions described in the Documents relating to
such transactions) or in the Documents on which this opinion is based, or an
inaccuracy in any of the representations or warranties upon which we have
relied in rendering this opinion.

This letter is not being delivered for the benefit of, nor may it be
relied upon by, the holders of the Debentures, the Guarantee or the Preferred
Securities or any other party to which it is not specifically addressed or on
which reliance is not expressly permitted hereby.

We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to reference to our firm under the caption
"Certain Federal Income Tax Consequences" and "Validity of Securities" in the
preliminary prospectus constituting a part of the Registration Statement.

Very truly yours,

/s/ LEWIS, RICE & FINGERSH, L.C.

<PAGE> 1

<TABLE>
LAKELAND FINANCIAL CORPORATION
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

<CAPTION>
Six Months
Ended June 30,
(unaudited) Years Ended December 31,
-------------------- ---------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
EXCLUDING INTEREST (dollars in thousands)
ON DEPOSITS:
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income $ 4,027 $ 3,218 $ 6,444 $ 5,645 $ 5,126 $ 4,235 $ 3,359
Income taxes 2,191 1,808 3,504 3,064 3,024 2,171 1,762
Fixed charges, excluding
preferred stock dividends and
capitalized interest 3,172 2,416 5,326 4,795 2,779 1,921 1,838
-------------------- ---------------------------------------------------------
(A) Earnings $ 9,390 $ 7,442 $15,274 $13,504 $10,929 $ 8,327 $ 6,959
==================== =========================================================
Interest, excluding interest
on deposits $ 3,172 $ 2,416 $ 5,326 $ 4,795 $ 2,779 $ 1,921 $ 1,838
Preferred stock dividends - - - - - - -
Capitalized interest - - - - - - -
-------------------- ---------------------------------------------------------
(B) Fixed charges $ 3,172 $ 2,416 $ 5,326 $ 4,795 $ 2,779 $ 1,921 $ 1,838
==================== =========================================================
Consolidated ratios of
earnings to fixed charges
excluding interest on deposits 2.96 3.08 2.87 2.82 3.93 4.33 3.79
(A/B) ==================== =========================================================

INCLUDING INTEREST
ON DEPOSITS:
Net income $ 4,027 $ 3,218 $ 6,444 $ 5,645 $ 5,126 $ 4,235 $ 3,359
Income taxes 2,191 1,808 3,504 3,064 3,024 2,171 1,762
Fixed charges, excluding
preferred stock dividends and
capitalized interest 13,246 11,449 23,737 21,642 14,887 12,022 13,622
-------------------- ---------------------------------------------------------
(C) Earnings $19,464 $16,475 $33,685 $30,351 $23,037 $18,428 $18,743
==================== =========================================================
Interest, including interest
on deposits $13,246 $11,449 $23,737 $21,642 $14,887 $12,022 $13,622
Preferred stock dividends - - - - - - -
Capitalized interest - - - - - - -
-------------------- ---------------------------------------------------------
(D) Fixed charges $13,246 $11,449 $23,737 $21,642 $14,887 $12,022 $13,622
==================== =========================================================
Consolidated ratios of
earnings to fixed charges
including interest on deposits 1.47 1.44 1.42 1.40 1.55 1.53 1.38
(C/D) ==================== =========================================================
</TABLE>

<PAGE> 1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS
-------------------------------

We consent to the reference to our firm under the caption "Experts" in this
Prospectus and Registration Statement on Form S-3 of Lakeland Financial
Corporation for the registration of Lakeland Capital Trust Preferred Securities
and to the incorporation by reference of our report dated January 16, 1997,
with respect to the consolidated financial statements of Lakeland Financial
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.

Crowe, Chizek and Company LLP

/s/ Crowe, Chizek and Company LLP

South Bend, Indiana
July 28, 1997

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1
---------

STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --

STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)

MASSACHUSETTS 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)

225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)

John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)

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

LAKELAND FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)

INDIANA 35-1559596
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

202 EAST CENTER STREET
WARSAW, INDIANA 46581
(Address of principal executive offices) (Zip Code)

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

% SUBORDINATED DEBENTURES
(Title of indenture securities)

<PAGE> 2

GENERAL

ITEM 1. GENERAL INFORMATION.

FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.

Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.

Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.

(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.

Trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.

The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.

(See note on page 2.)

ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.

ITEM 16. LIST OF EXHIBITS.

LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT
OF ELIGIBILITY.

1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS
NOW IN EFFECT.

A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.

2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.

A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.

3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE
DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.

A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.

4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.

A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration
Statement of Eastern Edison Company (File No. 33-37823) and
is incorporated herein by reference thereto.

1
<PAGE> 3

5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.

Not applicable.

6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.

The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.

7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.

A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.

NOTES

In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter
for the obligor, the trustee has relied upon information furnished to it by
the obligor and the underwriters, and the trustee disclaims responsibility
for the accuracy or completeness of such information.

The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 24th day of July, 1997.

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT

2
<PAGE> 4

EXHIBIT 6

CONSENT OF THE TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by
LAKELAND FINANCIAL CORPORATION of its % SUBORDINATED DEBENTURES, we
hereby consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT

DATED: JULY 24, 1997

3
<PAGE> 5

EXHIBIT 7

Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this
commonwealth and a member of the Federal Reserve System, at the close of
business March 31, 1997, published in accordance with a call made by the
--------------
Federal Reserve Bank of this District pursuant to the provisions of the
Federal Reserve Act and in accordance with a call made by the Commissioner of
Banks under General Laws, Chapter 172, Section 22(a).

<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin 1,665,142
Interest-bearing balances 8,193,292
Securities 10,238,113
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary 5,853,144
Loans and lease financing receivables:
Loans and leases, net of unearned income 4,936,454
Allowance for loan and lease losses 70,307
Allocated transfer risk reserve 0
Loans and leases, net of unearned income and allowances 4,866,147
Assets held in trading accounts 957,478
Premises and fixed assets 380,117
Other real estate owned 884
Investments in unconsolidated subsidiaries 25,835
Customers' liability to this bank on acceptances outstanding 45,548
Intangible assets 158,080
Other assets 1,066,957
----------

Total assets 33,450,737
==========

LIABILITIES

Deposits:
In domestic offices 8,270,845
Noninterest-bearing 6,318,360
Interest-bearing 1,952,485
In foreign offices and Edge subsidiary 12,760,086
Noninterest-bearing 53,052
Interest-bearing 12,707,034
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary 8,216,641
Demand notes issued to the U.S. Treasury and Trading
Liabilities 926,821
Other borrowed money 671,164
Subordinated notes and debentures 0
Bank's liability on acceptances executed and outstanding 46,137
Other liabilities 745,529

Total liabilities 31,637,223
----------

EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock 29,931
Surplus 360,717
Undivided profits and capital reserves/Net unrealized holding
gains (losses) 1,426,881
Cumulative foreign currency translation adjustments (4,015)

Total equity capital 1,813,514
----------

Total liabilities and equity capital 33,450,737
==========
</TABLE>

4
<PAGE> 6

I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.

Rex S. Schuette

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.

David A. Spina
Marshall N. Carter
Charles F. Kaye

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1
---------

STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --

STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)

Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)

225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)

John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)

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

LAKELAND CAPITAL TRUST
(Exact name of obligor as specified in its charter)

DELAWARE 35-2021126
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

202 EAST CENTER STREET
WARSAW, INDIANA 46581
(Address of principal executive offices) (Zip Code)

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

PREFERRED SECURITIES
(Title of indenture securities)

<PAGE> 2

GENERAL

ITEM 1. GENERAL INFORMATION.

FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS of EACH EXAMINING OR SUPERVISORY AUTHORITY
TO WHICH IT IS SUBJECT.

Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.

Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.

(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

Trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.

The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.

(See note on page 2.)

ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.

ITEM 16. LIST OF EXHIBITS.

LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.

1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW
IN EFFECT.

A copy of the Articles of Association of the trustee,
as now in effect, is on file with the Securities and
Exchange Commission as Exhibit 1 to Amendment No. 1 to
the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and
is incorporated herein by reference thereto.

2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.

A copy of a Statement from the Commissioner of Banks
of Massachusetts that no certificate of authority for
the trustee to commence business was necessary or
issued is on file with the Securities and Exchange
Commission as Exhibit 2 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of
Morse Shoe, Inc. (File No. 22-17940) and is incorporated
herein by reference thereto.

3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT
CONTAINED IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR
(2), ABOVE.

A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities
and Exchange Commission as Exhibit 3 to Amendment No.
1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and
is incorporated herein by reference thereto.

4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.

A copy of the by-laws of the trustee, as now in
effect, is on file with the Securities and Exchange
Commission as Exhibit 4 to the Statement of
Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated
herein by reference thereto.

1
<PAGE> 3

5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.

Not applicable.

6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.

The consent of the trustee required by Section 321(b)
of the Act is annexed hereto as Exhibit 6 and made a
part hereof.

7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.

A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority is annexed
hereto as Exhibit 7 and made a part hereof.

NOTES

In answering any item of this Statement of Eligibility which
relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information furnished
to it by the obligor and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such information.

The answer furnished to Item 2. of this statement will be amended,
if necessary, to reflect any facts which differ from those stated and which
would have been required to be stated if known at the date hereof.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 24th day of July, 1997.

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT

2
<PAGE> 4

EXHIBIT 6

CONSENT OF THE TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust
Indenture Act of 1939, as amended, in connection with the proposed issuance by
LAKELAND CAPITAL TRUST of its PREFERRED SECURITIES, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: JULY 24, 1997

3
<PAGE> 5

EXHIBIT 7

Total assets 33,450,737
==========

LIABILITIES

Total liabilities 31,637,223
----------

Total equity capital 1,813,514
----------

Total liabilities and equity capital 33,450,737
==========
</TABLE>

4
<PAGE> 6

Rex S. Schuette

David A. Spina
Marshall N. Carter
Charles F. Kaye

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1
---------

STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) --

STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)

Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)

225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)

John R. Towers, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)

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

LAKELAND FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)

INDIANA 35-1559596
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

202 EAST CENTER STREET
WARSAW, INDIANA 46581
(Address of principal executive offices) (Zip Code)

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

GUARANTEE
(Title of indenture securities)

<PAGE> 2

GENERAL

ITEM 1. GENERAL INFORMATION.

FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY
AUTHORITY TO WHICH IT IS SUBJECT.

Department of Banking and Insurance of The
Commonwealth of Massachusetts, 100 Cambridge Street,
Boston, Massachusetts.

Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C.

(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE
TRUST POWERS.
Trustee is authorized to exercise corporate trust
powers.

ITEM 2. AFFILIATIONS WITH OBLIGOR.

IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.

The obligor is not an affiliate of the trustee or of
its parent, State Street Boston Corporation.

(See note on page 2.)

ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.

ITEM 16. LIST OF EXHIBITS.

LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT
OF ELIGIBILITY.

1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE AS NOW IN EFFECT.

A copy of the Articles of Association of the trustee, as
now in effect, is on file with the Securities and
Exchange Commission as Exhibit 1 to Amendment No. 1 to
the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.

2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO
COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.

A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is
on file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1)
filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.

3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.

A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities
and Exchange Commission as Exhibit 3 to Amendment No. 1
to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.

4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.

A copy of the by-laws of the trustee, as now in effect,
is on file with the Securities and Exchange Commission
as Exhibit 4 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File
No. 33-37823) and is incorporated herein by reference
thereto.

1
<PAGE> 3

5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE
OBLIGOR IS IN DEFAULT.

Not applicable.

6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES
REQUIRED BY SECTION 321(b) OF THE ACT.

The consent of the trustee required by Section 321(b) of
the Act is annexed hereto as Exhibit 6 and made a part
hereof.

7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.

A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.

NOTES

In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for
the accuracy or completeness of such information.

SIGNATURE

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT

2
<PAGE> 4

EXHIBIT 6

CONSENT OF THE TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by
LAKELAND FINANCIAL CORPORATION of its GUARANTEE, we hereby consent
that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.

STATE STREET BANK AND TRUST COMPANY

By: /S/ PAUL D. ALLEN
-------------------------------------
PAUL D. ALLEN
VICE PRESIDENT

DATED: JULY 24, 1997

3
<PAGE> 5

EXHIBIT 7

Total assets 33,450,737
==========

LIABILITIES

Total liabilities 31,637,223
----------

Total equity capital 1,813,514
----------

Total liabilities and equity capital 33,450,737
==========
</TABLE>

4
<PAGE> 6

Rex S. Schuette

David A. Spina
Marshall N. Carter
Charles F. Kaye