Document:

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                                                                   EXHIBIT 10.31

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
6th day of February, 2002 ("Date of this Lease") by and between TBC PLACE
PARTNERS II, LLC, a Georgia limited liability company ("Landlord"), and TRIPATH
ONCOLOGY, INC., a Delaware corporation ("Tenant"), upon all the terms and
conditions set forth in this Lease and in all exhibits and riders hereto, to
each and all of which terms Landlord and Tenant hereby mutually agree, and in
consideration of One Dollar ($1.00) and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and of the rents,
agreements and benefits flowing between the parties hereto, as follows:

         1. BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS. Each reference in
this Lease to information and definitions contained in the Basic Lease
Information and Certain Definitions and each use of the terms capitalized and
defined in this Section shall be deemed to refer to, and shall have the
respective meaning set forth in this Section.

<TABLE>
<S>      <C>                                          <C>
A.       Premises:                                    That portion of the Building containing 22,098 net rentable
                                                      square feet (based on 1996 BOMA standards), known as Suite
                                                      400 and as identified on the Floor Plan attached hereto as
                                                      Exhibit A and incorporated herein by this reference.

B.       Building:                                    The building to be known as TBC Place II and located at 4025
                                                      Stirrup Creek Drive in the City of Durham, North Carolina.

C.       Land:                                        That certain parcel of land upon which the Building is
                                                      located and which is more particularly described in Exhibit E

                                                      attached hereto and incorporated herein by this reference.
D.       Project:                                     The land and all improvements thereon, including the
                                                      Building, the parking facilities, and all common areas.

E.       Commencement Date:                           May 15, 2002, or the date of Substantial Completion (as
                                                      defined in Section 6 of the Leasehold Improvements Work
                                                      Letter attached hereto as Exhibit B and incorporated herein
                                                      by this reference), whichever last occurs.

F.       Term:                                        Commencing on the Commencement Date and ending Eighty-Four
                                                     (84) months following the Commencement Date.

[NO PARAGRAPH G]

</TABLE>

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<TABLE>
<S>      <C>                                          <C>
H.       Net Rentable Area of the                     95,000 square feet.
         Building:

I.       Tenant's Proportionate Share:                Twenty-three and 261/1000 percent (23.261 %), representing
                                                      the ratio between the Net Rentable Area of the Premises and
                                                      the Net Rentable Area of the Building, subject to adjustment
                                                      pursuant to the express terms hereof.

J.       Rent:                                        The Base Rent and the Additional Rent.
</TABLE>

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<TABLE>
<S>      <C>                                          <C>
K.       Base Rent:                                   Initial Base Rent for the Net Rentable Area of the Premises
                                                      during the first twelve (12) month period of this Lease shall
                                                      be Ten and 15/100 Dollars ($10.15) per net rentable square
                                                      foot or $224.294.70 (22,098 square feet x $10.15), subject to
                                                      the four (4) months of free rent provided in Section 4.1 of
                                                      this Lease.

                                                      Including the Base Rent
                                                      Escalation set forth in
                                                      Section 1L of this Lease,
                                                      the Base Rent for each
                                                      succeeding twelve (12)
                                                      month period of the Lease
                                                      shall be as follows:

                                                      (i) the Base Rent during
                                                      the second twelve (12)
                                                      month period of this Lease
                                                      shall be Ten and 45/100
                                                      Dollars ($10.45) per net
                                                      rentable square foot or
                                                      $230,924.10 (22,098 square
                                                      feet x $10.45);

                                                      (ii) the Base Rent during
                                                      the third twelve (12)
                                                      month period of this Lease
                                                      shall be Ten and 76/100
                                                      Dollars ($10.77) per net
                                                      rentable square foot or
                                                      $237,995.46 (22,098 square
                                                      feet x $10.77);

                                                      (iii) the Base Rent during
                                                      the fourth twelve (12)
                                                      month period of this Lease
                                                      shall be Eleven and 08/100
                                                      Dollars ($11.09) per net
                                                      rentable square foot or
                                                      $245,066.82 (22,098 square
                                                      feet x $11.09);

                                                      (iv) the Base Rent during
                                                      the fifth twelve (12)
                                                      month period of this Lease
                                                      shall be Eleven and 41/100
                                                      Dollars ($11.42) per net
                                                      rentable square foot or
                                                      $252,359.16 (22,098 square
                                                      feet x $11.42);

                                                      (v) the Base Rent during
                                                      the sixth twelve (12)
                                                      month period of this Lease
                                                      shall be Eleven and 77/100
                                                      Dollars ($11.77) per net
                                                      rentable square foot or
                                                      $260,093.46 (22,098 square
                                                      feet x $11.77); and

                                                      (vi) the Base Rent during
                                                      the seventh twelve (12)
                                                      month period of this Lease
                                                      shall be Twelve and 12/100
                                                      Dollars ($12.12) per net
                                                      rentable square foot or
                                                      $267,827.76 (22,098 square
                                                      feet x $12.12).
</TABLE>

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<TABLE>
<S>      <C>                                          <C>
L.       Base Rent Escalation:                        Except as provided in Paragraph 4 of Exhibit B, the Base Rent
                                                      rate per square foot of Net Rentable Area of the Premises
                                                      shall be increased during the Term at the expiration of each
                                                      twelve (12) month period by  three percent (3.0%) of the Base
                                                      Rent rate applicable during the then expiring twelve (12)
                                                      month period.  The Base Rent Escalation is already reflected
                                                      in the schedule of Base Rent set forth in Section 1K above.

M.       Additional Rent:                             The Additional Rent shall be all other sums due and payable
                                                      by Tenant under the Lease,
                                                      including, but not limited
                                                      to, Tenant's Proportionate
                                                      Share of Operating
                                                      Expenses.

N.       Base Year:                                   The Base Year for purposes of calculating Tenant's
                                                      Proportionate Share of Operating Expenses is 2002.

O.       Tenant's Permitted Uses:                     Tenant may use the Premises only for the purposes set forth
                                                      in Section 13.1 of the Lease.

P.       Security Deposit:                            Standby Irrevocable Letter of Credit from a bank and
                                                      containing terms and conditions reasonably acceptable to
                                                      Landlord equal to two (2) months' Base Rent for the initial
                                                      twelve (12) month period of this Lease.  The Security Deposit
                                                      shall be held and disbursed as set forth in Section 5 of this
                                                      Lease.

Q.       Leasehold Improvement                        Twenty-Five and 00/100 Dollars ($25.00) per net rentable
         Allowance:                                   square foot as set forth in the Leasehold Improvements Work
                                                      Letter attached hereto as
                                                      Exhibit B. The Leasehold
                                                      Improvement Allowance
                                                      shall be subject to being
                                                      increased, at Tenant's
                                                      election, as provided in
                                                      Section 4 of the Leasehold
                                                      Improvements Work Letter.
                                                      In the event of such
                                                      increase, the Base Rent
                                                      payable under this Lease
                                                      shall also be increased as
                                                      provided in Section 4 of
                                                      the Leasehold Improvements
                                                      Work Letter, and this
                                                      Lease shall be amended to
                                                      reflect such changes.
</TABLE>

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<TABLE>
<S>      <C>                                          <C>
R.       Broker(s):                                   Landlord's Broker: Commercial Carolina Corporation

                                                      Tenant's Broker: Carolantic Realty

                                                      The Brokers shall be paid
                                                      real estate brokerage
                                                      commissions by Landlord as
                                                      set forth in Section 29 of
                                                      this Lease.
</TABLE>

         2. GRANTING CLAUSE. Subject to the terms and conditions hereof,
Landlord hereby leases the Premises to Tenant, and Tenant hereby rents and hires
the Premises from Landlord, for the Term of this Lease.

         3. TERM. The Term of this Lease shall be for the period set forth in
Section 1F of this Lease, and shall commence on the Commencement Date as defined
in Section 1E of this Lease. The date on which the Term expires shall sometimes
be referred to in this Lease as the "Expiration Date." Tenant shall accept the
Premises in its condition as of the Commencement Date, latent defects in the
Building Shell and any "punch list" items identified in writing by Tenant within
thirty (30) days thereafter excluded, subject to all applicable laws,
ordinances, regulations, covenants and restrictions and subject to Landlord's
completion of the Leasehold Improvements as required in the Leasehold
Improvements Work Letter attached to this Lease as Exhibit B and made a part of
this Lease by this reference as if fully set forth herein. Other than
representing that Tenant may engage in the use of the Premises permitted under
Section 13 hereof, Landlord has made no representation or warranty as to the
suitability of the Premises for the conduct of Tenant's business, and Tenant
waives any implied warranty that the Premises are suitable for Tenant's intended
purposes. Except as set forth in Sections 10, 11 and Exhibit B set forth herein
of this Lease, and except for any latent defects in the Building Shell and any
"punch list" items identified in writing by Tenant within thirty (30) days
thereafter, in no event shall Landlord have any obligation for any defects in
the Premises or any limitation on its use. The taking of possession of the
Premises shall be conclusive evidence that the Tenant accepts the Premises and
that the Premises were in good condition at the time possession was taken except
for items that are Landlord's responsibility under Sections 10, 11 and Exhibit B
of this Lease.

         4. RENT.

         4.1. Tenant shall pay to Landlord, without notice, demand, or deduction
in lawful money of the United States of America, at Landlord's Address for
Notices in Section 33.9, or at such other place as Landlord shall designate in
writing from time to time: (a) the Base Rent in equal monthly installments, in
advance, on or before the first day of each calendar month during the Term
commencing on the Commencement Date, except as otherwise set forth in this
Section 4.1 with respect to any period which is less than one (1) full calendar
month; and (b) the Additional Rent, at the respective times required hereunder.
The first monthly installment of Base Rent shall be paid in advance on the date
Tenant executes this Lease and applied to the first

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installment of Base Rent for a full calendar month coming due under this Lease.
For any period which is less than one (1) full calendar month, the Rent due for
such period under this Lease shall be a prorated amount. Tenant's covenant to
pay Rent hereunder is independent of any other covenant, condition, provision or
agreement herein contained. All past due installments of Rent which are more
than thirty (30) days past due shall be subject to a late charge of five percent
(5%) simple of the past due amounts. Notwithstanding anything contained in this
Lease to the contrary, Tenant shall not be required to pay any Base Rent during
the first four (4) months of the initial twelve (12) month term of this Lease.
The first monthly installment of Base Rent payable under this Lease shall be due
for the fifth (5th) month of the initial twelve (12) month term of this Lease.

         4.2. As used in this Lease, the term "Lease Year" shall mean a calendar
year during the Term, except that the first Lease Year shall be the period
commencing on the Commencement Date and expiring upon the expiration of the
calendar year in which the Commencement Date occurs and the final Lease Year
shall expire upon the expiration of the Term. If the first or final Lease Year
is less than twelve (12) months, all prorations shall be based upon a 365 day
year.

         4.3 If Substantial Completion is achieved prior to May 15, 2002, Tenant
shall be entitled to use and occupy the Premises without any obligation to pay
Base Rent for the period from and including the date on which Substantial
Completion is achieved through and including May 15, 2002. In the event
Substantial Completion is not achieved prior to May 15, 2002, Tenant shall be
entitled to use and occupy the Premises without any obligation to pay Base Rent
for the period from and including May 15, 2002, through and including the date
on which Substantial Completion is achieved.

         5. SECURITY DEPOSIT. The Security Deposit shall be due on the date
Tenant executes this Lease and shall be held by Landlord as security for the
performance of Tenant's obligations under this Lease. This Security Deposit is
not an advance rental deposit or measure of Landlord's damages in case of
Tenant's default. Upon each occurrence of an Event of Default (defined in
Section 22), Landlord may use all or part of the Security Deposit to pay
delinquent payments due under this Lease, and the cost of any damage, injury,
expense or liability caused by such Event of Default, without prejudice to any
other remedy provided herein or provided at law or in equity. Upon the initial
occurrence of an Event of Default under this Lease, Landlord shall be entitled
to present the standby irrevocable letter of credit delivered by Tenant as the
Security Deposit under this Lease for payment, and the Security Deposit shall
thereafter be held in the form of cash, and not in the form of a standby
irrevocable letter of credit. Tenant shall pay Landlord on demand the amount
that will restore the Security Deposit to its original amount. Landlord's
obligation regarding the Security Deposit is that of a debtor, and not a
trustee. The Security Deposit shall be the property of Landlord, but shall be
paid to Tenant when Tenant's obligations under this Lease have been completely
fulfilled, or otherwise as provided in Section 1P of this Lease. If the Security
Deposit is cash, the Security Deposit shall be deposited by Landlord in an
interest-bearing account in a federally insured financial institution. The
account

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shall be maintained in Landlord's name. Tenant shall provide Landlord with
Tenant's federal employer identification number which shall be given to the
financial institution in which such account is maintained for the purpose of
reporting the interest to the Internal Revenue Service. All interest earned
shall become part of the "Security Deposit." All interest earned on the Security
Deposit shall be retained by Landlord until the Security Deposit is either
returned to Tenant or used by Landlord, as provided in this Lease. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease, the Premises and the Security Deposit to a person or
entity which assumes Landlord's obligations under this Section.

         6. OPERATING EXPENSES.

         6.1. During each month of the Lease Term, on the same date that Base
Rent is due, Tenant shall pay Landlord an amount equal to 1/12 of the annual
cost, as reasonably estimated by Landlord from time to time, of Tenant's
Proportionate Share (as defined in Section 1I) of Operating Expenses for the
Project. Payment thereof for any fractional calendar month shall be prorated.
The term "Operating Expenses" means all costs and expenses incurred by Landlord
with respect to the ownership, maintenance, repair, replacement and operation of
the Project including, but not limited to, costs of: Taxes (defined in Section 8
of this Lease) and reasonable fees payable to tax consultants and attorneys for
consultation and contesting Taxes; insurance; utilities (except for utilities
which are separately metered to the Premises in which event Tenant shall pay for
such utilities directly to the provider thereof or to Landlord for remittance to
such provider, as reasonably required by Landlord and except for utilities
metered to other space for use by other tenants which will be separately charged
to, and paid for by, such other tenants); maintenance, repair and replacement of
all portions of the Project, including, without limitation, paving and parking
areas, roads, roofs, alleys and driveways, mowing, landscaping, exterior
painting, utility lines, heating, ventilation and air conditioning systems,
lighting, electrical systems, sprinkler systems and other mechanical and
building systems except to the extent such repair, maintenance or replacement
costs for such items only benefit Tenant in which event Tenant shall pay to
Landlord all costs for such items, including all amounts paid to contractors and
subcontractors for work or services performed in connection with any of the
foregoing and except to the extent such costs are the responsibility of Landlord
as set forth in Section 10.2; charges or assessments of any association to which
the Project is subject; property management fees payable to a property manager,
including any affiliate of Landlord (provided that if the property manager is
Landlord or any affiliate of Landlord, management fees shall not exceed four
percent (4%) of Base Rent), or if there is no property manager, an
administrative fee of 4% of the Operating Expenses payable to Landlord; security
services, if any; trash collection, sweeping and removal; and additions or
alterations made by Landlord to the Project or the Building in order to comply
with the requirements of applicable laws, statutes, ordinances, rules and
regulations (other than those which are in existence as of the Date of this
Lease) or that are appropriate to the continued operation of the Project or the
Building as an office facility in the Durham, North Carolina market area,
provided that the cost of additions or alterations that are

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required to be capitalized for federal income tax purposes shall be amortized on
a straight line basis over a period equal to the lesser of the useful life
thereof for federal income tax purposes or 10 years. Operating Expenses do not
include costs, expenses, depreciation or amortization for capital repairs and
capital replacements required to be made by Landlord under Section 10 of this
Lease, debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, the costs of renovating space for tenants
or any cost associated with any building other than the Building. There shall be
no duplication of costs or reimbursements. Notwithstanding anything contained in
this Section 6.1 to the contrary, in no event shall Operating Expenses include
(i) accounting and legal fees associated with lease negotiations, rent
collections or pursuing other rights and remedies against a specific tenant
under a lease of space in the Building; (ii) advertising or promotional expenses
related to marketing space in the Building; (iii) any costs which are actually
reimbursed by an insurance carrier or a third party (i.e., there shall be no
duplication of costs or reimbursements); or (iv) costs or expenses for goods or
services which only benefit or are attributable to a specific tenant (which
costs and expenses shall be paid by such tenant).

         6.2. If Tenant's total payments of Operating Expenses for any year are
less than Tenant's Proportionate Share of actual Operating Expenses for such
year, then Tenant shall pay the difference to Landlord within 30 days after
demand, and if more, then Landlord shall retain such excess and credit against
Tenant's next payments, unless such year is the final year of the Lease in which
event Landlord shall promptly reimburse Tenant such excess. For purposes of
calculating Tenant's Proportionate Share of Operating Expenses, a year shall
mean a calendar year except the first year, which shall begin on the
Commencement Date, and the last year, which shall end on the expiration of this
Lease. With respect to Operating Expenses, any expenses which Landlord allocates
to the entire Project, Tenant's Proportionate Share shall be the percentage set
forth in Section 1I of this Lease as Tenant's Proportionate Share of the
Project, as reasonably adjusted by Landlord in the future for changes in the
physical size of the Premises, the Building or the Project. Landlord may
equitably increase Tenant's Proportionate Share for any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement or service that
benefits only the Premises or only a portion of the Project or Building that
includes the Premises or that varies with occupancy or use, provided Tenant is
treated equitably with other tenants in the Building. No estimate of Operating
Expenses for the Premises by Landlord shall be a guaranty or warranty that such
estimates shall be accurate. Notwithstanding anything contained in this Section
6 to the contrary, Landlord shall not be entitled to increase any Operating
Expenses over which Landlord has sole control (for example, the costs of mowing
the grass and maintaining the grounds) except to the extent that increases in
such Operating Expenses are reasonable based upon comparable costs in the
Durham, North Carolina market area. Tenant, upon reasonable prior written
request, shall be entitled to audit Operating Expenses for which Tenant is
obligated to pay Tenant's Proportionate Share. Tenant shall not be entitled to
conduct such audits more frequently than annually.

         6.3. Landlord shall make available to the Premises all water, gas,
electrical

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power, telephone, sewer and sprinkler services. Landlord shall provide heating
and air-conditioning systems sufficient to serve the Premises 24 hours per day,
7 days per week, at such temperatures and in such amounts as requested by
Tenant, subject to any governmental requirements, ordinances, rules,
regulations, guidelines or standards relating to, among other matters, energy
conservation.

         7. UTILITIES. Tenant shall pay for all water, gas, electrical power,
telephone, sewer, refuse and trash collection and other utilities and services
used on the Premises, all maintenance charges for utilities within the Premises,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. Notwithstanding anything contained in Section 6.1
or otherwise in this Lease to the contrary, Landlord may cause, at Tenant's
expense, any utilities to be separately metered or charged directly to Tenant by
the provider. Tenant shall pay its share of all charges for jointly metered
utilities based upon consumption, as reasonably determined by Landlord. No
interruption or failure of utilities shall result in the termination of this
Lease or the abatement of Rent except as otherwise expressly provided below.
Tenant agrees to limit use of water and sewer for normal restroom use, except as
follows: operation of a dishwasher. Notwithstanding anything contained in this
Lease to the contrary, if an interruption or cessation of utilities results from
a cause within Landlord's reasonable control which renders the Premises unusable
by Tenant for the conduct of Tenant's business, Rent and applicable Operating
Expenses not actually incurred by Tenant shall be abated for the period which
commences twenty-four (24) hours after the date Tenant gives to Landlord written
notice of such interruption and shall continue until such utilities are
restored.

         8. TAXES. Landlord shall pay all taxes, assessments and governmental
charges (collectively, "Taxes") that accrue against the Project during the Lease
Term, provided that Taxes shall be included as part of the Operating Expenses
charged to Tenant. Landlord may contest by appropriate legal proceedings the
amount, validity or application of any Taxes or liens thereof. All levies or
other taxes assessed or imposed upon Landlord on the rents payable to Landlord
under this Lease and any franchise tax, any excise, transaction, sales or
privilege tax, assessment, levy or charge measured by or based, in whole or in
part, upon such rents from the Premises and/or the Project or any portion
thereof, shall be paid by Tenant to Landlord monthly in estimated installments
or upon reasonable demand, at the option of Landlord as Additional Rent;
provided, however, in no event shall Tenant be liable for any net income taxes
imposed upon Landlord unless such net income taxes are in substitution for any
Taxes payable under this Lease. Upon prior written request from Tenant, Landlord
shall provide Tenant with copies of bills for Taxes which are being included as
part of the Operating Expenses or for which Tenant otherwise is required to pay
Landlord under this Lease. If any such tax or excise is levied or assessed
directly against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authorities shall require.
Tenant shall be liable for all taxes levied or assessed against any personal
property or fixtures placed in the Premises, whether levied or assessed against
Landlord or Tenant.

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         9. INSURANCE.

         9.1 Tenant covenants and agrees that from and after the date of
delivery of the Premises by Landlord to Tenant, Tenant will carry and maintain,
at its sole cost and expense, the following insurance coverages:

         A. Public Liability Insurance. General comprehensive public liability
insurance covering the Premises and Tenant's use thereof against claims for
personal or bodily injury or death or property damage occurring upon in or about
the Premises (including contractual, indemnity and liability coverage to cover
Tenant's indemnities set forth herein), such insurance to insure both Tenant
and, as additional insureds, Landlord and its members, employees, agents,
Landlord's mortgagee(s) and the property manager, and to afford protection to
the limit of not less than $1,000,000.00 combined single limit or such higher
limits as Landlord may reasonably require from time to time during the Term, on
an occurrence basis, together with an umbrella insurance providing excess
insurance coverage in an amount not less than $20,000,000.00, in respect to
injury or death to any number of persons and broad form property damage arising
out of any one (1) occurrence, operations hazard, with a deductible reasonably
acceptable to Landlord. This insurance coverage shall extend to any liability of
Tenant arising out of the indemnities provided for in this Lease. Such policy
will be written in the names of Tenant, Landlord and any other parties
reasonably designated by Landlord or Tenant from time to time, as their
respective interests may appear.

         B. Property Insurance. Property insurance on all-risk extended coverage
basis (including coverage against fire, wind, tornado, vandalism, malicious
mischief, water damage and sprinkler leakage) covering all fixtures, equipment
and personalty owned or leased by Tenant and located in the Premises, in an
amount not less than one hundred percent (100%) of full replacement cost
thereof. The property insurance may provide for a reasonable deductible in an
amount of not more than $10,000.00 per occurrence. Such policy will be in the
names of Tenant, Landlord and any other parties reasonably designated by
Landlord or Tenant from time to time, as their respective interests may appear,
including the holder of any deed of trust or other security instrument
encumbering the Premises.

         C. Workers Compensation Insurance. Worker's compensation insurance
insuring against and satisfying Tenant's obligations and liabilities under the
worker's compensation laws of the State of North Carolina, except to the extent
such insurance coverage is otherwise provided for or on behalf of Tenant.

         D. Builder's Risk Insurance. In the event Tenant performs any repairs
or alterations in the Premises reasonably anticipated to cost more than
$5,000.00, builder's risk insurance on an "all risk" basis (including collapse)
on a completed value (non-reporting) form for full replacement value covering
all work incorporated in the Building and all materials and equipment in or
about the Premises.

<PAGE>

         E. Other Insurance. Any other form or forms of insurance or any changes
or endorsements to the insurance required herein as Landlord, or any mortgagee
of Landlord, may reasonably require from time to time.

         9.2. All such insurance will be issued and underwritten by companies
reasonably acceptable to Landlord and will contain endorsements that (a) such
insurance may not lapse with respect to Landlord, any mortgagee of Landlord or
property manager or be canceled or amended with respect to Landlord, any
mortgagee of Landlord or property manager without the insurance company
endeavoring to give Landlord, any mortgagee of Landlord and property manager at
least thirty (30) days prior written notice of such lapse, cancellation or
amendment, (b) Tenant will be solely responsible for payment of premiums, (c)
such insurance will include a loss payee endorsement protecting the Landlord and
Landlord's designees and (d) Tenant's insurance is contributing in the event of
overlapping coverage which may be carried by Landlord. Tenant shall deliver to
Landlord duplicate originals of all policies of insurance required by Section
9.1 of this Lease or duly executed originals of the certificates of such
insurance evidencing in-force coverage on or before the Commencement Date.
Further, Tenant shall deliver to Landlord renewals thereof at least ten (10)
days prior to the expiration of the respective policy terms.

         9.3. Tenant shall not knowingly conduct or permit to be conducted in
the Premises any activity, or place any equipment in or about the Premises or
the Building, which will invalidate the insurance coverage in effect or increase
the rate of casualty insurance or other insurance on the Premises or the
Building, and Tenant shall comply with all customary requirements and
regulations of Landlord's casualty and liability insurer. If any invalidation of
coverage or increase in the rate of casualty insurance or other insurance occurs
or is threatened by any insurance company due to any act or omission by Tenant,
or its agents, employees, contractors, or invitees, such statement or threat
shall be conclusive evidence that the increase in such rate is due to the act of
Tenant or the contents or equipment in or about the Premises, and, as a result
thereof, Tenant shall be liable for such increase and such amount shall be
considered Additional Rent payable with the next monthly installment of Base
Rent due under this Lease. In no event shall Tenant introduce or permit to be
kept on the Premises or brought into the Building any dangerous, noxious,
radioactive or explosive substance. Notwithstanding the foregoing, in no event
shall Tenant's Permitted Uses be deemed to be activities for which Tenant will
be liable for increased insurance costs or invalidation of insurance coverages.

         9.4. Landlord covenants and agrees that from and after the date of
delivery of the Premises from Landlord to Tenant, Landlord will carry and
maintain the following insurance, the cost of which shall be included in
Operating Costs:

         A. Public Liability Insurance. General comprehensive public liability
insurance covering the common areas of the Project and the Building against
claims for personal or bodily injury or death or property damage occurring upon,
in or about the common areas (including contractual, indemnity and liability
coverage to cover Landlord's indemnities set forth

<PAGE>

herein), such insurance to afford protection to the limit of not less than
$3,000,000 combined single limit or such higher limits as Landlord may elect, at
its option, to carry from time to time, on an occurrence basis, in respect to
injury or death to any number of persons and broad form property damage arising
out of any one (1) occurrence. Such policy shall be written in the names of
Landlord, Tenant and any other parties reasonably designated by Landlord from
time to time, as their respective interests may appear.

         B. Property Insurance. Property insurance on all-risk extended coverage
basis (including coverage against fire, wind, tornado, vandalism, malicious
mischief, water damage and sprinkler leakage) covering the Project, the Building
and the Leasehold Improvements within the Premises in an amount not less than
one hundred percent (100%) of full replacement cost thereof, subject to a
commercially reasonable deductible.

         C. Other Insurance. Such other insurance as Landlord may reasonably
elect, at its option, to carry and maintain from time to time, provided such
other insurance is being maintained on property similar to the Project in the
Durham, North Carolina market area.

         9.5. Landlord and Tenant each hereby waive any right of subrogation and
right of recovery or cause of action for injury or loss to the extent that such
injury or loss is covered by fire, extended coverage, "all risk" or similar
policies covering real property or personal property required to be obtained and
maintained hereunder (or which would have been covered if the party claiming
such right of subrogation or recovery or cause of action had carried the
insurance required by this Lease) or covered by any other insurance maintained
by the waiving party. Written notice of the terms of the above mutual waivers
shall be given to the insurance carriers of Landlord and Tenant and the parties'
insurance policies shall be properly endorsed, if necessary, to prevent the
invalidation of said policies by reason of such waivers.

         10. LANDLORD'S REPAIRS.

         10.1 Landlord shall maintain and repair, at Tenant's cost and expense
(billed to and paid by Tenant as Tenant's Proportionate Share of the Operating
Expenses), all portions of the Project and the Building except for items which
are Landlord's responsibility as set forth in Section 10.2, which items shall be
maintained and repaired at Landlord's expense, and except for the items which
are Tenant's responsibility as set forth in Section 11, which items shall be
maintained and repaired at Tenant's expense.

         10.2 Landlord shall maintain and repair, at Landlord's expense, the
structural soundness of the roof, foundation and exterior walls of the Building
in good condition, reasonable wear and tear and uninsured losses and damages
caused by Tenant, its employees, agents, contractors and invitees excluded. The
term "walls" as used in this Section shall not include doors or overhead doors,
special store fronts, dock bumpers, dock plates or levelers, or office entries.

<PAGE>

         10.3 Landlord shall maintain and repair, at Tenant's cost and expense
(not prorated as part of the Operating Expenses), the following components (i)
of the Building which exclusively serve the Premises and (ii) of the Premises:
dock and loading areas, dock bumpers, dock plates and levelers, truck and
overhead doors, fire sprinklers and fire protection systems and electrical,
plumbing and mechanical (including heating and air conditioning) systems and
equipment. Landlord shall cause all such maintenance and repair work to be
performed and shall send an invoice or invoices to Tenant which shall promptly
pay the same to Landlord.

         10.4 Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Section, after which Landlord shall
diligently make all necessary repairs within a reasonable period of time after
receipt of such written notice from Tenant. In connection with such repairs,
Landlord shall use reasonable efforts (i) not to interfere with Tenant's use or
possession of the Premises in a material and adverse manner; (ii) not to
materially and adversely detract from the appearance of the Premises; and (iii)
to protect Tenant and Tenant's agents, employees, contractors and invitees,
together with Tenant's equipment and other personal property from injury, damage
or destruction. If Landlord fails to perform any maintenance, repair or
replacement for which it is responsible, within a reasonable period of time
after receipt of written notice from Tenant, Tenant may, but shall not be
required to, perform, or cause to be performed, such work and be reimbursed by
Landlord for the reasonable costs and expenses thereof within ten (10) days
after demand therefore.

         11. TENANT'S REPAIRS. Tenant, at Tenant's expense, shall repair,
replace and maintain in good condition the interior of the Premises, including,
without limitation, entries, doors, ceilings, and roof membrane penetrations
caused by Tenant, its employees, agents, contractors and/or invitees, interior
walls and the interior side of demising walls. If Tenant fails to perform any
maintenance, repair or replacement for which it is responsible within a
reasonable period of time after receipt of written notice from Landlord by
Tenant, Landlord may, but shall not be required to, perform such work and be
reimbursed by Tenant within ten (10) days after demand therefore. Subject to
Sections 9 and 14 of this Lease, Tenant shall bear the full cost of any repair
or replacement to any part of the Building or the Project that results from
damage caused by the negligent or intentional acts or omissions of Tenant, its
employees, agents, contractors or invitees, as well as any repair that benefits
only the Premises (excluding repairs for which Landlord is responsible under
Section 10.2 of this Lease).

         12. ALTERATIONS.

         12.1. Tenant shall not make any alterations to the Premises without
first obtaining Landlord's written consent thereto, which consent may not be
unreasonably withheld, conditioned or delayed. Landlord shall be deemed to have
given its consent if Landlord fails to respond to Tenant's written request
within ten (10) business days following receipt thereof. Notwithstanding the
foregoing, in the event any such proposed alteration would, in the reasonable
judgment of Landlord, affect any structural components of the Building or any of
its

<PAGE>

equipment or systems, Landlord may withhold its consent to any such alteration
in its sole discretion. Without in any way limiting Landlord's consent rights,
Landlord shall not be required to give its consent until (a) Landlord is
reasonably satisfied that the contractor or person proposed by Tenant to make
such alterations (the "Contractor"), and the insurance coverage to be provided
by Contractor in connection with the work, are reasonably acceptable to
Landlord, (b) Landlord approves final and complete plans and specifications for
the work and (c) all appropriate governmental agencies have approved the plans
and specifications for such work. Upon Tenant's receipt of written approval from
Landlord and any required approval of any mortgagee of Landlord and any such
governmental agencies, and upon Tenant's payment to Landlord of any fees charged
by any mortgagee of Landlord for such review and approval, Tenant shall have the
right to proceed with the construction of all approved alterations, but only so
long as such alterations are made by the Contractor reasonably acceptable to
Landlord in strict compliance with the plans and specifications so approved by
Landlord and with the provisions of this Section 12. All alterations shall be
made at Tenant's sole cost and expense. Tenant shall keep the Project, the
Building, and the Premises and Landlord's interest therein free from any liens
arising from any work performed, materials furnished, or obligations incurred
by, or on behalf of, Tenant (other than by Landlord pursuant to this Lease).
Notice is hereby given that neither Landlord, nor any mortgagee or lessor of
Landlord, shall be liable for any labor or materials furnished to Tenant except
as furnished to Tenant by Landlord pursuant to this Lease. If any lien is filed
for such work or materials, such lien shall encumber only Tenant's interest in
leasehold improvements on the Premises. Within ten (10) days after Tenant learns
of the filing of any such lien, Tenant shall notify Landlord of such lien and
shall either discharge and cancel such lien of record or post a bond sufficient
under the laws of the State of North Carolina to cover the amount of the lien
claim plus any penalties, interest, attorney's fees, court costs, and other
legal expenses in connection with such lien. If Tenant fails to so discharge or
bond over such lien within twenty (20) days after the earlier of Tenant becoming
aware of such lien or written demand from Landlord, Landlord shall have the
right, at Landlord's option, to pay the full amount of such lien without inquiry
into the validity thereof, and Landlord shall be promptly reimbursed by Tenant,
as Additional Rent, for all amounts so paid by Landlord, including expenses,
interest, and reasonable attorney's fees actually incurred.

         12.2. All construction, alterations and repair work done by or for
Tenant shall: (a) be performed in such a manner as to maintain harmonious labor
relations; (b) not adversely affect any structural component of the Building or
any of the Building's systems or equipment or the safety of the Project, the
Building or the Premises; (c) comply with all building, safety, fire, plumbing,
electrical, and other codes and governmental and insurance requirements,
including, without limitation, requirements of the Americans with Disabilities
Act ("ADA"); (d) not result in any usage in excess of industry standard of
water, electricity, gas, or other utilities or of heating, ventilating or
air-conditioning (either during or after such work) unless prior written
arrangements satisfactory to Landlord are made with respect thereto; (e) be
completed promptly and in a good and workmanlike manner; and (f) not
unreasonably disturb Landlord or other tenants in the Building. After completion
of any alterations to the Premises, Tenant will deliver to Landlord a copy of
"as-built" plans and specifications depicting and describing such

<PAGE>

alterations.

         12.3. Landlord hereby reserves the right and at all times shall have
the right to repair, change, redecorate, alter, improve, modify, renovate,
enclose or make additions to any part of the Project (including structural
elements and load bearing elements within the Premises) and to enclose and/or
change the arrangement and/or location of driveways or parking areas or
landscaping or other common areas of the Project all without being held guilty
of an actual or constructive eviction of Tenant or breach of the implied
warranty of suitability or of any term of this Lease and without an abatement of
Rent. Without in any way limiting the generality of the foregoing Landlord's
rights shall include, but not limited to, the right to perform, or cause the
performance of the following: (i) construct scaffolding and other structures and
perform all work and other activities associated with such changes, alterations,
improvements, modifications, renovations, and/or additions; (ii) repair, change,
renovate, remodel, alter, improve, modify or make additions to the arrangement,
appearance, location and/or size of entrances or passageways, doors, and
doorways, corridors, elevators, elevator lobbies, stairs, toilets or other
common areas; (iii) temporarily close any Common Area and/or temporarily suspend
Building services and facilities in connection with any repairs, changes,
alterations, modifications, renovations or additions to any part of the
Building; (iv) repair, change, alter or improve plumbing, pipes and conduits
located in the Building, including without limitation, those located within the
Premises, and (v) repair, change, modify, alter, improve, renovate or make
additions to the structural components of the Building or any portion thereof.
When exercising the rights herein, Landlord will use reasonable efforts (i) not
to interfere with Tenant's use or possession of the Premises; (ii) not to
materially and adversely detract from the appearance of the Project or the
Building; and (iii) to protect Tenant and Tenant's agents, employees,
contractors and invitees, together with Tenant's equipment and other personal
property from injury, damage or destruction.

         13. USE AND COMPLIANCE WITH LAW.

         13.1. Subject to such use being permissible under applicable law, rules
and regulations, the Premises may be used for medical device and diagnostic
research and development laboratory and related office activities.
Notwithstanding the foregoing, Landlord makes no representation regarding
permissible uses of the Premises other than for general office and warehouse
purposes. Tenant acknowledges and agrees that it shall be Tenant's
responsibility to confirm with appropriate governmental authorities that any
other permitted use set forth above in this Section is permissible under zoning
and other applicable law, rules and regulations. Tenant shall not conduct or
give notice of any auction, liquidation or going out of business sale on the
Premises. Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises or the
Building in which the Premises is located or subject the Premises to use that
would damage the Premises or the Building in which the Premises is located.
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
noise or vibrations to emanate from the Premises, or take any other action that
would constitute a nuisance or would unreasonably disturb, interfere with, or

<PAGE>

endanger Landlord or any other tenants of the Project. Outside storage,
including without limitation, storage of trucks and other vehicles, is
prohibited without Landlord's prior written consent. Tenant, at Tenant's sole
expense, shall use and occupy the Premises in compliance with all laws
(including, without limitation, the ADA), orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants, and restrictions
now or hereafter applicable to the Premises (collectively "Legal Requirements").
The Premises shall not be used as a place of public accommodation under the ADA
or similar state statutes or local ordinances or any regulations promulgated
thereunder, as any or all of them may be amended from time to time. Tenant
shall, at Tenant's expense, make all alterations or modifications, within or
without the Premises, that are required by the Legal Requirements related to
Tenant's use or occupation of the Premises. If any increase in the cost of any
insurance on the Premises, the Building or the Project is caused, in whole or in
part, by Tenant's use or occupancy of the Premises in violation of this Lease,
or because Tenant vacates the Premises, then Tenant shall pay the amount of such
increase to Landlord. Any occupancy of the Premises by Tenant prior to the
Commencement Date shall be subject to all obligations of Tenant under this
Lease. Any statements set forth in this Section 13.1 or elsewhere in this Lease
regarding the particular nature of the business to be conducted by Tenant in the
Premises or the uses to be made thereof by Tenant shall not constitute a
representation or warranty by Landlord that such business or uses are lawful or
permissible under any certificate of occupancy for the Premises or the Building
or are otherwise permitted by applicable law. Tenant shall indemnify and hold
Landlord harmless from any loss, cost, or claim or expenses which Landlord
incurs or suffers by reason of Tenant's failure to comply with its obligations
under this Section 13. If Tenant receives notice of any such directive, order,
citation or of any violation of any law, order ordinance, regulation or any
insurance requirement, Tenant shall promptly notify Landlord in writing of such
alleged violation and furnish Landlord with a copy of such notice.

         13.2. Tenant shall not use or permit the use of the Premises or any
portion of the Project for the storage, treatment, use, production or disposal
of any hazardous substances or hazardous waste (as those terms are defined under
CERCLA or RCRA or any other applicable federal, state or local environmental
protection laws, ordinances, codes, rules or regulations) other than those which
are stored or used in accordance with all applicable laws, rules, regulations
and permits. Landlord acknowledges that Tenant has disclosed to Landlord that
Tenant will use the following commonly used chemicals which may be considered
hazardous and which will be used in the course of Tenant's occupancy of the
Premises:

         absolute ethyl alcohol (including various dilutions)
         xylene
         methanol
         hematoxylin stain
         eosin stain
         orange G stain
         nuclear fast red
         hydrochloric acid

<PAGE>

         acetic acid
         sodium hydroxide
         acetone
         acetic anhydride
         chloroform
         2-mercaptoethanol
         sodium dodecyl sulfate
         ammonium hydroxide
         formaldehyde
         neutral buffered formalin
         paraformaldehyde

Landlord acknowledges that Tenant has disclosed to Landlord that Tenant will use
the following materials which may be considered biohazardous and will be used in
the course of Tenant's occupancy of the Premises. All appropriate precautions
will be taken when using these materials.

         Cervical specimens
         Various cell cultures
         Formalin-fixed, paraffin embedded tissues sections

All of the above-described chemicals and materials and any other such chemicals
and materials used on the Premises that may be considered hazardous shall be in
research laboratory quantities only and shall be stored and used in accordance
with all applicable laws, rules, regulations and permits. Tenants shall provide,
at Tenant's expense, a contract with a third party to provide chemical and
biomedical disposal services for the Premises.

Tenant does hereby indemnify and hold Landlord harmless from and against any and
all damage to any property, or injury to or death of any person, as a result of
Tenant's violation of Section 13 of this Lease. Tenant's indemnity shall
include, without limitation, the obligation to reimburse Landlord for any and
all costs and expenses (including reasonable attorney's fees) incurred by
Landlord, its agents or employees as a result of Tenant's violation of Section
13 of this Lease.

         14. DAMAGE OR DESTRUCTION.

         14.1. If at any time during the Term of this Lease, the Premises are
damaged by fire or other casualty, Landlord shall notify Tenant within thirty
(30) days after such damage or destruction as to the amount of time Landlord
reasonably estimates it will take to restore the Premises. If the restoration
time is estimated to exceed one hundred twenty (120) days from the date of such
damage or destruction, either Landlord or Tenant may elect to terminate this
Lease upon written notice to the other party given no later than thirty (30)
days after Landlord's notice. If neither party elects to terminate this Lease or
if Landlord estimates that restoration will take one hundred twenty (120) days
or less, then, subject to receipt of sufficient insurance proceeds,

<PAGE>

Landlord shall promptly restore the Premises excluding the improvements
installed by Tenant or by Landlord and paid for by Tenant, subject to delays
arising from the collection of insurance proceeds or from Force Majeure events.
Tenant, at Tenant's expense, shall promptly perform, subject to delays arising
from the collection of insurance proceeds or from Force Majeure events, all
repairs or restorations not required to be done by Landlord and shall promptly
re-enter the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either party may terminate this Lease if the
Premises are damaged during the last nine (9) months of the Lease Term and
Landlord reasonably estimates that it will take more than one (1) month to
repair such damage. Tenant shall pay to Landlord with respect to any damage to
the Premises caused by the negligent or intentional act or omission of Tenant,
or any employee, agent, contractor or invitee of Tenant, the amount of the
commercially reasonable deductible (which shall not exceed $10,000.00) under
Landlord's insurance policy within ten (10) days after presentment of Landlord's
invoice. If the damage caused by Tenant, or Tenant's employees, agents,
contractors or invitees, involves the premises of other tenants, Tenant shall
pay the portion of the deductible that the cost of the restoration of the
Premises bears to the total cost of restoration, as determined by Landlord. Base
Rent and Operating Expenses shall be abated for the period of repair and
restoration proportionately based upon the area of the Premises which is not
usable by Tenant. Notwithstanding the foregoing, in no event shall Base Rent or
Operating Expenses abate or shall any termination occur if damage to or
destruction of the Premises is the result of the negligence or willful act or
omission of Tenant, or Tenant's employees, agents, contractors or invitees;
provided that if Landlord maintains rental insurance (which Landlord shall have
no obligation to maintain under this Lease), and such rental insurance actually
pays insurance benefits to Landlord for such Base Rent or Operating Expenses,
then such Base Rent or Operating Expenses shall be abated, but only to the
extent of such insurance payments. To the extent Tenant is entitled to such
abatement, such abatement shall be the sole remedy of Tenant, and except as
provided herein, Tenant waives any right to terminate the Lease based upon such
damage or destruction.

         14.2. Landlord shall have no liability to Tenant for inconvenience,
loss of business or annoyance arising from any repair of any portion of the
Premises or the Building under this Section 14. In the event that Tenant
collects any insurance proceeds (or would have the right to collect such
proceeds if Tenant had been carrying the insurance policies required by this
Lease) on account of damage or destruction to the Leasehold Improvements, and
such Leasehold Improvements are not restored or repaired, either in whole or in
part, then Tenant shall pay to Landlord an equitable portion of such insurance
proceeds (or those that would have been payable to Tenant had it been carrying
the insurance policies required by this Lease) based on the ratio between the
amount that Tenant expended in connection with such Leasehold Improvements and
the amount contributed by Landlord thereto pursuant to the other terms hereof.
The terms of the foregoing sentence shall survive the termination or expiration
of the Term of this Lease. To the extent that Landlord receives insurance
proceeds for Leasehold Improvements in the Premises, Landlord shall not be
entitled to recover insurance proceeds from Tenant for such Leasehold
Improvements.

<PAGE>

         14.3. In the event of termination of this Lease pursuant to Section 14
of this Lease, then all Rent shall be apportioned and paid to the date on which
possession is relinquished or the date of such damage, whichever last occurs,
and Tenant shall immediately vacate the Premises according to such notice of
termination; provided, however, that those provisions of this Lease which are
designated to cover matters of termination and the period thereafter shall
survive the termination hereof. Upon termination of this Lease and payment of
all Rent as required by this Lease, the Security Deposit shall promptly be
refunded by Landlord to Tenant.

         15. CONDEMNATION.

         15.1. In the event the whole or substantially the whole Building or the
Premises, or any portion of the Project, the loss of which would materially and
adversely affect Tenant's ability to use and enjoy the Premises, are taken or
condemned by eminent domain or by any conveyance in lieu thereof (such taking,
condemnation or conveyance in lieu thereof being hereinafter referred to as
"condemnation"), the Term shall cease and this Lease shall terminate on the
earlier of the date the condemning authority takes possession or the date title
vests in the condemning authority. Landlord shall notify Tenant promptly
following receipt of written notice from any municipality or other condemning
authority of such condemnation. In the event that all or substantially all of
the Premises is temporarily taken by eminent domain and such taking causes all
or a substantial portion of the Premises to be unusable by Tenant for a period
of one hundred twenty (120) consecutive days for the uses permitted hereunder in
which Tenant was engaged at the Premises immediately prior to such temporary
taking, and Tenant or Landlord, as the case may be, shows such fact to the other
party to a degree of certainty reasonably acceptable to such other party, either
Landlord or Tenant may terminate this Lease by delivering written notice thereof
to the other within ten (10) business days after the taking, condemnation or
sale in lieu thereof. Upon termination of this Lease based upon such
condemnation, the Security Deposit shall promptly be refunded by Landlord to
Tenant.

         15.2. In the event any portion of the Building shall be taken by
condemnation (whether or not such taking includes any portion of the Premises),
which taking, in Landlord's reasonable and good faith judgment, is such that the
Building cannot be restored in an economically feasible manner for use
substantially as originally designed, then Landlord shall have the right, at
Landlord's option, to terminate this Lease, effective as of the date specified
by Landlord in a written notice of termination from Landlord to Tenant.

         15.3. In the event of termination of this Lease pursuant to the
provisions of Section 15.1 or 15.2 of this Lease, the Rent shall be apportioned
as of such date of termination; provided, however, that those provisions of this
Lease which are designated to cover matters of termination and the period
thereafter shall survive the termination hereof.

         15.4. All compensation awarded or paid upon a condemnation of any
portion of the Project shall belong to and be the property of Landlord without
participation by Tenant.

<PAGE>

Nothing herein shall be construed, however, to preclude Tenant from prosecuting
any claim directly against the condemning authority for loss of business, loss
of good will, moving expenses, damage to, and cost of removal of, trade
fixtures, furniture and other personal property belonging to Tenant; provided,
however, that Tenant shall make no claim which shall diminish or adversely
affect any award claimed or received by Landlord.

         16. ACCESS AND INSPECTION. Landlord shall retain duplicate keys to all
doors of the Premises. Tenant shall provide Landlord with new keys should Tenant
receive Landlord's consent to change the locks. Landlord shall have the right to
re-enter the Premises at reasonable hours and upon reasonable prior notice (or,
in the event of an emergency or at any time that an event of default on the part
of Tenant is outstanding, at any hour and without any notice) for any reasonable
purpose, including, without limitation, the following purposes: (a) to exhibit
the same to present or prospective mortgagees, lessors or purchasers during the
Term of this Lease and to prospective tenants during the last year of the Term;
(b) to inspect the Premises; (c) to confirm that Tenant is complying with all of
Tenant's covenants and obligations under this Lease; (d) to clean or make
repairs required of Landlord under the terms of this Lease; (e) to make repairs
to areas adjoining the Premises; and (f) to repair and service utility lines or
other components of the Building. Landlord shall not be liable to Tenant for the
exercise of Landlord's rights under this Section, and Tenant hereby waives any
claims for damages for any injury, inconvenience or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. In connection with any such access and
inspection, Landlord shall use reasonable efforts (i) not to interfere with
Tenant's use or possession of the Premises in a material and adverse manner;
(ii) not to materially and adversely detract from the appearance of the
Premises; and (iii) to protect Tenant and Tenant's agents, employees,
contractors and invitees, together with Tenant's equipment and other personal
property from injury, damage or destruction. Notwithstanding anything contained
in this Section 16 to the contrary, Landlord shall not be entitled to any keys
or security codes to any areas of the Premises which Tenant reasonably deems to
be sensitive. Upon reasonable prior written notice, Tenant will provide
Landlord, and Landlord's employees, agents, contractors, invitees and licensees
with reasonable access to all areas of the Premises for which Landlord does not
have keys or security codes provided that Tenant shall have the right to
accompany Landlord during any entry into such areas for the purposes set forth
in this Section 16.

         17. INDEMNIFICATION. Subject to the provisions of this Section 17 and
Section 9.5 of this Lease, Tenant shall, and hereby agrees to, indemnify and
hold Landlord harmless from any damage to any property, or injury to or death of
any person, that occurs in the Premises or on the Project which arises out of or
relates to the acts or omissions of Tenant, its agents, employees, contractors
or invitees prior to the termination or expiration of the Lease or to Tenant
vacating possession of the Premises, whichever last occurs. Without limiting the
generality of the foregoing, Landlord shall not be liable for any injury to
persons or property resulting from the condition or design of, or any defect in,
the Premises, nor shall Landlord be liable for any damage or loss caused by
other tenants, occupants or persons in the Building or the Project. Tenant, for
itself and its agents, employees, contractors and invitees, expressly assumes

<PAGE>

all risks of injury or damage to person or property, whether proximate or
remote, resulting from the condition of the Premises. Subject to the provisions
of this Section 17 and Section 9.5 of this Lease, Landlord shall indemnify and
hold Tenant harmless from any liability for injury to or death of any person or
damage to any property relating to or arising out of the gross negligence or
intentional misconduct of Landlord or its employees, agents or contractors. If
the party to be indemnified is made a party to any litigation commenced by or
against it for which it is to be indemnified, then the indemnifying party shall
protect and hold harmless and pay all court costs, penalties, charges, damages,
expenses and reasonable attorney's fees actually incurred or paid by the party
to be indemnified. These obligations shall survive the expiration or earlier
termination of the Lease.

         18. ASSIGNMENT AND SUBLETTING.

         18.1 Without Landlord's prior written consent, which shall not be
unreasonably withheld, conditioned or delayed, Tenant shall not assign this
Lease or sublease all or part of the Premises or mortgage, pledge or hypothecate
Tenant's leasehold interest or grant any concession or license within the
Premises. Any attempt to do any of the foregoing shall be void ab initio and of
no force or effect. For purposes of this Section, a transfer of a controlling
ownership interest in Tenant shall be deemed an assignment of this Lease unless
such ownership interests are publicly traded on a nationally recognized stock
exchange. No acceptance by Landlord of any Rent, or any other sum of money, from
any assignee, subtenant or other transferee shall be deemed to constitute
Landlord's consent to any assignment, sublease, mortgage, pledge, encumbrance or
other transfer. Tenant acknowledges and agrees that any consent by Landlord
pursuant to this Section shall not be deemed to be a consent to any subsequent
assignment, sublease, mortgage, pledge, encumbrance or any other agreement or
other action to which Landlord's consent is required.

         18.2 Notwithstanding the foregoing, the Tenant may assign this Lease or
sublet the Premises, in whole or in part, to any entity which controls Tenant,
is controlled by Tenant or is under common control with Tenant (a "Tenant
Affiliate") without the prior written consent of Landlord but with prior written
notice to Landlord of such assignment or sublease. Tenant, upon written request
by Landlord, shall provide Landlord with such information and documentation
evidencing that the entity to which the Lease is being or was assigned or to
which the Premises is being or were sublet qualifies as a Tenant Affiliate.
Tenant shall reimburse Landlord for all of Landlord's reasonable out-of-pocket
costs and expenses, including legal costs and expenses, incurred in connection
with any assignment of this Lease or sublease of the Premises, in whole or in
part. Upon Landlord's receipt of Tenant's written notice of Tenant's desire to
assign this Lease or sublet the Premises, in whole or in part (other than to a
Tenant Affiliate), Landlord may, but shall not be required to, terminate this
Lease with respect to the space described in Tenant's Notice by giving written
notice to Tenant within thirty (30) days after receipt of Tenant's notice. Any
such termination shall be effective as of the date specified in Tenant's notice
for the commencement of the proposed assignment or sublease.

<PAGE>

         18.3 Notwithstanding any such assignment of this Lease or subletting of
the Premises, Tenant, and any guarantor or surety of Tenant's obligations under
this Lease, shall at all times remain fully and primarily responsible and liable
for the payment of Rent and for performance in accordance with the terms of this
Lease (regardless of whether Landlord's approval has been obtained for any such
assignment or subletting). In the event that the Rent due and payable by a
sublessee or assignee (or a combination of the Rent payable under such sublease
or assignment plus any bonus or other consideration therefore or incident
thereto) exceeds the Rent payable under this Lease, Tenant shall be bound and
obligated to pay Landlord as Additional Rent under this Lease fifty percent
(50%) of all such excess rental and other excess consideration within ten (10)
calendar days following the receipt thereof by, or on behalf of, Tenant.

         18.4 If this Lease is assigned or if the Premises is subleased (whether
in whole or in part) or in the event of the mortgage, pledge or hypothecation of
Tenant's leasehold interest or the grant of any concession or license within the
Premises or if the Premises be occupied, in whole or in part, by anyone other
than Tenant, then upon a default by Tenant under this Lease, Landlord may
collect Rent and any other sum of money otherwise due, from the assignee,
sublessee, mortgagee, pledgee, party to whom the leasehold interest was
hypothecated, concessionee or licensee or other occupant and, except to the
extent of any excess rentals to which Landlord is entitled as hereinabove set
forth, apply the amount collected to the next Rent payable under this Lease. All
Rent, collected by Tenant shall be held in trust for Landlord and shall
immediately be forwarded to Landlord. No such transaction or collection of Rent
or application thereof by Landlord, however, shall be deemed a waiver of the
terms of this Lease or a release of Tenant from the further performance by
Tenant of its covenants, duties or obligations under this Lease.

         19. QUIET ENJOYMENT. If Tenant shall perform all of the covenants and
agreements set forth in this Lease which are required to be performed by Tenant,
Tenant shall, subject to the terms and conditions of this Lease, at all times
during the Lease Term have peaceful and quiet enjoyment of the Premises against
any person claiming by, through or under Landlord.

         20. SURRENDER. Upon expiration or earlier termination of the Lease
Term, Tenant shall surrender the Premises to Landlord in the same condition as
received, broom clean, ordinary wear and tear and casualty loss and condemnation
covered by Sections 14 and 15 of this Lease excepted. Upon surrender of the
Premises to Landlord, any alterations, improvements and fixtures installed upon
the Premises by or for the benefit of Tenant shall remain a part of the Premises
and shall not be removed; and all of Tenant's personal property which is not
removed by Tenant within the five (5) days following the surrender of the
Premises to Landlord, as permitted or required by this Lease, shall be deemed
abandoned and may be stored, removed and disposed of by Landlord, at Tenant's
expense, and Tenant waives all claims against Landlord for any damages resulting
from Landlord's retention and disposition of such property. All obligations of
Tenant hereunder not fully performed as of the expiration or earlier termination
of

<PAGE>

the Lease Term shall survive such expiration or earlier termination of the Lease
Term, including, without limitation, indemnity obligations, payment obligations
with respect to Operating Expenses and obligations concerning the condition and
repair of the Premises.

         21. HOLDING OVER. If Tenant retains possession of the Premises after
the expiration of the Lease Term or the earlier termination of Tenant's right of
possession, unless otherwise agreed in writing, such possession shall be subject
to immediate termination by Landlord at any time, and all of the other terms and
conditions of this Lease (excluding any expansion or renewal option or other
similar right or option) shall be applicable during such holdover period, except
that Tenant shall pay Landlord from time to time, upon demand, as Base Rent for
the holdover period, an amount equal to 150% of the Base Rent in effect on the
termination date, computed on a monthly basis for each month, or part thereof,
during such holding over. All other payments shall continue under the terms of
this Lease. In addition, Tenant shall be liable for all damages incurred by
Landlord as a result of such holding over which are recoverable under this Lease
or under applicable law. No holding over by Tenant, whether with or without
consent of Landlord, shall operate to extend this Lease except as otherwise
expressly provided in this Lease, and this Section shall not be construed as
consent by Landlord for Tenant to retain possession of the Premises.

         22. EVENTS OF DEFAULT. The occurrence of any of the events described
below shall constitute a default by Tenant under this Lease:

         22.1.

         22.1.1 Tenant shall fail to pay any installment of Base Rent or any
other payment required under this Lease when due, and such failure to pay shall
continue for a period of thirty (30) days following the date of written notice
to Tenant from Landlord of such failure to pay; provided that Landlord shall not
be required to provide Tenant with written notice of such failure to pay more
than twice in any consecutive twelve (12) calendar month period; or

         22.1.2 In the event that Landlord has already given Tenant such written
notice of failure to pay twice in a consecutive twelve (12) month period, Tenant
shall fail to pay any installment of Base Rent or any other payment required
under this Lease when due, and such failure to pay shall continue for a period
of ten (10) days following the date such payment was due.

         22.2. Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (i) make a general assignment for the benefit of creditors; (ii)
commence any case, proceeding or other action seeking to have any order for
relief entered on its behalf as a debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its property (collectively a "proceeding for relief"); (iii)
become the subject of any proceeding for relief which is not dismissed within
sixty (60) days of its filing or entry; or (iv) die or suffer a legal

<PAGE>

disability (if Tenant, guarantor or surety is an individual) or be dissolved or
otherwise fail to maintain its legal existence (if Tenant, guarantor or surety
is a corporation, partnership, limited liability company or other entity).

         22.3. Any insurance required to be maintained by Tenant pursuant to
this Lease shall be canceled or terminated or shall expire or shall be reduced
or materially changed, except, in each case, as permitted in this Lease.

         22.4. [Deleted]

         22.5. Tenant shall attempt, or there shall occur any assignment,
subleasing or other transfer of Tenant's interest in or with respect to this
Lease, except as otherwise permitted in this Lease.

         22.6. Tenant shall fail to discharge any lien placed upon the Premises
in violation of this Lease within thirty (30) days after Tenant obtains notice
that any such lien or encumbrance is filed against the Premises to the extent
that such lien results from Tenant's acts or omissions and not from Landlord's
violation of this Lease.

         22.7. Tenant shall fail to comply with any term or condition of this
Lease other than those specifically referred to in this Section 22, and except
as otherwise expressly provided herein, such default shall continue for more
than thirty (30) days after Landlord has given Tenant written notice of such
default, or, if such failure to comply with any term or condition of this Lease
may not reasonably be cured within such thirty (30) day period, Tenant fails to
commence to cure such failure within such thirty (30) day period and to
continuously and diligently pursue such cure to completion.

         23. LANDLORD'S REMEDIES. Upon the occurrence and during the
continuation of any default by Tenant specified in Section 22 of this Lease,
Landlord, at its option, may in addition to all other rights and remedies
provided herein or at law or in equity, exercise one or more of the remedies set
forth below:

         23.1. Termination. Landlord may terminate this Lease by written notice
to Tenant in which event Tenant shall immediately surrender the Premises to
Landlord and if Tenant fails to do so, Landlord may without prejudice to any
other remedy which it may have for possession or arrearages in Rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying the Premises, or any part thereof, without being
liable for prosecution or any claim of damages therefor. Upon any such
termination, Tenant shall be and remain liable for all obligations of Tenant
arising or accruing under this Lease prior to the time of termination and, in
addition thereto, for the damages provided for in Section 23.4 hereof.

<PAGE>

         23.2. Terminate Possession. Landlord may terminate Tenant's right of
possession (but not this Lease), by written notice to Tenant specifying the date
of termination in such notice, and, on or after such date, enter upon and take
possession of the Premises and expel or remove Tenant and any other person who
may be occupying the Premises, or any part thereof, by entry, dispossessory suit
or otherwise, without thereby releasing Tenant from any liability hereunder,
without terminating this Lease, and without being liable for prosecution of any
claim of damages therefor, and, if Landlord so elects, make such alterations,
redecorations and repairs as, in Landlord's reasonable judgment, may be
necessary to relet the Premises. Landlord may, but shall be under no obligation
to do so, relet the Premises or any portion thereof in Landlord's or Tenant's
name, but for the account of Tenant, for such term or terms (which may be for a
term extending beyond the Lease Term under this Lease) and at such rental or
rentals and upon such other terms and conditions as Landlord in its sole
discretion may deem advisable, with or without advertisement, or by private
negotiations, and receive the rent therefor. Upon each such reletting, all
rentals and other sums received by Landlord from such reletting shall be
applied, first, to the payment of any indebtedness other than Rent due hereunder
from Tenant to Landlord, second, to the payment of any costs and expenses of
such reletting actually incurred by Landlord, including lease assumptions,
reasonable brokerage fees and reasonable attorneys' fees and the costs of any
alterations, repairs, redecorations and restorations; third, to the payment of
Rent and other charges due and unpaid hereunder; and the residue, if any shall
be held by Landlord and applied in payment of future Rent as the same may become
due and payable hereunder or shall be paid to Tenant to the extent (and only to
the extent) provided in the third following sentence. If such rentals and other
sums received from such reletting during any month are less than the amount of
Rent to be paid during that month by Tenant hereunder, Tenant shall pay such
deficiency to Landlord. Such deficiency shall be calculated and paid monthly. If
such rentals and the sums received from such reletting during any month shall be
more than the amount of Rent to be paid during that month by Tenant hereunder,
Tenant shall have no right to, and shall receive no credit for, the excess;
provided, however, if any such excess shall exist at such time as this Lease
shall terminate, after application of such rentals and sums received from
reletting in the manner hereinabove set forth, such excess shall be paid to
Tenant. No such reentry or taking possession of the Premises by Landlord
(whether through entry, dispossessory suit or otherwise) shall be construed as
an election on Landlord's part to terminate this Lease unless a written notice
of such termination be given to Tenant. Notwithstanding any such reletting
without termination, Landlord may at any time elect by written notice to Tenant
to terminate this Lease for such previous Event of Default.

         23.3. Entry. Landlord may enter upon the Premises, without being liable
for prosecution or any claim of damages therefor, and do whatever Tenant is
obligated to do under the terms of this Lease, and Tenant agrees to reimburse
Landlord on demand for any expenses including, without limitation, reasonable
attorneys' fees, which Landlord may actually incur in thus effecting compliance
with Tenant's obligations under this Lease. Tenant further agrees that Landlord
shall not be liable for any damages resulting to Tenant from such action unless
such damage results from the gross negligence or willful misconduct of Landlord,
its employees or agents.

<PAGE>

         23.4. [Deleted]

         23.5. Self-Help. Landlord may, at its option, without waiving or
releasing Tenant from obligations of Tenant, make any such payment or perform
any such other act on behalf of Tenant. All sums so paid by Landlord, or
incurred by Landlord in effecting such performance or other act, and all
necessary incidental costs, together with interest thereon at the legal rate of
interest, from the date of such payment by Landlord, shall be payable to
Landlord on demand. Tenant covenants to pay any such sums, and Landlord shall
have (in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the non-payment thereof by Tenant as in the case of
default by Tenant in the payment of Rent.

         23.6. Cumulative Remedies. No right or remedy herein conferred upon or
reserved to Landlord is intended to be exclusive of any other right or remedy,
and each and every right and remedy shall be cumulative and in addition to any
other right or remedy given hereunder or now or hereafter existing at law or in
equity or by statute. In addition to the other remedies provided in this Lease,
Landlord shall be entitled, to the extent permitted by applicable law, to
injunctive relief in the case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of this
Lease, or to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any other remedy
allowed to Landlord at law or in equity.

         24. TENANT'S REMEDIES.

         24.1. Anything contained in this Lease to the contrary notwithstanding,
Tenant agrees that Tenant shall look solely to the estate and property of
Landlord in the Building (and the actual rents received by Landlord from the
Building from and after the date of any money judgment against Landlord) for the
collection of any judgment or other judicial process requiring the payment of
money by Landlord. In no event shall either Landlord or any partners,
shareholders, members or other principals of Landlord, or any managers or
employees of Landlord be personally responsible or liable for the payment of any
such judgment or process obtained against Landlord, and, subject to the
preceding sentence, the assets of any such party or person shall not be subject
to levy, execution or other judicial process for the satisfaction thereof. The
term "Landlord", as used in this Lease, so far as covenants or obligations on
the part of Landlord are concerned, shall be limited to mean and include only
the owner or owners, at the time in question, of the fee title to, or a lessee's
interest in a ground lease of, the Land or the Building. In the event of any
assignment, conveyance or other transfer of any such title or interest (each of
which may be effected without Tenant's consent), Landlord herein named (and in
case of any subsequent transfers or conveyances, the then grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability as

<PAGE>

respects the performance of any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed.

         24.2. Should Landlord breach any of its duties or obligations to Tenant
and, in the case of monetary default, the breach continues for ten (10) days
after written notice is given to Landlord, or in the case of a non-monetary
default, the breach continues for thirty (30) days (or such longer period of
time as may reasonably be required to cure such breach provided Landlord
commences the cure of such non-monetary default within such thirty (30) day
period and diligently pursues the cure to completion) after written notice of
the breach is given to Landlord, Tenant may take such action as is reasonably
necessary to cure the breach. In such event, Landlord shall, upon demand
(accompanied by reasonable documentation supporting the demand) reimburse Tenant
for expenses reasonably incurred by Tenant in curing Landlord's breach,
including, without limitation, attorney's fees and expenses reasonably and
actually incurred.

         25. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE. This Lease and
Tenant's interests and rights hereunder are and shall be subject and subordinate
at all times to the lien of any mortgage, now existing or hereafter created, on
or against the Project, the Building or the Premises by Landlord, and all
amendments, restatements, renewals, modifications, consolidations, refinancings,
assignments and extensions thereof, without the necessity of any further
instrument or act on the part of Tenant. Tenant agrees, at the election of the
holder of any such mortgage, to attorn to any such holder. Tenant agrees upon
demand to execute, acknowledge and deliver such instruments and other documents
confirming such subordination and such instruments and other documents of
attornment as shall be requested by any such holder; provided, however, as a
condition to this subordination and attornment provision, Landlord shall be
required to obtain from any such holder of a mortgage and deliver to Tenant an
agreement in writing to Tenant providing in substance that, so long as Tenant
shall faithfully discharge the obligations on its part to be kept and performed
under the terms of this Lease, Tenant's tenancy under this Lease shall be
undisturbed; and, in the event of a default under such mortgage or in the event
of foreclosure or any enforcement of such mortgage, the rights of Tenant under
this Lease shall expressly survive, and this Lease shall in all respects
continue in full force and effect. Tenant shall execute and deliver such
instruments and other documents within ten (10) days after delivery or attempted
delivery thereof pursuant to Section 33.9 of this Lease. Notwithstanding the
foregoing, any such holder may at any time subordinate its mortgage to this
Lease, without Tenant's consent, by written notice to Tenant, and thereupon this
Lease shall be deemed prior to such mortgage without regard to their respective
dates of execution, delivery or recording, and in that event, such holder shall
have the same rights with respect to this Lease as though this Lease had been
executed prior to the execution, delivery and recording of such mortgage and had
been assigned to such holder. The term "mortgage" whenever used in this Lease
shall be deemed to include deeds of trust, mortgages, security deeds, security
assignments and any other instrument which creates a lien. Any reference to the
"holder" of such a mortgage shall be deemed to include the beneficiary under a
deed of trust.

<PAGE>

         26. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within ten
(10) days after delivery or attempted delivery pursuant to Section 33.9 of this
Lease, to execute and deliver to Landlord, or Landlord's designee, any estoppel
certificate requested by Landlord, stating the following: (i) this Lease is in
full force and effect; (ii) the date to which rent has been paid; (iii) Landlord
is not in default under this Lease (or specifying in detail the nature of
Landlord's default); (iv) the termination date of this Lease; and (v) such other
matters relating to this Lease as may be reasonably requested by Landlord.
Tenant's obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for Landlord's execution of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate. Notwithstanding anything contained in this
Section 26 to the contrary, in no event shall Tenant be obligated to execute an
estoppel certificate which contains information which is incorrect or which
alters or changes any term or provision of this Lease. In such event, Tenant
shall be obligated to insert correct information and return such estoppel
certificate with such correct information to Landlord on a timely basis as
required by this Section 26.

         27. SECURITY SERVICES. Tenant acknowledges and agrees that Landlord is
not providing, and is not obligated to provide, any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage or injury suffered or incurred by Tenant in connection with any
unauthorized entry into the Project, the Building or the Premises, or any other
breach of security with respect to the Project, the Building or the Premises
unless such loss or damage is caused by the gross negligence or willful
misconduct of Landlord, its employees or agents.

         28. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, Landlord or Tenant shall not be liable
or responsible for, and there shall be excluded from the computation for any
such period of time, any delays due to force majeure, which term shall include
strikes, riots, acts of God, shortages of labor or materials, war, governmental
approvals, laws, regulations, or restrictions, or any other cause of any kind
whatsoever which is beyond the reasonable control of Landlord or Tenant, as the
case may be. Force Majeure shall not excuse or delay Tenant's obligation to pay
Rent or any other amount due under this Lease.

         29. BROKERS AND COMMISSIONS. Tenant and Landlord each represent and
warrant to the other that it has not entered into any agreement with, or
otherwise had any dealings with, any broker or agent in connection with the
negotiation or execution of this Lease which could form the basis of any claim
by any such broker or agent for a brokerage fee or commission, finder's fee, or
any other compensation of any kind or nature in connection herewith, other than
with Brokers, and each party shall, and hereby agrees to, indemnify and hold the
other harmless from all costs (including court costs, investigation costs, and
attorneys' fees), expenses, or liability for commissions or other compensation
claimed by any broker or agent with respect to this Lease which arise out of any
agreement or dealings, or alleged

<PAGE>

agreement or dealings, between the indemnifying party and any such agent or
broker, other than with Brokers. This provision shall survive the expiration or
earlier termination of this Lease. Landlord shall pay a commission to Landlord's
Broker in accordance with a separate written agreement with Landlord's Broker
and shall pay a commission to Tenant's Broker in accordance with the terms
thereof or of a separate written agreement between Landlord and Tenant's Broker.
All brokers, including Brokers, shall be required to execute and deliver lien
waivers as a condition of payment. The parties hereto acknowledge that
Landlord's Broker is acting as agent for Landlord in this transaction and that
Tenant's Broker is acting as agent for Tenant in this transaction.

         30. BANKRUPTCY. Tenant acknowledges that this Lease is a lease of
nonresidential real property and therefore agrees that Tenant, as the debtor in
possession, or the trustee for Tenant (collectively the "Trustee") in any
proceeding under Title 11 of the United States Bankruptcy Code relating to
Bankruptcy, as amended (the "Bankruptcy Code"), shall not seek or request any
extension of time to assume or reject this Lease or to perform any obligations
of this Lease which arise from or after the entry of an order for relief.

         30.1. If the Trustee proposes to assume or to assign this Lease or
sublet the Premises (or any portion thereof) to any person which shall have made
a bona fide offer to accept an assignment of this Lease or a subletting on terms
acceptable to the Trustee, the Trustee shall give Landlord, and lessors and
mortgagees of Landlord of which Tenant has notice, written notice setting forth
the name and address of such person and the terms and conditions of such offer,
no later than twenty (20) days after receipt of such offer, but in any event no
later then ten (10) days prior to the date on which the Trustee makes
application to the Bankruptcy Court for authority and approval to enter into
such assumption and assignment or subletting. Landlord shall have the prior
right and option, to be exercised by written notice to the Trustee given at any
time prior to the effective date of such proposed assignment or subletting, to
accept an assignment of this Lease or subletting of the Premises upon the same
terms and conditions and for the same consideration, if any, as the bona fide
offer made by such person, less any brokerage commissions which may be payable
out of the consideration to be paid by such person for the assignment or
subletting of this Lease. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed, without
further act or deed, to have assumed all of the obligations arising under this
Lease and each of the conditions and provisions hereof on and after the date of
such assignment. Any such assignee shall, upon the request of Landlord,
forthwith execute and deliver to Landlord an instrument, in form and substance
acceptable to Landlord, confirming such assumption.

         30.2. The Trustee shall have the right to assume Tenant's rights and
obligations under this Lease only if the Trustee: (a) promptly cures or provides
adequate assurance that the Trustee will promptly cure any default under the
Lease; (b) compensates or provides adequate assurance that the Trustee will
promptly compensate Landlord for any actual pecuniary loss incurred by Landlord
as a result of Tenant's default under this Lease; and (c) provides adequate
assurance of future performance under the Lease. Adequate assurance of future
performance by

<PAGE>

the proposed assignee shall include, as a minimum, that: (i) the Trustee or any
proposed assignee of the Lease shall deliver to Landlord a security deposit in
an amount equal to at least three (3) months Rent accruing under the Lease; and
(ii) any proposed assignee of the Lease shall provide to Landlord an audited
financial statement, dated no earlier than six (6) months prior to the effective
date of such proposed assignment or sublease with no material change therein as
of the effective date, which financial statement shall show the proposed
assignee to have a net worth equal to at least twelve (12) months Rent accruing
under the Lease, or, in the alternative, the proposed assignee shall provide a
guarantor of such proposed assignee's obligations under the Lease, which
guarantor shall provide an audited financial statement meeting the requirements
of (ii) above and shall execute and deliver to Landlord a guaranty agreement in
form and substance acceptable to Landlord. All payments required of Tenant under
this Lease, whether or not expressly denominated as such in this Lease, shall
constitute rent for the purposes of Title 11 of the Bankruptcy Code.

         30.3. The parties agree that for the purposes of the Bankruptcy Code
relating to (i) the obligation of the Trustee to provide adequate assurance that
the Trustee will "promptly" cure defaults and compensate Landlord for actual
pecuniary loss, the word "promptly" shall mean that cure of defaults and
compensation will occur no later than sixty (60) days following the filing of
any motion or application to assume this Lease; and (ii) the obligation of the
Trustee to compensate or to provide adequate assurance that the Trustee will
promptly compensate Landlord for "actual pecuniary loss", the term "actual
pecuniary loss" shall mean, in addition to any other provisions contained herein
relating to Landlord's damages upon default, payments of Rent, including
interest at the legal rate on all unpaid Rent, all attorney's fees and all
related costs of Landlord incurred in connection with any default of Tenant in
connection with Tenant's bankruptcy proceedings.

         31. RULES AND REGULATIONS. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and regulations
("Rules and Regulations") at any time or from time to time established by
Landlord covering use of the Premises, the Building and the Project. The current
Rules and Regulations are attached hereto as Exhibit C and incorporated herein
by this reference. In the event of any conflict between the Rules and
Regulations and other provisions of this Lease, the other terms and conditions
of this Lease shall control. Landlord shall not have any liability or obligation
for the breach of any Rules and Regulations by any other tenants in the Project
or the Building. Tenant shall not be obligated to comply with any changes to the
Rules and Regulations which unreasonably interfere with Tenant's Permitted Uses.

         32. PARKING. Except as otherwise provided in this Lease, the parking
area available to Tenant, its employees, agents, contractors and invitees shall
be free and designated on a non-exclusive, unreserved basis for all Project
tenants (including Tenant) and their respective employees, customers, invitees
and visitors. Landlord shall designate certain parking spaces as being available
for visitor parking. Parking and delivery areas for all vehicles shall be in
accordance with parking regulations established from time to time by Landlord,
with which

<PAGE>

Tenant agrees to conform. Notwithstanding the foregoing, Landlord reserves the
right to designate certain portions of the parking areas on a reserved,
exclusive basis, including, without limitation, for handicapped, vans, visitors,
cycles, other tenants, courier and loading purposes.

         33. MISCELLANEOUS.

         33.1. Entire Agreement; Amendments. This Lease and the exhibits and
riders attached hereto set forth the entire agreement between the parties and
cancel all prior negotiations, arrangements, brochures, agreements, and
understandings, if any, between Landlord and Tenant regarding the subject matter
of this Lease, it being acknowledged that any such negotiations, arrangements,
brochures, agreements, and understandings have been fully incorporated herein
and this Lease is a full and final integration of the agreement of the parties
hereto, including without limitation, all such prior negotiations, arrangements,
brochures, agreements, and understandings. Neither Landlord nor Landlord's
agents or brokers have made any representations or promises with respect to the
Premises, the Building or any other portions of the Project except as herein
expressly set forth and all reliance with respect to any representations or
promises is based solely on those contained herein. No rights, easements, or
licenses are acquired by Tenant under this Lease by implication or otherwise
except as, and unless, expressly set forth in this Lease. No amendment or
modification of this Lease shall be binding or valid unless expressed in writing
executed by both parties hereto.

         33.2. Severability; Headings. Every agreement contained in this Lease
is, and shall be construed as, a separate and independent agreement. If any term
or condition of this Lease or the application thereof to any person or
circumstances shall be invalid or unenforceable, the remaining terms and
conditions contained in this Lease shall not be affected. The article headings
contained in this Lease are for convenience only and shall not enlarge or limit
the scope or meaning of the various and several articles hereof. Words in the
singular number shall be held to include the plural, unless the context
otherwise requires.

         33.3. Successors and Assigns. All agreements and covenants herein
contained shall be binding upon the respective heirs, personal representatives,
successors and assigns of the parties hereto. If there be more than one Tenant,
the obligations hereunder imposed upon Tenant shall be joint and several. If
there is a guarantor of Tenant's obligations hereunder, Tenant's obligations
shall be joint and several obligations of Tenant and such guarantor, and
Landlord need not first proceed against Tenant hereunder before proceeding
against such guarantor, and any such guarantor shall not be released from its
guarantee for any reason, including any amendment of this Lease, any forbearance
by Landlord or waiver of any of Landlord's rights, the failure to give Tenant or
such guarantor any notices, or the release of any party liable for the payment
or performance of Tenant's obligations hereunder. Notwithstanding the foregoing,
nothing contained in this Section 33.3 shall be deemed to override the terms and
conditions of Section 18 (Assignment and Subletting) of this Lease.

<PAGE>

         33.4. Tenant's Authority. If Tenant signs as a corporation, execution
hereof shall constitute a representation and warranty by Tenant that Tenant is a
duly organized and existing corporation, that Tenant has been and is qualified
to do business in the State of North Carolina and in good standing with the
State of North Carolina, that the corporation has full right and authority to
enter into this Lease, and that all persons signing on behalf of the corporation
were authorized to do so by appropriate corporate action. If Tenant signs as a
partnership, trust, or other legal entity, execution hereof shall constitute a
representation and warranty by Tenant that Tenant has complied with all
applicable laws, rules, and governmental regulations relative to Tenant's right
to do business in the State of North Carolina, that such entity has the full
right and authority to enter into this Lease, and that all persons signing on
behalf of Tenant were authorized to do so by any and all necessary or
appropriate partnership, trust, or other legal entity.

         33.5. Governing Law. This Lease shall be governed by and construed
under the laws of the State of North Carolina.

         33.6. Time of Essence. Time is of the essence of this Lease.

         33.7. No Estate. The Lease shall create the relationship of landlord
and tenant only between Landlord and Tenant and no estate shall pass out of
Landlord. Tenant shall have only a usufruct, not subject to levy and sale and
not assignable in whole or in part by Tenant (except as expressly provided
herein).

         33.8. Exhibits. Each of the exhibits attached hereto, and each of the
terms and conditions set forth therein, are hereby incorporated herein, and
shall be deemed to a part of this Lease as if fully set forth herein.

         33.9. Notices. All notices, requests, demands or other communications
required or permitted to be given hereunder shall be in writing and shall be
addressed and delivered by hand or by certified mail, return receipt requested,
or by commercial overnight courier, by hand delivery by reputable courier, to
each party at the addresses set forth below. Any such notice, request, demand or
other communication shall be considered given or delivered, as the case may be,
on the date of receipt. Rejection or other refusal to accept or inability to
deliver because of changed address of which proper notice was not given shall be
deemed to be receipt of the notice, request, demand or other communication. By
giving prior written notice thereof, any party may from time to time and at any
time change its address for notices hereunder. Legal counsel for the respective
parties may send to the other party any notices, requests, demands or other
communications required or permitted to be given hereunder by such party.

                   Landlord: TBC Place Partners II, LLC
                             c/o OA Development, Inc.
                             2801 Buford Highway, NE
                             Suite 500
                             Atlanta, GA 30329
                             Attn: Mr. Steven Berman

<PAGE>

                   With a copy to: Frank L. Wilson, III, Esq.
                                   Wilson Brock & Irby, LLC
                                   Overlook I, Suite 700
                                   2849 Paces Ferry Road
                                   Atlanta, Georgia 30339

                   Tenant:         Tripath Oncology, Inc.
                                   780 Plantation Drive
                                   Burlington, NC 27215

                   With a copy to: Schell Bray Aycock Abel & Livingston P.L.L.C.
                                   P. O. Box 21847
                                   Greensboro, NC 27420
                                   Attn: William P. Aycock II, Esq.

         33.10. Landlord Consent. Except as otherwise expressly provided in this
Lease or as otherwise required by law, Landlord retains the absolute right to
withhold any consent or approval in Landlord's sole discretion.

         33.11. Tenant's Financials. At Landlord's request, from time to time,
Tenant shall furnish Landlord with true and complete copies of Tenant's most
recent annual and quarterly financial statements prepared by Tenant or Tenant's
accountants and any other financial information or summaries that Tenant
typically provides to its lenders or principals, provided that Tenant shall not
be required to provide such financials more frequently than quarterly during
each calendar year.

         33.12. No Recording. Neither Landlord nor Tenant shall be entitled to
record this Lease, in whole or in part, in the appropriate public real estate
records. Either Landlord or Tenant may prepare, and upon request by Landlord or
Tenant, such other party will execute and deliver, a Memorandum of Lease which
may be filed by or on behalf of either Landlord or Tenant in the appropriate
public real estate records. Any such Memorandum of Lease shall only include the
names of Landlord and Tenant, the Date of this Lease, the Commencement Date and
the Expiration Date, a legal description of the real property on which the
Building and the Premises are located, a statement that such Memorandum of Lease
is automatically terminated and of no further force or effect as of the
Expiration Date of this Lease and such other information as may be reasonably
requested by either Landlord or Tenant. At any time after the expiration or
earlier termination of this Lease, Tenant shall execute and deliver to Landlord
an instrument terminating the Memorandum of Lease promptly following a request
therefor by Landlord. After the expiration or earlier termination of this Lease,
if Tenant fails or refuses to execute and deliver such an instrument promptly
following a request by Landlord, Tenant hereby irrevocably appoints Landlord as
Tenant's attorney-in-fact (such power of attorney being

<PAGE>

coupled with an interest) to execute, acknowledge and deliver any such
instrument for and in the name of Tenant and to cause any such instrument
terminating the Memorandum of Lease to be recorded in the appropriate public
real estate records.

         33.13. Rules of Construction. The normal rules of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Lease or any exhibits or
amendments hereto.

         33.14. Lease Submission Not Option. The submission by Landlord to
Tenant of this Lease shall have no binding force or effect, shall not constitute
an option for the leasing of the Premises, nor confer any right or impose any
obligations upon either party until execution of this Lease by both parties.

         33.15. No Merger. There shall be no merger of this Lease with any
ground leasehold interest or the fee estate in the Project or any part thereof
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate.

         33.16. [Deleted]

         33.17. Signs. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners or paintings or erect or install any signs, windows or door lettering,
placards, decorations or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent which
shall not unreasonably withheld, conditioned or delayed. Upon surrender or
vacation of the Premises, Tenant shall promptly remove, at Tenant's expense, all
signs and repair, paint and/or replace the Building facia surface to which its
signs, if any, are attached. Tenant shall obtain all applicable governmental
permits and approvals for sign and exterior treatments, if any. All signs,
decorations, advertising media, blinds, draperies and other window treatments or
bars or other security installations visible from outside the Premises shall be
subject to Landlord's approval, which approval shall not be unreasonably
withheld, conditioned or delayed, and shall conform in all respects to
Landlord's requirements. In the event signage is erected by Landlord on the
Project which lists Tenant's occupying space within the Building, Tenant, at
Landlord's cost and expense, shall be entitled to have signage advertising
Tenant's location within the Building placed on such Building signage in the
form reasonably required by Landlord.

         33.18. Special Stipulations. The Special Stipulations attached to this
Lease as Exhibit F is incorporated into this Lease and made a part hereof as if
fully set forth herein.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have set their hands and seals
hereunto and have caused this Lease to be executed by duly authorized officials
thereof, as of the Date of this Lease.

                                     LANDLORD:

                                     TBC PLACE PARTNERS II, LLC,
                                     a Georgia limited liability company

                                     BY: Steber, Inc., a Georgia corporation,
                                         Manager

                                     By: /s/ Steven Berman
                                        ---------------------------------------
                                         Steven Berman, President

                                                 [CORPORATE SEAL]

                                     TENANT:

                                     TRIPATH ONCOLOGY, INC., a
                                     Delaware corporation

                                     By: /s/ Paul R. Sohmer
                                        ---------------------------------------
                                     Name: Paul R. Sohmer
                                     Title: President and CEO

                                                 [CORPORATE SEAL]

<PAGE>

                                    EXHIBIT A

                           FLOOR PLAN OF THE PREMISES
<PAGE>

                                    EXHIBIT B

                       LEASEHOLD IMPROVEMENTS WORK LETTER

                        (LEASEHOLD IMPROVEMENT ALLOWANCE)

         1. Leasehold Improvements. Landlord shall cause the leasehold
improvements to the Premises ("Leasehold Improvements") to be constructed and
installed in a good and workmanlike manner and in substantial accordance with
final plans and specifications ("Working Drawings and Specifications") to be
prepared by Landlord's architect and engineers and approved by Tenant, such
approval not to be unreasonably withheld or delayed. Such plans and
specifications shall be in accordance with the preliminary space planning review
furnished by Landlord, at Landlord's expense, based upon input by Tenant. In
connection with, and in order to expedite, preparation of the Working Drawings
and Specifications, Tenant shall provide comments to, and shall cooperate with,
Landlord and Landlord's architects, engineers and other consultants promptly
following request for such comments. Landlord may commence construction prior to
finalization of the Working Drawings and Specifications, and Tenant agrees that
it shall cooperate with Landlord to review and approve portions of the Working
Drawings and Specifications for different stages or elements of the work so that
construction may proceed on a "fast track" basis. Unless otherwise agreed to in
writing by Landlord and Tenant, all work involved in the construction and
installation of the Leasehold Improvements shall be carried out under the sole
direction of Landlord. Tenant shall cooperate with Landlord and Landlord's
architect, contractors, employees, agents and other persons in order to promote
the efficient and expeditious completion of such work. The Landlord shall hire
the general contractor to construct the Leasehold Improvements.

         2. Tenant Change Orders. The Working Drawings and Specifications define
the entire scope of Landlord's obligation to construct or provide the Leasehold
Improvements. Subject to this Paragraph, Landlord shall make additions or
changes to the Working Drawings and Specifications requested by Tenant ("Tenant
Change Orders"). Tenant shall advise Landlord regarding any Tenant Change Orders
in writing. All reasonable costs of reviewing any Tenant Change Orders, and any
and all costs of making any such change shall be at Tenant's sole cost and
expense, and shall be paid pursuant to Paragraph 5 of this Leasehold Improvement
Work Letter. Such costs shall include, without limitation, costs of architects,
engineers and consultants in reviewing and designing any such changes and the
costs of contractors implementing such changes. When Landlord requests Tenant to
provide specific information regarding any Tenant Change Orders, Tenant shall
respond promptly so as not to delay Substantial Completion of the Leasehold
Improvements on or before the Target Completion Date.

         3. Target Completion Date. Landlord shall use its reasonable efforts to
cause the Leasehold Improvements to be substantially completed on or before May
15, 2002 ("Target Completion Date"). Landlord shall not be liable to Tenant for
any damages, losses, costs or

<PAGE>

expenses incurred by Tenant because of a failure to substantially complete the
Leasehold Improvements on or before the Target Completion Date.

         4. Leasehold Improvement Allowance. Landlord shall contribute an amount
equal to Twenty-Five and 00/100 Dollars ($25.00) per net rentable square foot,
inclusive of all design fees and moving allowance ("Leasehold Improvement
Allowance") for the actual costs of designing and constructing the Leasehold
Improvements as such costs are incurred. Landlord shall pay actual costs, up to
a maximum amount equal to the Leasehold Improvement Allowance directly to the
contractor promptly following receipt of billing and reasonably satisfactory
documentation, including appropriate contractor affidavits and waivers from the
contractor and all subcontractors engaged in installing or constructing the
Leasehold Improvements. Notwithstanding the foregoing, Tenant, at Tenant's
election, shall be entitled to increase its Leasehold Improvement Allowance up
to but not exceeding Forty-Five and 00/100 Dollars ($45.00) per net rentable
square foot of space with the Premises. In the event Tenant elects to increase
the Leasehold Improvement Allowance above the Twenty-Five and 00/100 Dollars
($25.00) per net rentable square foot amount otherwise provided in this Lease,
the Base Rent due and payable under this

<PAGE>

Lease for the eighty-four (84) month Term of this Lease shall be proportionately
increased as follows: if Tenant increases the Leasehold Improvement Allowance to
Forty-Five and 00/100 Dollars ($45.00) per net rentable square foot, the Base
Rent rate for the initial twelve (12) month period of this Lease shall be
Fourteen and 35/100 Dollars ($14.35) per net rentable square foot, and if such
increased Leasehold Improvement Allowance used is less than Forty-Five and
00/100 Dollars ($45.00) per net rentable square foot, the Base Rent rate for the
shall be proportionately adjusted for initial twelve (12) month period of this
Lease. In such event, this Lease shall be promptly amended, as appropriate, to
reflect the revised initial Base Rent as well as the revised Base Rent for each
subsequent twelve (12) month period of the Lease Term. The Base Rent Escalation
shall not apply to the portion of the Base Rent attributable to Tenant's
increase of the Leasehold Improvement Allowance.

         5. Tenant Responsibility for Excess Leasehold Improvement Costs.
Subject to Landlord's payment of the Leasehold Improvement Allowance, Tenant
shall be responsible for payment of all costs in connection with Leasehold
Improvements above and in excess of the maximum Leasehold Improvement Allowance
under Section 4 above of Forty-Five and 00/100 Dollars ($45.00) per net rentable
square foot, including, without limitation, professional fees, of Landlord's
architect, space planner, and other professionals for the review and preparation
of the Working Drawings and Specifications or any Tenant Change Orders or other
necessary change orders thereto; and all costs to complete the construction and
installation of the Leasehold Improvements, including, but not limited to, the
cost of all labor and materials supplied to construct, install and complete the
Leasehold Improvements, including the contractor's profit and overhead expenses.
Tenant shall pay to Landlord, upon substantial completion of the Leasehold
Improvements or at such earlier date as shall be requested by Landlord, the
amount by which the costs paid or incurred in connection with the Leasehold
Improvements or otherwise required to be paid hereunder by Tenant exceed the
maximum Leasehold Improvement Allowance, such amount to be indicated on a
statement delivered by Landlord to Tenant; provided, however, at Tenant's
election, Tenant shall be entitled to pay such excess Leasehold Improvement
costs by amending this Lease to provide for an increased Base Rental during the
initial Term of this Lease, such increased rental rate being subject to the
approval of Landlord which shall not be unreasonably withheld. Tenant, at
Tenant's request, shall be entitled to review copies of all invoices and
supporting documentation submitted by the architect, the contractor and others
in connection with the design and construction of the Leasehold Improvements.
Tenant agrees that in the event it fails to make any required payment required
in this Leasehold Improvements Work Letter in a timely manner, Landlord, in
addition to any and all other remedies to which Landlord is entitled at law or
in equity, shall have the same rights and remedies against Tenant as Landlord
would upon the occurrence of an Event of Default in the payment of Rent under
this Lease. Tenant, upon payment of all amounts due to Landlord for the
Leasehold Improvements, shall be entitled to assignment, to the extent
assignable, of all warranties or guarantees from the contractor which
constructed the Leasehold Improvements.

         6. Substantial Completion of Leasehold Improvements. The Leasehold
Improvements shall be deemed substantially completed ("Substantial Completion")
when, (i) Landlord obtains a temporary certificate of occupancy, or equivalent,
from the local

<PAGE>

governmental authority having jurisdiction thereof for the Premises, and (ii)
Landlord obtains a written statement signed by the construction manager (whether
an employee or agent of Landlord or a third party construction manager)
("Construction Manager") and from Landlord's architect, that, in the opinion of
the Construction Manager and Landlord's architect, the Leasehold Improvements
have been substantially completed in accordance with the Working Drawings and
Specifications, as modified by any Tenant Change Orders or other change orders,
except for punch list items which do not prevent in any material manner the
utilization of the Premises for the purposes for which they were intended. As
soon as Substantial Completion of the Leasehold Improvements has been achieved,
Landlord shall notify Tenant in writing of the date on which Substantial
Completion occurred. In the event Tenant, or Tenant's employees, agents or
contractors, cause construction of such improvements to be delayed, the date of
Substantial Completion shall be deemed to be the date that, in the opinion of
the Construction Manager, Substantial Completion would have occurred if such
delays had not taken place. Without limiting the foregoing, Tenant shall be
solely responsible for delays caused by Tenant's request for any changes in the
Working Drawings and Specifications, Tenant's request for long lead time

<PAGE>

items or Tenant's interference with the installation and construction of the
Leasehold Improvements, and such delays shall not cause a deferral of the
Commencement Date beyond what it otherwise would have been. Landlord shall cause
the contractor to cooperate in good faith with Tenant and Tenant's agents,
employees and contractors to permit them access to the Premises prior to
Substantial Completion of the Leasehold Improvements to the extent reasonably
required for the delivery and set-up of Tenant's furniture and equipment,
including Tenant's telecommunications equipment. Notwithstanding the foregoing,
in no event shall Tenant be entitled to cause delivery and set-up of such
furniture and equipment at a time or in a manner which might interfere with the
installation and construction of the Leasehold Improvements.

         7. Punch List Work. Tenant shall be entitled to prepare and deliver to
Landlord a list of punch list items ("Punch List") which need to be performed to
finally complete installation and construction of the Leasehold Improvements in
accordance with the Working Drawings and Specifications ("Punch List Work"). The
Punch List must be delivered to Landlord within thirty (30) days of the date of
Substantial Completion. Landlord shall cooperate with Tenant in good faith and
shall endeavor to complete, or cause to be completed, the Punch List Work as
soon as reasonably practicable following delivery of the Punch List as required
hereby. Landlord will cause all Punch List Work to be completed to Tenant's
reasonable satisfaction within thirty (30) days following the Commencement Date.

<PAGE>

                                    EXHIBIT C

                              RULES AND REGULATIONS

1. The sidewalk, entries and driveways of the Project shall not be obstructed by
Tenant, or its employees, agents, contractors or invitees or used by them for
any purpose other than ingress and egress to and from the Premises.

2. Tenant shall not place any objects, including antennas, outdoor furniture,
etc., in the parking areas, landscape areas or other areas outside of its
Premises or on the roof of the Project, except that Tenant shall be permitted to
install an antenna and radio in a location which is in reasonable proximity to
the Premises, subject to approval of such location by Landlord, such approval
not to be unreasonably withheld.

3. Except for seeing-eye dogs, no animals shall be allowed in the offices, halls
or corridors of the Building or the Premises.

4. Tenant shall not disturb the occupants of the Project or adjoining buildings
by the use of any radio or musical instrument or by the making of loud or
improper noises.

5. If Tenant desires telegraphic, telephonic or other electric connections in
the Premises, Landlord or its agent will direct the electrician as to where and
how the wires may be introduced; and, without such direction, no boring or
cutting of wires will be permitted. Any such installation or connection shall be
made at Tenant's expense.

6. Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except an air compressor and
otherwise as specifically approved in the Lease. The use of oil, gas or
inflammable liquids for heating, lighting or other purpose is expressly
prohibited. Explosives or other articles deemed extra hazardous shall not be
brought into the Project.

7. Parking any type of recreational vehicles is specifically prohibited on or
about the Project. Except for the overnight parking of operative vehicles, no
vehicle or any type shall be stored in the parking areas at any time. In the
event that a vehicle is disabled, it shall be removed within 48 hours. There
shall no "For Sale" or other advertising signs on or about any parked vehicle.
All vehicles shall be parked in the designated parking areas in conformity with
all signs and other markings. All parking will be open parking, and no reserved
parking, numbering or lettering of individual spaces will be permitted except as
specified by Landlord.

8. Tenant shall maintain the Premises free from rodents, insects and other
pests.

9. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs or who shall in any manner do any act in violation of the Rules
and Regulations of the Project.

<PAGE>

10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and cleanliness.
Landlord shall not be responsible to Tenant for any loss of property located on
the Project, the Building or the Premises, however occurring, or for any damage
to the personal property of Tenant, or Tenant's employees, agents, contractors
or invitees, by the janitors or any other employee or person.

11. Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating apparatus,
or any other service equipment affecting the Premises after Tenant becomes aware
of any such defects.

12. Tenant shall not permit storage outside the Premises, including without
limitation, outside storage of trucks and other vehicles, or dumping of water or
refuse or permit any harmful materials to be placed in any drainage system or
sanitary system in or about the Project, the Building or the Premises.

<PAGE>

13. All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for that
purpose.

14. No auction, public or private, will be permitted on the Premises, the
Building or the Project.

15. No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.

16. The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purposes other than those specified in
the Lease. No gaming devises shall be operated in the Premises.

17. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity for the electrical wiring in the Project and the Premises and the needs
of other tenants and shall not use more than safe capacity. Landlord's consent
to the installation of electric equipment shall not relieve Tenant from the
obligation not to use more electricity than such safe capacity.

18. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage other than that caused by or attributable to the gross
negligence or willful misconduct of Landlord, its employees or agents.

19. Tenant shall not install or operate on the Premises any machinery or
mechanical devise of a nature not directly related to Tenant's ordinary use of
the Premises and shall keep all such machinery free of vibration, noise and air
waves which may be transmitted beyond the Premises.

<PAGE>

                                   EXHIBIT D

                            SITE PLAN OF THE PROJECT

<PAGE>

                                   EXHIBIT E

                          LEGAL DESCRIPTION OF THE LAND

                          (TBC PLACE PARTNERS II, LLC)

All that tract or parcel of land lying and being in the City of Durham, Durham
County, North Carolina and being more particularly described as follows:

Beginning at an existing iron pin located on the western right of way line of
Stirrup Creek Drive, said iron pin being located North 16 degrees 52 minutes 46
seconds East, 224.84 feet from a pk nail located at the intersection of Stirrup
Creek Drive (60' public r/w) and Twin Creeks Drive (60' public r/w), thence
running along with the western right of way line of Stirrup Creek Drive the
following courses, along a curve to the right having a radius of 345.00 feet and
a length of 513.83 feet, a chord bearing and distance of South 48 degrees 53
minutes 19 seconds West, 467.64 feet to an existing iron pin located on the
northern right of way line of Stirrup Creek Drive, thence running along with the
northern right of way line of Stirrup Creek Drive North 88 degrees 26 minutes 40
seconds West, 329.89 feet to an existing iron pin, thence leaving the right of
way line of Stirrup Creek Drive North 9 degrees 45 minutes 33 seconds East,
598.99 feet to an existing iron pin, thence North 1 degree 23 minutes 13 seconds
East, 72.69 feet to an existing iron pin, thence North 2 degrees 15 minutes 41
seconds East, 71.64 feet to an existing iron pin, thence South 87 degrees 19
minutes 6 seconds East, 597.78 feet to an existing iron pin located on the
western right of way line of Stirrup Creek Drive, thence running along with the
western right of line of Stirrup Creek Drive South 5 degrees 15 minutes 43
seconds West, 62.24 feet to an existing iron pin, thence South 12 degrees 11
minutes 27 seconds East, 9.79 feet to an existing iron pin, thence South 87
degrees 19 minutes 6 seconds East, 19.10 feet to an existing iron pin, thence
South 6 degrees 13 minutes 17 seconds West, 337.63 feet to the point and place
of beginning, containing 10.001 acres (435,643 square feet).

Said tract is shown on that certain ALTA/ACSM Land Title Survey of Triangle
Business Center, Lot 102, for TBC Place Partners II, LLC and Triangle Park
(Raleigh) PIP Limited Partnership, prepared by DS Atlantic, bearing the seal and
certification of Thomas E. Teabo, North Carolina Registered Land Surveyor
L-3920, dated March 15, 2000, last revised August 2, 2000.

<PAGE>

                                   EXHIBIT F

                              SPECIAL STIPULATIONS

These Special Stipulations are incorporated into and made a part of that certain
Lease Agreement ("Lease") dated as of February 6, 2002, between TBC Place
Partners II, LLC, as Landlord, and Tripath Oncology, Inc., as Tenant. All terms
defined in the Lease shall have the same meanings when used in these Special
Stipulations. In the event of any conflict between these Special Stipulations
and the body of the Lease, these Special Stipulations shall control.

         1. Right of First Refusal for Currently Unleased Space in Building.
Tenant shall have a right of first refusal ("Right of First Refusal") with
respect to all or any part of 18,000 net rentable square feet of space within
the Building which is adjacent to the Premises and is not subject to a lease as
of the Date of this Lease, as shown on the floor plan for the Building attached
hereto as Exhibit F-1 and made a part hereof by this reference. In the event
Landlord receives an inquiry regarding the possible lease of all or any part of
such space from a prospective tenant of the Building, or from anyone acting on
such prospective tenant's behalf, Landlord shall give written notice of such
inquiry to Tenant. Tenant shall be entitled to lease such unleased space from
Landlord on the same terms and conditions as set forth in this Lease which are
then applicable to the Premises, including, without limitation, the then current
rate for Base Rent and for Operating Expenses; provided that Tenant shall not be
entitled to any free Rent (whether Base Rent or Additional Rent) with respect to
the lease of such space, the Leasehold Improvement Allowance with respect to
such space shall not exceed Twenty-Five and 00/100 Dollars ($25.00) per net
rentable square foot, and the Leasehold Improvement Allowance must be modified
so that it will be amortized in full prior to the scheduled expiration of the
Initial Lease Term. Tenant shall not be entitled to any Additional Leasehold
Improvement Allowance for any such unleased space. If Tenant desires to lease
all or any part of such unleased space, Tenant shall be required to notify
Landlord in writing within fifteen (15) days following the date written notice
is given by Landlord and to execute an amendment to this Lease providing for the
lease of such unleased space within thirty (30) days following the date written
notice is given by Landlord. Failure of Tenant to give Landlord written notice
within such fifteen (15) day period of Tenant's election to lease such unleased
space shall terminate Tenant's Right of First Refusal with respect to such
prospective tenant for such unleased space. If such prospective tenant does not
lease such unleased space, the Right of First Refusal for such space shall again
become in force and effect. If Tenant timely notifies Landlord of Tenant's
election to lease such unleased space under this Lease but Tenant fails to
execute an amendment to this Lease providing for the lease of such unleased
space within thirty (30) days following the date written notice is given by
Landlord, the Right of First Refusal provided in this Section 1 of the Special
Stipulations shall terminate and be of no further force or effect.<PAGE>
                                                                     EXHIBIT 4.1

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

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

                              CARMIKE CINEMAS, INC.

                   10 3/8% Senior Subordinated Notes due 2009

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

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

                                    INDENTURE

                          Dated as of January 31, 2002

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

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

                            WILMINGTON TRUST COMPANY,

                                     Trustee

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

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

<PAGE>

                             CROSS-REFERENCE TABLE*

         Provisions of Trust Indenture Act of 1939 and Indenture dated as
January 31, 2002 among Carmike Cinemas, Inc., a Delaware corporation, the
Guarantors party thereto and Wilmington Trust Company, as trustee:

<TABLE>
<CAPTION>
     Trust Indenture Act Section                                    Indenture Section
     <S>                                                            <C>
     310    (a)(1)...................................                      7.10
            (a)(2)...................................                      7.10
            (a)(3)...................................                      N.A.
            (a)(4)...................................                      N.A.
            (a)(5)...................................                      7.10
            (b)......................................                      7.10
            (c)......................................                      N.A.
     311    (a)......................................                      7.11
            (b)......................................                      7.11
            (c)......................................                      N.A.
     312    (a)......................................                      2.05
            (b)......................................                     12.03
            (c)......................................                     12.03
     313    (a)......................................                      7.06
            (b)(1)...................................                      N.A.
            (b)(2)...................................                      7.07
            (c)......................................                   7.06,12.02
            (d)......................................                      7.06
     314    (a)......................................                   4.03,12.02
            (b)......................................                      N.A.
            (c)(1)...................................                     12.04
            (c)(2)...................................                     12.04
            (c)(3)...................................                      N.A.
            (d)......................................                      N.A.
            (e)......................................                     12.05
            (f)......................................                      N.A.
     315    (a)......................................                      7.01
            (b)......................................                   7.05,12.02
            (c)......................................                      7.01
            (d)......................................                      7.01
            (e)......................................                      6.11
     316    (a) (last sentence)......................                      2.09
            (a)(1)(A)................................                      6.05
            (a)(1)(B)................................                      6.04
            (a)(2)...................................                      N.A.
            (b)......................................                      6.07
            (c)......................................                      2.12
     317    (a)(1)...................................                      6.08
            (a)(2)...................................                      6.09
            (b)......................................                      2.04
</TABLE>

                                        i

<PAGE>

<TABLE>
     <S>                                                                  <C>
     318    (a)......................................                     12.01
            (b)......................................                      N.A.
            (c)......................................                     12.01
</TABLE>

N.A. means not applicable.

*This Cross Reference Table is not part of the Indenture.

                                       ii

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                      ARTICLE 1
                                     DEFINITIONS AND INCORPORATION BY REFERENCE
<S>                   <C>                                                                                        <C>
Section 1.01          Definitions.................................................................................2
Section 1.02          Other Definitions..........................................................................17
Section 1.03          Incorporation by Reference of Trust Indenture Act..........................................18
Section 1.04          Rules of Construction......................................................................18

                                                      ARTICLE 2
                                                      THE NOTES

Section 2.01          Form and Dating............................................................................18
Section 2.02          Execution and Authentication...............................................................19
Section 2.03          Registrar and Paying Agent.................................................................19
Section 2.04          Paying Agent to Hold Money in Trust........................................................20
Section 2.05          Holder Lists...............................................................................20
Section 2.06          Transfer and Exchange......................................................................20
Section 2.07          Replacement Notes..........................................................................23
Section 2.08          Outstanding Notes..........................................................................23
Section 2.09          Treasury Notes.............................................................................24
Section 2.10          Temporary Notes............................................................................24
Section 2.11          Cancellation...............................................................................24
Section 2.12          Defaulted Interest.........................................................................24
Section 2.13          CUSIP Numbers..............................................................................25

                                                      ARTICLE 3
                                              REDEMPTION AND PREPAYMENT

Section 3.01          Notices to Trustee.........................................................................25
Section 3.02          Selection of Notes to Be Redeemed..........................................................25
Section 3.03          Notice of Redemption.......................................................................25
Section 3.04          Effect of Notice of Redemption.............................................................26
Section 3.05          Deposit of Redemption Price................................................................26
Section 3.06          Notes Redeemed in Part.....................................................................27
Section 3.07          Optional Redemption........................................................................27
Section 3.08          Mandatory Redemption.......................................................................27

                                                      ARTICLE 4
                                                      COVENANTS

Section 4.01          Payment of Notes...........................................................................28
Section 4.02          Maintenance of Office or Agency............................................................28
Section 4.03          Reports....................................................................................28
Section 4.04          Compliance Certificate.....................................................................29
Section 4.05          Taxes......................................................................................30
Section 4.06          Stay, Extension and Usury Laws.............................................................30
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                   <C>                                                                                        <C>
Section 4.07          Restricted Payments........................................................................30
Section 4.08          [Reserved.]................................................................................32
Section 4.09          Incurrence of Indebtedness and Issuance of Preferred Stock.................................32
Section 4.10          Fall-Away Event............................................................................35
Section 4.11          Transactions with Affiliates...............................................................35
Section 4.12          Corporate Existence........................................................................36
Section 4.13          Payments for Consent.......................................................................37
Section 4.14          Additional Note Guarantees.................................................................37
Section 4.15          Offer to Repurchase Upon Change of Control.................................................37
Section 4.16          No Senior Subordinated Debt................................................................38
Section 4.17          Limitation on Asset Sales..................................................................38
Section 4.18          Limitations on Dividend and Other Payment Restrictions Affecting Subsidiaries..............39

                                                      ARTICLE 5
                                                     SUCCESSORS

Section 5.01          Merger, Consolidation, or Sale of Assets...................................................39
Section 5.02          Successor Corporation Substituted..........................................................40

                                                      ARTICLE 6
                                                DEFAULTS AND REMEDIES

Section 6.01          Events of Default..........................................................................41
Section 6.02          Acceleration...............................................................................42
Section 6.03          Other Remedies.............................................................................43
Section 6.04          Waiver of Past Defaults....................................................................43
Section 6.05          Control by Majority........................................................................44
Section 6.06          Limitation on Suits........................................................................44
Section 6.07          Rights of Holders of Notes to Receive Payment..............................................44
Section 6.08          Collection Suit by Trustee.................................................................44
Section 6.09          Trustee May File Proofs of Claim...........................................................45
Section 6.10          Priorities.................................................................................45
Section 6.11          Undertaking for Costs......................................................................46

                                                      ARTICLE 7
                                                       TRUSTEE

Section 7.01          Duties of Trustee..........................................................................46
Section 7.02          Rights of Trustee..........................................................................47
Section 7.03          Individual Rights of Trustee...............................................................48
Section 7.04          Trustee's Disclaimer.......................................................................48
Section 7.05          Notice of Defaults.........................................................................48
Section 7.06          Reports by Trustee to Holders of the Notes.................................................48
Section 7.07          Compensation and Indemnity.................................................................49
Section 7.08          Replacement of Trustee.....................................................................50
Section 7.09          Successor Trustee by Merger, etc...........................................................50
Section 7.10          Eligibility; Disqualification..............................................................51
Section 7.11          Preferential Collection of Claims Against Company..........................................51
Section 7.12          Trustee's Application for Instructions from the Company....................................51
</TABLE>

                                       ii

<PAGE>

<TABLE>
                                                      ARTICLE 8
                                      LEGAL DEFEASANCE AND COVENANT DEFEASANCE
<S>                   <C>                                                                                        <C>
Section 8.01          Option to Effect Legal Defeasance or Covenant Defeasance...................................51
Section 8.02          Legal Defeasance and Discharge.............................................................51
Section 8.03          Covenant Defeasance........................................................................52
Section 8.04          Conditions to Legal or Covenant Defeasance.................................................52
Section 8.05          Deposited Money and Government Securities to be Held in
                      Trust; Other Miscellaneous Provisions......................................................53
Section 8.06          Repayment to Company.......................................................................54
Section 8.07          Reinstatement..............................................................................54

                                                      ARTICLE 9
                                          AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01          Without Consent of Holders of Notes........................................................55
Section 9.02          With Consent of Holders of Notes...........................................................55
Section 9.03          Compliance with Trust Indenture Act........................................................57
Section 9.04          Revocation and Effect of Consents..........................................................57
Section 9.05          Notation on or Exchange of Notes...........................................................57
Section 9.06          Trustee to Sign Amendments, etc............................................................57

                                                     ARTICLE 10
                                                    SUBORDINATION

Section 10.01         Agreement to Subordinate...................................................................57
Section 10.02         Liquidation; Dissolution; Bankruptcy.......................................................58
Section 10.03         Default on Designated Senior Debt..........................................................58
Section 10.04         Acceleration of Notes......................................................................59
Section 10.05         When Distribution Must Be Paid Over........................................................59
Section 10.06         Notice by Company..........................................................................59
Section 10.07         Subrogation................................................................................59
Section 10.08         Relative Rights............................................................................60
Section 10.09         Subordination May Not Be Impaired by Company...............................................60
Section 10.10         Distribution or Notice to Representative...................................................60
Section 10.11         Rights of Trustee and Paying Agent.........................................................60
Section 10.12         Authorization to Effect Subordination......................................................61
Section 10.13         Amendments.................................................................................61
Section 10.14         Trustee Not Fiduciary for Holders of Senior Indebtedness...................................61

                                                     ARTICLE 11
                                                   NOTE GUARANTEES

Section 11.01         Guarantee..................................................................................61
Section 11.02         Subordination of Note Guarantee............................................................62
Section 11.03         Limitation on Guarantor Liability..........................................................62
Section 11.04         Execution and Delivery of Note Guarantee...................................................63
</TABLE>

                                        iii

<PAGE>

<TABLE>
<S>                   <C>                                                                                        <C>
Section 11.05         Guarantors May Consolidate, etc., on Certain Terms.........................................63
Section 11.06         Releases Following Sale of Assets..........................................................64

                                                     ARTICLE 12
                                                    MISCELLANEOUS

Section 12.01         Trust Indenture Act Controls...............................................................64
Section 12.02         Notices....................................................................................64
Section 12.03         Communication by Holders of Notes with Other Holders of Notes..............................66
Section 12.04         Certificate and Opinion as to Conditions Precedent.........................................66
Section 12.05         Statements Required in Certificate or Opinion..............................................66
Section 12.06         Rules by Trustee and Agents................................................................66
Section 12.07         No Personal Liability of Directors, Officers, Employees and Stockholders...................66
Section 12.08         Governing Law..............................................................................67
Section 12.09         No Adverse Interpretation of Other Agreements..............................................67
Section 12.10         Successors.................................................................................67
Section 12.11         Severability...............................................................................67
Section 12.12         Counterpart Originals......................................................................67
Section 12.13         Table of Contents, Headings, etc...........................................................67
Section 12.14         Plan of Reorganization.....................................................................67
</TABLE>

                                    EXHIBITS

Exhibit A         FORM OF NOTE
Exhibit B         FORM OF NOTE GUARANTEE
Exhibit C         FORM OF SUPPLEMENTAL INDENTURE

                                    SCHEDULES

Schedule I        Schedule of Guarantors

                                       iv

<PAGE>

         INDENTURE dated as of January 31, 2002 among Carmike Cinemas, Inc., a
Delaware corporation (the "Company"), the Guarantors named on Schedule I hereto
(the "Original Guarantors") and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the "Trustee").

                                 R E C I T A L S

         WHEREAS, the Company and the Trustee previously entered into an
Indenture (the "Original Indenture") pursuant to which $200,000,000 aggregate
principal amount of 9 3/8% Senior Subordinated Notes due 2009 (the "Original
Notes") of the Company have been issued; and

         WHEREAS, the Company defaulted on an interest payment with respect to
the Original Notes; and the Company and the Original Guarantors subsequently
filed for reorganization under Chapter 11 of the United States Bankruptcy Code;
and

         WHEREAS, pursuant to the Amended Plan of Reorganization under Chapter
11 of the United States Bankruptcy Code for the Company and the Original
Guarantors (as it may be altered, amended or modified from time to time, the
"Plan of Reorganization"), which Plan of Reorganization was confirmed by Order
of the United States Bankruptcy Court for the District of Delaware on January 3,
2002 (the "Confirmation Order"), (i) on the effective date of the Plan of
Reorganization, $154,315,000 aggregate principal amount of Notes (as defined
below) are to be issued under this Indenture in exchange for $154,315,000
aggregate principal amount of the Original Notes and (ii) shares of the common
Capital Stock of the Company (the "Plan Exchanged Capital Stock") are to be
issued in exchange for the remaining $45,685,000 aggregate principal amount of
the Original Notes (the "Original Exchanged Notes"); and

         WHEREAS, pursuant to the Plan of Reorganization and the Confirmation
Order, the Company and the Original Guarantors have duly authorized this
Indenture and the execution and delivery hereof; and

         WHEREAS, this Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act that are required to be part of and to
govern indentures qualified under the Trust Indenture Act; and

         WHEREAS, pursuant to the Plan of Reorganization and the Confirmation
Order, all acts and things necessary have been done to make the Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid, binding and legal obligations of the Company,
and to make this Indenture a valid agreement of the Company and the Original
Guarantors in accordance with its terms.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         The Company, the Original Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 10 3/8% Senior Subordinated Notes due 2009 (the "Notes") issued
hereunder:

                                      A-1

<PAGE>

                                   ARTICLE 1
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

         Section 1.01  Definitions.

         "Acquired Debt" means, with respect to any specified Person:

         (a)      Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and

         (b)      Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control",
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling", "controlled by" and "under common control
with" shall have correlative meanings.

         "Agent" means any Registrar, Paying Agent or co-registrar.

         "Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary that apply to such transfer or exchange.

         "Asset Acquisition" means:

         (a)      any transaction pursuant to which any Person shall become a
Subsidiary of the Company or shall be consolidated or merged with the Company or
any Subsidiary of the Company; or

         (b)      the acquisition by the Company or any Subsidiary of the
Company of assets of any Person comprising a division, line of business or
theatre site of such Person.

         "Asset Sale" by any Person means any transfer, conveyance, sale, lease
or other disposition by such Person or any of its Restricted Subsidiaries
(including any issuance or sale by a Restricted Subsidiary of Capital Stock of
such Restricted Subsidiary, and including a consolidation or merger or other
sale of any such Restricted Subsidiary with, into or to another Person in a
transaction in which such Restricted Subsidiary ceases to be a Restricted
Subsidiary, but excluding a disposition by a Restricted Subsidiary of such
Person to such Person or a Wholly Owned Restricted Subsidiary of such Person
that is a Guarantor or by such Person to a Wholly Owned Restricted Subsidiary of
such Person that is a Guarantor) of (i) shares of Capital Stock

                                      A-2

<PAGE>

(other than directors' qualifying shares) or other ownership interests of a
Restricted Subsidiary of such Person, (ii) substantially all of the assets of
such Person or any of its Restricted Subsidiaries representing a division or
line of business or (iii) other assets or rights of such Person or any of its
Restricted Subsidiaries outside of the ordinary course of business.

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

         "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.

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

         "Business Day" means any day other than a Legal Holiday.

         "Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.

         "Capital Stock" means:

         (a)      in the case of a corporation, corporate stock;

         (b)      in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

         (c)      in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

         (d)      any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

         "Change of Control" means the occurrence of any of the following:

         (a)      the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Company and its Restricted Subsidiaries taken as a whole to any "person"
(as that term is used in Section 13(d)(3) of the Exchange Act) other than to the
Principal, a Related Party of the Principal, PIA, any of PIA's officers or
directors or any Affiliate of PIA or any of PIA's officers or directors
(collectively, the "Permitted Holders"); or

                                      A-3

<PAGE>

         (b)      the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Permitted Holders or any direct or
indirect Subsidiary of any Permitted Holder or any Permitted Group, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock
of the Company, measured by voting power rather than number of shares.

         "Company" means Carmike Cinemas, Inc., and any and all successors
thereto.

         "Consolidated EBITDA" means, for any period:

                  (i)      the aggregate of the TLCF of all Theatres operated by
         the Company and its Restricted Subsidiaries for such period less,

                  (ii)     the consolidated selling and general administrative
         expense (other than any compensation expense arising from grants to
         management of the Company and its Restricted Subsidiaries of Equity
         Interests in the Company) of the Company and its Restricted
         Subsidiaries for such period,

all as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP; provided that, Consolidated EBITDA shall
not include:

                  (x)      the TLCF of any Theatre accrued at any time when such
                           Theatre is not operated by the Company or any of its
                           Restricted Subsidiaries, including, without
                           limitation, the TLCF of any Theatre operated by any
                           Person that accrued prior to the date such Person
                           becomes a Restricted Subsidiary or is merged into or
                           consolidated with the Company or any of its
                           Restricted Subsidiaries or all or substantially all
                           of the property and assets of such Person are
                           acquired by the Company or any of its Restricted
                           Subsidiaries; and

                  (y)      the TLCF of any Theatre that is operated by any
                           Restricted Subsidiary to the extent that the
                           declaration or payment of dividends or similar
                           distributions by such Restricted Subsidiary of such
                           TLCF is not at the time permitted by the operation of
                           the terms of its charter or any agreement,
                           instrument, judgment, decree, order, statute, rule or
                           governmental regulation applicable to such Restricted
                           Subsidiary (other than any agreement or instrument
                           evidencing Indebtedness or Preferred Stock that (I)
                           is outstanding on the Issue Date or incurred or
                           issued thereafter in compliance with Section 4.09
                           hereof and (II) has not been created and does not
                           exist in violation of Section 4.18 hereof; provided
                           that the terms of any such agreement restricting the
                           declaration and payment of dividends or similar
                           distributions apply only in the event of a default
                           with respect to a financial covenant or a covenant
                           relating to payment (beyond any applicable period of
                           grace) contained in such agreement or instrument and
                           provided such terms are determined by the Company to
                           be customary in comparable financings and such
                           restrictions are determined by the

                                      A-4

<PAGE>

                           Company not to materially affect the Company's
                           ability to make principal or interest payments on the
                           Notes when due).

         "Consolidated Indebtedness" means, with respect to any Person as of any
date of determination, the sum, without duplication, of:

         (a)      the total amount of Indebtedness of such Person and its
Restricted Subsidiaries, plus

         (b)      the total amount of Indebtedness of any other Person, to the
extent that such Indebtedness has been Guaranteed by the referent Person or one
or more of its Restricted Subsidiaries, plus

         (c)      the aggregate liquidation value of all Disqualified Stock of
such Person and all Preferred Stock of Restricted Subsidiaries of such Person,
in each case, determined on a consolidated basis in accordance with GAAP.

         "Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, the sum of:

         (a)      the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization or original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations); and

         (b)      the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, and

         (c)      any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon);

excluding, however, any amount of such interest of any Restricted Subsidiary if
(i) neither the Company nor any other Restricted Subsidiary is obligated
therefor and (ii) the TLCF of Theatres operated by such Restricted Subsidiary is
excluded in the calculation of Consolidated EBITDA pursuant to clause (y) of the
definition thereof (but only in the same proportion as the TLCF of Theatres
operated by such Restricted Subsidiary is excluded from the calculation of
Consolidated EBITDA pursuant to clause (y) of the definition thereof), in each
case, on a consolidated basis and in accordance with GAAP.

         "Construction Indebtedness Amount" shall mean, as of any date, an
amount equal to the lesser of:

         (a)      $100.0 million; and

                                      A-5

<PAGE>

         (b)      the total Indebtedness of any Person and its Restricted
Subsidiaries outstanding on the last day of the most recently ended period of
the Company for which internal financial statements are available incurred in
connection with the construction or enhancement of Theatres or screens that, on
such date, are not yet open for business.

         "Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.

         "Credit Exit Facilities" means the credit facilities with General
Electric Capital Corporation and certain other banks and other institutional
lenders initially established on the Issue Date to provide for revolving credit
loans, swing line loans and letters of credit having an aggregate principal (or
face) amount not to exceed $50 million at any one time outstanding, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.

         "Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.

         "Debt Rating" shall mean the rating assigned to the Notes by Moody's or
S&P, as the case may be.

         "Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.

         "Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.

         "Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

         "Designated Senior Debt" means:

         (a)      any Indebtedness outstanding under Credit Exit Facilities; and

         (b)      after payment in full of all Obligations under Credit Exit
Facilities, any other Senior Debt permitted under this Indenture the principal
amount of which is $25.0 million or more and that has been designated by the
Company as "Designated Senior Debt".

         "Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the

                                      A-6

<PAGE>

Notes mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07 hereof.

         "Domestic Subsidiary" means, with respect to the Company, any
Subsidiary of the Company that:

         (a)      was formed under the laws of the United States of America, any
state thereof or the District of Columbia; or

         (b)      guarantees or otherwise becomes obligated with respect to any
Indebtedness of the Company or any Plan Trade Payables.

         "Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security or other
Indebtedness that is convertible into, or exchangeable for, or otherwise
constitutes the right to acquire, Capital Stock).

         "Equity Offering" means any underwritten offering of Qualified Capital
Stock of the Company.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Existing Capital Lease Obligations" means the Capital Lease
Obligations in respect of the Company's Theatres existing on the Issue Date,
including the Company's Theatres under construction in Fort Wayne, Indiana, and
Jacksonville, North Carolina on the Issue Date, each as in existence on the
Issue Date, less any amounts repaid in connection with Asset Sales, scheduled or
optional principal payments, cash flow sweeps or other repayments (no such
repaid amounts permitted to be reborrowed hereunder pursuant to clause (b) of
the second paragraph of Section 4.09).

         "Existing Indebtedness" means (i) the Plan Term Loan Bank Debt and (ii)
the Existing Capital Lease Obligations.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.

         "Global Notes" means, individually and collectively, each permanent
global Note substantially in the form of Exhibit A hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary and issued in accordance with Section
2.01 hereof.

                                      A-7

<PAGE>

         "Global Note Legend" means the legend set forth in Section 2.06(g),
which is required to be placed on all Global Notes issued under this Indenture.

         "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

         "Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

         "Guarantors" means each of:

         (a)      the Company's Domestic Restricted Subsidiaries; and

         (b)      any other subsidiary that executes a Note Guarantee in
accordance with the provisions of this Indenture;

and their respective successors and assigns. The Company's Domestic Restricted
Subsidiaries on the Issue Date consist of each of the Subsidiaries of the
Company named on Schedule I hereto.

         "Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:

         (a)      interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements; and

         (b)      other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.

         "Holder" means a Person in whose name a Note is registered.

         "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:

         (a)      in respect of borrowed money;

         (b)      evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof);

         (c)      in respect of banker's acceptances;

         (d)      representing Capital Lease Obligations;

         (e)      in respect of the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or

                                      A-8

<PAGE>

         (f)      representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP; provided, however, that, in
the case of the Company or any Subsidiary thereof, the term "Indebtedness" shall
not include the Plan Trade Payables. In addition, the term "Indebtedness"
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person.

         The amount of any Indebtedness outstanding as of any date shall be:

         (a)      the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and

         (b)      the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness;

         For purposes of calculating the amount of any Indebtedness hereunder,
(a) there shall be no double-counting of direct obligations, Guarantees and
reimbursement obligations for letters of credit; (b) the principal amount of any
Indebtedness of any Person arising by reason of such Person having granted or
assumed a Lien on its property to secure Indebtedness of others shall be the
lower of the fair market value of such property and the principal amount of such
Indebtedness outstanding (or committed to be advanced) at the time of
determination; (c) the principal amount of any Indebtedness of any Person
arising by reason of such Person having Guaranteed Indebtedness of others where
the amount of such Guarantee is limited to an amount less than the principal
amount of the Indebtedness Guaranteed, shall be such amount as so limited; (d)
the payment obligation for non-interest rate Hedging Obligations shall be equal
to (i) zero, to the extent the notional amount of the Hedging Obligation is not
greater than the reasonably anticipated requirements of the Company and its
Subsidiaries for the asset that is the subject of the Hedging Obligation, as
such needs are projected by management of the Company at the time the Hedging
Obligation is entered into or (ii) the notional amount of such Hedging
Obligation, to the extent such notional amount exceeds such reasonably
anticipated requirements.

         "Indenture" means this Indenture, as amended or supplemented from time
to time.

         "Independent Financial Advisor" means an accounting, appraisal,
investment banking firm or consultant to Persons engaged in the motion picture
exhibition and distribution business of nationally recognized standing that is,
in the judgment of the Board of Directors, qualified to perform the task for
which it has been engaged.

         "Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.

                                      A-9

<PAGE>

         "Investment Grade Status" exists as of a date and thereafter if at such
date either (i) the Debt Rating of Moody's is at least Baa3 (or the equivalent)
or higher; or (ii) the Debt Rating of S&P is at least BBB- (or the equivalent)
or higher.

         "Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP.

         "Issue Date" means January 31, 2002, the effective date of the Plan of
Reorganization.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

         "Leverage Ratio" means, as of any date, the ratio of:

         (a)      Consolidated Indebtedness (excluding any Construction
Indebtedness Amount and net of any cash and cash equivalents) of the Company on
such date to

         (b)      the aggregate amount of Consolidated EBITDA of the Company for
the most recently ended four full fiscal quarter period of the Company for which
internal financial statements are available (the "Reference Period").

         In addition to the foregoing, for purposes of this definition,
"Consolidated EBITDA" shall be calculated on a pro forma basis after giving
effect to:

         (a)      the incurrence of the Indebtedness or the issuance of the
Disqualified Stock or other Preferred Stock (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
or issuance (and the application of the proceeds therefrom) or repayment of
other Indebtedness or Preferred Stock, other than the incurrence or repayment of
Indebtedness for ordinary working capital purposes, at any time subsequent to
the beginning of the Reference Period and on or prior to the date of
determination, as if such incurrence (and the application of the proceeds
thereof), or the repayment, as the case may be, occurred on the first day of the
Reference Period;

         (b)      any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Subsidiaries (including any
Person that becomes a Restricted Subsidiary as a result of such Asset
Acquisition) incurring, assuming or otherwise becoming liable for or issuing
Indebtedness or Preferred Stock) at any time on or subsequent to the first day
of the Reference Period and on or prior to the date of determination, as if such
Asset Sale or Asset Acquisition (including the incurrence, assumption or
liability for any such Indebtedness or Preferred Stock and also

                                      A-10

<PAGE>

including any Consolidated EBITDA associated with such Asset Acquisition) had
occurred on the first day of the Reference Period; and

         (c)      any Theatre that was permanently closed for business at any
time on or subsequent to the first day of the Reference Period and on or prior
to the date of determination as if such Theatre was closed on the first day of
the Reference Period.

         "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
securing Indebtedness, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

         "Moody's" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.

         "Net Cash Proceeds" from any Asset Sale by any Person means cash or
readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of assumption by the acquiree of
Indebtedness or other obligations relating to such properties or assets)
therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Sale, (ii) all payments made by such Person or
its Restricted Subsidiaries on any Indebtedness which is secured by such assets
in accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Sale or by applicable law, be repaid out of the proceeds from such
Asset Sale, (iii) all distributions and other payments made to minority interest
holders in Restricted Subsidiaries of such Person or joint ventures as a result
of such Asset Sale and (iv) appropriate amounts to be provided by such Person or
any Restricted Subsidiary thereof, as the case may be, as a reserve in
accordance with GAAP against any liabilities associated with such assets and
retained by such Person or any Restricted Subsidiary thereof, as the case may
be, after such Asset Sale, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Sale, in each case as determined by the Board of
Directors, in its reasonable good faith judgment evidenced by a resolution of
the Board of Directors filed with the Trustee; provided, however, that any
reduction in such reserve following the consummation of such Asset Sale will be
treated for all purposes of this Indenture and the Notes as a new Asset Sale at
the time of such reduction with Net Cash Proceeds equal to the amount of such
reduction.

         "Note Guarantee" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.

         "Notes" has the meaning assigned to such term in the Recitals to this
Indenture.

                                      A-11

<PAGE>

         "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

         "Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Officers of such Person, one
of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of such Person, that
meets the requirements of Section 12.05 hereof.

         "Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.

         "Original Exchanged Notes" has the meaning assigned to such term in the
Recitals to this Indenture.

         "Original Guarantors" means each of the Subsidiaries of the Company
named on Schedule I hereto, which constitute all of the Company's Domestic
Restricted Subsidiaries on the Issue Date.

         "Original Indenture" has the meaning assigned to such term in the
Recitals to this Indenture.

         "Original Notes" means the 9 3/8% Senior Subordinated Notes due 2009 of
the Company issued pursuant to the Original Indenture.

         "Participant" means, with respect to the Depositary, a Person who has
an account with the Depositary.

         "Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) by
virtue of the Stockholders' Agreement, as the same may be amended, modified or
supplemented from time to time, provided that no single Person (other than the
Principal and the Principal's Related Parties) Beneficially Owns (together with
its Affiliates) more of the Voting Stock of the Company that is Beneficially
Owned by such group of investors than is then collectively Beneficially Owned by
the Principal and the Principal's Related Parties in the aggregate.

         "Permitted Junior Securities" means:

         (a)      Equity Interests in the Company or any Guarantor; or

                                      A-12

<PAGE>

         (b)      debt securities that are subordinated to all Senior Debt and
any debt securities issued in exchange for Senior Debt to substantially the same
extent as, or to a greater extent than, the Notes and the Note Guarantees are
subordinated to Senior Debt under this Indenture.

         "Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:

         (a)      the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest thereon and
the amount of all customary expenses and premiums incurred in connection
therewith);

         (b)      such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;

         (c)      if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and

         (d)      such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.

         "Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).

         "PIA" means Goldman, Sachs & Co. and its Affiliates.

         "Plan Exchanged Capital Stock" has the meaning assigned to such term in
the Recitals to this Indenture.

         "Plan of Reorganization" has the meaning assigned to such term in the
Recitals to this Indenture.

         "Plan Term Loan Bank Debt" means term loan bank Indebtedness of the
Company owing to certain banks in an aggregate principal amount of
$264,977,449.00 million on the Issue Date issued pursuant to Section 4.4(b) of
the Plan of Reorganization in exchange for Allowed Class 4 Claims (as defined in
the Plan of Reorganization), as in existence on the Issue Date, less any

                                      A-13

<PAGE>

amounts repaid in connection with Asset Sales, scheduled or optional principal
payments, cash flow sweeps or other repayments (no such repaid amounts permitted
to be reborrowed hereunder pursuant to clause (b) of the second paragraph of
Section 4.09).

         "Plan Trade Payables" means the unsecured trade payables provided for
pursuant to Section 4.5(b) of the Plan of Reorganization in satisfaction of
Allowed Class 5 Claims (as defined in the Plan of Reorganization) and bearing
interest at the annual rate of 9.4%, each as in existence on the Issue Date,
less any amounts repaid in connection with refinancing of the Plan Term Loan
Bank Debt, with Asset Sales, scheduled or optional principal payments, cash flow
sweeps or other repayments (no such repaid amounts permitted to be reborrowed
hereunder pursuant to clause (b) or (d) of the second paragraph of Section
4.09).

         "Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.

         "Principal" means Michael W. Patrick.

         "Qualified Capital Stock" means any Capital Stock that is not
Disqualified Stock.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, executed by the Company for the benefit
of certain holders of the common Capital Stock of the Company pursuant to
Section 5.9 of the Plan of Reorganization, as in effect on the Issue Date.

         "Related Party" means:

         (a)      any controlling stockholder, 80% (or more) owned Subsidiary,
or immediate family member (in the case of an individual) of the Principal; or

(b) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other Persons
referred to in the immediately preceding clause (a).

         "Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.

         "Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Department of the Trustee (or any successor
group of the Trustee) with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.

         "Restricted Subsidiary" means each Subsidiary of the Company.

         "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor to the rating agency business thereof.

                                      A-14

<PAGE>

         "SEC" means the Securities and Exchange Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Senior Debt" means:

         (a)      all Indebtedness of the Company or any Guarantor outstanding
under the Credit Exit Facilities and the Plan Term Loan Bank Debt and all
Hedging Obligations with respect thereto;

         (b)      any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is on a parity with or subordinated in right of payment to the Notes or any Note
Guarantee; and

         (c)      all Obligations with respect to the items listed in the
preceding clauses (a) and (b).

         Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:

         (a)      any liability for federal, state, local or other taxes owed or
owing by the Company;

         (b)      any Indebtedness of the Company to any of its Subsidiaries or
other Affiliates;

         (c)      the Plan Trade Payables or any trade payables; or

         (d)      the portion of any Indebtedness that is incurred in violation
of this Indenture.

         "Senior Guarantees" means the Guarantees by the Guarantors of
Obligations under the Senior Debt.

         "Significant Restricted Subsidiary" means any Restricted Subsidiary
that would be a "Significant Subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the Issue Date.

         "Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date.

         "Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

         "Stockholders' Agreement" means the Stockholders' Agreement, dated as
of the Issue Date, among the Company and holders of the common Capital Stock of
the Company on the Issue Date, entered into pursuant to Section 5.8 of the Plan
of Reorganization, as in effect on the Issue Date.

                                      A-15

<PAGE>

         "Subsidiary" means, with respect to any specified Person:

         (a)      any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and

         (b)      any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).

         "Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.

         "Theatre" means any building and related improvements or complex of
buildings and related improvements containing one or more movie screens and
operated as a movie theatre by the Company or any Restricted Subsidiary.

         "Theatre Level Cash Flow" or "TLCF" means, with respect to any Theatre,
for any period:

         (a)      the revenues of the Company and its Subsidiaries generated for
such period by such Theatre, less

         (b)      the costs and expenses of operations (including, without
limitation, film exhibition costs, concession costs, salaries and wages,
facility leases, advertising, utilities and other theatre operating costs but
excluding depreciation and amortization and general and administrative expenses)
of the Company and its Subsidiaries allocable to such Theatre for such period,
less

         (c)      if the Company and its Subsidiaries do not own such Theatre
and the lease in respect thereof is a Capital Lease Obligation, all interest and
principal amounts on such Capital Lease Obligations for such period,

all determined on a consolidated basis (i) with any volume discounts or similar
pricing matters associated with film exhibition costs, advertising or other
expenses incurred as a cost of operating such Theatre and one or more other
Theatres being allocated equitably on a pro rata basis among all such Theatres
and (ii) otherwise in conformity with GAAP.

         "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA; provided, however, that in the event such Act is
further amended after such date, "TIA" means, to the extent required by any such
amendment, such Act as so further amended.

                                      A-16

<PAGE>

         "Total Tangible Assets" means the total consolidated assets of the
Company and its Restricted Subsidiaries, less total consolidated intangible
assets of the Company and its Restricted Subsidiaries, in each case, as shown on
the most recent balance sheet of the Company that is as of a date after the
Issue Date.

         "Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

         "Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

         "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

         (a)      the sum of the products obtained by multiplying (i) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in respect
thereof, by (ii) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

         (b)      the then outstanding principal amount of such Indebtedness.

         "Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.

         Section 1.02  Other Definitions.

<TABLE>
<CAPTION>
                                       Term                                    Defined in
                                                                                 Section
         <S>                                                                   <C>
         "Affiliate Transaction".........................................          4.11
         "Authentication Order"..........................................          2.02
         "Change of Control Offer".......................................          4.15
         "Change of Control Payment".....................................          4.15
         "Change of Control Payment Date"................................          4.15
         "Covenant Defeasance"...........................................          8.03
         "DTC"...........................................................          2.03
         "Event of Default"..............................................          6.01
         "Fall-Away Event"...............................................          4.10
         "incur".........................................................          4.09
         "Legal Defeasance"..............................................          8.02
         "Payment Default"...............................................          6.01
         "Paying Agent"..................................................          2.03
         "Permitted Debt"................................................          4.09
         "Registrar".....................................................          2.03
         "Restricted Payments"...........................................          4.07
</TABLE>

                                      A-17

<PAGE>

         Section 1.03      Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "indenture securities" means the Notes;

         "indenture security Holder" means a Holder of a Note;

         "indenture to be qualified" means this Indenture;

         "indenture trustee" or "institutional trustee" means the Trustee; and

         "obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.

         All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.

         Section 1.04  Rules of Construction. Unless the context otherwise
requires:

         (a)      a term has the meaning assigned to it;

         (b)      an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;

         (c)      "or" is not exclusive;

         (d)      words in the singular include the plural, and in the plural
include the singular;

         (e)      provisions apply to successive events and transactions; and

         (f)      references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.

                                    ARTICLE 2
                                    THE NOTES

         Section 2.01      Form and Dating.

         (a)      General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.

                                      A-18

<PAGE>

         The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.

         (b)      Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with written
instructions given by the Holder thereof as required by Section 2.06 hereof.

         Section 2.02      Execution and Authentication. Two Officers shall sign
the Notes for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Notes and may be in facsimile form.

         If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

         A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

         The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.07 hereof.

         The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

         Section 2.03      Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency where Notes may
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term

                                      A-19

<PAGE>

"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.

         The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.

         The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

         Section 2.04      Paying Agent to Hold Money in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal, premium or
interest on the Notes, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.

         Section 2.05      Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of all Holders and shall otherwise comply with TIA
ss. 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company shall otherwise comply with
TIA ss. 312(a).

         Section 2.06      Transfer and Exchange.

         (a)      Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary or (ii) the Company, in its sole discretion,
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee. Upon the occurrence of either of the

                                      A-20

<PAGE>

preceding events in clause (i) or (ii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.

         (b)      Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures.

         (c)      Transfer or Exchange of Beneficial Interests for Definitive
Notes. If any holder of a beneficial interest in a Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, (i) the transferor of such beneficial interest must
deliver to the Registrar (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above; and (ii) upon
satisfaction of such conditions, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar in writing through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.

         (d)      Transfer and Exchange of Definitive Notes for Beneficial
Interests. A Holder of a Definitive Note may exchange such Note for a beneficial
interest in a Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Global Note at
any time. Upon receipt of a written request for such an exchange or transfer,
the Trustee shall cancel the applicable Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the Global Notes.

         (e)      Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing.

                                      A-21

<PAGE>

         (f)      [Reserved.]

         (g)      Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:

                  "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
         INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
         BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
         PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
         SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF
         THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
         IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
         NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
         SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
         TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
         CARMIKE CINEMAS, INC."

         (h)      Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a Global Note have been exchanged for Definitive
Notes or a Global Note has been redeemed, repurchased or canceled in whole and
not in part, each such Global Note shall be returned to or retained and canceled
by the Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction.

         (i)      General Provisions Relating to Transfers and Exchanges.

                  (i)      To permit registrations of transfers and exchanges,
         the Company shall execute and the Trustee shall authenticate Global
         Notes and Definitive Notes upon the Company's order or at the
         Registrar's request.

                  (ii)     No service charge shall be made to a holder of a
         beneficial interest in a Global Note or to a Holder of a Definitive
         Note for any registration of transfer or exchange, but the Company may
         require payment of a sum sufficient to cover any transfer tax or
         similar governmental charge payable in connection therewith (other than
         any such transfer taxes or similar governmental charge payable upon
         exchange or transfer pursuant to Sections 2.10, 3.06, 4.15 and 9.05
         hereof).

                  (iii)    The Registrar shall not be required to register the
         transfer of or exchange any Note selected for redemption in whole or in
         part, except the unredeemed portion of any Note being redeemed in part.

                  (iv)     All Global Notes and Definitive Notes issued upon any
         registration of transfer or exchange of Global Notes or Definitive
         Notes shall be the valid obligations of the Company, evidencing the
         same debt, and entitled to the same benefits under this

                                      A-22

<PAGE>

         Indenture, as the Global Notes or Definitive Notes surrendered upon
         such registration of transfer or exchange.

                  (v)      The Company shall not be required (A) to issue, to
         register the transfer of or to exchange any Notes during a period
         beginning at the opening of 15 days before the day of any selection of
         Notes for redemption under Section 3.02 hereof and ending at the close
         of business on the day of selection, (B) to register the transfer of or
         to exchange any Note so selected for redemption in whole or in part,
         except the unredeemed portion of any Note being redeemed in part or (C)
         to register the transfer of or to exchange a Note between a record date
         and the next succeeding Interest Payment Date.

                  (vi)     Prior to the due presentment for the registration of
         a transfer of any Note, the Trustee, any Agent and the Company may deem
         and treat the Person in whose name any Note is registered as the
         absolute owner of such Note for the purpose of receiving payment of
         principal of and interest on such Notes and for all other purposes, and
         none of the Trustee, any Agent or the Company shall be affected by
         notice to the contrary.

                  (vii)    The Trustee shall authenticate Global Notes and
         Definitive Notes in accordance with the provisions of Section 2.02
         hereof.

                  (viii)   All certifications, certificates and Opinions of
         Counsel required to be submitted to the Registrar pursuant to this
         Section 2.06 to effect a registration of transfer or exchange may be
         submitted by facsimile.

         Section 2.07      Replacement Notes. If any mutilated Note is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note, the Company
shall issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.

         Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

         Section 2.08      Outstanding Notes. The Notes outstanding at any time
are all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.08 as not outstanding. Except as set forth
in Section 2.09 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note; however, Notes held by
the Company or a Subsidiary of the Company shall not be deemed to be outstanding
for purposes of Section 3.07(a) hereof.

                                      A-23

<PAGE>

         If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.

         If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

         If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

         Section 2.09      Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded.

         Section 2.10      Temporary Notes. Until certificates representing
Notes are ready for delivery, the Company may prepare and the Trustee, upon
receipt of an Authentication Order, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of certificated Notes but may
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.

         Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

         Section 2.11      Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall dispose of such canceled Notes in its customary manner
(subject to the record retention requirement of the Exchange Act). The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.

         Section 2.12      Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15

                                      A-24

<PAGE>

days before the special record date, the Company (or, upon the written request
of the Company, the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.

         Section 2.13      CUSIP Numbers. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE 3
                            REDEMPTION AND PREPAYMENT

         Section 3.01      Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 45 days (unless a shorter period shall be
acceptable to the Trustee) but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the clause of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.

         Section 3.02      Selection of Notes to Be Redeemed. If less than all
of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee shall select the Notes to be redeemed or purchased among the
Holders of the Notes in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not so listed, on a pro rata basis, by lot or in accordance with any
other method the Trustee considers fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.

         The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

         Section 3.03      Notice of Redemption. At least 30 days but not more
than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address.

                                      A-25

<PAGE>

         The notice shall identify the Notes (including applicable CUSIP
Numbers) to be redeemed and shall state:

         (a)      the redemption date;

         (b)      the redemption price;

         (c)      if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;

         (d)      the name and address of the Paying Agent;

         (e)      that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;

         (f)      that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;

         (g)      the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and

         (h)      that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.

         Section 3.04      Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.

         Section 3.05      Deposit of Redemption Price. On or prior to 10:00
a.m., New York City time, on the redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed.

         If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related

                                      A-26

<PAGE>

interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the redemption date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01 hereof.

         Section 3.06      Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.

         Section 3.07      Optional Redemption.

         (a)      Except as set forth in clause (b) of this Section 3.07, the
Notes shall not be redeemable at the Company's option pursuant to this Section
3.07 prior to February 1, 2004. After February 1, 2004, the Company may redeem
all or a part of the Notes upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest to the applicable redemption date,
if redeemed during the twelve-month period beginning on February 1 of the years
indicated below:

<TABLE>
<CAPTION>
       Year                                      Percentage
       <S>                                       <C>
       2004................................       104.688%
       2005................................       103.125%
       2006................................       101.563%
       2007 and thereafter.................       100.000%
</TABLE>

         (b)      Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to February 1, 2002, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture at a redemption price equal to 109.375% of the principal
amount thereof plus accrued and unpaid interest to the redemption date, with the
net cash proceeds of one or more Equity Offerings; provided that at least 65% of
the aggregate principal amount of Notes issued under this Indenture remain
outstanding immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and that such redemption must occur
within 60 days of the date of the closing of such Equity Offering.

         (c)      Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.

         Section 3.08      Mandatory Redemption. The Company shall not be
required to make mandatory redemption payments with respect to the Notes.

                                      A-27

<PAGE>

                                    ARTICLE 4
                                    COVENANTS

         Section 4.01      Payment of Notes. The Company shall pay or cause to
be paid the principal of, premium, if any, and interest on the Notes on the
dates and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.

         The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.

         Section 4.02      Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. 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, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.

         The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

         The Company hereby designates the Trustee's drop agent, Computershare
Trust Company of New York, Wall Street Plaza, 88 Pine Street, 19th Floor, New
York, New York 10005 as one such office or agency of the Company in accordance
with Section 2.03 hereof.

         Section 4.03      Reports.

         (a)      Whether or not required by the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes and to the
Trustee, within the time periods specified in the SEC's rules and regulations
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information

                                      A-28

<PAGE>

only, a report on the annual financial statements by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports. The Company shall at all times comply with TIA ss. 314(a). Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).

         (b)      Whether or not required by the SEC, the Company shall file a
copy of all of the information and reports referred to in clauses (a)(i) and
(a)(ii) above with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request.

         (c)      For so long as any Notes remain outstanding, the Company and
the Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

         Section 4.04      Compliance Certificate.

         (a)      The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.

         (b)      So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

                                      A-29

<PAGE>

         (c)      The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon, but in any event within
five Business Days, of any Officer becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

         Section 4.05      Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

         Section 4.06      Stay, Extension and Usury Laws. The Company and each
of the Guarantors covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company and each of the Guarantors
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

         Section 4.07      Restricted Payments. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly:

         (a)      declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or to
the Company);

         (b)      purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company; or

         (c)      make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Note Guarantees, except a payment of interest
or principal at the Stated Maturity thereof (all such payments and other actions
set forth in clauses (a) through (c) above being collectively referred to as
"Restricted Payments"),

unless, at the time of and after giving effect to such Restricted Payment:

         (a)      no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and

                                      A-30

<PAGE>

         (b)      the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness (other than Permitted Debt)
pursuant to the Leverage Ratio test set forth in the first paragraph of Section
4.09 hereof; and

         (c)      such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made after the Issue Date, shall not
exceed, at the date of determination, the sum of:

                  (i)      an amount equal to 100% of the Company's Consolidated
         EBITDA since the Issue Date to the end of the Company's most recently
         ended full fiscal quarter for which internal financial statements are
         available, taken as a single accounting period, plus the interest
         component of all payments associated with Capital Lease Obligations
         included in Consolidated Interest Expense for such period to the extent
         deducted in computing Consolidated EBITDA for such period, less the
         product of 2.0 times the Company's Consolidated Interest Expense since
         the Issue Date to the end of the Company's most recently ended full
         fiscal quarter for which internal financial statements are available,
         taken as a single accounting period, plus

                  (ii)     an amount equal to 100% of the aggregate net
         proceeds, including the fair market value of property other than cash,
         received by the Company from the sale of Equity Interests since the
         Issue Date other than (A) sales of Disqualified Stock, (B) Equity
         Interests sold to any of the Company's Subsidiaries, and (C) any Equity
         Interests sold or otherwise issued pursuant to the Plan of
         Reorganization (including, without limitation, the Plan Exchanged
         Capital Stock issued in exchange for the Original Exchanged Notes),
         plus

                  (iii)    the greater of (i) $60.0 million and (ii) 10% of
         Total Tangible Assets of the Company and its consolidated Subsidiaries
         as determined in accordance with GAAP as of the date of the most
         recently prepared internal balance sheet of the Company that is as of a
         date after the Issue Date.

         So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:

         (a)      the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture;

         (b)      the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any Guarantor or
of any Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of the
Company) of, Equity Interests of the Company (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c)(ii) of the preceding paragraph;

                                      A-31

<PAGE>

         (c)      the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;

         (d)      the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Subsidiary of the
Company held by any employee, director or consultant of the Company (or any of
its Subsidiaries) pursuant to any equity subscription agreement or stock option
or similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not exceed
$2.5 million in any twelve-month period;

         (e)      repurchases of Equity Interests deemed to occur upon exercise
of Equity Interests if such Equity Interests represent a portion of the exercise
price of such warrants, options or rights; provided that the portion of such
exercise price represented by such Equity Interests so exercised shall be
excluded from the aggregate net proceeds from the sale of Equity Interests upon
exercise of such warrants, options or rights; and

         (f)      the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of the Company or any of its Restricted
Subsidiaries or any class or series of Preferred Stock of Restricted
Subsidiaries of the Company, in each case, issued in accordance with Section
4.09 hereof.

         The amount of all Restricted Payments, other than cash, shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant shall be determined by the Board of Directors in good faith whose
resolution with respect thereto shall be delivered to the Trustee.

         Section 4.08      [Reserved.]

         Section 4.09      Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly, or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and the Company shall not issue any Disqualified Stock and shall
not permit any of its Restricted Subsidiaries to issue any shares of Preferred
Stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock, and the Company's
Restricted Subsidiaries may incur Indebtedness or issue shares of Preferred
Stock, if the Company's Leverage Ratio at the time of incurrence of such
Indebtedness or the issuance of such Disqualified Stock or Preferred Stock,
after giving pro forma effect to such incurrence or issuance as set forth in the
definition of "Leverage Ratio", would have been no greater than 7.0 to 1.

         The first paragraph of this Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness, issuances of Preferred
Stock, or acquisitions of Indebtedness, Disqualified Stock or Preferred Stock
(collectively, "Permitted Debt"):

                                      A-32

<PAGE>

         (a)      the incurrence by the Company and any of its Restricted
Subsidiaries of additional Indebtedness and letters of credit pursuant to the
Credit Exit Facilities (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) in an aggregate principal amount at any one
time outstanding under this clause (a) not to exceed $50.0 million;

         (b)      to the extent the Company or any Restricted Subsidiary is
deemed to incur any Existing Indebtedness or Plan Trade Payables on the Issue
Date, the incurrence by the Company and its Restricted Subsidiaries of such
Existing Indebtedness or Plan Trade Payables on the Issue Date;

         (c)      the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes to be issued on the Issue Date (including
the Note Guarantees);

         (d)      the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace, Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to be
incurred under the first paragraph of this Section 4.09 or clauses (b), (c) or
(d) of this paragraph;

         (e)      the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that:

                  (i)      if the Company or any Guarantor is the obligor on
         such Indebtedness, such Indebtedness must be expressly subordinated to
         the prior payment in full in cash of all Obligations with respect to
         the Notes, in the case of the Company, or the Note Guarantee, in the
         case of a Guarantor; and

                  (ii)     (A) any subsequent issuance or transfer of Equity
         Interests that results in any such Indebtedness being held by a Person
         other than the Company or a Restricted Subsidiary thereof and (B) any
         sale or other transfer of any such Indebtedness to a Person that is not
         either the Company or a Restricted Subsidiary thereof shall be deemed,
         in each case, to constitute an incurrence of such Indebtedness by the
         Company or such Restricted Subsidiary, as the case may be, that was not
         permitted by this clause (e);

         (f)      the issuance by the Company or any of its Restricted
Subsidiaries of Preferred Stock that is held solely by the Company and/or any of
its Restricted Subsidiaries; provided, however, that:

                  (i)       if the Company or any Guarantor is the issuer of
         such Preferred Stock, such Preferred Stock (A) must not be mandatorily
         redeemable or redeemable at the option of the issuer thereof or the
         holder thereof, in whole or in part, on or prior to the date that is 91
         days after the date on which the Notes mature; (B) if such Preferred
         Stock is exchangeable into Indebtedness, such Indebtedness shall not be
         Permitted Debt unless it meets the criteria of one or more of the
         categories of Permitted Debt described in clauses (a) through (j); and

                                      A-33

<PAGE>

                  (ii)     (A) any subsequent issuance or transfer of Equity
         Interests that results in any such Preferred Stock being held by a
         Person other than the Company or a Restricted Subsidiary thereof and
         (B) any sale or other transfer of any such Preferred Stock to a Person
         that is not either the Company or a Restricted Subsidiary thereof shall
         be deemed, in each case, to constitute an issuance of such Preferred
         Stock by the Company or such Restricted Subsidiary, as the case may be,
         that was not permitted by this clause (f);

         (g)      the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any Indebtedness the incurrence of
which was not prohibited by the terms of this Indenture or currency exchange
risk other than solely for speculative purposes;

         (h)      Indebtedness not constituting Indebtedness for borrowed money
in respect of performance bonds, reimbursement obligations with respect to
letters of credit, bankers' acceptances, completion guarantees and surety or
appeal bonds provided by the Company or any of its Restricted Subsidiaries in
the ordinary course of their business or Indebtedness not constituting
Indebtedness for borrowed money with respect to reimbursement type obligations
regarding workers' compensation claims;

         (i)      Indebtedness not constituting Indebtedness for borrowed money
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in each case incurred in
connection with the disposition of any business assets or Subsidiaries of the
Company (other than guarantees of Indebtedness or other obligations incurred by
any Person acquiring all or any portion of such business assets or Restricted
Subsidiaries of the Company for the purpose of financing such acquisition) in a
principal amount not to exceed the gross proceeds, including non-cash proceeds,
actually received by the Company or any of its Restricted Subsidiaries in
connection with such disposition; provided, however, that such Indebtedness is
not reflected on the balance sheet of the Company or any Restricted Subsidiary
(contingent obligations referred to in a footnote to financial statements and
not otherwise reflected on the balance sheet will not be deemed to be reflected
on such balance sheet for purposes of this clause (i)); and

         (j)      Capital Lease Obligations incurred after the Issue Date in an
aggregate principal amount at any one time outstanding under this clause (j) not
to exceed (i) if such time is prior to January 1, 2004, $50 million, (ii) if
such time is after December 31, 2003 and prior to January 1, 2006, $75 million
or (iii) if such time is after December 31, 2005, $100 million.

         For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (a) through (j) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company shall be permitted to classify such item of Indebtedness on
the date of its incurrence, or later reclassify all or a portion thereof, in any
manner that complies with this Section 4.09. Indebtedness under Credit Exit
Facilities outstanding on the Issue Date shall be deemed to have been incurred
on such date in reliance on the exception provided by clause (a) of the
definition of Permitted Debt.

                                      A-34

<PAGE>

         Section 4.10      Fall-Away Event. The Company's and its Restricted
Subsidiaries' obligations to comply with the provisions of Sections 4.07, 4.09,
4.11, 4.16, 4.17 and 4.18 and Section 5.01 hereof will terminate if and when the
Notes achieve Investment Grade Status (a "Fall-Away Event"); provided, however,
that, if the Notes thereafter cease to be of Investment Grade Status, the
Company's and its Restricted Subsidiaries' obligations to comply with such
provisions shall automatically be reinstated as to events occurring after the
date the Notes again are not of Investment Grade Status (with all amounts
specified in clause (c) of Section 4.07 to be calculated at any time thereafter
as if the Fall-Away Event had not occurred), subject to the terms, conditions
and obligations set forth in this Indenture.

         Section 4.11      Transactions with Affiliates. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, make any payment to,
or sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate in any single transaction or series
of related transactions involving aggregate payments or consideration in excess
of $5.0 million (each, an "Affiliate Transaction"), unless:

         (a)      such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and

         (b)      the Company delivers to the Trustee with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this covenant and that such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board of
Directors.

         The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:

         (a)      reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder;

         (b)      any obligations of the Company under any employment agreement,
non-competition or confidentiality agreement with any officer of the Company, as
in effect on the Issue Date (provided that each amendment of any of the
foregoing agreements shall be subject to the limitations of this Section 4.11);

         (c)      Restricted Payments that are permitted by the provisions of
Section 4.07 hereof;

         (d)      any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by the
Board of Directors;

         (e)      loans or advances to employees in the ordinary course of
business of the Company or any of its Restricted Subsidiaries consistent with
the past practices;

                                      A-35

<PAGE>

         (f)      payments by the Company or any of its Restricted Subsidiaries
to PIA or its Affiliates made for any financial advisory, financing,
underwriting or placement services or in respect of other investment banking or
similar services, including, without limitation, in connection with acquisitions
or divestitures, which payments are approved by a majority of the Board of
Directors in good faith;

         (g)      transactions in which the Company or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a letter from an
Independent Financial Advisor stating that such transaction is fair to the
Company or such Restricted Subsidiary from a financial point of view or that it
is on terms that are no less favorable than those that might reasonably have
been obtained in a comparable transaction on an arms-length basis from a person
that is not an Affiliate;

         (h)      the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of, the
Stockholders' Agreement or the Registration Rights Agreement to which it is a
party as of the Issue Date and any similar agreements that it may enter into
thereafter; provided, however, that the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of obligations under any future
amendment to any such existing agreement or under any similar agreement entered
into after the Issue Date shall only be permitted by this clause (h) to the
extent that the terms, taken as a whole, of any such amendment or new agreement
are not otherwise disadvantageous to the Holders in any material respect;

         (i)      transactions with customers, clients, suppliers, or purchasers
or sellers of goods or services, in each case in the ordinary course of business
and otherwise in compliance with the terms of this Indenture which are fair to
the Company or its Restricted Subsidiaries, in the reasonable determination of
the Board of Directors or the management thereof, or are on terms, taken as a
whole, at least as favorable as might reasonably have been obtained at such time
from a person that is not an Affiliate;

         (j)      any agreement as in effect since the Issue Date or any
amendment thereto (so long as any such amendment, taken as a whole, is not
disadvantageous to the Holders in any material respect) or any transaction
contemplated thereby; and

         (k)      any purchase of Capital Stock (other than Disqualified Stock)
of the Company by Affiliates thereof.

         Section 4.12      Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company

                                      A-36
<PAGE>

and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse
in any material respect to the Holders of the Notes.

         Section 4.13      Payments for Consent. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
pay or cause to be paid any consideration to or for the benefit of any Holder of
Notes for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Notes unless such consideration is
offered to be paid and is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.

         Section 4.14      Additional Note Guarantees. If the Company or any of
its Subsidiaries acquires or creates another Subsidiary after the Issue Date,
then the Company shall cause that newly acquired or created Subsidiary, prior
to, or contemporaneously with the acquisition or creation of such Subsidiary, to
become a Guarantor and execute a supplemental indenture and deliver an Opinion
of Counsel to the Trustee, which Opinion of Counsel shall state that the
execution of such supplemental indenture is authorized or permitted by this
Indenture and that such Subsidiary has become a Guarantor hereunder. The form of
such Supplemental Indenture is attached as Exhibit C hereto.

         Section 4.15      Offer to Repurchase Upon Change of Control.

         (a)      Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest to the date of purchase (the
"Change of Control Payment"). Within 10 days following any Change of Control,
the Company shall mail a notice to each Holder stating: (i) that the Change of
Control Offer is being made pursuant to this Section 4.15 and that all Notes
tendered will be accepted for payment; (ii) the purchase price and the purchase
date, which shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the "Change of Control Payment Date"); (iii) that
any Note not tendered will continue to accrue interest; (iv) that, unless the
Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (v) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that Holders
will be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (vii) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and

                                      A-37
<PAGE>

regulations thereunder to the extent such laws and regulations are applicable in
connection with the repurchase of Notes in connection with a Change of Control.
To the extent that the provisions of any Securities laws or regulations conflict
with this Section 4.15, the Company shall comply with the applicable Securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.15 by virtue of such conflict.

         (b)      On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to each Holder of Notes the
Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered by such Holder, if any; provided, that each such new Note shall be
in a principal amount of $1,000 or an integral multiple thereof. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.

         (c)      Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
shall either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.15.

         (d)      Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.15 and Sections 3.01 through 3.06 hereof and all other
provisions of this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.

         Section 4.16      No Senior Subordinated Debt. The Company shall not
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of the Company and senior in any respect in right of payment to the Notes.
No Guarantor shall incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
the Senior Debt of such Guarantor and senior in any respect in right of payment
to such Guarantor's Note Guarantee.

         Section 4.17      Limitation on Asset Sales. The Company shall not, and
shall not permit any Restricted Subsidiary to, make any Asset Sale in one or
more related transactions unless: (i) the Company or the Restricted Subsidiary,
as the case may be, receives consideration for such disposition at least equal
to the fair market value for the assets sold or disposed of as determined by the
Board of Directors in good faith; and (ii) all Net Cash Proceeds of such Asset
Sale are applied in a manner permitted under the terms of the instruments or
agreements governing the Senior Debt then outstanding.

                                      A-38
<PAGE>

         Section 4.18      Limitations on Dividend and Other Payment
Restrictions Affecting Subsidiaries. The Company shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrances or restriction on the
ability of any Restricted Subsidiary of the Company (i) to pay dividends (in
cash or otherwise) or make any other distributions in respect of its Capital
Stock or pay any Indebtedness or other obligation owed to the Company or any
other Restricted Subsidiary; (ii) to make any Investment in or to the Company or
any other Restricted Subsidiary; or (iii) to transfer any of its property or
assets to the Company or any other Restricted Subsidiary. Notwithstanding the
foregoing, the Company may, and may permit any Restricted Subsidiary to, suffer
to exist any such encumbrances or restriction (a) pursuant to any agreement or
instrument governing the Credit Exit Facilities or the Plan Term Loan Bank Debt;
(b) pursuant to an agreement relating to any Indebtedness incurred by a Person
(other than a Restricted Subsidiary of the Company existing on the Issue Date or
any Restricted Subsidiary carrying on any of the businesses of any such
Restricted Subsidiary) prior to the date on which such Person became a
Restricted Subsidiary of the Company and outstanding on such date and not
incurred in anticipation of becoming a Restricted Subsidiary, which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person so acquired; (c) pursuant to an agreement
effecting a renewal, refunding or extension of Debt incurred pursuant to an
agreement referred to in clause (a) or (b) above, provided, however, that the
provisions contained in such renewal, refunding or extension agreement relating
to such encumbrance or restriction are no more restrictive in any material
respect than the provisions contained in the agreement the subject thereof, as
determined in good faith by the Board of Directors; (d) in the case of clause
(iii) above, contained in any security agreement (including a capital lease)
securing Indebtedness of a Restricted Subsidiary otherwise permitted under this
Indenture, but only to the extent such restrictions restrict the transfer of the
property subject to such security agreement; (e) in the case of clause (iii)
above, constituting a customary nonassignment provision entered into in the
ordinary course of business consistent with past practices in a lease or other
contract to the extent such provision restricts the transfer or subletting or
licensing of any such lease or the assignment of rights under any such contract;
(f) with respect to a Restricted Subsidiary of the Company imposed pursuant to
an agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted Subsidiary,
provided that consummation of such transaction would not result in an Event of
Default or a Default, that such restriction terminates if such transaction is
closed or abandoned and that the closing or abandonment of such transaction
occurs within one year of the date such agreement was entered into; or (g) to
the extent such encumbrance or restriction is the result of applicable corporate
law or regulation relating to the payment of dividends or distributions.

                                   ARTICLE 5
                                   SUCCESSORS

         Section 5.01      Merger, Consolidation, or Sale of Assets. The Company
may not, directly or indirectly: (i) consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation); or (ii) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries taken as a
whole, in one or more related transactions, to another Person; unless:

                                      A-39
<PAGE>

         (a)      either: (i) the Company is the surviving corporation; or (ii)
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;

         (b)      the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and this Indenture pursuant to
agreements reasonably satisfactory to the Trustee;

         (c)      immediately after such transaction no Default or Event of
Default exists;

         (d)      the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made will
either:

                  (i)      on the date of such transaction after giving pro
         forma effect thereto and any related financing transactions as if the
         same had occurred at the beginning of the applicable four-quarter
         period, be permitted to incur at least $1.00 of additional Indebtedness
         (other than Permitted Debt) pursuant to the Leverage Ratio test set
         forth in the first paragraph of Section 4.09 hereof; or

                  (ii)     have a Leverage Ratio less than the Leverage Ratio of
         the Company immediately prior to such transaction; and

         (e)      the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that such merger, consolidation,
or sale of assets complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with.

         Notwithstanding the foregoing clauses (b) and (d), (i) any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company or to another Restricted
Subsidiary and (ii) the Company may merge with an Affiliate of the Company
organized solely for the purposes of reorganizing the Company in another
jurisdiction in the United States to realize tax or other benefits.

         In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 shall not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Wholly Owned Restricted Subsidiaries.

         Section 5.02      Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such

                                      A-40
<PAGE>

consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.

                                   ARTICLE 6
                              DEFAULTS AND REMEDIES

         Section 6.01      Events of Default.  An "Event of Default" occurs if:

         (a)      the Company defaults in the payment when due of interest on
the Notes whether or not prohibited by Article 10 hereof and such default
continues for a period of 30 days;

         (b)      the Company defaults in the payment when due of principal of
or premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase) or
otherwise whether or not prohibited by Article 10 hereof;

         (c)      the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Sections 4.07, 4.09, 4.15, 4.17, 4.18 or
5.01 hereof;

         (d)      the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or other
agreement in this Indenture or the Notes for 60 days after notice to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding voting as a single
class;

         (e)      a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the Issue Date, which default (i) is caused by a failure to pay
principal of, or interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period, if any, provided in such Indebtedness on the
date of such default (a "Payment Default") or (ii) results in the acceleration
of such Indebtedness prior to the express maturity thereof and, in each case,
the principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness which has so had a Payment Default or the maturity
of which has been so accelerated, aggregates $20.0 million or more;

         (f)      a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against the Company
or any of its Significant Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Restricted
Subsidiary and such judgment or judgments remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 consecutive days,
provided that the aggregate of all such undischarged judgments exceeds $10.0
million;

                                      A-41
<PAGE>

         (g)      the Company or any of its Significant Restricted Subsidiaries
or any group of Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Restricted Subsidiary pursuant to or within the meaning of
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,

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

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

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

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

                  (ii)     appoints a custodian of the Company or any of its
         Significant Restricted Subsidiaries or any group of Restricted
         Subsidiaries that, taken as a whole, would constitute a Significant
         Restricted Subsidiary or for all or substantially all of the property
         of the Company or any of its Significant Restricted Subsidiaries or any
         group of Restricted Subsidiaries that, taken as a whole, would
         constitute a Significant Restricted Subsidiary; or

                  (iii)    orders the liquidation of the Company or any of its
         Significant Restricted Subsidiaries or any group of Restricted
         Subsidiaries that, taken as a whole, would constitute a Significant
         Restricted Subsidiary;

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

         (i)      except as permitted by this Indenture, any Note Guarantee of
any Significant Restricted Subsidiary is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor that is a Significant Restricted Subsidiary, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee.

         Section 6.02      Acceleration. If any Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 hereof with
respect to the Company, any Significant Restricted Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Restricted Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately. Upon any such declaration, the
Notes shall become due and payable immediately. Notwithstanding the foregoing,
if an Event of Default specified in

                                      A-42
<PAGE>

clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company, any
of its Significant Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Restricted
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if (i)
the rescission would not conflict with any judgment or decree, (ii) if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived and (iii) the Company shall have paid to the Trustee all amounts due
under Section 7.07 hereof.

         If an Event of Default occurs on or after February 1, 2004 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to February 1,
2004 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on February 1 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):

<TABLE>
<CAPTION>
             Year                                        Percentage
             <S>                                         <C>
             2001.................................        107.500%
             2002.................................        106.563%
             2003.................................        105.625%
</TABLE>

         Section 6.03      Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

         Section 6.04      Waiver of Past Defaults. Subject to Section 6.02,
holders of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, premium and, if any, or interest on, the Notes (including in

                                      A-43
<PAGE>

connection with an offer to purchase); provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.

         Section 6.05      Control by Majority. Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
Notwithstanding any provision to the contrary in this Indenture, the Trustee
shall not be obligated to take any action with respect to the provisions of the
last paragraph of Section 6.02 unless directed to do so pursuant to this Section
6.05.

         Section 6.06      Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture or the Notes only if:

         (a)      the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

         (b)      the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;

         (c)      such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;

         (d)      the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and

         (e)      during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.

         A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

         Section 6.07      Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium, if any, and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

         Section 6.08      Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal

                                      A-44
<PAGE>

of, premium, if any, and interest remaining unpaid on the Notes and interest on
overdue principal and, to the extent lawful, interest and such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amount due the Trustee under Section 7.07
hereof.

         Section 6.09      Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

         Section 6.10      Priorities. If the Trustee collects any money
pursuant to this Article 6, it shall pay out the money in the following order:

                  First: to the Trustee, its agents and attorneys for amounts
         due under Section 7.07 hereof, including payment of all compensation,
         expense and liabilities incurred, and all advances made, by the Trustee
         and the costs and expenses of collection;

                  Second: to Holders of Notes for amounts due and unpaid on the
         Notes for principal, premium, if any, and interest, ratably, without
         preference or priority of any kind, according to the amounts due and
         payable on the Notes for principal, premium and interest, respectively;
         and

                  Third: to the Company or to such party as a court of competent
         jurisdiction shall direct by a final, non-appealable judgment or order.

         The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

                                      A-45
<PAGE>

         Section 6.11      Undertaking for Costs. 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 a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.

                                    ARTICLE 7
                                     TRUSTEE

         Section 7.01      Duties of Trustee.

         (a)      If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

         (b)      Except during the continuance of an Event of Default:

                  (i)      the duties of the Trustee shall be determined solely
         by the express provisions of this Indenture and the Trustee need
         perform only those duties that are specifically set forth in this
         Indenture and no others, and no implied covenants or obligations shall
         be read into this Indenture against the Trustee; and

                  (ii)     in the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements
         of this Indenture. However, the Trustee shall examine the
         certificates and opinions to determine whether or not they conform to
         the requirements of this Indenture (but need not confirm or
         investigate the accuracy of mathematical calculations or other facts
         stated therein).

         (c)      The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                  (i)      this paragraph does not limit the effect of paragraph
         (b) of this Section 7.01;

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

                  (iii)    the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.05 hereof.

                                      A-46

<PAGE>

         (d)      Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.

         (e)      No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, including, without limitation, the provisions of
Section 6.05 hereof, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.

         (f)      The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

         Section 7.02      Rights of Trustee.

         (a)      The Trustee may conclusively rely upon any document believed
(whether in its original or facsimile form) by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.

         (b)      Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel of its own selection or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.

         (c)      The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.

         (d)      The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.

         (e)      Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

         (f)      The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.

         (g)      The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture.

                                      A-47

<PAGE>

         (h)      The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.

         (i)      The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.

         (j)      The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty except to the extent expressly
provided herein, and the Trustee shall not be answerable for other than
negligence or willful misconduct.

         Section 7.03      Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.

         Section 7.04      Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.

         Section 7.05      Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.

         Section 7.06      Reports by Trustee to Holders of the Notes. Within 60
days after each May 15 beginning with the May 15 following the Issue Date, and
for so long as Notes remain outstanding, the Trustee shall mail to the Holders
of the Notes a brief report dated as of such reporting date that complies with
TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has occurred within
the twelve months preceding the reporting date, no report need be transmitted).

                                      A-48
<PAGE>

The Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA ss. 313(c).

         A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange or delisted therefrom.

         Section 7.07      Compensation and Indemnity. The Company shall pay to
the Trustee as agreed upon in writing from time to time reasonable compensation
for its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.

         The Company shall fully indemnify the Trustee against any and all
losses, claims, damages, liabilities or expenses (including taxes other than
taxes based on the income of the Trustee) incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or willful misconduct. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.

         The obligations of the Company under this Section 7.07 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture.

         To secure the Company's payment obligations in this Section 12.04, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

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

                                      A-49

<PAGE>

         Section 7.08      Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.

         The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:

         (a)      the Trustee fails to comply with Section 7.10 hereof;

         (b)      the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;

         (c)      a custodian or public officer takes charge of the Trustee or
its property; or

         (d)      the Trustee becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.

         If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee and its agents and counsel hereunder have been paid and subject to the
Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.

         Section 7.09      Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.

                                      A-50

<PAGE>

         Section 7.10      Eligibility; Disqualification. There shall at all
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition.

         This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).

         Section 7.11      Preferential Collection of Claims Against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated therein.

         Section 7.12      Trustee's Application for Instructions from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

                                    ARTICLE 8
                    LEGAL DEFEASANCE AND COVENANT DEFEASANCE

         Section 8.01      Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

         Section 8.02      Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Company shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from its obligations
with respect to all outstanding Notes on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in clauses (a) and
(b) below, and to have satisfied all its other obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights

                                      A-51

<PAGE>

of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium and interest on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (d) this Article 8. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.

         Section 8.03      Covenant Defeasance. Upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, the
Company and the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from its obligations under the
covenants contained in Sections 4.07, 4.09, 4.11, 4.13, 4.14, 4.15, 4.16, 4.17
and 4.18 hereof and clause (d) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(f) hereof shall not constitute Events of Default.

         Section 8.04      Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.02 or
8.03 hereof to the outstanding Notes:

         In order to exercise either Legal Defeasance or Covenant Defeasance:

         (a)      the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and interest on
the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be;

         (b)      in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, there has been a change in the

                                      A-52

<PAGE>

applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;

         (c)      in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;

         (d)      no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;

         (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

         (f)      the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;

         (g)      the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company;

         (h)      the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and

         (i)      the Company shall have delivered to the Trustee the written
consent of the holders of each series of Senior Debt or their designated
representative.

         Section 8.05      Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as

                                      A-53

<PAGE>

the Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and interest, but such money
need not be segregated from other funds except to the extent required by law.

         The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

         Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

         Section 8.06      Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium or interest on any Note and remaining
unclaimed for two years after such principal, premium or interest has become due
and payable shall be paid to the Company on its written request or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

         Section 8.07      Reinstatement. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.

                                      A-54
<PAGE>

                                    ARTICLE 9
                        AMENDMENT, SUPPLEMENT AND WAIVER

         Section 9.01      Without Consent of Holders of Notes. Notwithstanding
Section 9.02 hereof, the Company, the Guarantors and the Trustee may amend or
supplement this Indenture, the Note Guarantees or the Notes without the consent
of any Holder of a Note:

         (a)      to cure any ambiguity, defect or inconsistency;

         (b)      to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof (including
the related definitions) in a manner that does not materially adversely affect
any Holder;

         (c)      to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to the
Company pursuant to Article 5 or Article 11 hereof;

         (d)      to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under this Indenture of any Holder of the Notes;

         (e)      to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or

         (f)      to allow any Guarantor to execute a supplemental indenture
and/or a Note Guarantee with respect to the Notes.

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
12.04 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this 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 such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

         Section 9.02      With Consent of Holders of Notes. Except as provided
below in this Section 9.02, the Company, the Guarantors and the Trustee may
amend or supplement this Indenture (including Section 4.15 hereof), the Note
Guarantees and the Notes with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, if any, or interest on the
Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture, the Note
Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which
Notes are considered to be "outstanding" for purposes of this Section 9.02.

                                      A-55

<PAGE>

         Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 12.04 hereof, the Trustee
shall join with the Company in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture directly 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 amended or supplemental Indenture.

         It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement, or waiver, but it shall be sufficient if such consent approves the
substance thereof.

         After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

         (a)      reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;

         (b)      reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the redemption of
the Notes except as provided above with respect to Section 4.15 hereof;

         (c)      reduce the rate of or change the time for payment of interest,
including default interest, on any Note;

         (d)      waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);

         (e)      make any Note payable in money other than that stated in the
Notes;

         (f)      make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;

         (g)      waive a redemption payment with respect to any Note other than
a payment required under Section 4.15 hereof;

                                      A-56

<PAGE>

         (h)      make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or

         (i)      release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture, except in accordance with the terms of this
Indenture.

         In addition, without the consent of at least 75% in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, such Notes), no waiver or
amendment to this Indenture may make any change in the provisions of Article 10
hereof that adversely affects the rights of any Holder of Notes.

         Section 9.03      Compliance with Trust Indenture Act. Every amendment
or supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental Indenture that complies with the TIA as then in effect.

         Section 9.04      Revocation and Effect of Consents. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

         Section 9.05      Notation on or Exchange of Notes. The Trustee may
place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.

         Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

         Section 9.06      Trustee to Sign Amendments, etc. The Trustee shall
sign any amended or supplemental Indenture authorized pursuant to this Article 9
if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.01 hereof) shall be fully protected in relying upon,
in addition to the documents required by Section 12.04 hereof, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.

                                   ARTICLE 10
                                  SUBORDINATION

         Section 10.01     Agreement to Subordinate. The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of

                                      A-57

<PAGE>

payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.

         Section 10.02     Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshaling of the Company's assets and liabilities:

                  (i)      holders of Senior Debt shall be entitled to receive
         payment in full of all Obligations due in respect of such Senior Debt
         (including interest after the commencement of any such proceeding at
         the rate specified in the applicable Senior Debt) before Holders of the
         Notes shall be entitled to receive any payment with respect to the
         Notes (except that Holders may receive (A) Permitted Junior Securities
         and (B) payments and other distributions made from any defeasance trust
         created pursuant to Section 8.01 hereof); and

                  (ii)     until all Obligations with respect to Senior Debt (as
         provided in clause (i) above) are paid in full, any distribution to
         which Holders would be entitled but for this Article 10 shall be made
         to holders of Senior Debt (except that Holders of Notes may receive (A)
         Permitted Junior Securities and (B) payments and other distributions
         made from any defeasance trust created pursuant to Section 8.01
         hereof), as their interests may appear.

         Section 10.03     Default on Designated Senior Debt.

         (a)      The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (A) Permitted Junior Securities and (B) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal and other Obligations with respect to the Senior
Debt have been paid in full if:

                  (i)      a default in the payment of any principal or other
         Obligations with respect to Designated Senior Debt occurs and is
         continuing beyond any applicable grace period in the agreement,
         indenture or other document governing such Designated Senior Debt; or

                  (ii)     a default, other than a payment default, on
         Designated Senior Debt occurs and is continuing that then permits
         holders of the Designated Senior Debt to accelerate its maturity and
         the Trustee receives a notice of the default (a "Payment Blockage
         Notice") from a Person who may give it pursuant to Section 10.10
         hereof. If the Trustee receives any such Payment Blockage Notice, no
         subsequent Payment Blockage Notice shall be effective for purposes of
         this Section unless and until 360 days shall have elapsed since the
         effectiveness of the immediately prior Payment Blockage Notice. No
         nonpayment

                                      A-58

<PAGE>

         default that existed or was continuing on the date of delivery of any
         Payment Blockage Notice to the Trustee shall be, or be made, the basis
         for a subsequent Payment Blockage Notice unless such default shall have
         been waived for a period of not less than 180 days.

         (b)      The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:

                  (i)      the date upon which the default is cured or waived,
         or

                  (ii)     in the case of a default referred to in clause (ii)
         of Section 10.03(a) hereof, 179 days pass after the applicable Payment
         Blockage Notice is received if the maturity of such Designated Senior
         Debt has not been accelerated,

if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.

         Section 10.04     Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration.

         Section 10.05     When Distribution Must Be Paid Over. In the event
that the Trustee or any Holder receives any payment of any Obligations with
respect to the Notes at a time when the Trustee or such Holder, as applicable,
has been notified (as a result of the receipt of a Payment Blockage Notice or
otherwise) that such payment is prohibited by this Article 10, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.

         With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.

         Section 10.06     Notice by Company. The Company shall promptly notify
the Trustee and the Paying Agent of any facts known to the Company that would
cause a payment of any Obligations with respect to the Notes to violate this
Article 10, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Debt as provided in this Article 10.

         Section 10.07     Subrogation. After all Senior Debt is paid in full
and until the Notes are paid in full, Holders of Notes shall be subrogated
(equally and ratably with all other

                                      A-59

<PAGE>

Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.

         Section 10.08     Relative Rights. This Article 10 defines the relative
rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture
shall:

                  (i)      impair, as between the Company and Holders of Notes,
         the obligation of the Company, which is absolute and unconditional, to
         pay principal of and interest on the Notes in accordance with their
         terms;

                  (ii)     affect the relative rights of Holders of Notes and
         creditors of the Company other than their rights in relation to holders
         of Senior Debt; or

                  (iii)    prevent the Trustee or any Holder of Notes from
         exercising its available remedies upon a Default or Event of Default,
         subject to the rights of holders and owners of Senior Debt to receive
         distributions and payments otherwise payable to Holders of Notes.

         If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

         Section 10.09     Subordination May Not Be Impaired by Company. No
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.

         Section 10.10     Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.

         Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.

         Section 10.11     Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 10 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 or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would

                                      A-60

<PAGE>

cause the payment of any Obligations with respect to the Notes to violate this
Article 10. Only the Company or a Representative may give the notice. Nothing in
this Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.

         The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

         Section 10.12     Authorization to Effect Subordination. Each Holder of
Notes, by the 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 as provided in this Article 10, and appoints the
Trustee to act as such Holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 6.09 hereof at least 30
days before the expiration of the time to file such claim, the Representatives
are hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Notes.

         Section 10.13     Amendments. The provisions of this Article 10 shall
not be amended or modified without the written consent of the holders of all
Senior Debt. In addition, without the consent of at least 75% in principal
amount of the Notes then outstanding (including such consents obtained in
connection with a tender offer or exchange offer for, or purchase of, such
Notes), no waiver or amendment to this Indenture may make any change in the
provisions of this Article 10 that adversely affects the rights of any Holder of
Notes.

         Section 10.14     Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise. With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall be
read into this Indenture against the Trustee.

                                   ARTICLE 11
                                 NOTE GUARANTEES

         Section 11.01     Guarantee. Subject to this Article 11, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the

                                      A-61

<PAGE>

extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.

         The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.

         If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.

         Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.

         Section 11.02 Subordination of Note Guarantee. The Obligations of
each Guarantor under its Note Guarantee pursuant to this Article 11 shall be
junior and subordinated to the Senior Guarantee of such Guarantor on the same
basis as the Notes are junior and subordinated to Senior Debt of the Company.
For the purposes of the foregoing sentence, the Trustee and the Holders shall
have the right to receive and/or retain payments by any of the Guarantors only
at such times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof.

         Section 11.03     Limitation on Guarantor Liability. Each Guarantor,
and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent

                                      A-62

<PAGE>

Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11, result
in the obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.

         Section 11.04     Execution and Delivery of Note Guarantee. To evidence
its Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby
agrees that a notation of such Note Guarantee substantially in the form included
in Exhibit B shall be endorsed by an Officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor by its President or one of its Vice
Presidents.

         Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.

         If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.

         The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.

         In the event that the Company creates or acquires any new Subsidiaries
subsequent to the Issue Date, if required by Section 4.14 hereof, the Company
shall cause such Subsidiaries to execute supplemental indentures to this
Indenture and Note Guarantees in accordance with Section 4.14 hereof and this
Article 11, to the extent applicable.

         Section 11.05     Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06 hereof, no Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person (other than the Company or another Guarantor)
whether or not affiliated with such Guarantor unless:

         (a)      subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such Guarantor, pursuant
to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture and the Note Guarantee on the terms set
forth herein or therein; and

         (b)      immediately after giving effect to such transaction, no
Default or Event of Default exists.

         In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and

                                      A-63

<PAGE>

satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the Issue Date.

         Except as set forth in Article 4 and Article 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.

         Section 11.06     Releases Following Sale of Assets. In the event of a
sale or other disposition of all of the assets of any Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all the
Capital Stock of any Guarantor, in each case to a Person that is not (either
before or after giving effect to such transactions) a Subsidiary of the Company,
then such Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its Note Guarantee. Upon
delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale, other disposition or
designation was made by the Company in accordance with the provisions of this
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its obligations under its Note
Guarantee.

         Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.

                                   ARTICLE 12
                                  MISCELLANEOUS

         Section 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA
ss.318(c), the imposed duties shall control.

         Section 12.02 Notices. Any notice or communication by the Company , any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:

                                      A-64
<PAGE>

         If to the Company and/or any Guarantor:

                  Carmike Cinemas, Inc.
                  1301 First Avenue
                  Columbus, Georgia  31902-2109
                  Telecopier No.: (706) 576-3419
                  Attention:  President

         With a copy to:

                  Troutman Sanders LLP
                  Bank of America Plaza
                  600 Peachtree Street, N.E.
                  Suite 5200
                  Atlanta, Georgia  30308
                  Telecopier No.: (404) 885-3900
                  Attention:  Terry C. Bridges

         If to the Trustee:

                  Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE 19890
                  Telecopier No.: (302) 636-4140
                  Attention:  Corporate Trust Administration

         The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.

         All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

         Any notice or communication to a Holder shall be mailed by first class
mail, postage prepaid, certified or registered mail, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA ss. 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

                                      A-65

<PAGE>

         If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

         Section 12.03     Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).

         Section 12.04     Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

         (a)      an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and

         (b)      an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, such action
is authorized or permitted by this Indenture and that all such conditions
precedent and covenants have been satisfied.

         Section 12.05     Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss. 314(e) and shall
include:

         (a)      a statement that the Person making such certificate or opinion
has read such covenant or condition;

         (b)      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;

         (c)      a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and

         (d)      a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.

         Section 12.06     Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.

         Section 12.07     No Personal Liability of Directors, Officers,
Employees and Stockholders. No past, present or future director, officer,
employee, incorporator or stockholder of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or the Guarantors
under the Notes, the Note Guarantees or this Indenture or for any

                                      A-66

<PAGE>

claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.

         Section 12.08     Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

         Section 12.09     No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

         Section 12.10     Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors. All agreements of each Guarantor in
this Indenture shall bind its successors, except as otherwise provided in
Section 11.06 hereof.

         Section 12.11     Severability. In case any provision in this Indenture
or in the Notes 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 12.12     Counterpart Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.

         Section 12.13     Table of Contents, Headings, etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.

         Section 12.14     Plan of Reorganization. Pursuant to the Plan of
Reorganization, the Original Indenture has been terminated and cancelled and, in
connection therewith, (i) any and all obligations of the Company under the
Original Indenture to the holders of Original Notes or the Trustee immediately
prior to the execution and delivery of this Indenture on the Issue Date are
discharged in full except for the $154,315,000 in aggregate principal amount
evidenced by the 10 3/8% Senior Subordinated Notes due 2009 issued hereunder on
the Issue Date and except for other distributions required under the Plan of
Reorganization, and (ii) any existing Defaults or Events of Default immediately
prior to the execution and delivery of this Indenture on the Issue Date (and any
of the consequences thereof) are waived in their entirety.

                                      A-67

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, effective as of the date first written above.

                                           CARMIKE CINEMAS, INC.

                                           By:     /s/ Martin A. Durant
                                              ---------------------------------
                                           Name:   Martin A. Durant
                                                -------------------------------
                                           Title:  Senior Vice President
                                                 ------------------------------

                                           EASTWYNN THEATRES, INC.

                                           By:     /s/ Martin A. Durant
                                              ---------------------------------
                                           Name:   Martin A. Durant
                                                -------------------------------
                                           Title:  Senior Vice President
                                                 ------------------------------

                                           WOODEN NICKEL PUB, INC.

                                           By:     /s/ Martin A. Durant
                                              ---------------------------------
                                           Name:    Martin A. Durant
                                                -------------------------------
                                           Title:  Senior Vice President
                                                 ------------------------------

                                           MILITARY SERVICES, INC.

                                           By:     /s/ Martin A. Durant
                                              ---------------------------------
                                           Name:   Martin A. Durant
                                                 ------------------------------
                                           Title:  Senior Vice President
                                                -------------------------------

                                           WILMINGTON TRUST COMPANY, as Trustee

                                           By:     /s/ Steven Cimalore
                                             ----------------------------------
                                           Name:   Steven Cimalore
                                               --------------------------------
                                           Title:  Senior Vice President
                                                -------------------------------

                                      A-68
<PAGE>

                                                                       EXHIBIT A

                                 [Face of Note]

                                                            CUSIP/CINS 143436AE3

                   10 3/8% Senior Subordinated Notes due 2009

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

                              Carmike Cinemas, Inc.

promises to pay to Cede & Co.

or registered assigns,

the principal sum of $___________

Dollars on February 1, 2009.

Interest Payment Dates:  February 1 and August 1

Dated:

                                      A-69

<PAGE>

                                        CARMIKE CINEMAS, INC.

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

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

                                                           (SEAL)

This is one of the Global Notes referred to
in the within-mentioned Indenture:

WILMINGTON TRUST COMPANY, as Trustee

By:
   ----------------------------------------
         (Authorized Signer)

Dated:

                                      A-70

<PAGE>

                                 [Back of Note]

                   10 3/8% Senior Subordinated Notes due 2009

                  [Insert the Global Note Legend, if applicable
                  pursuant to the provisions of the Indenture]

         Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.

         1.       INTEREST. Carmike Cinemas, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note from
August 1, 2001 (the "Interest Commencement Date") until the Issue Date at 9 3/8%
per annum and from the Issue Date until maturity at 10 3/8% per annum. The
Company will pay interest semi-annually in arrears on February 1 and August 1 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Interest Commencement Date; provided that if
there is no existing Default in the payment of interest, and if this Note is
authenticated after a Record Date and before the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be February
1, 2002. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

         2.       METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the January 15 or July 15 next preceding the
Interest Payment Date (or, in the case of the first Interest Payment Date, at
the close of business on the Issue Date) (the "Record Date"), even if such Notes
are canceled after such Record Date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium, if any, and
interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment by
wire transfer of immediately available funds will be required with respect to
principal of and interest and premium on, all Global Notes and all other Notes
the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.

         3.       PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.

                                      A-71

<PAGE>

         4.       INDENTURE. The Company issued the Notes under an Indenture
dated as of January 31, 2002 ("Indenture") among the Company, the Guarantors
named therein and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $154,315,000 in aggregate principal amount.

         5.       OPTIONAL REDEMPTION.

         (a)      Except as set forth in subparagraph (b) of this Paragraph 5,
the Notes shall not be redeemable at the Company's option pursuant to this
Paragraph 5 prior to February 1, 2004. On or after February 1, 2004, the Company
may redeem all or a part of the Notes upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest to the applicable
redemption date, if redeemed during the twelve-month period beginning on
February 1 of the years indicated below:

<TABLE>
<CAPTION>
           Year                                      Percentage
           <S>                                       <C>
           2004...............................        104.688%
           2005...............................        103.125%
           2006...............................        101.563%
           2007 and thereafter................        100.000%
</TABLE>

         (b)      Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to February 1, 2002, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes of
the redemption price equal to 109.375% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that at least 65% in aggregate
principal amount of Notes issued under the Indenture remain outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Company and its Subsidiaries); and that such redemption must occur within 60
days of the date of the closing of such Equity Offering.

         6.       MANDATORY REDEMPTION.

         Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.

         7.       REPURCHASE AT OPTION OF HOLDER.

         (a)      If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest to the date of purchase (the "Change of Control

                                      A-72
<PAGE>

Payment"). Within 10 days following any Change of Control, the Company shall
mail a notice to each Holder setting forth the procedures governing the Change
of Control Offer as required by the Indenture.

         8.       NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.

         9.       DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

         10.      PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

         11.      AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Note Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes voting as a single class, and any existing
default or compliance with any provision of the Indenture, the Note Guarantees
or the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes voting as a single class. Without
the consent of any Holder of a Note, the Indenture, the Note Guarantees or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's or
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation or sale of all or substantially all of the Company's assets, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act or to allow any Guarantor to execute a supplemental indenture to
the Indenture and/or a Note Guarantee with respect to the Notes.

         12.      DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on the Notes whether or not
prohibited by the subordination provisions of the Indenture; (ii) default in
payment when due of principal of, or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including

                                      A-73
<PAGE>

in connection with an offer to purchase) or otherwise whether or not prohibited
by the subordination provisions of the Indenture, (iii) failure by the Company
to comply with Section 4.07, 4.09, 4.15, 4.17, 4.18 or 5.01 of the Indenture;
(iv) failure by the Company or any of its Restricted Subsidiaries for 60 days
after notice to the Company by the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding voting as a single class to
comply with certain other agreements in the Indenture or the Notes; (v) default
under certain other agreements relating to Indebtedness of the Company which
default (a) is caused by a failure to pay principal of, or interest or premium,
if any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment Default")
or (b) results in the acceleration of such Indebtedness prior to its express
maturity; (vi) certain final judgments for the payment of money that remain
undischarged for a period of 60 consecutive days; (vii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Significant
Restricted Subsidiaries or any group of Restricted Subsidiaries, that taken as a
whole, would constitute a Significant Restricted Subsidiary; and (viii) except
as permitted by the Indenture, any Note Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor that is a Significant Restricted
Subsidiary or any Person acting on its behalf shall deny or disaffirm its
obligations under such Guarantor's Note Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.

         13.      TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.

         14.      NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator or stockholder, of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or the Guarantors under the Notes, the Indenture or the Note Guarantees or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.

                                      A-74

<PAGE>

         15.      AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.

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

         17.      CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

Carmike Cinemas, Inc.
1301 First Avenue
Columbus, Georgia 31901
Attention:  President

                                      A-75
<PAGE>

                                 ASSIGNMENT FORM

         To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:
                                             -----------------------------------
                                               (Insert assignee's legal name)

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

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

                           Your Signature:
                                          --------------------------------------
                                          (Sign exactly as your name appears on
                                           the face of this Note)

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

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A-76
<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 of the Indenture, check the appropriate box below:

                                [ ] Section 4.15

         If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount you elect to
have purchased:

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

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

                               Your Signature:

                                              --------------------------------
                                              (Sign exactly as your name
                                              appears on the face of this Note)

                               Tax Identification No.:
                                                      --------------------------
Signature Guarantee*:
                     -------------------------------------

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

                                      A-77
<PAGE>

             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

         The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:

<TABLE>
<CAPTION>
                                                                           Principal Amount             Signature of
                    Amount of decrease in    Amount of increase in        of this Global Note       authorized officer of
                       Principal Amount         Principal Amount         following such decrease      Trustee or Note
Date of Exchange      of this Global Note     of this Global Note            (or increase)               Custodian
<S>                 <C>                      <C>                         <C>                        <C>
</TABLE>

* This schedule should be included only if the Note is issued in global form.

                                      A-78

<PAGE>

                                                                       EXHIBIT B

                          FORM OF NOTATION OF GUARANTEE

         For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in and subject to the provisions in the
Indenture dated as of January 31, 2002 (the "Indenture") among Carmike Cinemas,
Inc., the Guarantors listed on Schedule I thereto and Wilmington Trust Company,
as trustee (the "Trustee"), (a) the due and punctual payment of the principal
of, premium, if any, interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal and premium, and, to the
extent permitted by law, interest, and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. The obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth
in Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose; provided, however, that the Indebtedness evidenced by this Note
Guarantee shall cease to be so subordinated and subject in right of payment upon
any defeasance of this Note in accordance with the provisions of the Indenture.

                                     EASTWYNN THEATRES, INC.

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

                                     WOODEN NICKEL PUB, INC.

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

                                     MILITARY SERVICES, INC.

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

                                       B-1

<PAGE>

                                                                       EXHIBIT C

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

         SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Carmike Cinemas, Inc. (or its permitted successor), a Delaware
corporation (the "Company"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and Wilmington Trust Company, as trustee under
the indenture referred to below (the "Trustee").

                                   WITNESSETH

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of January 31, 2002 providing
for the issuance of an aggregate principal amount of up to $154,315,000 of 10
3/8% Senior Subordinated Notes due 2009 (the "Notes");

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1.       CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

         2.       AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:

         (a)      Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:

                  (i)      the principal of interest on the Notes will be
         promptly paid in full when due, whether at maturity, by acceleration,
         redemption or otherwise, and interest on the overdue principal of
         interest on the Notes, if any, if lawful, and all other obligations of
         the Company to the Holders or the Trustee hereunder or thereunder will
         be promptly paid in full or performed, all in accordance with the terms
         hereof and thereof; and

                                      C-1

<PAGE>

                  (ii)     in case of any extension of time of payment or
         renewal of any Notes or any of such other obligations, that same will
         be promptly paid in full when due or performed in accordance with the
         terms of the extension or renewal, whether at stated maturity, by
         acceleration or otherwise. Failing payment when due of any amount so
         guaranteed or any performance so guaranteed for whatever reason, the
         Guarantors shall be jointly and severally obligated to pay the same
         immediately.

         (b)      The obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.

         (c)      The following is hereby waived: diligence presentment, demand
of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever.

         (d)      This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture, and the
Guaranteeing Subsidiary accepts all obligations of a Guarantor under the
Indenture.

         (e)      If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.

         (f)      The Guaranteeing Subsidiary shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.

         (g)      As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six of the Indenture
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Six of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.

         (h)      The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does not impair
the rights of the Holders under the Guarantee.

         (i)      Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed liabilities that
are relevant under any applicable Bankruptcy or fraudulent conveyance laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect

                                      C-2

<PAGE>

of the obligations of such other Guarantor under Article Eleven of the
Indenture, this new Note Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guarantor under this Note
Guarantee will not constitute a fraudulent transfer or conveyance.

         3.       EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.

         4.       GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.

         (a)      The Guaranteeing Subsidiary may not sell or otherwise dispose
of all or substantially all of its assets or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:

                  (i)      subject to Sections 11.05 and 11.06 of the Indenture,
         the Person formed by or surviving any such consolidation or merger (if
         other than a Guarantor or the Company) unconditionally assumes all the
         obligations of such Guarantor, pursuant to a supplemental indenture in
         form and substance reasonably satisfactory to the Trustee, under the
         Notes, the Indenture and the Note Guarantee on the terms set forth
         herein or therein; and

                  (ii)     immediately after giving effect to such transaction,
         no Default or Event of Default exists.

         (b)      In case of any such consolidation, merger, sale or conveyance
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 Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the Indenture to be
performed by the Guarantor, such successor corporation shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Note Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been issued at the date of
the execution hereof.

         (c)      Except as set forth in Articles Four and Five and Section
11.06 of the Indenture, and notwithstanding clauses (a) and (b) above, nothing
contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.

         5.       RELEASES.

         (a)      In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the Capital

                                      C-3

<PAGE>

Stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transaction) a Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note Guarantee. Upon delivery
by the Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to the effect that such sale, other disposition or designation was made
by the Company in accordance with the provisions of the Indenture, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Note Guarantee.

         (b)      Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article Eleven of the Indenture.

         6.       NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Note
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.

         7.       NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

         8.       COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         9.       EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.

         10.      THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.

                                      C-4

<PAGE>

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

Dated:                 ,
      -----------------  ----

                                       [GUARANTEEING SUBSIDIARY]

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

                                       CARMIKE CINEMAS, INC.

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

                                       EASTWYNN THEATRES, INC.

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

                                       WOODEN NICKEL PUB, INC.

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

                                       MILITARY SERVICES, INC.

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

                                       WILMINGTON TRUST COMPANY, as Trustee

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

                                      C-5

<PAGE>

                                   SCHEDULE I

                             SCHEDULE OF GUARANTORS

         The following schedule lists each Guarantor under the Indenture as of
the Issue Date:

1.       Eastwynn Theatres, Inc.

2.       Wooden Nickel Pub, Inc.

3.       Military Services, Inc.

                                  Schedule I-1

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