S-3/A

QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on May 22, 2003

Registration No. 333-103719

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
the Securities Act of 1933

CAREER EDUCATION CORPORATION
(Exact name of registrant as specified in its charter)
See Table of Additional Registrants

Delaware	36-3932190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2895 Greenspoint Parkway, Suite 600, Hoffman Estates, Illinois, 60195, (847) 781-3600
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

John M. Larson
Chairman, President and Chief Executive Officer
2895 Greenspoint Parkway, Suite 600, Hoffman Estates, Illinois,60195, (847) 781-3600
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Lawrence D. Levin, Esq.
Katten Muchin Zavis Rosenman
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661-3693
(312) 902-5200

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

        If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ý

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

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

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

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered(1)		Amount to be Registered	Proposed Maximum Offering Price Per Security(2)	Proposed Maximum Aggregate Offering Price(3)	Amount of Registration Fee(4)
Debt Securities
Convertible Debt Securities
Guarantees of the Debt Securities and Convertible Debt Securities(5)(6)
Preferred Stock, $.01 par value(7)
Convertible Preferred Stock, $.01 par value(7)
Common Stock, $.01 par value(7)
	Total	$300,000,000 (3)	(8)	$300,000,000	$24,270*

*

previously paid

(1)

Any securities registered hereunder may be sold separately or together with other securities registered hereunder.

(2)

The proposed maximum offering price per security will be determined from time to time by the Registrants in connection with the issuance of the securities hereunder.

(3)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933 and exclusive of any accrued interest, distributions and dividends. The maximum aggregate offering price of all securities registered hereunder will not exceed $300,000,000. If any debt securities are issued at an original issue discount, then the securities registered hereunder shall include such additional debt securities as may be necessary such that the aggregate initial public offering price of all securities issued hereunder will equal $300,000,000.

(4)

Calculated pursuant to Rule 457(o).

(5)

Pursuant to Rule 457(n), no separate registration fee is payable in connection with the Guarantees.

(6)

Each of Career Education Corporation's subsidiaries listed in the table of additional registrants below may fully and unconditionally guarantee the Debt Securities and Convertible Debt Securities.

(7)

The amount of securities registered hereunder includes shares of preferred stock and common stock that may be issued from time to time upon conversion of convertible debt securities or convertible preferred stock. Because this additional preferred stock and common stock is issuable only upon the conversion of convertible debt securities or convertible preferred stock for no separate consideration, no registration fee is required with respect to such preferred stock and common stock pursuant to the provisions of Rule 457(i).

(8)

Not applicable pursuant to General Instruction II.D. of Form S-3.

        The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

NAME	JURISDICTION OF INCORPORATION OR ORGANIZATION	I.R.S. EMPLOYEE IDENTIFICATION NO.	PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER
ABS Educational Heritage, LLC	Delaware	01-0584053	8200
AIU Educational Heritage, LLC	Delaware	01-0584068	8200
Al Collins Graphic Design School, Ltd.	Delaware	86-0752105	8200
Allentown Business School, Ltd.	Delaware	36-4027078	8200
American InterContinental University, Inc.	Georgia	58-1286467	8200
American InterContinental University—London, LTD. U.S.	District of Columbia	58-1920398	8200
Briarcliffe College, Inc.	New York	11-2128233	8200
Briarcliffe Educational Heritage, LLC	Delaware	01-0584060	8200
Brooks College, Ltd.	Delaware	33-0615730	8200
Brooks Institute of Photography, L.L.C.	Delaware	36-4268865	8200
Brown Institute, Ltd.	Delaware	36-4027082	8200
California Culinary Academy, Inc.	California	94-3042862	8200
California Culinary Academy, LLC	Delaware	36-4329853	8200
CEC Educated Staffing, Inc.	Delaware	36-4371877	8200
CEC e-Learning, LLC	Illinois	71-0911286	8200
CEC Employee Group, LLC	Delaware	36-4302828	8200
CEC Europe, LLC	Delaware	04-3736581	8200
CEC Holdings I, Inc.	Delaware	13-3775180	8200
CEC Management, Inc.	Illinois	36-4027077	8200
CEC OnLine Sales, LLC	Illinois	36-4520571	8200
EduTrek Systems, Inc.	Georgia	58-2012368	8200
EduTrek International, Inc.	Georgia	58-2255470	8200
Gibbs College of Boston, Inc., a private two-year college	Massachusetts	04-3218659	8200
Harrington Institute of Interior Design, Inc.	Illinois	36-2486327	8200
Hoban Holding, Inc	Pennsylvania	25-1822464	8200
IAMD, Limited	Delaware	36-4158674	8200
International Academy of Design—Orlando, Inc.	Florida	36-4376545	8200
International Academy of Design & Technology—Detroit, Inc.	Delaware	56-2341970	8200
International Academy of Merchandising & Design, Inc.	Florida	59-2887925	8200
International Academy of Merchandising & Design, Ltd.	Illinois	36-3772608	8200
Katharine Gibbs of Philadelphia, LLC	Pennsylvania	52-2257467	8200
KGS Educational Heritage, LLC	Delaware	01-0584044	8200
LCB Culinary Schools, LLC	Delaware	36-4269757	8200
LCB Educational Heritage, LLC	Delaware	35-2194580	8200
McIntosh College, Inc.	Delaware	36-4278498	8200
Marlin Acquisition Corp.	Florida	56-2341960	8200
Market Direct, Inc.	Illinois	36-4120782	8200
Missouri College, Inc.	Missouri	47-0793327	8200
Orlando Culinary Academy, Inc.	Florida	36-4476023	8200
PA Culinary Acquisition Corporation	Delaware	36-4481432	8200
PA Culinary Educational Heritage, LLC	Delaware	01-0584079	8200
Pennsylvania Institute of Culinary Arts, Inc.	Pennsylvania	25-1548137	8200
School of Computer Technology, Inc.	Delaware	36-4128983	8200
Scottsdale Culinary Institute, Ltd.	Delaware	35-4226208	8200
Scottsdale Beverages, LLC	Delaware	57-1159760	8200
Scottsdale Group, LLC	Delaware	57-1159755	8200
Southern California School of Culinary Arts, Ltd.	Delaware	36-4128983	8200
TCA Acquisition, L.P.	Texas	74-3005808	8200
TCA Beverages, Inc.	Texas	75-3083474	8200
TCA Group, Inc.	Texas	72-1535834	8200
The Cooking and Hospitality Institute of Chicago, Inc.	Illinois	36-3230002	8200
The Katharine Gibbs Corporation—Melville	New York	11-3193464	8200
The Katharine Gibbs Corporation—New York	New York	13-3751139	8200
The Katharine Gibbs School of Montclair, Inc.	New Jersey	23-3275485	8200
The Katharine Gibbs School of Piscataway, Inc.	New Jersey	22-3275484	8200
The Katharine Gibbs School of Norwalk, Inc.	Connecticut	06-1388463	8200
The Katharine Gibbs School of Providence, Inc.	Rhode Island	05-0475713	8200
Washington Business School, Ltd.	Delaware	36-4328545	8200
Western Culinary Institute, Ltd.	Delaware	36-4094425	8200

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 22, 2003

PROSPECTUS

$300,000,000

Debt Securities
Convertible Debt Securities
Preferred Stock
Convertible Preferred Stock
Common Stock

        By this prospectus, we may periodically offer and issue any combination of the following securities:

•

unsecured debt securities or unsecured convertible debt securities consisting of debentures, notes and/or other evidences of unsecured indebtedness, in one or more series, which may be fully and unconditionally guaranteed by our current, wholly-owned, domestic subsidiaries;



•

preferred stock or convertible preferred stock, in one or more series; and



•

common stock.

        The total offering price of these securities will not exceed $300,000,000. We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the applicable supplement carefully before you purchase any of these securities.

        Our common stock is listed on the Nasdaq National Market under the symbol "CECO."

        Investing in our securities involves certain risks. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risks Related to Our Business" in our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2002, which is incorporated by reference into this prospectus.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Prospectus is                        , 2003

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	1
WHERE YOU CAN FIND MORE INFORMATION	1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	3
THE COMPANY	3
USE OF PROCEEDS	4
RATIO OF EARNINGS TO FIXED CHARGES	5
DESCRIPTION OF DEBT SECURITIES AND SUBSIDIARY GUARANTEES	5
DESCRIPTION OF CAPITAL STOCK	13
PLAN OF DISTRIBUTION	16
LEGAL MATTERS	17
EXPERTS	17

i

ABOUT THIS PROSPECTUS

        This prospectus is part of a shelf registration statement we have filed with the SEC. By using a shelf registration statement, we may sell, from time to time and in one or more offerings, any combination of the securities described in this prospectus. We may sell these securities separately, together or in units. We will not sell more than $300,000,000 of securities through these offerings.

        In this prospectus, we provide you with material terms currently known or contemplated by us for securities we may offer. Each time we sell securities, we will provide a prospectus supplement that contains additional information about the specific terms of those securities and the offering. In the prospectus supplement, we may also add to or update information contained in this prospectus. You should read both this prospectus and any prospectus supplement, together with the additional information described below under the heading "Where You Can Find More Information." Prior to investing in securities we offer pursuant to this prospectus, you should read the most recent risk factors, which currently appear under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risks Related to Our Business" in our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2002, included in incorporated documents and any update to those risk factors included in the accompanying prospectus supplement.

        You should rely only on the information incorporated by reference or provided in this prospectus and the applicable prospectus supplement. We have not authorized anyone else to provide you with different information. You should not assume that the information in this prospectus or any applicable prospectus supplement is accurate as of any date other than the date on the cover of the applicable document. We are not making an offer of the securities in any state where the offer or sale is not permitted.

        When used in this prospectus, an accompanying prospectus supplement or the documents incorporated by reference herein, the following terms have the following meanings:

•

the term "school" means a campus or group of campuses known by a single brand name, such as The Katharine Gibbs Schools or Collins College;



•

the term "campus" means a single location of any school, such as the New York campus of The Katharine Gibbs Schools or Collins College in Tempe, Arizona; and



•

the term "institution" means a main campus and its additional locations, as such are defined under regulations of the U.S. Department of Education.

WHERE YOU CAN FIND MORE INFORMATION

        We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549 or at the SEC's regional offices located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 233 Broadway, New York, New York 10005. You may obtain information on the operation of the public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. Our SEC filings also are available from the SEC's web site at http://www.sec.gov.

        This prospectus is part of a registration statement we filed with the SEC. As permitted by SEC rules, this prospectus does not contain all of the information contained in the registration statement and its exhibits and schedules. For more information about us, please see the registration statement and its exhibits and schedules, which can be obtained from the SEC as described above.

        The SEC allows us to "incorporate by reference" into this prospectus other documents we file separately with it, which means that we can disclose important information to you by referring you to those documents. The information in the documents incorporated by reference is considered to be part

1

of this prospectus, and information in documents that we file later with the SEC will automatically update and supersede this information and information contained in this prospectus. We incorporate by reference the documents listed below that we have filed with the SEC (Commission File No. 0-23245) and any future filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all of the securities offered by this prospectus:

1.

Our Annual Report on Form 10-K for our fiscal year ended December 31, 2002 that we filed with the SEC on March 10, 2003, as amended on Form 10-K/A that we filed with the SEC on April 28, 2003;



2.

Our Quarterly Report on Form 10-Q for our quarter ended March 31, 2003 that we filed with the SEC on May 13, 2003;



3.

Our Current Reports on Form 8-K that we filed with the SEC on February 17, 2003, March 27, 2003 and April 23, 2003;



4.

The description of our common stock contained in our Registration Statement on Form 8-A that we filed with the SEC on October 21, 1997 and any amendment or report that we file to update the description; and



5.

The description of our preferred stock purchase rights contained in our Registration Statement on Form 8-A that we filed with the SEC on May 28, 2002 and any amendment or report that we file to update the description.

        You may obtain a copy of the documents we incorporate by reference, at no cost, by writing or telephoning us at the following address and telephone number:

Career Education Corporation
Attn: Investor Relations Department
2895 Greenspoint Parkway, Suite 600
Hoffman Estates, Illinois, 60195
Telephone: (847) 781-3600

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus and the information incorporated by reference herein contain "forward-looking statements," as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act, that reflect our current expectations regarding our future growth, results of operations, performance and business prospects and opportunities. We have tried to use words such as "anticipate," "believe," "plan," "expect," "intend" and similar expressions to identify these forward-looking statements. These statements are based on information currently available to us and are subject to risks and uncertainties that could cause our actual growth, results of operations, performance and business prospects and opportunities to differ from those expressed in, or implied by, these statements. These risks and uncertainties include the following:

•

our ability to comply with, and the impact of changes in, legislation and regulations that affect our ability to participate in student financial aid programs;



•

our ability to complete our acquisition of Whitman Education Group on a timely basis or at all;



•

the effect of our acquisition strategy on future operating results, including our ability to effectively integrate acquired companies, such as Whitman Education Group, into our existing operations;



•

the effect of general economic or business conditions;



•

the effect of competitive pressures in the education industry; and



•

the factors discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risks Related to Our Business" in our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2002.

        You should not place undue reliance on forward-looking statements. Except as otherwise specifically required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements contained or incorporated by reference in this prospectus, whether as a result of new information, future events, changed circumstances or otherwise.

THE COMPANY

        We are a provider of private, for-profit postsecondary education with 51 campuses throughout the United States, Canada, France, the United Kingdom and the United Arab Emirates. We also offer online programs through American InterContinental University-Online, our e-learning division. Our total student population as of April 30, 2003 was approximately 54,400. Our schools enjoy long operating histories and offer a variety of master's degree, bachelor's degree, associate's degree, and diploma programs in career-oriented disciplines.

        We were founded in January 1994 to capitalize on opportunities in the large and highly fragmented postsecondary school industry. Since our inception, we have completed 25 acquisitions and have opened four branch start-up campuses. We have acquired schools that we believe possess strong curricula, leading reputations and broad marketability, but that have been under managed from a marketing and/or financial standpoint. We seek to apply our expertise in operations, marketing and curricula development, as well as our financial strength, to improve the performance of these schools.

        Our schools offer educational programs principally in the following five career-related fields of study, identified by us as areas with highly interested and motivated students, strong entry-level employment opportunities and ongoing career and salary advancement potential:

•

Visual Communication and Design Technologies: These programs include desktop publishing, graphic design, fashion design, interior design, graphic imaging, web page design, animation, photography and visual journalism.

3

•

Information Technology: These programs include PC/LAN, PC/Net, computer technical support, computer network operation, computer information management and computer programming.



•

Business Studies: These programs include business administration, business operations, e-commerce, merchandising management and hospitality management.



•

Culinary Arts: These programs include culinary arts, hotel and restaurant management and pastry arts.



•

Health Education: These programs include healthcare management, dental office administration, medical massage science, medical office administration, medical assisting, dental assisting, medical administrative assisting and massage therapy.

        We were incorporated in Delaware on January 5, 1994. Our principal executive offices are located at 2895 Greenspoint Parkway, Suite 600, Hoffman Estates, Illinois 60195 and our telephone number is (847) 781-3600. Our web site is located at http://www.careered.com.

Subsidiary Guarantors

        Our payment obligations under the debt securities, including the payment of principal, premium, if any, and interest, may be fully and unconditionally guaranteed by each of our current, wholly-owned, domestic subsidiaries. In this prospectus, we refer to these guarantors as the subsidiary guarantors and to these guarantees as the subsidiary guarantees.

Recent Development

        On March 26, 2003, we entered into a merger agreement with Whitman Education Group, Inc., a proprietary provider of career-oriented post-secondary education, under which we will acquire all of the outstanding shares of Whitman for a combination of cash and our common stock. Under the terms of the agreement, Whitman's shareholders will receive $6.00 in cash and shares of our common stock valued at approximately $8.25 for each of their shares of Whitman common stock. The value of the stock portion of the per share merger consideration is subject to adjustment if the average closing price of our common stock during the 20-day trading period prior to the closing of the merger is greater than $58.00 or less than $44.00. Each outstanding option to purchase Whitman common stock, whether vested or unvested, that is in-the-money based on the value, in cash, of the per share merger consideration will be cashed out by us upon consummation of the merger.

        The merger furthers our strategy to invest in growth opportunities while creating operating efficiencies through economies of scale by acquiring schools that we believe will benefit from the implementation of our business, operating and marketing strategy. For example, we believe that the merger will strengthen our health and online educational programs. The merger will also expand our geographic presence to include new major markets in the United States. In addition to obtaining Whitman shareholder approval, we must also obtain regulatory approvals and satisfy other conditions before we can complete the merger.

USE OF PROCEEDS

        We expect to use the net proceeds from the sale of the securities for general corporate purposes, including working capital, capital expenditures and repayment of existing debt. We may also use the net proceeds to fund acquisitions of other businesses in the education sector. We will describe the use of the net proceeds from the sale of securities in the prospectus supplement for the offering of those securities. Pending their use, we may invest the net proceeds in short-term, interest bearing securities.

4

RATIO OF EARNINGS TO FIXED CHARGES

        The following table sets forth our ratio of earnings to fixed charges and of earnings to combined fixed charges and preferred stock dividends for the periods indicated:

	Three months ended March 31,		Year ended December 31,
	2003	2002	2002	2001	2000	1999	1998
Ratio of earnings to fixed charges	77.6	42.3	44.3	32.3	26.2	12.5	6.0
Ratio of earnings to combined fixed charges and preferred stock dividends	77.6	42.3	44.3	32.3	26.2	12.5	5.4

        For purposes of this calculation, earnings consist primarily of income from continuing operations before provision for income taxes, minority interests, and fixed charges. Fixed charges consist of interest expense, capitalized interest and amortization of premiums, discounts, and capitalized expenses related to indebtedness. Combined fixed charges and preferred stock dividends include preferred stock dividend requirements and fixed charges. Preferred stock dividends consist of the pre-tax earnings required to pay dividends on all preferred stock.

DESCRIPTION OF DEBT SECURITIES AND SUBSIDIARY GUARANTEES

General

        The following description sets forth material terms currently known or contemplated by us for debt securities and subsidiary guarantees that we may offer pursuant to this prospectus. We will describe additional specific terms of any debt securities and subsidiary guarantees that we offer in a prospectus supplement relating to those securities.

        We may offer pursuant to this prospectus up to $300 million aggregate principal amount of debt securities from time to time in one or more series, or if the debt securities are issued at a discount, such principal amount as may be sold for an initial public offering price of up to $300 million. The debt securities may be fully and unconditionally guaranteed by all of our current, wholly-owned, domestic subsidiaries. Our existing $200 million senior revolving credit facility requires us to satisfy various financial covenants on a periodic basis and limits the aggregate amount of additional debt that we may have outstanding to $100 million. As of the date of this prospectus, we are in compliance with these financial covenants and have no debt outstanding that would count against this limit. The debt securities will be our direct, unsecured obligations and, as indicated in the applicable prospectus supplement, will either be (1) senior debt that ranks equally in right of payment with all of our other current and future unsecured, unsubordinated indebtedness and senior in right of payment to all current and future subordinated indebtedness or (2) subordinated debt that ranks equally in right of payment with all of our other current and future subordinated indebtedness and junior in right of payment to all of our current and future senior debt. The debt securities will be issued under a senior or subordinated indenture, as applicable, between us and one or more trustees. The indentures will not limit the amount of debt securities that we may issue thereunder. The form of the indentures has been filed as an exhibit to the registration statement of which this prospectus is a part and is subject to any amendments or supplements that we enter into with the applicable trustee from time to time. The following summarizes the material terms of the indentures. If you would like more information about the indentures, you should read their more detailed provisions.

        As a holding company that conducts its business operations through its subsidiaries, our ability to make payments of principal of, and/or interest on, issued debt securities will depend upon the cash flow of our subsidiaries and the ability of our subsidiaries to make funds available to us in the form of dividends, loans and other payments, including management services fees. The laws of the states of

5

incorporation for each of our subsidiaries generally place restrictions on our subsidiaries' ability to declare and pay dividends or make advances or other payments to us while they are insolvent. The debt securities we issue may be guaranteed by the subsidiary guarantors. During the insolvency of any of these subsidiary guarantors, you would need to rely on its guarantee of our obligations under the debt securities to submit a claim for payment. If the debt securities are guaranteed by the subsidiary guarantors, they will be pari pasu in right of payment to the unsecured liabilities of those subsidiaries, including, unless the debt securities are subordinated, any liabilities of those subsidiaries resulting from their guarantee of repayment of our obligations under our senior revolving credit facility. Therefore, the rights of the holders of the debt securities guaranteed by the subsidiary guarantors to participate in any distribution of the assets of any of those subsidiaries upon that subsidiary's liquidation or reorganization or otherwise will be pari pasu with the unsecured claims of creditors of that subsidiary, which would include, unless the debt securities are subordinated, the obligations under our senior revolving credit facility that are guaranteed by our subsidiaries. The rights of the holders of the debt securities not guaranteed by the subsidiary guarantors to participate in any distribution of the assets of any of our subsidiaries upon that subsidiary's liquidation or reorganization or otherwise would be subordinate to the claims of all creditors of that subsidiary, including the obligations under our senior revolving credit facility that are guaranteed by our subsidiaries. Our subsidiaries are not currently parties to agreements that prohibit or restrict dividends, loans or other payments to us, but may enter into such agreements in the future. These agreements will be described in the applicable prospectus supplement.

        As of March 31, 2003, our total consolidated debt was approximately $31.1 million (the current portion of which was approximately $3.5 million). In addition, as described in the section entitled "Recent Development," on March 26, 2002, we entered into an agreement to purchase all of the outstanding stock of Whitman Education Group in exchange for a combination of cash and our common stock. We expect to borrow under our existing $200 million senior revolving credit facility the approximately $125 million necessary to pay the cash consideration payable to Whitman's shareholders and option holders in the merger.

        We will include additional specific terms relating to a particular series of debt securities in a prospectus supplement relating to the offering. The terms we will describe in the prospectus supplement will include some or all of the following:

•

the distinct title and designation (including whether they are senior debt or subordinated debt and whether or not they are guaranteed by the subsidiary guarantors) of the debt securities;



•

the terms, if any, on which the debt securities will be subordinate to any of our other debt;



•

the total principal amount and initial offering price, expressed as a percentage of the principal amount, of the debt securities;



•

the date or dates when the principal of the debt securities will be payable;



•

the rate at which the debt securities will bear interest;



•

the date from which interest on the debt securities will accrue;



•

the dates when interest on the debt securities will be payable and the regular record date for these interest payment dates;



•

the place where



•

the principal, premium, if any, and interest on the debt securities will be paid,



•

registered debt securities may be surrendered for registration of transfer, and



•

debt securities may be surrendered for exchange;

6

•

any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities;



•

the terms and conditions upon which we will have the option to redeem the debt securities;



•

the denominations in which any registered debt securities and any bearer debt securities will be issuable, if other than denominations of $1,000 or integral multiples;



•

the identity of the trustee, security registrar, authenticating agent and paying agent;



•

the portion of the principal amount of debt securities that will be payable upon acceleration of the maturity of the debt securities;



•

any index, formula or other method used to determine the amount of principal, premium or interest on the debt securities;



•

any material changes to the events of default, defaults or covenants described herein;



•

whether the debt securities are issuable as registered debt securities or bearer debt securities, whether there are any restrictions relating to the form in which they are issued and whether bearer and registered debt securities may be exchanged for each other;



•

whether we will issue the debt securities in certificated or book-entry form;



•

whether the holders of the debt securities will have any rights to require the us to redeem the debt securities prior to maturity;



•

any obligation that we may have under Rule 14e-1 of the Exchange Act and any other tender offer rules of the Exchange Act with respect to our repurchase of debt securities at the holders' option;



•

to whom interest will be payable



•

if other than the registered holder (for registered debt securities),



•

if other than upon presentation and surrender of the related coupons (for bearer debt securities), or



•

if other than as specified in the indentures (for global debt securities);



•

if the debt securities are to be convertible into or exchangeable for shares of our common stock or preferred stock included in this prospectus, the terms of conversion or exchange;



•

any securities exchanges or markets on which the debt securities will be listed; and



•

any other material terms of the debt securities.

        We may issue debt securities as original issue discount securities to be sold at a discount below their principal amount. Special U.S. federal income tax considerations applicable to original issue discount securities that we issue will be described in the prospectus supplement for those debt securities.

The Subsidiary Guarantees

        Our payment obligations under any series of debt securities may be jointly and severally, fully and unconditionally guaranteed by the subsidiary guarantors. We will describe whether or not a series of debt securities is guaranteed by the subsidiary guarantors in the applicable prospectus supplement. The form of subsidiary guarantee to be executed by each subsidiary guarantor is filed as an exhibit to the registration statement of which this prospectus is a part.

7

        The applicable prospectus supplement for an offering of debt securities that are guaranteed by subsidiary guarantors will describe any restrictions on the ability of the subsidiary guarantors to:

•

pay dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the subsidiary guarantors' capital stock; or



•

incur any indebtedness, make any payment of principal of, or interest or premium on, indebtedness or repay, repurchase or redeem any debt securities of the subsidiary guarantors.

        The obligations of each subsidiary guarantor under its subsidiary guarantee will be limited to the maximum amount that will not result in the obligations of the subsidiary guarantor under the subsidiary guarantee constituting a fraudulent conveyance or fraudulent transfer under Federal or state law, after giving effect to:

•

all other contingent and fixed liabilities of the subsidiary guarantor; and



•

any collections from or payments made by or on behalf of any other subsidiary guarantors in respect of the obligations of the subsidiary guarantor under its subsidiary guarantee.

        If a series of unsubordinated debt securities is guaranteed by the subsidiary guarantors, then the subsidiary guarantees will be pari pasu in right of payment to the unsecured claims of that particular subsidiaries' creditors, including the subsidiary guarantees of the senior revolving credit facility. If a series of subordinated debt securities is guaranteed by the subsidiary guarantors then the subsidiary guarantees will be subordinated to the subsidiary guarantees of the senior revolving credit facility to substantially the same extent as the series is subordinated to our senior revolving credit facility.

Registration and Transfer

        We presently plan to issue each series of debt securities only as registered securities. However, we may issue a series of debt securities as bearer securities, or a combination of both registered securities and bearer securities. If we issue debt securities as bearer securities, they will have interest coupons attached unless we elect to issue them as zero coupon securities. If we issue bearer securities, we will describe material U.S. federal income tax consequences and other material considerations, procedures and limitations in the prospectus supplement for that offering.

        Holders of registered debt securities may present the debt securities for exchange for different authorized amounts of other debt securities of the same series and of similar principal amount at the corporate trust office of the trustee in New York, New York or at any other office we may designate for the purpose and describe in the applicable prospectus supplement. The registered securities must be duly endorsed or accompanied by a written instrument of transfer. The agent will not impose a service charge on you for the transfer or exchange. We may, however, require that you pay any applicable tax or other governmental charge. We will describe any procedures for the exchange of bearer securities for other debt securities of the same series in the prospectus supplement for that offering. Generally, we will not allow you to exchange registered securities for bearer securities.

Conversion and Exchange

        If any debt securities will be convertible into or exchangeable for shares of our common stock or preferred stock included in this prospectus, the applicable prospectus supplement will set forth the terms and conditions of the conversion or exchange, including:

•

the conversion price or exchange ratio;



•

the conversion or exchange period;



•

whether the conversion or exchange will be mandatory or at the option of the holder or us;

8

•

provisions for adjustment of the conversion price or exchange ratio; and



•

provisions that may affect the conversion or exchange if the debt securities are redeemed.

Global Securities

        The debt securities of a series may be issued in whole or in part in the form of one or more global securities that we will identify in a prospectus supplement. This means we would not issue certificates to each holder. Unless and until it is exchanged in whole or in part for the individual debt securities represented thereby, a global security may not be registered for transfer or exchange except:

•

as a whole by the depositary for the global security to a nominee of the depositary, by a nominee of the depositary to the depositary or another nominee of the depositary, or by the depositary or a nominee of the depositary to a successor depositary or a nominee of the successor depositary; and



•

in any other circumstances described in the prospectus supplement applicable thereto.

        The specific terms of the depositary arrangement with respect to any portion of a series of debt securities to be represented by a global security will be described in the applicable prospectus supplement. We expect that the following provisions will apply to depositary arrangements.

        Unless otherwise specified in the applicable prospectus supplement, debt securities that are to be represented by a global security to be deposited with or on behalf of a depositary will be represented by a global security or, in some cases, global securities registered in the name of the depositary or its nominee. Upon the issuance of the global security, and the deposit of the global security with or on behalf of the depositary for the global security, the depositary will credit on its book entry registration and transfer system the respective principal amounts of the debt securities represented by the global security to the accounts of institutions that have accounts with the depositary or its nominee ("participants"). The accounts to be credited will be designated by the underwriters or agents of the debt securities. If we directly offer and sell debt securities, the accounts to be credited will be designated by us. Ownership of beneficial interests in the global security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in the global security will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depositary or its nominee for the global security. Ownership of beneficial interests in the global security by persons that hold through participants will be shown on, and the transfer of that ownership interest within the participant will be effected only through, records maintained by the participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities in certificated form. The foregoing limitations and the laws may impair the ability to transfer beneficial interests in the global securities.

        So long as the depositary for a global security, or its nominee, is the registered owner of the global security, the depositary or the nominee, as the case may be, will be considered the sole owner or registered holder of the debt securities represented by the global security for all purposes under the indenture. Unless otherwise specified in the applicable prospectus supplement, owners of beneficial interests in the global security will not be entitled to have debt securities of the series represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of the series in certificated form and will not be considered the holders of the debt securities for any purposes under the indenture. Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the depositary and, if the person is not a participant, on the procedures of the participant through which the person owns its interest to exercise any rights of a holder of debt securities under the indenture. We understand that under existing industry practices, if we request any action of holders or an owner of a beneficial interest in the global security desires to give any notice or take any action a holder is entitled to give or take under the

9

indenture, then the depositary would authorize the participants to give this notice or take this action, and participants would authorize beneficial owners owning through these participants to give this notice or take this action or would otherwise act upon the instructions of beneficial owners owning through them.

        Principal of, and any premium and interest on, a global security will be payable in the manner described in the applicable prospectus supplement.

Consolidation, Merger and Sale of Assets

        Each indenture will provide that we may, without the consent of holders of the debt securities, consolidate with or merge into, or convey, transfer or lease all or substantially all of our properties and assets to, any person, and we may permit any person to merge into, or convey, transfer or lease our properties and assets substantially as an entirety to us so long as:

•

the surviving entity is a corporation, limited liability company, partnership or trust organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and expressly assumes our obligations on the debt securities and under the indenture;



•

immediately after giving effect to the transaction, no event of default or event, after notice and/or lapse of time would become an event of default, will have occurred and be continuing under the indenture; and



•

certain other conditions regarding delivery of an officers' certificate and opinion of counsel are met.

        Unless the terms of the applicable series of debt securities provide otherwise, the indentures do not contain any provision that afford the holders of the debt securities protection in the event that we undertake a highly leveraged transaction or have a change of control. However, our senior revolving credit facility provides that, unless waived or consented to by the lenders, an event of default occurs upon a change of control, defined generally as a change in the beneficial ownership of 35% or more of our voting equity securities or a change outside the ordinary course of a majority of the board of directors. An event of default under our senior revolving credit facility, such as a change of control, could cause a default under the applicable series of debt securities pursuant to cross default provision of the applicable indenture.

Events of Default

        Unless otherwise provided in a prospectus supplement, the following will be "events of default" regarding any series of debt securities under each indenture:

•

default for 30 days in the payment of any interest installment when due and payable;



•

default in the payment of principal or premium (if any) when due at its stated maturity, by declaration, when called for redemption or otherwise;



•

default in the making of any sinking fund payment when due;



•

default in the performance of any covenant in the debt securities or in the indenture for 90 days after notice to us by the applicable trustee or by holders of 25% in principal amount of the outstanding debt securities of that series;



•

default with respect to any other series of debt issued pursuant to the indenture or default and a corresponding acceleration of payment with respect to any of our other debt having unpaid principal in excess of $2,000,000;

10

•

events of bankruptcy, insolvency and reorganization of us or one of our significant subsidiaries; and



•

any other event of default provided in a supplemental indenture with respect to that series of debt securities.

We will be required to file every year with the trustee an officers' certificate stating whether any default exists and specifying any default that exists.

        If an event of default occurs and continues with respect to debt securities of a particular series, the applicable trustee or the holders of not less than 25% in principal amount of outstanding debt securities of that series may declare the outstanding debt securities of that series due and payable immediately.

        Under the terms of our senior revolving credit facility, any default under a particular series of debt securities may constitute a default under our senior revolving credit facility. In this event, to the extent we had outstanding obligations under our senior revolving credit facility, the lenders under the facility could declare that outstanding debt immediately due and payable.

        If an event of default with respect to debt securities of a particular series occurs and is continuing, the trustee will be under no obligation to exercise any of its rights or powers under the applicable indenture at the request or direction of any of the holders of debt securities of the series, unless the holders shall have offered to the trustee reasonable indemnity and security against the costs, expenses and liabilities that might be incurred by it in compliance with the request.

        The holders of a majority in principal amount of the outstanding debt securities of the series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable trustee under each indenture, or exercising any trust or power conferred on the trustee with respect to the debt securities of that series. The trustee may refuse to follow directions in conflict with law or the indenture that may involve the trustee in personal liability or may be unduly prejudicial to the other, non-directing holders.

Modification or Waiver

        Each indenture will allow us and the applicable trustee, with the consent of the holders of not less than a majority in principal amount of the outstanding debt securities of all affected series acting as one class, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the indenture or modifying the rights of the holders of the debt securities of the series. However, without the consent of the holders of all the outstanding debt securities affected thereby, no supplemental indenture may:

•

change the stated maturity of the principal of, or any installment of principal of or interest on, any debt security;



•

reduce the principal amount of, the rate of interest on, or any premium payable upon the redemption of, any debt security;



•

reduce the amount of the principal of any original issue discount security that would be due and payable upon acceleration of the maturity of the debt security;



•

change any place of payment where any debt security or any premium or interest thereon is payable;



•

impair the right to institute suit for the enforcement of any payment on or after the stated maturity of the debt security or, in the case of redemption, on or after the redemption date;

11

•

affect adversely the right of repayment at the option of the holder of any debt security of the series;



•

reduce the percentage in principal amount of the outstanding debt securities of any series, the consent of whose holders is required for a supplemental indenture, or the consent of whose holders is required for any waiver of compliance with various provisions of the indenture or various defaults thereunder and their consequences provided for in the indenture; or



•

modify any of the foregoing described provisions.

        Each indenture will provide that a supplemental indenture that changes or eliminates any covenant or other provision of the indenture that has expressly been included solely for the benefit of one or more particular series of debt securities, or that modifies the rights of the holders of such series with respect to such covenant or other provision, will be deemed not to affect the rights under the indenture of the holders of debt securities of any other series.

        Each indenture will allow us and the applicable trustee, without the consent of any holders of any series of debt securities, to enter into supplemental indentures for various purposes, including:

•

evidencing the succession of another entity to us and the assumption of our covenants and obligations under the debt securities and the indenture by the successor;



•

adding to our covenants for the benefit of the holders;



•

adding additional events of default for the benefit of the holders;



•

establishing the form or terms of any series of debt securities issued under the supplemental indentures;



•

curing ambiguities or inconsistencies in the indentures; and



•

making other provisions that do not adversely affect the interests of the holders of any series of debt securities in any material respect.

Covenants

        Existence.    Except as permitted under "—Consolidation, Merger and Sale of Assets," each indenture will require us to do or cause to be done all things necessary to preserve and keep in full force and effect our corporate existence, rights (by certificate of incorporation, bylaws and statute) and franchises; provided, however, that we will not be required to preserve any right or franchise if our board of directors determines that the preservation thereof is no longer desirable in the conduct of its business.

        Maintenance of Properties.    Each indenture will require us to cause all of our material properties used or useful in the conduct of our business or the business of any subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in our judgment may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

        Provision of Financial Information.    Whether or not we are subject to Section 13 or 15(d) of the Exchange Act, each indenture will require us, within 15 days of each of the respective dates by which we would have been required to file annual reports, quarterly reports and other documents with the SEC if we were so subject, (1) to transmit by mail to all holders of debt securities, as their names and addresses appear in the applicable register for such debt securities, without cost to the holders, copies of the annual reports, quarterly reports and other documents that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject to such sections,

12

(2) to file with the applicable trustee copies of the annual reports, quarterly reports and other documents that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject to such sections and (3) to supply, promptly upon written request and payment of the reasonable cost of duplication and delivery, copies of the documents to any prospective holder.

        Additional Covenants.    Any additional covenants with respect to any series of debt securities will be set forth in the prospectus supplement relating thereto.

Defeasance

        Each indenture will include provisions allowing us to be discharged from our obligation on the debt securities of any series. To be discharged from our obligations on the debt securities, we would be required to deposit with the trustee, money or U.S. government obligations sufficient to make all principal, premium (if any) and interest payments on those debt securities. If we make this defeasance deposit with respect to your debt securities, we may elect either:

•

to be discharged from all of our obligations on your debt securities, except for our obligations to register transfers and exchanges, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency in respect of the debt securities and to hold moneys for payment in trust; or



•

to be released from restrictions relating to liens and sale-leaseback transactions and, in the case of all debt securities, to be released from other covenants as may be described in the prospectus supplement relating to such debt securities.

        To establish the trust, we must deliver to the trustee an opinion of our counsel that the holders of the debt securities will not recognize gain or loss for federal income tax purposes as a result of the defeasance and will be subject to U.S. federal income tax on the same amount, and in the same manner and at the same times as would have been the case if the defeasance had not occurred. There may be additional provisions relating to defeasance that we will describe in the applicable prospectus supplement.

Governing Law

        Each indenture and subsidiary guarantee will provide that the debt securities, the indenture and the subsidiary guarantee will be governed by, and their provisions will be construed in accordance with, the internal laws of the State of New York.

DESCRIPTION OF CAPITAL STOCK

        Our authorized capital stock consists of 150,000,000 shares of common stock, $.01 par value per share, and 1,000,000 shares of preferred stock, $.01 par value per share.

Common Stock

        As of April 21, 2003, 46,269,587 shares of common stock were outstanding and held by 72 holders of record. Subject to the rights of holders of preferred stock, the holders of outstanding shares of common stock are entitled to share ratably in dividends declared out of assets legally available therefor at such time and in such amounts as the board of directors may from time to time lawfully determine. Each holder of common stock is entitled to one vote for each share held. Subject to the rights of holders of any outstanding preferred stock, upon our liquidation, dissolution or winding up, any assets legally available for distribution to stockholders as such are to be distributed ratably among the holders of our common stock at that time outstanding. All shares of common stock currently outstanding are, and all shares of common stock offered hereby when duly issued and paid for will be, fully paid and

13

nonassessable, not subject to redemption and assessment and without conversion, preemptive or other rights to subscribe for or purchase any proportionate part of any new or additional issues of any class or of securities convertible into stock of any class. Our common stock is quoted on the Nasdaq National Market. The transfer agent and registrar for our common stock is Computershare Investor Services LLC.

        If we offer shares of common stock, a prospectus supplement will describe the terms of the offering, including number of shares offered and the offering price.

Preferred Stock

        Preferred stock may be issued by us in one or more series from time to time with such designations, relative rights, priorities, preferences, qualifications, limitations and restrictions thereof, to the extent that such are not fixed in our certificate of incorporation, as the board of directors determines and without any vote or action by our stockholders.

        If we offer a series of preferred stock, a prospectus supplement will describe its terms, including the following:

•

the maximum number and designation of shares to constitute the series;



•

the offering price for the shares;



•

the annual dividend rate, if any, and whether it is fixed or variable or both;



•

the date or dates from which dividends, if any, will begin to accrue or accumulate and whether dividends will be cumulative;



•

if payments are based on an index or formula, the manner in which the payments will be determined;



•

the terms and conditions of our right, if any, to redeem the shares;



•

the liquidation preference, if any, of the shares;



•

the terms and conditions of your right, if any, to cause us to redeem the shares;



•

whether the shares will be subject to operation of a retirement or sinking fund and, if so, the terms and provisions of the fund;



•

the terms and conditions of your right, if any, to convert the shares into, or exchange the shares for, shares of our common stock or any other series of our preferred stock that are included in this prospectus;



•

voting rights, if any, of the shares;



•

any securities exchanges or markets on which the shares will be listed;



•

the material federal income tax consequences under U.S. law of owning the shares;



•

whether we will offer the shares, in whole or in part, in book-entry form represented by global securities and, if so, the depositary for the global securities and the specific depositary arrangement with respect to the shares; and



•

any other preferences and relative, participating, optional or other special rights, qualifications, limitations or restrictions of the shares.

        On May 28, 2002, our board of directors declared a dividend distribution of one right for each outstanding share of our common stock. Each right entitles the registered holder to purchase from us one ten-thousandth of a share of our Series A Preferred Stock at a purchase price of $350 in cash,

14

subject to adjustment. The description and terms of the rights are set forth in a Rights Agreement, dated as of May 28, 2002, between us and Computershare Investor Services LLC, as rights agent. The rights are not exercisable or detachable from the common stock until ten days after any person or group acquires 15% or more (or commences a tender offer for 15% or more) of our common stock. If any person or group acquires 15% or more of our common stock, each right (other than those held by the acquiring person) will entitle the holder to receive, instead of one ten-thousandth of a share of Series A Preferred Stock, our common stock having a market value of approximately two times the $350 exercise price. The rights expire on May 28, 2015 and can be redeemed by us at any time prior to their becoming exercisable. The Rights Agreement is incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. If you would like more information about the Rights Agreement, you should read its more detailed provisions.

Certain Corporate Provisions

        We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, this statute prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person becomes an interested stockholder, unless either:

•

prior to the date on which the stockholder became an interested stockholder, the corporation's board of directors approved either the business combination or the transaction in which the person became an interested stockholder;



•

the stockholder acquires more than 85% of the outstanding voting stock of the corporation (excluding shares held by directors who are officers or held in certain employee stock plans) upon consummation of the transaction in which the stockholder becomes an interested stockholder; or



•

the business combination is approved by the board of directors and by two- thirds of the outstanding voting stock of the corporation (excluding shares held by the interested stockholder) at a meeting of the stockholders (and not by written consent) held on or subsequent to the date of the business combination.

An "interested stockholder" is a person who, together with affiliates and associates, owns, or at any time within the prior three years did own, 15% or more of the corporation's voting stock. Section 203 defines a "business combination" to include, without limitation, mergers, consolidations, stock sales, asset sales and other transactions resulting in a financial benefit to the interested stockholder.

        In addition to the preferred stock purchase rights under our Rights Agreement described above under "—Preferred Stock," our certificate of incorporation and by-laws contain a number of provisions relating to corporate governance and to the rights of stockholders. Some of these provisions may be deemed to have a potential "anti-takeover" effect in that such provisions may delay, defer or prevent a change of control of us. These provisions include:

•

a requirement that stockholder action may be taken only at stockholder meetings and not be written consent;



•

notice requirements relating to nominations to our board of directors and to the raising of business matters at stockholders meetings; and



•

the classification of the board of directors into three classes, each serving for staggered three-year terms.

15

PLAN OF DISTRIBUTION

        We may offer the securities directly to you, to or through underwriters, through dealers or agents or through a combination of these methods. A prospectus supplement will disclose the following information:

•

the underwriters, dealers or agents involved in the offering under this prospectus;



•

the terms of the offering, including the purchase price of the securities and proceeds to us from the sale of the securities;



•

the underwriting discounts and commissions and other items constituting underwriters' compensation;



•

any initial public offering price;



•

any discounts or concessions allowed, reallowed or paid to dealers, which may change from time to time;



•

the terms of any offers to purchase securities solicited by us directly from investors;



•

the terms of any over-allotment option that we grant to the underwriters;



•

the anticipated delivery date of the securities; and



•

the securities exchanges or markets on which the securities may be listed.

        If we use underwriters in an offering of securities, we will execute an underwriting agreement with the underwriters. If we use an underwriter or an underwriting syndicate in an offering, the underwriter(s) will purchase all of the securities for their own account(s), subject to certain conditions, and may resell them from time to time in one or more transactions at:

•

a fixed price or prices which may be changed;



•

prevailing market prices;



•

prices relating to the prevailing market prices; or



•

negotiated prices.

        If we use a dealer in an offering of securities, we will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.

        If we use an agent in an offering of securities, the agent will act on a best efforts basis for the period of its appointment unless we indicate otherwise in the applicable prospectus supplement.

        Any dealer or agent that we use in an offering of securities may be deemed an underwriter within the meaning of the Securities Act, and any discounts or commissions received by them from us, and any profit on the resale of the securities by them, may be treated as underwriting discounts and commissions under the Securities Act. We may solicit offers to purchase securities from, and we may sell securities directly to, institutional investors or others who may be deemed underwriters within the meaning of the Securities Act when they resell the securities. We may enter into agreements with any underwriters, dealers and/or agents that we use in an offering of securities to indemnify them against certain civil liabilities, including liabilities under the Securities Act.

        Some of the underwriters, dealers or agents and their associates may engage in transactions with, serve as financial advisors to and perform other general financing and bank services for us and for our affiliates in the ordinary course of business.

16

        Some persons participating in the offering may engage in, and discontinue at any time, transactions that stabilize, maintain or otherwise affect the price of the securities in order to facilitate an offering of the securities. These transactions may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than they have purchased from us who then cover the over-allotments or short positions by purchasing securities in the open market or by exercising any over-allotment option granted to them by us. These transactions may also include bidding for or purchasing securities in the open market or imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market.

        Other than our common stock, which is quoted on the Nasdaq National Market, each series of securities will be a new issue of securities with no established trading market. Any common stock sold pursuant to this prospectus will be quoted on the Nasdaq National Market. Other securities may or may not be listed or quoted on a national securities exchange or market, and a secondary market may not be created, or if created, may not continue for these securities.

LEGAL MATTERS

        The validity of our securities offered hereby and other legal matters will be passed upon for us by Katten Muchin Zavis Rosenman, Chicago, Illinois.

EXPERTS

        The consolidated financial statements of Career Education Corporation and Subsidiaries as of December 31, 2002 and for the year then ended appearing in Career Education Corporation's Annual Report (Form 10-K/A) have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

        The consolidated financial statements of Career Education Corporation and Subsidiaries as of December 31, 2001 and for the two years in the period then ended appearing in Career Education Corporation's Annual Report (Form 10-K/A) have been audited by Arthur Andersen LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon the authority of such firm as experts in accounting and auditing in giving such report.

17

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.    Other Expenses of Issuance and Distribution

        Set forth below is an estimate of the approximate amount of fees and expenses (other than underwriting commissions and discounts) payable by the Registrants in connection with the issuance and distribution of securities pursuant to the prospectus contained in this registration statement. The Registrants will pay all of these expenses.

	Approximate Amount
Securities and Exchange Commission registration fee	$	24,270
Nasdaq National Market fee		15,000
Accountants' fees and expenses		60,000
Legal fees and expenses		150,000
Transfer Agent and Registrar fees and expenses		10,000
Trustee's fees and expenses		30,000
Rating agencies' fees		100,000
Printing and engraving		100,000
Miscellaneous expenses		10,730
Total	$	500,000

        All expenses other than the Securities and Exchange Commission registration fee are estimated.

Item 15.    Indemnification of Directors and Officers

        Article XII of Career Education Corporation's Amended and Restated Certificate of Incorporation provides that it shall indemnify its directors and officers to the fullest extent permitted by the General Corporation Law of the State of Delaware, except that it shall not be obligated to indemnify any such person (i) with respect to proceedings, claims or actions initiated or brought voluntarily by any such person and not by way of defense, or (ii) for any amounts paid in settlement of an action indemnified against by Career Education Corporation without the prior written consent of Career Education Corporation. In addition, Article XII of Career Education Corporation's Amended and Restated Certificate of Incorporation provides that a director of Career Education Corporation shall not be personally liable to Career Education Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to Career Education Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for willful or negligent conduct in paying dividends or repurchasing stock out of other than lawfully available funds or (iv) for any transaction from which the director derives an improper personal benefit.

        Career Education Corporation has entered into indemnity agreements with each of its directors. These agreements may require Career Education Corporation, among other things, to indemnify such directors against certain liabilities that may arise by reason of their status or service as directors, to advance expenses to them as they are incurred, provided that they undertake to repay the amount advanced if it is ultimately determined by a court that they are not entitled to indemnification, and to obtain directors' liability insurance if available on reasonable terms.

        Reference is made to Section 145 of the General Corporation Law of the State of Delaware which provides for indemnification of directors and officers in certain circumstances.

        Career Education Corporation maintains liability insurance for its directors and officers.

II-1

        Each of Al Collins Graphic Design School, Ltd., Allentown Business School, Ltd., Brooks College, Ltd., Brown Institute, Ltd., CEC Educated Staffing, Inc., CEC Holdings I, Inc., IAMD, Limited, International Academy of Design & Technology-Detroit, Inc., McIntosh College, Inc., PA Culinary Acquisition Corporation, School of Computer Technology, Inc., Scottsdale Culinary Institute, Ltd., Southern California School of Culinary Arts, Ltd., Washington Business School Ltd. and Western Culinary Institute, Ltd., each a Delaware corporation, is empowered by Section 145 of the Delaware General Corporation Law, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of incorporation and by-laws.

        The certificate of incorporation of each of Al Collins Graphic Design School, Allentown Business School, Ltd., Brooks College Ltd., Brown Institute, Ltd., CEC Educated Staffing, Inc., CEC Holdings I, Inc., IAMD, Limited, PA Culinary Acquisition Corporation, School of Computer Technology, Inc., Scottsdale Culinary Institute, Ltd., Southern California School of Culinary Arts, Ltd., Washington Business School Ltd. and Western Culinary Institute, Ltd. does not contain indemnification provisions.

        Article IX of the certificate of incorporation of McIntosh College, Inc. and Paragraph Eleventh of the certificate of incorporation of International Academy of Design & Technology-Detroit, Inc. provide that each corporation shall indemnify its directors and officer to the fullest extent permitted by the Delaware General Corporation Law.

        Article V of the by-laws of each of Al Collins Graphic Design School, Ltd., Allentown Business School, Ltd., Brooks College Ltd., Brown Institute, Ltd., CEC Educated Staffing, Inc., CEC Holdings I, Inc., IAMD, Limited, School of Computer Technology, Inc., Scottsdale Culinary Institute, Ltd., Southern California School of Culinary Arts, Ltd., Washington Business School Ltd. and Western Culinary Institute, Ltd., provides that each corporation shall indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law.

        The by-laws of McIntosh College, Inc. and International Academy of Design & Technology-Detroit, Inc. do not contain indemnification provisions.

        Article VII of the by-laws of PA Culinary Acquisition Corporation provides that the corporation shall indemnify any person, made or threatened to be made, a party in any civil or criminal action or proceeding by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the corporation's request as a director or officer of another corporation, partnership, joint venture, trust or other enterprise.

        American InterContinental University, Inc., EduTrek International, Inc. and EduTrek Systems, Inc., each a Georgia corporation, is empowered by Sections 14-2-850 through 14-2-859 of the Georgia Business Corporation Code, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation of American InterContinental University, Inc. do not contain indemnification provisions. Article VIII of the articles of incorporation of each of EduTrek International, Inc. and EduTrek Systems, Inc. provide that the corporation shall indemnify its directors and officers to the fullest extent permitted by the Georgia Business Corporation Code.

        Article VI of each of the by-laws of American InterContinental University, Inc. and EduTrek International, Inc. provides for mandatory indemnification against reasonable expenses for a director or officer to the extent that a director or officer has been successful, on the merits or otherwise, in the defense of any proceeding to which such director or officer was a party, or in defense of any claim,

II-2

issue or matter therein, because the director or officer holds or held such a position in the corporation. The by-laws further provide for permissive indemnification against liability incurred in a proceeding if the director or officer believed in good faith to be in or not opposed to the best interests of the corporation, and in the case of any criminal proceeding, had reasonable cause to believe the conduct was not unlawful.

        Article VI of the by-laws of EduTrek Systems, Inc. provides that the corporation may indemnify an officer, employee or agent who is not a director to the extent permitted by the articles of incorporation, the by-laws or by law.

        American InterContinental University-London, LTD. U.S., a District of Columbia corporation, is empowered by Section 29-101.04 of the District of Columbia Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to these standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws. Neither the articles of incorporation nor the by-laws of American InterContinental University-London, LTD. U.S. contain indemnification provisions.

        Briarcliffe College, Inc., The Katharine Gibbs Corporation-Melville and The Katharine Gibbs Corporation-New York, each a New York corporation, are empowered by Sections 721 through 726 of the New York Business Corporation Law, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of incorporation and by-laws.

        The certificate of incorporation of each of Briarcliffe College, Inc., The Katharine Gibbs Corporation-Melville and The Katharine Gibbs Corporation-New York do not contain indemnification provisions.

        The by-laws of Briarcliffe College, Inc. does not contain indemnification provisions. Article IV of the by-laws of each of The Katharine Gibbs-Melville and The Katharine Gibbs Corporation-New York provides that to the fullest extent permitted by the New York Business Corporation Law, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        California Culinary Academy, Inc., a California corporation, is empowered by Section 317 of the California Corporations Code, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation of California Culinary Academy, Inc. does not contain indemnification provisions.

        Article V, Section 52 of the by-laws of California Culinary Academy, Inc. provides that directors and officers of the corporation may, in the discretion of the Board of Directors, be indemnified and held harmless by the corporation from and against any loss, cost, liability or expense that may be imposed on or incurred by the director or officer in connection with or resulting from any claim, action, suit or proceeding, civil or criminal, in which the director or officer may have become a party or otherwise involved because of having been a director or officer of the corporation.

II-3

        CEC Management, Inc., The Cooking and Hospitality Institute of Chicago, Inc., Harrington Institute of Interior Design, Inc., International Academy of Merchandising & Design, Ltd. and Market Direct, Inc., each an Illinois corporation, are empowered by Section 8.75 of the Illinois Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation of each of CEC Management, Inc., The Cooking and Hospitality Institute of Chicago, Inc., Harrington Institute of Interior Design, Inc., International Academy of Merchandising & Design, Ltd. and Market Direct, Inc. do not contain indemnification provisions.

        Article XI of each of the by-laws of CEC Management, Inc., International Academy of Merchandising & Design, Ltd. and Market Direct, Inc., and Article XII of each of the by-laws of The Cooking and Hospitality Institute of Chicago, Inc. and Harrington Institute of Interior Design, Inc. provides that the corporation shall indemnify any person, made or threatened to be made, a party in any civil or criminal action or proceeding by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the corporation's request as a director or officer of another corporation, partnership, joint venture, trust or other enterprise.

        Hoban Holdings, Inc. and Pennsylvania Institute of Culinary Arts, Inc., each a Pennsylvania corporation, is empowered by Sections 1741 through 1750 of Subchapter D, Chapter 17 of the Pennsylvania Business Corporation Law, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation each of Hoban Holdings, Inc. and Pennsylvania Institute of Culinary Arts, Inc. do not contain indemnification provisions.

        Section 8.2 of the by-laws of Hoban Holdings, Inc. and Article V of the by-laws of Pennsylvania Institute of Culinary Arts, Inc. provide that the corporation shall indemnify and hold harmless to the full extent not prohibited by law, as the same exists or may hereinafter be amended, interpreted or implemented, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil or criminal, administrative or investigative and by reason of the fact that he or she, or a person of whom he or she is the heir, executor or administrator, is or was a director or officer of the corporation or is or was serving at the request of the corporation as director, officer or trustee of another corporation or of a partnership, joint venture, trust or other enterprise.

        International Academy of Design-Orlando, Inc., International Academy of Merchandising & Design, Inc., Orlando Culinary Academy, Inc. and Marlin Acquisition Corp., each a Florida corporation, are empowered by Section 607.0850 of the Florida Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation of each of International Academy of Design-Orlando, Inc., International Academy of Merchandising & Design, Inc. and Orlando Culinary Academy, Inc. do not contain indemnification provisions.

        Article Eighth of the articles of incorporation of Marlin Acquisition Corp. provides that the corporation shall indemnify its directors and officers to the fullest extent permitted by the Florida Business Corporation Act.

II-4

        Article V of each of the by-laws of International Academy of Design-Orlando, Inc., Orlando Culinary Academy, Inc. and Marlin Acquisition Corp. provides that the corporation shall indemnify its directors and officers to the fullest extent permitted by the Florida Business Corporation Act. The by-laws of International Academy of Merchandising & Design, Inc. do not contain indemnification provisions.

        The Katharine Gibbs College of Boston, Inc., a private two-year college, a Massachusetts corporation, is empowered by Section 67 of the Massachusetts Business Corporation Law, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of organization and by-laws.

        The articles of organization of The Katharine Gibbs College of Boston, Inc., a private two-year college does not contain indemnification provisions.

        Article IV of the by-laws of The Katharine Gibbs College of Boston, Inc., a private two-year college provides that to the fullest extent permitted by the Massachusetts Business Corporation Law, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        The Katharine Gibbs School of Montclair, Inc. and The Katharine Gibbs School of Piscataway, Inc., each a New Jersey corporation, are empowered by Section 14A:3-5 of the New Jersey Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of incorporation and by-laws.

        The certificate of incorporation of each of The Katharine Gibbs School of Montclair, Inc. and The Katharine Gibbs School of Piscataway, Inc. do not contain indemnification provisions.

        Article IV of the by-laws of each of The Katharine Gibbs School of Montclair, Inc. and The Katharine Gibbs School of Piscataway, Inc. provides that to the fullest extent permitted by the New Jersey Business Corporation Act, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        The Katharine Gibbs School of Norwalk, Inc., a Connecticut corporation, is empowered by Sections 33-770 through 33-779 Connecticut Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of incorporation and by-laws.

        The certificate of incorporation of The Katharine Gibbs School of Norwalk, Inc. does not contain indemnification provisions.

II-5

        Article IV of the by-laws of The Katharine Gibbs School of Norwalk, Inc. provides that to the fullest extent permitted by the Connecticut Business Corporation Act, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        The Katharine Gibbs School of Providence, Inc., a Rhode Island corporation, is empowered by Section 7-1.1-4.1 of the Rhode Island Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of incorporation and by-laws.

        The certificate of incorporation of The Katharine Gibbs School of Providence, Inc. does not contain indemnification provisions.

        Article IV of the by-laws of The Katharine Gibbs School of Providence, Inc. provides that to the fullest extent permitted by the Rhode Island Business Corporation Act, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        Missouri College, Inc., a Missouri corporation, is empowered by Section 351.355 of The Missouri General and Business Corporation Law, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        Neither the articles of incorporation nor the by-laws of Missouri College, Inc. contain indemnification provisions.

        TCA Beverages, Inc. and TCA Group, Inc., each a Texas corporation, is empowered by Section 2.02-1 of the Texas Business Corporation Act, subject to the procedures and limitations therein, to indemnify and hold harmless any director or officer or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of incorporation and by-laws.

        The articles of incorporation of each of TCA Beverages, Inc. and TCA Group, Inc. do not contain indemnification provisions.

        Article 5 of each of the by-laws of TCA Beverages, Inc. and TCA Group, Inc. provides that to the fullest extent permitted by the Texas Business Corporation Act, the corporation shall indemnify any current or former director or officer of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding brought by or in the right of the corporation, to which he was or is a party by reason of his current or former position with the corporation or by reason of the fact that he is or was serving, at the request of the corporation, as a

II-6

director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

        ABS Educational Heritage, LLC, AIU Educational Heritage, LLC, Briarcliffe Educational Heritage, LLC, Brooks Institute of Photography, L.L.C., California Culinary Academy, LLC, CEC Employee Group, LLC, CEC Europe, LLC, Curriculum Holding Co., LLC, KGS Educational Heritage, LLC, LCB Culinary Schools, LLC, LCB Educational Heritage, LLC and PA Culinary Educational Heritage, LLC, each a Delaware limited liability company, are empowered by Section 18-108 of the Delaware Limited Liability Company Act, subject to the procedures and limitations therein, to indemnify and hold harmless its members and managers from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of formation and limited liability company agreement.

        The certificate of formation of each of ABS Educational Heritage, LLC, AIU Educational Heritage, LLC, Briarcliffe Educational Heritage, LLC, Brooks Institute of Photography, L.L.C., California Culinary Academy, LLC, CEC Employee Group, LLC, CEC Europe, LLC, Curriculum Holding Co., LLC, KGS Educational Heritage, LLC, LCB Culinary Schools, LLC, LCB Educational Heritage, LLC and PA Culinary Educational Heritage, LLC, does not contain indemnification provisions.

        Article V of the limited liability company agreement of each of ABS Educational Heritage, LLC, AIU Educational Heritage, LLC, Briarcliffe Educational Heritage, LLC, Curriculum Holding Co., LLC, KGS Educational Heritage, LLC and PA Culinary Educational Heritage, LLC provides that the company shall indemnify members and officers for any act performed by any of them with respect to company matters, provided, that no member or officer shall be indemnified as a consequence of its own fraud, gross negligence or willful misconduct against the company.

        Article V, Section 5 of the limited liability company agreement of each of Brooks Institute of Photography, L.L.C. and California Culinary Academy, LLC provides that the company shall indemnify and hold harmless each manager and the partners, shareholders, officers and employees of each manager from and against any loss, expense, damage or injury suffered or sustained by them by reason of any acts, omissions or alleged acts or omission arising out of their activities on behalf of the company, which were for a purpose reasonably believed to be in the best interests of the company and within the power or authority delegated to such party thereunder and were not performed or omitted fraudulently or in bad faith or as a result of gross negligence by such party.

        Article V, Section 5 of the limited liability company agreement of CEC Employee Group, LLC provides that the company shall indemnify and hold harmless each member and the partners, shareholders, officers and employees of each member from and against any loss, expense, damage or injury suffered or sustained by them by reason of any acts, omissions or alleged acts or omission arising out of their activities on behalf of the company, which were for a purpose reasonably believed to be in the best interests of the company and within the power or authority delegated to such party thereunder and were not performed or omitted fraudulently or in bad faith or as a result of gross negligence by such party.

        CEC e-Learning, LLC and CEC OnLine Sales, LLC, each an Illinois limited liability company, are empowered by Section Section 15-7 of the Illinois Limited Liability Company Act, subject to the procedures and limitations therein, to indemnify and hold harmless its members and managers from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of organization and operating agreement.

        The articles of organization of each of CEC e-Learning, LLC and CEC OnLine Sales, LLC do not contain indemnification provisions.

II-7

        Article V, Section 5 of the operating agreement of CEC e-Learning, LLC provides that the company shall indemnify and hold harmless each member and the partners, shareholders, officers and employees of each member from and against any loss, expense, damage or injury suffered or sustained by them by reason of any acts, omissions or alleged acts or omission arising out of their activities on behalf of the company, which were for a purpose reasonably believed to be in the best interests of the company and within the power or authority delegated to such party thereunder and were not performed or omitted fraudulently or in bad faith or as a result of gross negligence by such party.

        Katharine Gibbs of Philadelphia, LLC, a Pennsylvania limited liability company, is empowered by Section 8945 of Subchapter E, Chapter 89 of the Pennsylvania Limited Liability Company Law, subject to the procedures and limitations therein, to indemnify and hold harmless its members and managers from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its certificate of organization and operating agreement.

        The certificate of organization of Katharine Gibbs of Philadelphia, LLC, does not contain indemnification provisions. Article V, Section 5 of the operating agreement of Katharine Gibbs of Philadelphia, LLC provides that the company shall indemnify and hold harmless each member and the manager and the partners, shareholders, officers and employees of each member and the manager from and against any loss, expense, damage or injury suffered or sustained by them by reason of any acts, omissions or alleged acts or omission arising out of their activities on behalf of the company, which were for a purpose reasonably believed to be in the best interests of the company and within the power or authority delegated to such party thereunder and were not performed or omitted fraudulently or in bad faith or as a result of gross negligence by such party.

        Scottsdale Group, LLC and Scottsdale Beverages, LLC, each a Nevada limited liability company, are empowered by Sections 86.411 through 86.451 of the Nevada Limited Liability Company Act, subject to the procedures and limitations therein, to indemnify and hold harmless its members and managers from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of organization and operating agreement.

        The articles of organization of each of Scottsdale Group, LLC and Scottsdale Beverages, LLC do not contain indemnification provisions.

        TCA Acquisition, L.P., a Texas limited partnership, is empowered by Article 11 of the Texas Revised Limited Partnership Act, subject to the procedures and limitations therein, to indemnify and hold harmless its general partner from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its Limited Partnership Agreement.

        The limited partnership agreement of TCA Acquisition, L.P. does not contain indemnification provisions.

        Under the terms of any underwriting agreement entered into for the offering of securities hereunder, the underwriters will agree to indemnify, under certain conditions, Career Education Corporation, its directors, certain of its officers and persons who control us within the meaning of the Securities Act against certain liabilities.

Item 16.    Exhibits and Financial Statement Schedules

(a)

Exhibits.

1+	Form of Underwriting Agreement for common stock, preferred stock and debt securities.
4.1*	Amended and Restated Certificate of Incorporation of Career Education Corporation, as amended.

II-8

4.2**	Amended and Restated Bylaws of Career Education Corporation.
4.3***	Specimen stock certificate representing common stock.
4.4****	Credit Agreement dated as of December 19, 2002 among Career Education Corporation, as borrower, Bank of America, N.A., as Administrative Agent, LaSalle Bank National Association and JPMorgan Chase Bank, as Co-Syndication Agents, SunTrust Bank, as Documentation Agent, and the other lenders named therein.
4.5*	Credit Agreement dated as of February 18, 2003 among International Academy of Merchandising & Design (Canada) Ltd., Académie Internationale du Design Inc./International Academy of Design Inc., Softtrain Institute Inc., Retter Business College Corp., Bank of America, N.A., acting through its Canadian branch, as Canadian Administrative Agent, and the other lenders named therein.
4.6*****	Rights Agreement dated as of May 28, 2002 between Career Education Corporation and Computershare Investor Services, LLC which includes as Exhibit A, the Form of Certificate of Designations, as Exhibit B, the Form of Rights Certificate and as Exhibit C, the Summary of Rights to Purchase Preferred Shares.
4.7	Form of Indenture for senior or subordinated debt securities.
4.8+	Form of Note with respect to each particular series of debt securities issued hereunder.
4.9	Form of Subsidiary Guarantee.
4.10+	Certificate of designation, preferences and rights with respect to each particular series of preferred stock issued hereunder.
5	Opinion of Katten Muchin Zavis Rosenman as to the legality of the securities being registered (including consent).
12	Statement of Computation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends.
23.1	Consent of Ernst & Young LLP with respect to the consolidated financial statements of Career Education Corporation.
23.2	Explanation Concerning Absence of Consent of Arthur Andersen LLP with respect to the consolidated financial statements of Career Education Corporation.
24++	Power of Attorney (included on signature page).
25+	Statement of Eligibility on Form T-1 of the Trustee under the Indenture.

+	To be filed as an exhibit to a Current Report on Form 8-K that we will file with the SEC and will be incorporated by reference herein.
++	Previously filed for Career Education Corporation.
*	Incorporated herein by reference to our Annual Report on Form 10-K for the year ended December 31, 2002.
**	Incorporated herein by reference to our Annual Report on Form 10-K for the year ended December 31, 1997.
***	Incorporated herein by reference to our Registration Statement on Form S-1, effective as of January 28, 1998.
****	Incorporated herein by reference to our Current Report on Form 8-K filed on December 20, 2002.
*****	Incorporated herein by reference to our Registration Statement on Form 8-A, effective as of May 28, 2002.

II-9

Item 17.    Undertakings.

        The undersigned registrants hereby undertake:

        (1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i)    To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

        (ii)   To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

        (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs 1(i) and 1(ii) do not apply if the registration statement is on Form S-3, S-8 or F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

        (2)   That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (4)   That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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

        (6)   The undersigned registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

II-10

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, Career Education Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

CAREER EDUCATION CORPORATION
By:	/s/  JOHN M. LARSON John M. Larson Chairman of the Board, President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Chairman of the Board, President, Chief Executive Officer (Principal Executive Officer) and a Director
/s/  PATRICK K. PESCH Patrick K. Pesch	Executive Vice President, Chief Financial Officer, Treasurer, Secretary and a Director (Principal Financial and Accounting Officer)
* Dennis H. Chookaszian	Director
* Robert E. Dowdell	Director
* Thomas B. Lally	Director
* Wallace O. Laub	Director
* Keith K. Ogata	Director

*By:
/s/  JOHN M. LARSON Attorney-in-fact

SIGNATURES

        Pursuant to the requirements of the Securities Act, each of the following subsidiaries of Career Education Corporation: Al Collins Graphic Design School, Ltd., a Delaware corporation, Allentown Business School, Ltd., a Delaware corporation, Brooks College, Ltd., a Delaware corporation, Brown Institute, Ltd., a Delaware corporation, CEC Educated Staffing, Inc., a Delaware corporation, CEC Holdings I, Inc., a Delaware corporation, CEC Management, Inc., an Illinois corporation, The Cooking and Hospitality Institute of Chicago, Inc., an Illinois corporation, Harrington Institute of Interior Design, Inc., an Illinois corporation, IAMD, Limited, a Delaware corporation, Market Direct, Inc., an Illinois corporation, PA Culinary Acquisition Corporation, a Delaware corporation, School of Computer Technology, Inc., a Delaware corporation, Scottsdale Culinary Institute, Ltd., a Delaware corporation, Southern California School of Culinary Arts, Ltd., a Delaware corporation, Western Culinary Institute, Ltd., a Delaware corporation, Briarcliffe College, Inc., a New York corporation, The Katherine Gibbs School of Montclair, Inc., a New Jersey corporation, The Katherine Gibbs School of Piscataway, Inc., a New Jersey corporation, The Katherine Gibbs Corporation-New York, a New York corporation, The Katherine Gibbs Corporation-Melville, a New York corporation, The Katherine Gibbs School of Norwalk, Inc., a Connecticut corporation, The Katherine Gibbs School of Providence, Inc., a Rhode Island corporation, Gibbs College of Boston, Inc., a private two year college, a Massachusetts corporation, McIntosh College, Inc., a Delaware corporation, Washington Business School, Ltd., a Delaware corporation, International Academy of Merchandising & Design, Ltd., an Illinois corporation, International Academy of Merchandising & Design, Inc., a Florida corporation, International Academy of Design-Orlando, Inc., a Florida corporation, Orlando Culinary Academy, Inc., a Florida corporation, Missouri College, Inc., a Missouri corporation, American InterContinental University, Inc., a Georgia corporation, EduTrek Systems, Inc., a Georgia corporation, American InterContinental University-London, Ltd, U.S., a corporation organized under the laws of the District of Columbia, Hoban Holding, Inc., a Pennsylvania corporation, Pennsylvania Institute of Culinary Arts, Inc., a Pennsylvania corporation, California Culinary Academy, Inc., a California corporation, Marlin Acquisition Corp., a Florida corporation and International Academy of Design & Technology-Detroit, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

Al Collins Graphic Design School, Ltd.
Allentown Business School, Ltd.
Brooks College, Ltd.
Brown Institute, Ltd.
CEC Educated Staffing, Inc.
CEC Holdings I, Inc.
CEC Management, Inc.
The Cooking and Hospitality Institute of Chicago, Inc.
Harrington Institute of Interior Design, Inc.
IAMD, Limited
Market Direct, Inc.
PA Culinary Acquisition Corporation
School of Computer Technology, Inc.
Scottsdale Culinary Institute, Ltd.
Southern California School of Culinary Arts, Ltd.
Western Culinary Institute, Ltd.
Briarcliffe College, Inc.
The Katherine Gibbs School of Montclair, Inc.
California Culinary Academy, Inc.
International Academy of Design & Technology-Detroit, Inc. The Katherine Gibbs School of Piscataway, Inc.
The Katherine Gibbs Corporation-New York
The Katherine Gibbs Corporation-Melville
The Katherine Gibbs School of Norwalk, Inc.
The Katherine Gibbs School of Providence, Inc.
Gibbs College of Boston, Inc., a private two-year college
McIntosh College, Inc.
Washington Business School, Ltd.
International Academy of Merchandising & Design, Ltd.
International Academy of Merchandising & Design, Inc.
International Academy of Design-Orlando, Inc.
Orlando Culinary Academy, Inc.
Missouri College, Inc.
American InterContinental University, Inc.
EduTrek Systems, Inc.
American InterContinental University-London, Ltd, U.S.
Hoban Holding, Inc.
Pennsylvania Institute of Culinary Arts, Inc.
Marlin Acquisition Corp.

By:
/s/  JOHN M. LARSON John M. Larson
Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Chairman of the Board, President, Chief Executive Officer (Principal Executive Officer) and a Director
/s/  PATRICK K. PESCH Patrick K. Pesch	Executive Vice President, Chief Financial Officer, Treasurer, Secretary (Principal Financial and Accounting Officer) and a Director

SIGNATURES

        Pursuant to the requirements of the Securities Act, EduTrek International, Inc., a Georgia corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

EDUTREK INTERNATIONAL, INC.
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Chairman of the Board, President, Chief Executive Officer (Principal Executive Officer) and a Director
/s/  PATRICK K. PESCH Patrick K. Pesch	Executive Vice President, Chief Financial Officer, Treasurer, Secretary (Principal Financial and Accounting Officer) and a Director
/s/  TODD STEELE Todd Steele	Director

SIGNATURES

        Pursuant to the requirements of the Securities Act, each of TCA Group, Inc., a Texas corporation and TCA Beverages, Inc., a Texas corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 20^th day of May, 2003.

TCA GROUP, INC. TCA BEVERAGES, INC.
By:	/s/  HARVEY GIBLIN Harvey Giblin President and Secretary

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 20, 2003.

Signature	Title
/s/  HARVEY GIBLIN Harvey Giblin	President, Secretary (Principal Executive Officer) and a Director
/s/  MARCUS MCMELLON Marcus McMellon	Vice President, Treasurer, Assistant Secretary (Principal Financial and Accounting Officer) and a Director

SIGNATURES

        Pursuant to the requirements of the Securities Act, Brooks Institute of Photography, L.L.C., a Delaware limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

BROOKS INSTITUTE OF PHOTOGRAPHY, L.L.C.
By:	/s/  JOHN M. LARSON John M. Larson Manager, Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Manager, President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Manager, Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)

SIGNATURES

        Pursuant to the requirements of the Securities Act, each of the following subsidiaries of Career Education Corporation: CEC Europe, LLC, a Delaware limited liability company, ABS Educational Heritage, LLC, a Delaware limited liability company, Briarcliffe Educational Heritage, LLC, a Delaware limited liability company, KGS Educational Heritage, LLC, a Delaware limited liability company, LCB Educational Heritage, LLC, a Delaware limited liability company, AIU Educational Heritage, LLC, a Delaware limited liability company, CEC OnLine Sales, LLC, an Illinois limited liability company, and PA Culinary Educational Heritage, LLC, a Delaware limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

LCB EDUCATIONAL HERITAGE, LLC	CEC EUROPE, LLC
AIU EDUCATIONAL HERITAGE, LLC	ABS EDUCATIONAL HERITAGE, LLC
CEC ONLINE SALES, LLC	BRIARCLIFFE EDUCATIONAL HERITAGE, LLC
PA CULINARY EDUCATIONAL HERITAGE, LLC	KGS EDUCATIONAL HERITAGE, LLC
	By:	/s/  JOHN M. LARSON John M. Larson Manager, Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Manager, President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Manager, Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
/s/  ROBERT W. NACHTSHEIM Robert W. Nachtsheim	Manager
/s/  JOHN P. GRAHAM John P. Graham	Manager

SIGNATURES

        Pursuant to the requirements of the Securities Act, CEC e-Learning, L.L.C., a Delaware limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

CEC E-LEARNING, L.L.C.
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)

Career Education Corporation
By:	/s/  JOHN M. LARSON	Member and Manager
Its:	President and Chief Executive Officer

SIGNATURES

        Pursuant to the requirements of the Securities Act, LCB Culinary Schools, LLC, a Delaware limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

LCB CULINARY SCHOOLS, L.L.C.
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
Career Education Corporation

By:	/s/  JOHN M. LARSON	Member and Manager
Its:	President and Chief Executive Officer
CEC Holdings I, Inc.
By:	/s/  JOHN M. LARSON	Member and Manager
Its:	President and Chief Executive Officer

SIGNATURES

        Pursuant to the requirements of the Securities Act, Katherine Gibbs of Philadelphia, LLC, a Pennsylvania limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

KATHERINE GIBBS OF PHILADELPHIA, LLC
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
Career Education Corporation

By:	/s/  JOHN M. LARSON	Manager
Its:	President and Chief Executive Officer

SIGNATURES

        Pursuant to the requirements of the Securities Act, each of CEC Employee Group, LLC, a Delaware limited liability company has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

CEC EMPLOYEE GROUP, LLC
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	Authorized Signatory (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Authorized Signatory (Principal Financial and Accounting Officer)
The Katherine Gibbs Corporation-New York

By:	/s/  JOHN M. LARSON	Member and Manager
Its:	President and Chief Executive Officer

SIGNATURES

        Pursuant to the requirements of the Securities Act, TCA Acquisition, L.P., a Texas limited partnership, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

TCA ACQUISITION, L.P.
By:	CEC EMPLOYEE GROUP, LLC, its General Partner
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	President and Chief Executive Officer (Principal Executive Officer) of its General Partner
/s/  PATRICK K. PESCH Patrick K. Pesch	Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) of its General Partner
CEC EMPLOYEE GROUP, LLC

By:	/s/  JOHN M. LARSON	Member and Manager of its General Partner
Its:	Authorized Signatory

SIGNATURES

        Pursuant to the requirements of the Securities Act, California Culinary Academy, LLC, a Delaware limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

CALIFORNIA CULINARY ACADEMY, LLC
By:	/s/  JOHN M. LARSON John M. Larson Chief Executive Officer and President

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  JOHN M. LARSON John M. Larson	President and Chief Executive Officer (Principal Executive Officer)
/s/  PATRICK K. PESCH Patrick K. Pesch	Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
Career Education Corporation

By:	/s/  JOHN M. LARSON	Manager
Its:	President and Chief Executive Officer

SIGNATURES

        Pursuant to the requirements of the Securities Act, Scottsdale Group, LLC and Scottsdale Beverages, LLC, each a Nevada limited liability company, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, and State of Illinois on the 21^st day of May, 2003.

SCOTTSDALE GROUP, LLC SCOTTSDALE BEVERAGES, LLC
By:	/s/  JOHN P. GRAHAM John P. Graham Manager

POWER OF ATTORNEY

        Each person whose signature appears below hereby constitutes and appoints John M. Larson and Patrick K. Pesch, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, to sign on his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this Registration Statement on Form S-3 (including any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and all amendments thereto) and to file the same, with all exhibits thereto and any other documents in connection therewith, with the Securities and Exchange Commission under the Securities Act of 1933, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as each might or could do in person, hereby ratifying and confirming each act that said attorneys-in-fact and agents may lawfully do or cause to be done by virtue thereof.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities indicated on May 21, 2003.

Signature	Title
/s/  RENEE BRAITTIN Renee Braittin	Manager
/s/  JOHN P. GRAHAM John P. Graham	Manager
/s/  JENNIFER WHITE Jennifer White	Manager

EXHIBIT INDEX

Exhibits
4.7	Form of Indenture for senior or subordinated debt securities.
4.9	Form of Subsidiary Guarantee.
5	Opinion of Katten Muchin Zavis Rosenman as to the legality of the securities being registered (including consent).
12	Statement of Computation of Ratio of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends.
23.1	Consent of Ernst & Young LLP with respect to the consolidated financial statements of Career Education Corporation.
23.2	Explanation Concerning Absence of Consent of Arthur Andersen LLP with respect to the consolidated financial statements of Career Education Corporation.

QuickLinks

ABOUT THIS PROSPECTUS
WHERE YOU CAN FIND MORE INFORMATION
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
THE COMPANY
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
DESCRIPTION OF DEBT SECURITIES AND SUBSIDIARY GUARANTEES
DESCRIPTION OF CAPITAL STOCK
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
EXHIBIT INDEX

EX-4.7

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 4.7

INDENTURE

BETWEEN

CAREER EDUCATION CORPORATION

AND

                                                           , AS TRUSTEE

Dated as of                         , 2003

CAREER EDUCATION CORPORATION

CROSS-REFERENCE SHEET^*

        Showing the location in the Career Education Corporation Indenture of the provisions inserted pursuant to Sections 310 through 318(a) of the Trust Indenture Act of 1939.

Provision of Trust Indenture Act of 1939	Indenture Provision
§ 310(a)(1), (2)	Section 9.09
(3)	Not Applicable
(4)	Not Applicable
(5)
(b)	Sections 9.08 and 9.10
(c)	Not Applicable
§ 311(a)	Section 9.13(a)
(b)	Section 9.13(b)
(b)(2)	Sections 9.03(a)(ii) and 9.03(b)
(c)	Not Applicable
§ 312(a)	Sections 9.01 and 9.02(a)
(b)	Section 9.02(b)
(c)	Section 9.03(c)
§ 313(a)	Section 9.03(a)
(b)(1)	Not Applicable
(2)	Section 9.03(b)
(c)	Section 9.03(a) and 9.03(b)
(d)	Section 9.03(c)
§ 314(a)	Section 9.04
(b)	Not Applicable
(c)	Section 1.02
(d)	Not Applicable
(e)	Section 1.02
(f)	Not Applicable
§ 315(a)(1)	Section 9.01(a)(i)
(2)	Section 9.01(a)(ii)
(b)	Section 9.02 and 10.03(a)(vi)
(c)	Section 9.01(b)
(d)(1)	Section 9.01(a)
(2)	Section 9.01(c)(ii)
(3)	Section 9.01(c)(iii)
(e)	Section 8.14
§ 316(a)	Sections 8.02, 8.12 and 8.13
(b)	Section 8.08
(c)	Section 15.04
§ 317(a)(1), (2)	Sections 8.03 and 8.04
(b)	Section 13.03
§ 318(a)	Section 1.09

*

This cross-reference sheet shall not, for any purpose, be deemed to be a part of the Indenture.

i

CAREER EDUCATION CORPORATION.

INDENTURE

TABLE OF CONTENTS^*

				Page
ARTICLE I			DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	1
	Section 1.01.		Definitions	1
		Act of the Holders		1
		Authenticating Agent		1
		Authorized Newspaper		1
		Board of Directors		1
		Board Resolution		1
		Business Day		1
		Commission		1
		Company		2
		Company Consent		2
		Corporate Trust Office		2
		corporation		2
		Coupon		2
		Coupon Security		2
		Debt		2
		Defaulted Interest		2
		Depositary		2
		Event of Default		2
		Federal Bankruptcy Code		2
		Fully Registered Security		2
		Global Security		2
		Governmental Obligations		3
		Holder		3
		Indenture		3
		Interest		3
		Interest Payment Date		3
		Maturity		3
		Officer's Certificate		3
		Opinion of Counsel		3
		Original Issue Discount Security		3
		Outstanding		3
		Overdue Rate		4
		Paying Agent		4

*

This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.

i

		Person		4
		Place of Payment		4
		Predecessor Securities		4
		record date		4
		Redemption Date		4
		Redemption Price		4
		Registered Holder		4
		Registered Security		5
		Responsible Officer		5
		Security or Securities		5
		Securities Register and Securities Registrar		5
		Senior Debt		5
		special record date		5
		Specified Amount		5
		Stated Maturity		5
		Subordinated Debt		5
		Subsidiary		5
		Trustee		5
		Trust Indenture Act		5
		Unregistered Security		5
		Voting Stock		5
	Section 1.02.		Other Defined Terms	6
	Section 1.03.		Compliance Certificates and Opinions	6
	Section 1.04.		Form of Documents Delivered to Trustee	6
	Section 1.05.		Act of Holders	7
	Section 1.06.		Notice to Trustee and Company	7
	Section 1.07.		Notice to Holders; Waiver	7
	Section 1.08.		Immunity of Incorporators, Stockholders, Officers and Directors	8
	Section 1.09.		Conflict with Trust Indenture Act	8
	Section 1.10.		Effect of Headings and Table of Contents	8
	Section 1.11.		Successors and Assigns	9
	Section 1.12.		Separability Clause	9
	Section 1.13.		Benefits of Indenture	9
	Section 1.14.		Governing Law	9
	Section 1.15.		Cross References	9
	Section 1.16.		Counterparts	9
ARTICLE II			FORM OF SECURITIES	10
	Section 2.01.		Forms Generally	10
	Section 2.02.		Form of Certificate of Authentication	10
	Section 2.03.		Securities Issuable in the Form of a Global Security	10
ARTICLE III			THE SECURITIES	12
	Section 3.01.		Amount Unlimited; Issuable in Series; Terms	12
	Section 3.02.		Denominations	14
	Section 3.03.		Authentication and Dating	14
	Section 3.04.		Execution of Securities	15

ii

	Section 3.05.	Exchange and Registration of Transfer of Securities	16
	Section 3.06.	Mutilated, Destroyed, Lost or Stolen Securities	17
	Section 3.07.	Temporary Securities	18
	Section 3.08.	Payment of Interest; Interest Rights Preserved	18
	Section 3.09.	Persons Deemed Owners	20
	Section 3.10.	Cancellation	20
	Section 3.11.	Computation of Interest	20
	Section 3.12.	Compliance with Certain Laws and Regulations	20
ARTICLE IV		REDEMPTION OF SECURITIES	22
	Section 4.01.	Applicability of Article	22
	Section 4.02.	Election to Redeem; Notice to Trustee	22
	Section 4.03.	Selection by Trustee of Securities to be Redeemed	22
	Section 4.04.	Notice of Redemption	22
	Section 4.05.	Deposit of Redemption Price	23
	Section 4.06.	Securities Payable on Redemption Date	23
	Section 4.07.	Securities Redeemed in Part	23
ARTICLE V		SINKING FUNDS	24
	Section 5.01.	Applicability of Article	24
	Section 5.02.	Satisfaction of Mandatory Sinking Fund Payments with Securities	24
	Section 5.03.	Redemption of Securities for Sinking Fund	24
	Section 5.04.	No Sinking Fund Redemption During Default	25
ARTICLE VI		CONVERSION OF SECURITIES	25
	Section 6.01.	Applicability of Article	25
	Section 6.02.	Exercise of Conversion Privilege	26
	Section 6.03.	No Fractional Shares	26
	Section 6.04.	Adjustment of Conversion Price	27
	Section 6.05.	Notice of Certain Corporate Actions	29
	Section 6.06.	Reservation of Shares of Common Stock	30
	Section 6.07.	Payment of Certain Taxes Upon Conversion	30
	Section 6.08.	Nonassessability	30
	Section 6.09.	Effect of Consolidation or Merger on Conversion Privilege	30
	Section 6.10.	Duties of Trustee Regarding Conversion	31
	Section 6.11.	Repayment of Certain Funds Upon Conversion	31
ARTICLE VII		SATISFACTION AND DISCHARGE	32
	Section 7.01.	Satisfaction and Discharge of Securities of any Series	32
	Section 7.02.	Satisfaction and Discharge of Indenture	33
	Section 7.03.	Application of Trust Money	33
	Section 7.04.	Reinstatement	34
	Section 7.05.	Repayment to Company	35
ARTICLE VIII		DEFAULTS AND REMEDIES	35
	Section 8.01.	Events of Default	35
	Section 8.02.	Acceleration of Maturity; Rescission and Annulment	36

iii

	Section 8.03.	Collection of Indebtedness and Suits for Enforcement by Trustee	36
	Section 8.04.	Trustee May File Proofs of Claim	37
	Section 8.05.	Trustee May Enforce Claims Without Possession of Securities	38
	Section 8.06.	Application of Money Collected	38
	Section 8.07.	Limitation on Suits	38
	Section 8.08.	Unconditional Right of Holders to Receive Principal, Premium and Interest	39
	Section 8.09.	Restoration of Rights and Remedies	39
	Section 8.10.	Rights and Remedies Cumulative	39
	Section 8.11.	Delay or Omission Not Waiver	39
	Section 8.12.	Control by Holders	39
	Section 8.13.	Waiver of Past Defaults	40
	Section 8.14.	Undertaking for Costs	40
	Section 8.15.	Waiver of Stay or Extension Laws	40
ARTICLE IX		THE TRUSTEE	41
	Section 9.01.	Certain Duties and Responsibilities	41
	Section 9.02.	Notice of Defaults	41
	Section 9.03.	Certain Rights of Trustee	42
	Section 9.04.	Not Responsible for Recitals or Issuance of Securities	42
	Section 9.05.	May Hold Securities	43
	Section 9.06.	Money Held in Trust	43
	Section 9.07.	Compensation and Reimbursement	43
	Section 9.08.	Disqualification; Conflicting Interests	43
	Section 9.09.	Corporate Trustee Required; Eligibility	47
	Section 9.10.	Resignation and Removal; Appointment of Successor	47
	Section 9.11.	Acceptance of Appointment by Successor	48
	Section 9.12.	Merger, Conversion, Consolidation or Succession to Business	49
	Section 9.13.	Preferential Collection of Claims Against Company	50
	Section 9.14.	Authenticating Agent	52
ARTICLE X		HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY	54
	Section 10.01.	Holders' Lists	54
	Section 10.02.	Communications to Holders	54
	Section 10.03.	Reports by Trustee	55
	Section 10.04.	Reports by Company	56
ARTICLE XI		CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	57
	Section 11.01.	Company May Consolidate, etc	57
	Section 11.02.	Successor Corporation Substituted	57
ARTICLE XII		SUPPLEMENTAL INDENTURES	58
	Section 12.01.	Supplemental Indentures Without Consent of Holders	58
	Section 12.02.	Supplemental Indentures With Consent of Holders	59
	Section 12.03.	Execution of Supplemental Indentures	60
	Section 12.04.	Effect of Supplemental Indentures	60

iv

	Section 12.05.	Conformity with Trust Indenture Act	60
	Section 12.06.	Reference in Securities to Supplemental Indentures	60
ARTICLE XIII		COVENANTS	60
	Section 13.01.	Payment of Principal, Premium and Interest	60
	Section 13.02.	Maintenance of Office or Agency	61
	Section 13.03.	Money for Securities Payments to be Held in Trust; Paying Agent to Repay Moneys Held; Return of Unclaimed Moneys	61
	Section 13.04.	Maintenance of Properties	62
	Section 13.05.	Statement as to Compliance	62
	Section 13.06.	Corporate Existence	63
ARTICLE XIV		HOLDERS' MEETINGS	64
	Section 14.01.	Purposes of Meetings	64
	Section 14.02.	Call of Meetings by Trustee	64
	Section 14.03.	Call of Meetings by Company or Holders	64
	Section 14.04.	Qualifications for Voting	64
	Section 14.05.	Regulations	65
	Section 14.06.	Voting	65
	Section 14.07.	No Delay of Rights by Meeting	66
ARTICLE XV		CONCERNING HOLDERS OF SECURITIES	66
	Section 15.01.	Evidence of Action by Holders	66
	Section 15.02.	Proof of Execution of Instruments and of Holding of Securities	66
	Section 15.03.	Securities Owned by the Company or Other Obligor on the Securities to be Disregarded in Certain Cases	66
	Section 15.04.	Record Date	66
ARTICLE XVI		SUBORDINATION OF SECURITIES	67
	Section 16.01.	Securities Subordinate to Senior Debt	67
	Section 16.02.	No Payments When Senior Debt in Default; Payment Over of Proceeds upon Dissolution, Etc	67
	Section 16.03.	Trustee to Effectuate Subordination	69
	Section 16.04.	Trustee Not Charged With Knowledge Of Prohibition	69
	Section 16.05.	Rights Of Trustee As Holder Of Senior Debt	69
	Section 16.06.	Article Applicable To Paying Agent	69

v

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION

        Section 1.01.    Definitions.

        For all purposes of this Indenture, of all indentures supplemental hereto and of all Securities issued hereunder or thereunder, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article I shall have the meanings assigned to them in this Article I, and include the plural as well as the singular, (b) all terms used in this Indenture, in any indenture supplemental hereto or in any such Securities which are defined in the Trust Indenture Act shall have the meanings assigned to them in such Act; and (c) all accounting terms not otherwise defined in this Indenture, in any indenture supplemental hereto or in such Securities shall have the meanings assigned to them in accordance with generally accepted accounting principles, and the term "generally accepted accounting principles," with respect to any computation required or permitted hereunder, shall mean such accounting principles which are generally accepted at the date of such computation.

        "Act of the Holders": See Section 1.05.

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

        "applicants": See Section 10.02.

        "Authenticating Agent": See Section 9.14.

        "Authorized Newspaper"means, when used with respect to the Securities of any series the terms of which permit Unregistered Securities, a newspaper of general circulation in the English language, published at least once a day, and customarily published for at least five days in each calendar week, and of general circulation in such city or cities in the United States of America as may be specified by the terms of the Securities of such series. Whenever successive publications in an Authorized Newspaper are required hereunder, they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or in different Authorized Newspapers in the same city.

        "Board of Directors"means the board of directors of the Company, any duly authorized committee of the board of directors, or officers of the Company to whom such board or committee shall have duly delegated its authority.

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

        "Business Day"when used in conjunction with the name of a city, shall mean any day other than a day on which banking institutions in such city are authorized or required by law or executive order to close, and shall otherwise mean each day of the week which is not a day on which banking institutions at the place where any specified act pursuant to this Indenture is to occur are authorized or required by law or executive order to close.

        "Commission"means the Securities and Exchange Commission.

        "Common Stock" means shares of common stock, par value $0.01 per share, of the Company.

        "Company"means Career Education Corporation, a Delaware corporation, until a successor replaces it pursuant to the applicable provisions of this Indenture, and thereafter means the successor.

        "Company Consent", "Company Order" and "Company Request" mean, respectively, a written consent, order or request signed in the name of the Company by the Chief Executive Officer, the President, any Vice President, the Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company, and delivered to the Trustee.

        "Conversion Price" means the price at which shares of Common Stock or Preferred Stock, as applicable, are issuable upon conversion of any Securities, as adjusted from time to time in accordance with Article 6.

        "Corporate Trust Office"means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered; provided, however, that with respect to presentation of Registered Securities for payment or for registration of transfer and exchange, presentation of Unregistered Securities for registration and the location of the Securities Register, such term shall mean the office or agency of the Trustee at which at any particular time its corporate agency business shall be principally conducted.

        "corporation"includes a corporation, voluntary association, joint stock company and business trust.

        "Coupon"means any interest coupon appertaining to any Security.

        "Coupon Security"means any Security authenticated and delivered with one or more Coupons appertaining thereto.

        "Debt"of any Person means (i) all liabilities, whether issued or assumed, contingent or otherwise, of such Person (x) in respect of money borrowed by such Person or (y) evidenced by note, debenture or other like written obligation of such Person to pay money, (ii) all guarantees or legal liability (x) in respect of money borrowed by third persons or (y) in respect of obligations of third persons evidenced by note, debenture or other like written obligation of such third persons to pay money and (iii) any obligation of the type described in clauses (i) and (ii) secured by a lien to which the property or assets of such Person are subject, whether or not the obligations secured thereby shall have been assumed by, or otherwise be the legal liability of, such Person.

        "Defaulted Interest": See Section 3.08.

        "Depositary"means, unless otherwise specified by the Company pursuant to either Section 2.03 or 3.01, with respect to Securities of any series issuable or issued as a Global Security, The Depository Trust Company, New York, New York, or any successor thereto registered under the Securities and Exchange Act of 1934, as amended, or other applicable statute or regulation.

        "Event of Default": See Section 8.01.

        "Federal Bankruptcy Code"means Title 11 of the United States Code, as amended.

        "Fully Registered Security"means any Security registered as to principal and interest, if any.

        "Global Security"means with respect to any series of Securities issued hereunder, a Security which is executed by the Company and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction, all in accordance with this Indenture and an indenture supplemental hereto, if any, or Board Resolution and pursuant to a Company Order, and which shall be registered in the name of the Depositary or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series or any portion thereof, in either case having the same terms, including, without limitation, the same issue date, date or dates on which principal is due, and interest rate or method of determining interest.

2

        "Government Obligations"means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

        "Holder"means a Person in whose name a Registered Security of any series is registered in the Securities Register or a bearer of an Unregistered Security or a Coupon.

        "Indenture"means this Indenture, as amended or supplemented from time to time, and shall include the form and terms of particular series of Securities established as contemplated hereunder.

        "Interest"when used with respect to non-interest bearing Securities, means interest payable after Maturity.

        "Interest Payment Date"means the Stated Maturity of an installment of interest on the Securities of any series.

        "Market Price" of any security means (i) the last closing trade price for such security on the primary securities exchange or market on which such security is listed or, if the foregoing is not applicable, the last closing trade price in the domestic over-the-counter market as reported by the National Bulletin Board, or any similar successor organization, or, if the foregoing is not applicable, the last closing trade price as reported in the "pink sheets" by the National Quotation Bureau, Inc. or any similar successor organization, in each such case, averaged over a period of twenty (20) consecutive trading days ending on the day prior to the day "Market Price" is being determined and (ii) if the "Market Price" cannot be calculated for a security pursuant to clause (i), the fair market value of such security determined by the Board of Directors of the Company pursuant to a Board Resolution.

        "Maturity"means the date on which the principal of any Security becomes due and payable, whether at Stated Maturity or by declaration of acceleration, call for redemption, pursuant to a sinking fund or otherwise.

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

        "Opinion of Counsel"means a written opinion signed by legal counsel to the Company, who shall be acceptable to the Trustee and who may be an employee of the Company, and delivered to the Trustee.

        "Original Issue Discount Security"means any Security which is initially sold at a discount from the principal amount thereof and which provides that an amount less than its principal amount is due and payable upon a declaration of acceleration pursuant to Section 8.02.

        "Outstanding"means, as of the date of determination, all Securities previously authenticated and delivered under this Indenture, except:

        (a)   Securities previously cancelled by the Trustee or delivered to the Trustee for cancellation;

3

        (b)   Securities or portions thereof for whose payment or redemption money in the necessary amount has been deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the holders of such Securities, provided that, if such Securities or portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

        (c)   Securities in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Trustee is presented that any such Securities are held by a holder in due course.

        However, in determining whether the Holders of the requisite principal amount of Securities Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) Securities owned by the Company or any other obligor upon the Securities, or any Affiliate of the Company or such other obligor, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be disregarded (Securities which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right to act with respect to such Securities and the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor), and (ii) the principal amount of Original Issue Discount Securities that shall be deemed to be Outstanding for such purposes shall be the principal amount of such Securities that would be declared due and payable as of the date of such determination upon a declaration of acceleration pursuant to Section 8.02.

        "Overdue Rate": See Section 3.01(k).

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

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

        "Place of Payment"when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) or interest, if any, on the Securities of such series are payable as specified by the terms of the Securities of such series, established as provided in Section 3.01.

        "Predecessor Securities"of any particular Security means every previous Security evidencing all or a portion of the same Debt as that evidenced by such particular Security. Any Security authenticated and delivered under Section 3.06 in lieu of a mutilated, lost, destroyed or stolen Security shall be deemed to evidence the same Debt as the mutilated, lost, destroyed or stolen Security.

        "Preferred Stock" means shares of the preferred stock, par value $0.01 per share, of the Company.

        "record date": See Section 3.08.

        "Redemption Date"means the date fixed for redemption of the Securities of any series by the terms of the Securities of such series, established as provided in Section 3.01.

        "Redemption Price"when used with respect to any Security to be redeemed, means the price at which it is to be redeemed as specified by the terms of the Securities of such series established as provided in Section 3.01, exclusive of interest accrued and unpaid to the Redemption Date.

        "Registered Holder"means the Person in whose name a Registered Security is registered in the Securities Register.

4

        "Registered Security"means any Security, registered as to principal.

        "Responsible Officer"when used with respect to the Trustee, means the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of the board of directors, the president, any vice president (whether or not designated by a number or a word or words added before or after the title "vice president"), the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

        "Security" or "Securities"means a Fully Registered Security or a Registered Security or an Unregistered Security, authenticated and delivered under this Indenture.

        "Securities Register" and "Securities Registrar": See Section 3.05.

        "Senior Debt"means Debt of the Company which is not by its terms made subordinate or junior in right of payment with respect to the general assets of the Company to any other Debt of the Company.

        "Significant Subsidiary" means a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, as in effect on the date hereof, except that any Subsidiary the common stock of which is listed on a national securities exchange or authorized for quotation on the National Market System of NASDAQ (at present or at any future relevant time), and any Subsidiary of such Subsidiary, shall be deemed not to be a Significant Subsidiary.

        "special record date": See Section 3.08.

        "Specified Amount": See Section 3.12(i).

        "Stated Maturity"when used with respect to any Security or any installment of interest thereon, means the date specified in such Security or a Coupon, if any, as the fixed date on which the principal (or any portion thereof) of such Security (or premium, if any) or such installment of interest is due and payable.

        "Subordinated Debt"means all Debt of the Company which is by its terms made subordinate or junior in right of payment to any other Debt of the Company.

        "Subsidiary"means any corporation of which more than 50% of the Voting Stock (other than directors' qualifying shares) shall at the time as of which any determination is being made, be owned, directly or indirectly, by the Company or by one or more Subsidiaries, or by the Company and one or more Subsidiaries.

        "Trustee"means the party named as such in the first paragraph of this Indenture and, subject to the provisions of Article IX hereof, shall also include its successors and assigns as Trustee hereunder. If there shall be at any one time more than one Trustee hereunder, "Trustee" shall mean each such Trustee and shall apply to each such Trustee only with respect to those series of Securities with respect to which it is serving as Trustee.

        "Trust Indenture Act"means the Trust Indenture Act of 1939, as in force on the date of this Indenture, except as provided in Section 10.03 and Section 12.05.

        "Unregistered Security"means any Security that is not registered as to principal.

        "Voting Stock"means stock of the class or classes having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such

5

corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

        Section 1.02.    Other Defined Terms.

        Certain terms used in Article IX are defined in that Article.

        Section 1.03.    Compliance Certificates and Opinions.

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

        Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

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

        (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 each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

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

        Section 1.04.    Form of Documents Delivered to Trustee.

        In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

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

        Any certificate, statement or opinion of an officer of the Company or of counsel may be based, insofar as it relates to accounting matters, upon a certificate of or representations by an accountant or firm of accountants, unless such officer or counsel, as the case may be, knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the

6

accounting matters upon which such officer's or counsel's certificate, statement or opinion may be based is erroneous.

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

        Section 1.05.    Act of Holders.

        (a)   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act of the Holders" signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent by a Holder of a Security or of any Coupon shall be sufficient for any purpose of this Indenture and (subject to Section 9.01 and Section 9.03) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.05.

        (b)   The fact and date of the execution by any Person of any such instrument or writing, or the authority of the Person executing the same, may be proved in any manner which the Trustee deems sufficient and in accordance with such reasonable requirements as the Trustee may determine.

        (c)   The ownership of Registered Securities of any series shall be proved by the Securities Register for such series or by a certificate of the Securities Registrar for such series; the ownership of Unregistered Securities of any series and Coupons shall be proved by proof of possession reasonably satisfactory to the Trustee.

        (d)   Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind the Holder of every Security and any Coupon appertaining thereto issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or permitted to be done by the Trustee or the Company or any agent of the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security or Coupon.

        Section 1.06.    Notice to Trustee and Company.

        Any notice, Act of the Holders or other document required or permitted by this Indenture shall be sufficiently given if in writing and (except as provided in subsections (d) and (e) of Section 8.01 of this Indenture or in any supplemental indenture) delivered in person or mailed, by first-class mail, postage prepaid, registered mail, certified mail or national overnight courier service, as follows:

        if to the Company,

Career Education Corporation
2895 Greenspoint Parkway, Suite 600
Hoffman Estates, Illinois 60195
Attention: Chief Financial Officer

        if to the Trustee, at its Corporate Trust Office, or at such other address previously furnished in writing by one party to the other.

        Section 1.07.    Notice to Holders; Waiver.

        Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) (a) if in writing and mailed, by first-class mail,

7

postage prepaid, registered mail, certified mail or national overnight courier service, to Holders of any Fully Registered Securities affected by such event, as their names and addresses appear in the Securities Register, not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice, and (b) with respect to Holders of any Unregistered Securities affected by such event, (i) if in writing and mailed by first-class mail, postage prepaid, registered mail, certified mail or national overnight courier service, to such Holders, in the manner and to the extent provided in Section 10.03, and (ii) if published at least twice, each on a Business Day, in an Authorized Newspaper or Newspapers, the first such publication to be not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice. If the Company mails a notice to Holders, it shall mail or deliver a copy thereof to the Trustee. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance on such waiver. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. In case by reason of the suspension of publication of any Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Unregistered Securities as provided above, then such notice as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder.

        Section 1.08.    Immunity of Incorporators, Stockholders, Officers and Directors.

        No recourse shall be had for the payment of the principal of (and premium, if any) or the interest, if any, on any Security or Coupon of any series, or for any claim based thereon, or upon any obligation, covenant or agreement of this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or of any successor corporation, either directly or indirectly through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise. It is expressly agreed and understood that this Indenture and all the Securities and Coupons of each series, are solely corporate obligations, and that no personal liability whatever shall attach to, or is incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of any successor corporation, either directly or indirectly through the Company or any successor corporation, because of the incurring of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities of any series, or to be implied herefrom or therefrom. It is further expressly agreed and understood that all such personal liability is hereby expressly released and waived as a condition of, and as part of the consideration for, the execution of this Indenture and the issue of the Securities or Coupons of each series.

        Section 1.09.    Conflict with Trust Indenture Act.

        If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the Trust Indenture Act, the required provision shall control.

        Section 1.10.    Effect of Headings and Table of Contents.

        The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction of this Indenture.

8

        Section 1.11.    Successors and Assigns.

        All covenants and agreements in this Indenture by the Company shall bind its successors and assigns. All agreements in this Indenture by the Trustee shall bind its successors and assigns.

        Section 1.12.    Separability Clause.

        In case any provision in this Indenture or in the Securities or Coupons of any series shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions (or of the other series of Securities) shall not in any way be affected or impaired thereby.

        Section 1.13.    Benefits of Indenture.

        Nothing in this Indenture or in the Securities or Coupons, expressed or implied, shall give to any Person, other than the parties hereto and their successors and assigns hereunder, and the Holders of the Securities or Coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture.

        Section 1.14.    Governing Law.

        This Indenture, each Security and each Coupon shall be deemed to be a contract made under the laws of the State of New York, and this Indenture, each Security and each Coupon for all purposes shall be governed by and construed in accordance with the laws of the State of New York.

        Section 1.15.    Cross References.

        All references herein to "Articles" and other subdivisions are to the corresponding Articles or other subdivisions of this Indenture; the word "Section" refers to corresponding Sections of this Indenture; and the words "herein", "hereof", "hereby", "hereunder", "hereinbefore" and "hereinafter" and other words of similar purport refer to this Indenture generally and not to any particular Article, Section or other subdivision hereof.

        Section 1.16.    Counterparts.

        This Indenture may be executed in any number of counterparts, each of which shall be an original, but all of which, taken together, shall constitute one and the same instrument.

9

ARTICLE II

FORM OF SECURITIES

        Section 2.01.    Forms Generally.

        The Securities of each series and the Coupons if any, to be attached thereto, shall be in substantially the form or forms established by or pursuant to the authority granted in a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required by this Indenture. The Securities may have notations, legends or endorsements placed thereon as may be required by law, any rule or regulation of any securities exchange or market on which the Securities may be listed, or agreements to which the Company is party, or as may, consistently herewith, be determined by the officers of the Company executing such Securities and Coupons, if any, as evidenced by their execution of the Securities and Coupons, if any.

        The definitive Securities and Coupons, if any, of each series shall be printed, lithographed or engraved or produced in any other manner, all as determined by the officers of the Company executing such Securities, and Coupons, if any, as evidenced by their execution of such Securities and Coupons, if any.

        Section 2.02.    Form of Certificate of Authentication.

        The certificate of authentication on all Securities shall be in substantially the following form:

This is one of the Securities of the series provided for under the within-mentioned Indenture.

as Trustee

By

Authorized Officer

or

as Trustee

By

Authenticating Agent

By

Authorized Officer

        Section 2.03.    Securities Issuable in the Form of a Global Security.

        (a)   If the Company shall establish pursuant to Section 3.01 that the Securities of a particular series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee shall, in accordance with Section 3.03 and the Company Order delivered to the Trustee thereunder, authenticate and deliver such Global Security or Global Securities, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Securities of such series to be represented by such Global Security or

10

Global Securities, (ii) shall be registered in the name of the Depositary for such Global Security or Global Securities or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction and (iv) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for the Securities in definitive form, this Global Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary."

        (b)   Notwithstanding any other provision of this Section 2.03 or of Section 3.05, subject to the provisions of subsection (c) below, unless the terms of a Global Security expressly permit such Global Security to be exchanged in whole or in part for Securities in definitive form, a Global Security may be transferred, in whole but not in part, and in the manner provided in Section 3.05, only to a nominee of the Depositary for such Global Security, or to the Depositary, or to a successor Depositary for such Global Security selected or approved by the Company, or to a nominee of such successor Depositary.

        (c)   (i) If at any time the Depositary for a Global Security notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time the Depositary for a Global Security shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depositary with respect to such Global Security. If a successor Depositary for such Global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Securities of such series in exchange for such Global Security, will authenticate and deliver, Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of the Global Security in exchange for such Global Security.

        (ii)   The Company may at any time and in its sole discretion determine that the Securities of any series issued or issuable in the form of one or more Global Securities shall no longer be represented by such Global Security or Global Securities. In such event, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of individual Securities of such series in exchange in whole or in part for such Global Security, will authenticate and deliver, Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such Global Security or Global Securities representing such series in exchange for such Global Security or Global Securities.

        (iii)  If specified by the Company pursuant to Section 3.01 with respect to Securities issued or issuable in the form of a Global Security, the Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for Securities of such series of like tenor and terms in definitive form on such terms as are acceptable to the Company and such Depositary. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, (1) to each Person specified by such Depositary a new Security or Securities of the same series of like tenor and terms in definitive form and of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security; and (2) to such Depositary a new Global Security of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof.

        (iv)  In any exchange provided for in any of clause (i), (ii) or (iii), the Company will execute, and the Trustee will authenticate and deliver, Securities in definitive registered form in authorized denominations. Upon the exchange of a Global Security for Securities in definitive form, such Global Security shall be canceled by the Trustee. Securities issued in exchange for a Global Security pursuant

11

to this Section shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.

ARTICLE III

THE SECURITIES

        Section 3.01.    Amount Unlimited; Issuable in Series; Terms.

        The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

        The Securities may be issued in one or more series. There shall be established in or pursuant to the authority granted in a Board Resolution or established in one or more indentures supplemental hereto, prior to the issuance of any Securities of any series:

        (a)   the title of the Securities of such series (which shall distinguish the Securities of such series from all other series of Securities);

        (b)   any limit on the aggregate principal amount of the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 2.03, Section 3.05, Section 3.06, Section 3.07, Section 4.07 or Section 12.06);

        (c)   if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of such series shall be issuable;

        (d)   the date or dates on which the principal (and premium, if any) of the Securities of such series shall be payable;

        (e)   the rate or rates (which may be fixed or variable), or the method of determination thereof, at which the Securities of such series shall bear interest, if any;

        (f)    the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable, and in the case of Fully Registered Securities, the record dates, if other than as set forth in Section 3.08, for the determination of Holders to whom any such interest shall be payable, and whether any special terms and conditions relating to the payment of additional amounts in respect of payments on the Securities of such series shall, in the event of certain changes in the United States Federal income tax laws, apply to Unregistered Securities of such series or to Registered Securities of such series;

        (g)   the Place or Places of Payment for Securities of such series;

        (h)   the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of such series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise, and whether any special terms and conditions of redemption shall apply to Unregistered Securities of such series or to Registered Securities of such series;

        (i)    the obligation, if any, of the Company to redeem, repay or purchase Securities of such series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, and the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of such series shall be redeemed, repaid, or purchased, in whole or in part, pursuant to such obligation;

        (j)    any deletions, modifications or additions to the Events of Default with respect to the Securities of such series;

12

        (k)   if other than the rate of interest stated in the title of the Securities of such series, the applicable rate of interest upon any overdue payments (the "Overdue Rate");

        (l)    if other than the principal amount thereof, the portion of the principal amount of Securities of such series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 8.02;

        (m)  if the Securities of such series do not bear interest, the applicable dates for purposes of Section 10.01;

        (n)   whether payment of the principal of (and premium, if any) and interest, if any, on the Securities of such series shall be with or without deduction for taxes, assessments or governmental charges, and with or without reimbursement of taxes, assessments or governmental charges paid by Holders;

        (o)   whether the Securities of such series are to be issued as Registered Securities (with or without Coupons) or Unregistered Securities or both, and, if Unregistered Securities or Coupon Securities are issued, whether Unregistered Securities or Coupon Securities of such series may be exchanged for Registered Securities or Fully Registered Securities of such series and whether Registered Securities or Fully Registered Securities of such series may be exchanged for Unregistered Securities of such series and the circumstances under which and the place or places where any such exchanges, if permitted, may be made;

        (p)   if other than as set forth in Section 7.01, provisions for the satisfaction and discharge of this Indenture;

        (q)   any deletions, modifications or additions to the covenants of the Company with respect to the Securities of such series, set forth herein, provided that no covenant required by the Trust Indenture Act as then in effect may be deleted;

        (r)   if other than the Trustee, the designation of the Authentication Agent, Paying Agent and Securities Registrar;

        (s)   whether the Securities will be convertible into, or exchangeable for, shares of Common Stock, shares of a series of Preferred Stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion or exchange price and the conversion or exchange period;

        (t)    whether the Securities shall be issued in whole or in part in the form of one or more Global Securities; the terms and conditions, if any, upon which such Global Securities may be exchanged in whole or in part for Securities in definitive form; and the Depositary for such Global Securities;

        (u)   the terms and conditions, if any, upon which the payment of Securities of such series shall be subordinated to other indebtedness of the Company; and

        (v)   any other terms of such series (which terms shall not be inconsistent with the provisions of this Indenture).

        All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the authority granted in such Board Resolution or in any such supplemental indenture.

        Not all of the Securities of any one series need be issued at the same time, and, unless otherwise provided in the Board Resolution or supplemental indenture establishing a series, such series may be reopened for issuances of additional Securities or to establish additional terms of such series of Securities pursuant to the provisions hereof.

13

        Section 3.02.    Denominations.

        Securities of each series shall be denominated and payable in the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. In the absence of any specification pursuant to Section 3.01 with respect to the Securities of any series, the Securities of such series shall be issuable as Fully Registered Securities in denominations of $1,000 and any integral multiple thereof.

        Section 3.03.    Authentication and Dating.

        At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series, with appropriate Coupons, if any, attached thereto, executed by the Company together with a Company Order, to the Trustee for authentication. Such Company Order may authorize authentication and delivery of the Securities of such series from time to time in accordance with oral instructions of officers of the Company, provided that such oral instructions are confirmed by telecopy. Except as otherwise provided in this Article III, the Trustee shall thereupon authenticate and deliver, or cause to be authenticated and delivered, such Securities pursuant to such Company Order without any further action by the Company. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive and (subject to Section 9.01) shall be fully protected in relying upon:

        (a)   a Board Resolution relating thereto and, if applicable, an appropriate record of any action taken pursuant to such resolution;

        (b)   an executed supplemental indenture, if any, relating thereto;

        (c)   an Officers' Certificate setting forth the form and terms of the Securities of such series pursuant to Section 2.01 and Section 3.01 (if not done in a supplemental indenture) and stating that all conditions precedent provided for in this Indenture relating to the issuance of such Securities have been complied with, that no Event of Default with respect to any series of Securities has occurred and is continuing and that the issuance of such Securities is not and will not result in (i) an Event of Default or an event or condition which, upon the giving of notice (or the acquisition of knowledge) or the lapse of time or both, would become an Event of Default or (ii) a default under the provisions of any other instrument or agreement by which the Company is bound; and

        (d)   an Opinion of Counsel stating:

        (i)    that the form and terms of such Securities and Coupons, if any, have been established in conformity with the provisions of this Indenture;

        (ii)   that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will, together with any Coupons appertaining thereto, constitute legal, valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors' rights and by general equitable principles, regardless of whether such enforceability is considered in a proceeding in equity or at law;

        (iii)  that the Company has the necessary corporate power to issue such Securities and Coupons, if any, and has duly taken all necessary corporate action with respect to such issuance;

        (iv)  that the issuance of such Securities and Coupons, if any, will not contravene the charter or by-laws of the Company or result in any violation of any of the terms or provisions

14

of any New York or Federal law or regulation, of the General Corporation Law of the State of Delaware or any regulation issued thereunder, or of any indenture, mortgage or other similar agreement known to such counsel by which the Company is bound; and

        (v)   that all applicable provisions and requirements of the General Corporation Law of the State of Delaware, and all New York or Federal laws and requirements in respect of the execution and delivery by the Company of such Securities and the related supplemental indenture, if any, have been complied with and that authentication and delivery of such Securities and the execution and delivery of the related supplemental indenture, if any, by the Trustee will not violate the terms of the Indenture; and

        (vi)  such other matters as the Trustee may reasonably request.

        With respect to Securities of a series constituting a medium term note program, the Company shall be required to deliver to the Trustee the documents described in this Section 3.03 only prior to the initial authentication of the Securities of such series and the Trustee may conclusively rely on such documents (unless revoked by superseding comparable documents) as to the authorization of the Board of Directors of any Securities delivered hereunder, the form thereof and the legality, validity, binding effect and enforceability thereof.

        If all the Securities of any one series are not to be issued at one time (i) the Trustee shall be entitled to assume that, at the time of the issuance of such Securities, the terms of such Securities do not violate any applicable law or agreement then binding on the Company, and (ii) it shall not be necessary to deliver a Board Resolution, an executed supplemental indenture, if any, an Officers' Certificate or an Opinion of Counsel at the time of issuance of each Security, but such Board Resolution, supplemental indenture, if any, Officers' Certificate and Opinion of Counsel shall be delivered at or prior to the time of issuance of the first Security of such series and the Trustee may conclusively rely on such documents as to the matters covered thereby until revoked by superseding comparable documents delivered to it. After any first delivery of Securities of a series, any separate request by the Company that the Trustee authenticate Securities of such series for original issue will be deemed to be a certification by the Company that all conditions precedent provided for in this Indenture relating to authentication and delivery of such Securities continue to have been complied with.

        The Trustee shall have the right to decline to authenticate and deliver any Securities together with any Coupons appertaining thereto under this Section 3.03 if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith by its board of directors or trustees, executive committee, or a trust committee of directors or trustees or vice presidents shall determine that such action would expose the Trustee to personal liability to existing Holders.

        Each Registered Security shall be dated the date of its authentication. Each Unregistered Security of any series shall be dated the date of its authentication, except as otherwise provided pursuant to Section 3.01 with respect to the Securities of such series.

        Section 3.04.    Execution of Securities.

        The Securities and the Coupons, if any, appertaining thereto, shall be signed in the name and on behalf of the Company by its Chief Executive Officer, its President, one of its Vice Presidents or its Treasurer and attested to by its Secretary or one of its Assistant Secretaries; all signatures of officers of the Company may be manual or facsimile. Only such Securities as shall bear thereon a certificate of authentication substantially in the form recited in Section 2.02, executed by or on behalf of the Trustee by manual signature, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by or on behalf of the Trustee upon any Security executed by the Company

15

shall be conclusive evidence, and the only evidence, that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

        In case any officer of the Company who shall have signed any of the Securities or Coupons, if any, shall cease to be such officer before the Securities or Coupons, if any, so signed shall have been authenticated (in the case of the Securities) and delivered by or on behalf of the Trustee, or disposed of by the Company, such Securities and Coupons, if any, appertaining thereto nevertheless may be authenticated (in the case of the Securities) and delivered or disposed of as though the person who signed such Securities or Coupons, if any, had not ceased to be such officer of the Company; and any Security or Coupon may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Security or Coupon, if any, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

        The Trustee shall not authenticate or deliver any Coupon Security until any matured Coupons appertaining thereto have been detached and cancelled, except as otherwise provided or permitted by this Indenture.

        Section 3.05.    Exchange and Registration of Transfer of Securities.

        Subject to Section 2.03, Securities of any series may be exchanged for a like aggregate principal amount of Securities of the same series of other authorized denominations of a like Stated Maturity and with like terms and provisions. Securities to be exchanged shall be surrendered together, in the case of Coupon Securities, with all unmatured Coupons and matured Coupons in default appertaining thereto, at one of the offices or agencies to be maintained by the Company, as provided in Section 13.02, and the Company shall execute and register, or cause to be registered, and the Trustee shall authenticate and deliver, or cause to be authenticated and delivered, in exchange therefor, the Security or Securities in the same series and in such authorized denominations as the Holder making such exchange shall have requested and shall be entitled to receive.

        The Company shall keep, at each of such offices or agencies, a register for each series of Securities issued hereunder (hereinafter collectively referred to as the "Securities Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities of such series and registration of transfer of Securities as in this Article III provided. The Securities Register shall be in written form or in any other form capable of being converted into written form within a reasonable time. The Company shall from time to time appoint one or more Persons to serve as securities registrar for the purpose of registering Registered Securities of each series and registering transfers of Registered Securities of each series as herein provided (each, a "Securities Registrar"); provided, however, that there shall not be more than one Securities Registrar for any series of Securities at any given time. Upon due presentment for registration of transfer of any Security of any series at such office or agency, the Company shall execute and register, or cause to be registered, and the Trustee shall authenticate and deliver, or cause to be authenticated and delivered, in the name of the transferee or transferees a new Registered Security or Securities of the same series in authorized denominations for an equal aggregate principal amount.

        At the option of the Holder thereof, Securities of any series, whether Registered Securities or Unregistered Securities, which by their terms are registerable as to principal only or as to principal and interest, may, to the extent and under the circumstances specified by the terms of the Securities established as provided in Section 3.01, be exchanged for such Registered Securities with Coupons or Fully Registered Securities of such series, as may be issued by the terms thereof. Securities of any series, whether Registered Securities or Unregistered Securities, which by their terms provide for the issuance of Unregistered Securities, may not, except to the extent and under the circumstances specified by the terms of the Securities established as provided in Section 3.01, be exchanged for Unregistered Securities of such series. Securities so issued in exchange for other Securities shall be of like Stated Maturity and interest rate, if any. Unregistered Securities of any series issued in exchange

16

for Registered Securities of such series between the record date for such Registered Securities and the next Interest Payment Date will be issued without the Coupon relating to such Interest Payment Date, and Unregistered Securities surrendered in exchange for Registered Securities between such dates shall be surrendered without the Coupon relating to such Interest Payment Date.

        Upon presentation for registration of any Unregistered Security of any series which by its terms is registrable as to principal, at an office or agency of the Company to be maintained as provided in Section 13.02, such Security shall be registered as to principal in the name of the Holder thereof, and such registration shall be noted on such Security. Any Security so registered shall be transferable on the Securities Register of the Company upon presentation of such Security at such office or agency for similar notation thereon. To the extent permitted by law, such Security may be de-registered by presenting such Security to the Securities Registrar for transfer to bearer form, whereupon transferability by delivery shall be restored. To the extent permitted by law, Unregistered Securities may be registered and de-registered successively from time to time at the option of the Holders thereof.

        Every Security issued upon registration of transfer or exchange of Securities pursuant to this Section 3.05 shall be the valid obligation of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Security or Securities surrendered upon registration of such transfer or exchange.

        Unregistered Securities and Coupons shall be transferred by delivery. All Registered Securities presented for registration of transfer or for exchange, redemption or payment shall (if so required by the Company, the Trustee or the Securities Registrar) be duly endorsed by, or be accompanied by, a written instrument or instruments of transfer in form satisfactory to the Company, the Trustee and the Securities Registrar duly executed by the Holder thereof or such Holder's attorney duly authorized in writing.

        No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.07, Section 4.07 or Section 12.06 not involving any transfer.

        The Company shall not be required (a) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series and ending at the close of business on the day of such mailing or (b) to register the transfer of or exchange any Security selected for redemption in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not to be redeemed.

        None of the Company, the Trustee, any Paying Agent, any Authenticating Agent or the Securities Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

        Section 3.06.    Mutilated, Destroyed, Lost or Stolen Securities.

        In case any Security or Coupon shall become mutilated or be destroyed, lost or stolen, and in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company in the case of a mutilated Security or Coupon shall, and in the case of a lost, stolen or destroyed Security or Coupon may in its discretion, execute, and upon a Company Request, the Trustee shall authenticate and deliver, or cause to be authenticated and delivered, a new Security (with Coupons, if any, attached so that neither gain nor loss in interest shall result) of the same series and principal amount bearing a number, letter or other distinguishing symbol not contemporaneously outstanding, or a new Coupon, as appropriate, in exchange and substitution for the mutilated Security or Coupon, or in lieu of and substitution for the Security or Coupon so destroyed, lost or stolen. If any

17

such Security or Coupon shall have become due and payable or shall be about to become due and payable, instead of issuing a substituted Security or Coupon, the Company may pay or authorize the payment of the same without surrender thereof (except in the case of a mutilated Security or Coupon). In every case, the applicant for a substituted Security or Coupon shall furnish to the Company and to the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof.

        Upon the issuance of any substituted Security or Coupon under this Section 3.06, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and any Authenticating Agent) connected therewith.

        Every substituted Security or Coupon issued pursuant to the provisions of this Section 3.06 by virtue of the fact that any Security is mutilated, destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security or Coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities and Coupons of that series duly issued hereunder. All Securities and Coupons shall be held and owed upon the express condition that the foregoing provisions of this Section 3.06 are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities and Coupons and shall preclude (to the extent lawful) any and all other rights or remedies with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

        Section 3.07.    Temporary Securities.

        Pending the preparation of definitive Securities of any series, the Company may execute and the Trustee shall authenticate and deliver temporary Securities (printed, lithographed, typewritten, photocopied or otherwise produced), which may be Registered Securities or Unregistered Securities, with or without Coupons attached. Temporary Securities shall be issuable in any authorized denomination and substantially in the form of the definitive Securities in lieu of which they are issued, but may have variations as may be appropriate for temporary Securities, all as may be determined by the Company with the concurrence of the Trustee. Every such temporary Security shall be executed by the Company and shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Securities in lieu of which they are issued. Without unreasonable delay, the Company will execute and deliver to the Trustee definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor, at the Corporate Trust Office of the Trustee, or, in the case of temporary Securities issued in respect of Unregistered Securities of any series, at the corporate trust office of the Trustee located in a city specified by the terms of the Securities established as provided in Section 3.01, and the Trustee shall authenticate and deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of the same series with appropriate Coupons, if any, attached. Such exchange shall be made by the Company at its own expense and without any charge therefor except that, in case of any such exchange involving any registration of transfer, the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

        Section 3.08.    Payment of Interest; Interest Rights Preserved.

        The Holder of any Fully Registered Security at the close of business on any record date with respect to any Interest Payment Date shall be entitled to receive the interest, if any, payable on such

18

Interest Payment Date notwithstanding the cancellation of such Securities upon any transfer or exchange subsequent to the record date and prior to such Interest Payment Date. In the case of Coupon Securities, the Holder of any Coupon shall be entitled to receive the interest payable on such Interest Payment Date, upon surrender on such Interest Payment Date of the Coupon in respect of such interest. Except as otherwise specified by the terms of the Fully Registered Securities of a particular series established as provided in Section 3.01, the term "record date" as used in this Section 3.08 with respect to any Interest Payment Date shall mean the last day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the fifteenth day of the calendar month, and shall mean the fifteenth day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the first day of the calendar month, whether or not such day shall be a New York Business Day.

        If and to the extent the Company shall default in the payment of the interest due on such Interest Payment Date in respect of any Fully Registered Securities, such defaulted interest (herein called "Defaulted Interest") shall cease to be payable to the registered Holder on such record date and shall be paid by the Company, at its election, as provided in clause (a) or (b) below:

        (a)   The Company may make payment of any Defaulted Interest to the Holders of Fully Registered Securities at the close of business on a subsequent record date (a "special record date") established in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Fully Registered Security and the date of the proposed payment, and at the same time the Company shall make arrangements satisfactory to the Trustee for deposit with the Trustee, prior to the date of the proposed payment, of an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest, such money when deposited to be held in trust for the benefit of the Holders entitled to such Defaulted Interest. The Company shall fix the special record date for the payment of such Defaulted Interest which shall not be more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. At least 10 days before the special record date, the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first-class postage prepaid, to each Holder of Fully Registered Securities at such Holder's address as it appears on the Securities Register. Thereafter, such Defaulted Interest shall be paid to the Holders of Fully Registered Securities at the close of business on the special record date (notwithstanding the cancellation of such Fully Registered Securities upon any transfer or exchange subsequent to such special record date and prior to such payment).

        (b)   The Company may make payment of any Defaulted Interest on the Fully Registered Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange or market on which the Securities of such series may be listed, and upon such notice as may be required by such exchange or market, if such manner of payment shall be deemed practicable by the Trustee.

        Any Defaulted Interest payable in respect of a Coupon Security of any series shall be payable pursuant to such procedures as may be satisfactory to the Trustee in such manner that there is no discrimination between the Holders of Fully Registered Securities and Coupon Securities of such series, and notice of the payment date therefor shall be given by the Trustee, in the name and at the expense of the Company, in the manner provided in Section 1.07.

        Subject to the foregoing provisions of this Section 3.08, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

19

        Subject to the provisions of Section 6.02, with respect to any Security which is converted after any applicable record date for an Interest Payment Date and on or prior to the record date for the next succeeding Interest Payment Date (other than any Security the principal of (or premium, if any, on) which shall become due and payable, whether at Stated Maturity or by declaration, call for redemption or otherwise prior to the record date for such next succeeding Interest Payment Date), interest whose Stated Maturity is on such Interest Payment Date, notwithstanding such conversion (whether or not such interest is punctually paid or duly provided for), shall be paid to the Person in whose name that Security is registered at the close of business on such record date. Except as otherwise expressly provided in the immediately preceding sentence, with respect to any Security which is converted, interest whose Stated Maturity is after the date of conversion of such Security shall not be payable.

        Section 3.09.    Persons Deemed Owners.

        Prior to the due presentment for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Registered Security is registered as the owner of such Registered Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.08), if such Registered Security is a Fully Registered Security, interest, if any, on such Registered Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. The Company, the Trustee, and any agent of the Company or the Trustee may treat the Holder of any Unregistered Security and the Holder of any Coupon, whether or not the Security to which such Coupon appertains be registered, as the absolute owner of such Security or Coupon, as the case may be, for the purposes of receiving payment thereof or on account thereof and for all other purposes whatsoever whether or not such Security or Coupon be overdue, and neither the Company, the Trustee, any Paying Agent nor any Securities Registrar shall be affected by notice to the contrary. All such payments so made to any Holder, or upon such Holder's order, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon such Security or Coupon.

        No holder of any beneficial interest in any Global Security held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary as holder of any Security.

        Section 3.10.    Cancellation.

        All Securities surrendered for the purpose of payment, redemption, repayment, purchase, exchange, conversion or registration of transfer or for credit against any sinking fund shall, if surrendered to the Company or any Paying Agent or any Securities Registrar, be surrendered to the Securities Registrar and promptly cancelled by it or, if surrendered to the Securities Registrar, shall be promptly cancelled by it, and no Securities or Coupons shall be issued in lieu thereof except as expressly permitted by this Indenture. The Securities Registrar shall destroy cancelled Securities and Coupons in accordance with a Company Order and deliver a certificate of such destruction to the Company unless, by a Company Order, the Company directs that such cancelled Securities and Coupons be returned to the Company.

        Section 3.11.    Computation of Interest.

        Except as otherwise specified by the terms of the Securities of any series established as provided in Section 3.01, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. If any provision of this Indenture or the terms of the Securities of any series established as provided in Section 3.01 would require the Company to pay interest at a rate exceeding

20

the maximum rate permitted by applicable law, the Company shall instead pay interest on the Securities of the applicable series at the maximum rate permitted by applicable law.

        Section 3.12.    Compliance with Certain Laws and Regulations.

        If any Unregistered Securities or Coupon Securities are to be issued in any series of Securities, the Company will use reasonable efforts to provide for arrangements and procedures designed pursuant to then applicable laws and regulations, if any, to ensure that such Unregistered Securities or Coupon Securities are sold or resold, exchanged, transferred and paid only in compliance with such laws and regulations and without adverse consequences to the Company or the Trustee.

21

ARTICLE IV

REDEMPTION OF SECURITIES

        Section 4.01.    Applicability of Article.    The provisions of this Article shall be applicable to the Securities of any series which by their terms are redeemable before their Maturity except as otherwise specified by the terms of the Securities of such series established as provided in Section 3.01.

        Section 4.02.    Election to Redeem; Notice to Trustee.

        The election of the Company to redeem all, or, as the case may be, any part of the Securities of any series (or all or any part of the Registered Securities of such series, if the terms and conditions of redemption shall differ with respect to Unregistered Securities and Registered Securities of such series as specified by the terms of the Securities of such series, established as provided in Section 3.01) shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all of the Securities of a series (except in the case of a redemption in whole of the Unregistered Securities, the Coupon Securities, the Registered Securities or the Fully Registered Securities of such series), the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed.

        Section 4.03.    Selection by Trustee of Securities to be Redeemed.

        If less than all the Securities of any series are to be redeemed, the Trustee shall select, not more than 60 days prior to the Redemption Date, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate (which is in compliance with the requirements of any securities exchange or market on which such Securities may be listed) the Securities of such series or portions thereof (in multiples of $1,000, except as otherwise set forth in the applicable form of Security) to be redeemed.

        The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed.

        For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

        Section 4.04.    Notice of Redemption.

        At least 30 days but not more than 60 days prior to the Redemption Date, the Company shall give notice, as provided in Section 1.07, to each Holder of Securities of the series to be redeemed. Neither the failure to mail or publish such notice, nor any defect in any notice so mailed or published to any particular Holder, shall affect the sufficiency of such notice with respect to other Holders.

        In any event, the notice of redemption shall identify the Securities to be redeemed and shall state:

        (1)   the Redemption Date;

        (2)   the Redemption Price;

        (3)   the Place or Places of Payment;

        (4)   if less than all Outstanding Securities of such series are to be redeemed, the identification (and, if any Security is to be redeemed in part, the principal amount) of the Securities of such series to be redeemed;

22

        (5)   that on the Redemption Date, the Redemption Price, together with accrued interest, if any, to the Redemption Date, will become due and payable upon each such Security, and that interest, if any, thereon shall cease to accrue from and after the Redemption Date;

        (6)   that Coupon Securities, if any, surrendered for payment must be accompanied by all Coupons, if any, maturing subsequent to the Redemption Date, failing which the amount of any such missing Coupon or Coupons will be deducted from the sum due for payment; and

        (7)   that the redemption is pursuant to a sinking fund, if such is the case.

        Notice of redemption of the Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.

        Section 4.05.    Deposit of Redemption Price.

        On or before any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided, in Section 13.03) an amount of money (in immediately available funds in the case of deposits made on a Redemption Date), sufficient to pay the Redemption Price of, and accrued interest, if any, on, all the Securities or portions thereof which are to be redeemed on that date.

        Section 4.06.    Securities Payable on Redemption Date.

        Once notice of redemption is mailed or published, as the case may be, the Securities or portions thereof to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, together with accrued interest, if any, to the Redemption Date, and from and after such date (unless the Company defaults in the payment of the Redemption Price) such Securities or portions thereof shall cease to bear interest. Upon surrender of such Securities for redemption in accordance with such notice, and all Coupons, if any, appertaining thereto, at a Place of Payment in such notice specified, such Securities and Coupons or specified portions thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date. Installments of interest, if any, whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities registered as such on the relevant record dates according to their terms and the provisions of Section 3.08 hereof.

        If any Coupon Security surrendered for redemption shall not be accompanied by all appurtenant Coupons maturing on or after the Redemption Date, such Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing Coupons or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee, if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing Coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted.

        If any Security called for redemption shall not be so paid upon surrender thereof on such Redemption Date, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate specified in the Security.

        Section 4.07.    Securities Redeemed in Part.

        Any Security which is to be redeemed only in part and the Coupons, if any, appertaining thereto shall be surrendered at the Place of Payment (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver, or cause to be authenticated

23

and delivered, to the Holder of such Security without service charge, a new Security or Securities of the same series of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal amount of the Security so surrendered. If a Global Security is so surrendered, such new Security so issued shall be a new Global Security.

ARTICLE V

SINKING FUNDS

        Section 5.01.    Applicability of Article.

        The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a series which by their terms provide for a sinking fund, except as otherwise specified by the terms of the Securities of such series established as provided in Section 3.01.

        The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an "optional sinking fund payment."

        Section 5.02.    Satisfaction of Mandatory Sinking Fund Payments with Securities.

        In lieu and satisfaction of making all or any part of any mandatory sinking fund payment with respect to any Securities of a series in cash, the Company may at its option (a) deliver to the Trustee Securities of such series (together with the unmatured Coupons, if any, appertaining thereto) previously purchased or otherwise acquired by the Company or (b) receive credit for the principal amount of Securities of that series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly.

        Section 5.03.    Redemption of Securities for Sinking Fund.

        Not less than 45 days prior to each sinking fund payment date for any series of the Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment for such series pursuant to the terms of such series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of such series pursuant to Section 5.02 (which Securities will accompany such certificate) and whether the Company intends to exercise its right to make any permitted optional sinking fund payment with respect to such series. Such Officers' Certificate shall also state that no Event of Default has occurred and is continuing with respect to such series. Such Officers' Certificate shall be irrevocable and upon its delivery the Company shall be obligated to make the cash payment or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. In the case of the failure of the Company to deliver such Officers' Certificate when due, the Company will not have the right to make any optional sinking fund payment, if any, with respect to such series on the next succeeding sinking fund payment date.

        Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused balance of any preceding sinking fund payments made with respect to the Securities of any particular series shall be applied by the Trustee (or by the Company, if the Company is acting as its own Paying Agent) on the sinking fund payment date on which such payment is made (or, if such payment is made before a sinking fund payment date, on the sinking fund payment date following the date of such

24

payment) to the redemption of such Securities at the Redemption Price specified in such Securities for operation of the sinking fund, together with accrued interest, if any, to the applicable Redemption Date. Any sinking fund moneys not so applied or allocated by the Trustee (or by the Company, if the Company is acting as its own Paying Agent) to the redemption of Securities shall be added to the next cash sinking fund payment received by the Trustee (or by the Company, if the Company is acting as its own Paying Agent, segregated and held in trust as provided in Section 12.03) for such series and, together with such payment (or such amount so segregated) shall be applied in accordance with the provisions of this Section 5.03. Any and all sinking fund moneys with respect to the Securities of any particular series held by the Trustee (or by the Company, if the Company is acting as its own Paying Agent) on the last sinking fund payment date with respect to Securities of such series and not held for the payment or redemption of particular Securities shall be applied by the Trustee (or by the Company, if the Company is acting as its own Paying Agent) together with other moneys, if necessary, to be deposited (or segregated) sufficient for the purpose, to the payment of the principal of the Securities of such series at Maturity.

        The Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in the first paragraph of Section 4.03 and the Company shall cause notice of the redemption thereof to be given in the manner provided in Section 4.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 4.06 and 4.07.

        On or before any sinking fund payment date, the Company shall deposit with the Trustee (or, if the Company is acting as its own Paying Agent, will segregate and hold in trust as provided in Section 13.03) an amount of money (in immediately available funds in the case of deposits made on a sinking fund payment date), sufficient to pay any interest accrued to the Redemption Date for Securities or portions thereof to be redeemed on such sinking fund payment date pursuant to this Section 5.03.

        Section 5.04.    No Sinking Fund Redemption During Default.

        Neither the Company nor the Trustee shall redeem any Securities of any series with sinking fund moneys or mail any notice of redemption of such Securities by operation of the sinking fund for such series during the continuance of a default in payment of interest on such Securities or of any Event of Default (other than an Event of Default occurring as a consequence of this Section) with respect to such Securities, except that if the notice of redemption of any such Securities shall theretofore have been mailed in accordance with the provisions of this Article V, the Trustee (or the Company, if the Company is acting as its own Paying Agent) shall redeem such Securities if cash sufficient for that purpose shall be deposited with the Trustee (or segregated by the Company) in accordance with the terms of this Article V. Except as aforesaid, any moneys in the sinking fund for such series at the time when such default or Event of Default shall occur and any moneys thereafter paid into such sinking fund shall, during the continuance of such default or Event of Default, be held as security for the payment of such Securities and the Coupons, if any, appertaining thereto. However, in case such Event of Default or default shall have been cured or waived as provided in this Indenture, such moneys shall thereafter be applied on the next sinking fund payment date for such Securities on which such moneys may be applied pursuant to the provisions of Section 5.03.

ARTICLE VI

CONVERSION OF SECURITIES

        Section 6.01.    Applicability of Article.    The provisions of this Article shall be applicable to the Securities of any series which are convertible by their terms into shares of Common Stock or shares of the applicable series of Preferred Stock, and the issuance of such shares of Common Stock or Preferred

25

Stock upon the conversion of such Securities, except as otherwise specified as contemplated by Section 3.01 for the Securities of such series.

        Section 6.02.    Exercise of Conversion Privilege.    In order to exercise a conversion privilege, the Holder of a Security of a series with such a privilege shall surrender such Security to the Company at the office or agency maintained for that purpose, accompanied by written notice, in the form set forth in or prescribed by such Security, to the Company that the Holder elects to convert such Security or a specified portion thereof. Such notice shall also state, if different from the name and address of such Holder, the name or names (with address) in which the certificate or certificates for shares of Common Stock or shares of the applicable series of Preferred Stock which shall be issuable on such conversion shall be issued. Securities surrendered for conversion shall (if so required by the Company or the Trustee) be duly endorsed by or accompanied by instruments of transfer in forms satisfactory to the Company and the Trustee duly executed by the Holder or its attorney duly authorized in writing. Securities so surrendered for conversion during the period from the close of business on any record date to the opening of business on the next succeeding Interest Payment Date (excluding Securities or portions thereof called for redemption during such period) shall also be accompanied by payment in funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security then being converted, and such interest shall be payable to such Holder notwithstanding the conversion of such Security, subject to the provisions of Section 3.08 relating to the payment of Defaulted Interest by the Company. As promptly as practicable after the receipt of such notice and of any payment required pursuant to a Board Resolution and, subject to Section 3.03, set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto setting forth the terms of such series of Security, and the surrender of such Security in accordance with such reasonable regulations as the Company may prescribe, the Company shall issue and shall deliver, at the office or agency at which such Security is surrendered, to such Holder or on its written order, a certificate or certificates for the number of full shares of Common Stock or full shares of the applicable series of Preferred Stock issuable upon the conversion of such Security (or specified portion thereof), in accordance with the provisions of such Board Resolution, Officers' Certificate or supplemental indenture, and cash as provided therein in respect of any fractional share of such Common Stock or such series of Preferred Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such notice and such payment, if required, shall have been received in proper order for conversion by the Company and such Security shall have been surrendered as aforesaid (unless such Holder shall have so surrendered such Security and shall have instructed the Company to effect the conversion on a particular date following such surrender and such Holder shall be entitled to convert such Security on such date, in which case such conversion shall be deemed to be effected immediately prior to the close of business on such date) and at such time the rights of the Holder of such Security as such Holder shall cease and the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock or shares of the applicable series of Preferred Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby. Except as set forth above and subject to the final paragraph of Section 3.08, no payment or adjustment shall be made upon any conversion on account of any interest accrued on the Securities surrendered for conversion or on account of any dividends on the Common Stock or shares of the applicable series of Preferred Stock issued upon such conversion. In the case of any Security which is converted in part only, upon such conversion, the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Company, a new Security or Securities of the same series, of authorized denominations, in aggregate principal amount equal to the unconverted portion of such Security.

        Section 6.03.    No Fractional Shares.    No fractional share of Common Stock or Preferred Stock shall be issued upon conversions of Securities of any series. If more than one Security shall be

26

surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed by the Company on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If, except for the provisions of this Section 6.03, any Holder of a Security or Securities would be entitled to a fractional share of Common Stock or Preferred Stock upon the conversion of such Security or Securities, or specified portions thereof, the Company shall pay to such Holder an amount in cash equal to the product obtained by multiplying the Market Price per share of Common Stock or the applicable series of Preferred Stock, as the case may be, by the amount of such fractional share. The Trustee shall not have any responsibility with respect to the computation of the Conversion Price, and may conclusively rely upon the Company's determination thereof.

        Section 6.04.    Adjustment of Conversion Price.    The Conversion Price in effect at any time shall be subject to adjustment as follows:

        (a)   In case the Company shall (i) pay a dividend in or make a distribution of shares of its capital stock (whether shares of Common Stock, the applicable series of Preferred Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock or the applicable series of Preferred Stock, (iii) combine its outstanding shares of Common Stock or the applicable series of Preferred Stock into a smaller number of shares or (iv) issue by reclassification of its shares of Common Stock or the applicable series of Preferred Stock any shares of capital stock of the Company, the Conversion Price in effect immediately prior to such action shall be adjusted by the Company so that the Holder of any Security thereafter surrendered for conversion shall be entitled to receive the number of shares of capital stock of the Company which such Holder would have owned or been entitled to receive immediately following such action had such Security been exchanged immediately prior thereto. An adjustment made pursuant to this subsection (a) shall become effective retroactively immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subsection (a), the Holder of any Security thereafter surrendered for conversion shall become entitled to receive shares of two or more classes of capital stock of the Company, the Board of Directors (whose determination shall be conclusive) shall determine the allocation of the adjusted exchange price between or among shares of such classes of capital stock.

        (b)   In case the Company shall distribute to all holders of its Common Stock or the applicable series of Preferred Stock, as the case may be, evidences of its indebtedness or assets (excluding any cash dividend paid from retained earnings of the Company), then, in each such case, the Conversion Price shall be adjusted to equal the price determined by multiplying the Conversion Price in effect immediately prior to the date of such distribution by a fraction of which the numerator shall be the Market Price per share of Common Stock or the applicable series of Preferred Stock, as applicable, less the then fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or evidences of indebtedness so distributed, and of which the denominator shall be such Market Price per share of the Common Stock or the applicable series of Preferred Stock, as applicable, on the applicable record date. Such adjustment shall become effective retroactively immediately after the record date for the determination of stockholders entitled to receive such distribution.

        (c)   In any case in which this Section 6.04 shall require that an adjustment be made retroactively immediately following a record date, the Company may elect to defer (but only until five Business Days following the mailing by the Company of the Officers' Certificate described in subsection (h) below issuing to the holder of any share converted after such record date (i) the shares of Common Stock, the applicable series of Preferred Stock and other capital stock of the Company issuable upon such conversion over and above (ii) the shares of Common Stock, the

27

applicable series of Preferred Stock and other capital stock of the Company issuable upon such conversion only on the basis of the Conversion Price prior to adjustment.

        (d)   In the case of either (i) any consolidation or merger to which the Company is a party, other than a consolidation or a merger in which the Company is a continuing corporation and which does not result in any reclassification of, or change (other than a change in par value or from par value to no par value or from no par value to par value, or as a result of a subdivision or combination) in, outstanding shares of the Common Stock or outstanding shares of the applicable series of Preferred Stock, or (ii) any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, then the holder of each Outstanding Security shall have the right to exchange such Security into the kind and amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock or Preferred Stock issuable upon conversion of such Security immediately prior to such consolidation, merger, sale or conveyance, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 6.04 assuming, in the case of any consolidation, merger, sale or conveyance, such holder of Common Stock or holder of the applicable series of Preferred Stock (i) is not a Person with or into which the Company consolidated or merged or which merged into the Company or to which such sale or conveyance was made, as the case may be ("constituent Person"), or an Affiliate of a constituent Person and (ii) failed to exercise such holder's rights of election, if any, as to the kind or amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance (provided that if the kind or amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance is not the same for each share of Common Stock or share of the applicable series of Preferred Stock, as applicable, held immediately prior to such consolidation, merger, sale or conveyance by others than a constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this Section 6.04 the kind and amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance by each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). The provisions of this subsection (d) shall similarly apply to successive consolidations, mergers, sales or conveyances.

        (e)   No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this subsection are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and, provided further that adjustment shall be required and made in accordance with the provisions of this Section 6.04 (other than this subsection (e)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock or Preferred Stock, as applicable. All calculations under this Section 6.04 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. Anything in this Section 6.04 to the contrary notwithstanding, the Company shall be permitted to make such reductions in the Conversion Price in addition to those required by this Section 6.04 as it in its discretion shall consider to be advisable in order that any stock dividends, subdivision of shares, distribution of rights to purchase stock or securities, or distribution of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable to the holders of the Common Stock or Preferred Stock.

        (f)    In the event that at any time as a result of an adjustment made pursuant to subsection (a) above, the holder of any Security thereafter surrendered for conversion shall become entitled to receive any shares of the Company other than shares of its Common Stock or the applicable

28

series of Preferred Stock, thereafter the conversion price of such other shares so receivable upon conversion of any Security shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Common Stock and the applicable series of Preferred Stock contained in subsections (a) through (e) above, and the provisions of Sections 6.01 through 6.03 and Sections 6.05 through 6.09 with respect to the Common Stock and the applicable series of Preferred Stock shall apply on like or similar terms to any such other shares.

        (g)   Before taking any action which would cause an adjustment reducing the then equivalent Conversion Price to be below the then par value of the Common Stock or the Preferred Stock, as applicable, the Company will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock or the applicable series of Preferred Stock at the Conversion Price as so adjusted.

        (h)   Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly (i) file with the Trustee and each additional conversion agent, if any, an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment to each Holder of Securities at such Holder's address as the same appears on the Securities Registrar of the Company. Neither the Trustee nor any conversion agent shall be under any responsibility to determine the correctness of any adjustment to the Conversion Price to be made pursuant to this Section.

        Section 6.05.    Notice of Certain Corporate Actions.    In case:

        (a)   the Company shall declare a dividend (or any other distribution) on its Common Stock or the applicable series of Preferred Stock (other than dividends or distributions which will not require an adjustment of the Conversion Price of Securities of any series pursuant to Section 6.04); or

        (b)   the Company shall authorize the granting to the holders of its Common Stock or the applicable series of Preferred Stock, as applicable, of rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (other than any such grant for which approval of any stockholders of the Company is required or which will not require an adjustment of the Conversion Price of Securities of any series pursuant to Section 6.04); or

        (c)   of any reclassification of the Common Stock or the applicable series of Preferred Stock (other than a subdivision or combination of its outstanding shares of Common Stock or the applicable series of Preferred Stock, or any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required or which will not require an adjustment of the Conversion Price of Securities of any series pursuant to Section 6.04), or of the sale of all or substantially all of the assets of the Company; or

        (d)   of the voluntary or involuntary dissolution, liquidation or winding up of the Company;

then the Company shall cause to be filed with the Trustee, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the Securities Register, at least 20 days (or 10 days in any case specified in clause (a) or (b) above) prior to the applicable record date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock or the applicable series of Preferred Stock, as applicable, of record to be entitled to such dividend, distribution, rights, options or warrants are to be determined, or (ii) the date on which such reclassification, consolidation, merger, share

29

exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock or the applicable series of Preferred Stock, as applicable, of record shall be entitled to exchange their shares of Common Stock or the applicable series of Preferred Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up. If at any time the Trustee shall not be the conversion agent, a copy of such notice shall also forthwith be filed by the Company with the conversion agent.

        Section 6.06.    Reservation of Shares of Common Stock.    The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock and the applicable series of Preferred Stock, for the purpose of effecting the conversion of Securities, the full number of shares of Common Stock and the full number of shares of the applicable series of Preferred Stock then issuable upon the conversion of all Outstanding Securities of any series that have conversion rights.

        Section 6.07.    Payment of Certain Taxes Upon Conversion.    The Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock and the applicable series of Preferred Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or shares of the applicable series of Preferred Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid.

        Section 6.08.    Nonassessability.    The Company covenants that all shares of Common Stock and each series of Preferred Stock which may be issued upon conversion of Securities will upon issue in accordance with the terms hereof be duly and validly issued and fully paid and nonassessable.

        Section 6.09.    Effect of Consolidation or Merger on Conversion Privilege.    In case of any consolidation of the Company with, or merger of the Company into or with any other Person, or in the case of a statutory share exchange to which the Company is a party or in case of any sale or conveyance of all or substantially all of the properties or assets of the Company (including cash), the Company or the Person formed by such consolidation or the Person into which the Company shall have been merged or the Person which shall have acquired such assets, or the surviving entity in such share exchange, as the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security then outstanding of any series that is convertible into Common Stock or a series of Preferred Stock shall have the right, which right shall be the exclusive conversion right thereafter available to said Holder (until the expiration of the conversion right of such Security), to convert such Security into the kind and amount of shares of stock or other securities or property (including cash) receivable upon such consolidation, merger, share exchange, conveyance or sale by a holder of the number of shares of Common Stock or the applicable series of Preferred Stock into which such Security might have been converted immediately prior to such consolidation, merger, share exchange, conveyance or sale, subject to compliance with the other provisions of this Indenture, such Security and such supplemental indenture. Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in such Security. The above provisions of this Section shall similarly apply to successive consolidation, mergers, share exchanges, conveyances or sales. It is expressly agreed and understood that anything in this Indenture to the contrary notwithstanding, if pursuant to such merger, consolidation, share exchange, conveyance or sale, holders of outstanding shares of Common Stock and the applicable series of Preferred Stock do not receive shares of common stock or preferred stock, as applicable, of the surviving corporation but receive other securities, cash or other property or any combination thereof, Holders of Securities shall not have the right to thereafter convert their Securities into common stock

30

or preferred stock, as applicable, of the surviving corporation or the corporation which shall have acquired such assets, but rather, shall have the right upon such conversion to receive the other securities, cash or other property receivable by a holder of the number of shares of Common Stock or the applicable series of Preferred Stock into which the Securities held by such holder might have been converted immediately prior to such consolidation, merger, share exchange, conveyance or sale, all as more fully provided in the first sentence of this Section 6.09. Anything in this Section 6.09 to the contrary notwithstanding, the provisions of this Section 6.09 shall not apply to a merger or consolidation of another corporation with or into the Company or any share exchange to which the Company is a party pursuant to which both of the following conditions are applicable: (i) the Company is the surviving or successor corporation and (ii) the outstanding shares of Common Stock or the applicable series of Preferred Stock, as applicable, are not changed or converted into any other securities or property (including cash) or changed in number or character or reclassified pursuant to the terms of such merger, consolidation or share exchange. As evidence of the kind and amount of shares of stock or other securities or property (including cash) into which Securities may properly be convertible after any such consolidation, merger, share exchange, conveyance or sale, or as to the appropriate adjustments of the conversion prices applicable with respect thereto, the Trustee shall be furnished with and may accept the certificate or opinion of an independent certified public accountant with respect thereto; and, in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely thereon, and shall not be responsible or accountable to any Holder of Securities for any provision in conformity therewith or approved by such independent certified accountant which may be contained in said supplemental indenture.

        Section 6.10.    Duties of Trustee Regarding Conversion.    Neither the Trustee nor any conversion agent shall at anytime be under any duty or responsibility to any Holder of Securities of any series that is convertible into Common Stock or a series of Preferred Stock to determine whether any facts exist which may require any adjustment of the conversion price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, whether herein or in any supplemental indenture, any resolutions of the Board of Directors or written instrument executed by one or more officers of the Company provided to be employed in making the same. Neither the Trustee nor any conversion agent shall be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or a series of Preferred Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Securities and neither the Trustee nor any conversion agent makes any representation with respect thereto. Subject to the provisions of Section 8.1, neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of its Common Stock or a series of Preferred Stock or stock certificates or other securities or property upon the surrender of any Security for the purpose of conversion or to comply with any of the covenants of the Company contained in this Article or in the applicable supplemental indenture, resolutions of the Board of Directors or written instrument executed by one or more duly authorized officers of the Company.

        Section 6.11.    Repayment of Certain Funds Upon Conversion.    Any funds which at any time shall have been deposited by the Company or on its behalf with the Trustee or any other paying agent for the purpose of paying the principal of, and premium, if any, and interest, if any, on any of the Securities (including funds deposited for the sinking fund referred to in Article V hereof) and which shall not be required for such purposes because of the conversion of such Securities as provided in this Article shall after such conversion be repaid to the Company by the Trustee upon the Company's written request.

31

ARTICLE VII

SATISFACTION AND DISCHARGE

        Section 7.01.    Satisfaction and Discharge of Securities of any Series.

        The Company shall be deemed to have satisfied and discharged the entire indebtedness on all the Securities of any particular series and the Trustee, upon Company Request and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of such indebtedness, when

        (1)   either

        (A)  all Securities of such series previously authenticated and delivered (other than (i) any Securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (ii) Securities of such series for whose payment money has previously been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in the last paragraph of Section 13.03) have been delivered to the Trustee for cancellation; or

        (B)  with respect to all Outstanding Securities of such series described in (A) above not previously delivered to the Trustee for cancellation:

        (i)    the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient to pay and discharge the entire indebtedness on all such Outstanding Securities of such series for principal (and premium, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by Section 7.03, as the case may be; or

        (ii)   the Company has irrevocably deposited or caused to be deposited with the Trustee as obligations in trust such amount of Government Obligations as will, in a written opinion of independent public accountants delivered to the Trustee, together with the predetermined and certain income to accrue thereon (without consideration of any reinvestment thereof), be sufficient to pay and discharge when due the entire indebtedness on all such Outstanding Securities of such series for unpaid principal (and premium, if any) and interest, if any, to the Stated Maturity or any Redemption Date as contemplated by Section 7.03, as the case may be;

        (2)   the Company has paid or caused to be paid all other sums payable with respect to the Securities of such series;

        (3)   the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the entire indebtedness on all Securities of such series have been complied with; and

        (4)   if the Securities of such series are not to become due and payable at their Stated Maturity within one year of the date of such deposit or are not to be called for redemption within one year of the date of such deposit under arrangements satisfactory to the Trustee as of the date of such deposit, then the Company shall have given, not later than the date of such deposit, notice of such deposit to the Holders of the Securities of such series;

provided that the Company shall not make the deposit provided for by subsection (B) of this Section 7.01 unless the Company shall have delivered to the Trustee:

        (a)   an Opinion of Counsel to the effect that (x) either (i) as a result of such deposit and the related exercise of the Company's option under this Section 7.01, registration will not be required under the Investment Company Act of 1940, as amended, by the Company, the trust funds representing such deposit or the Trustee or (ii) all necessary registrations under such Act have been effected, and (y) such deposit with the Trustee to discharge the Company's obligation in

32

respect of payments is not prohibited by the rules or regulations of any securities exchange or market on which the applicable series of Securities are listed, and

        (b)   an Opinion of Counsel (which counsel shall be recognized tax counsel) stating that in such counsel's opinion the deposit of funds and obligations and the satisfaction and discharge of indebtedness on the Securities of such series pursuant to this Section 7.01 will not result in recognition by the Holders of income, gain or loss for Federal income tax purposes (other than income, gain, or loss which would have been recognized in like amount and at a like time absent such deposit, satisfaction and discharge).

        Subject to Section 7.04, upon the satisfaction of the conditions set forth in this Section 7.01 with respect to all the Securities of any series, the terms and conditions of such series, including the terms and conditions with respect thereto set forth in this Indenture, shall no longer be binding upon, or applicable to, the Company, and the Holders of the Outstanding Securities of such series shall look for payment only to the funds or obligations deposited with the Trustee pursuant to Section 7.01(1)(B). However, in no event shall the Company be discharged from (a) any payment obligations in respect of Securities of such series which are deemed not to be Outstanding under clause (c) of the definition thereof if such obligations continue to be valid obligations of the Company under applicable law, (b) any obligations under Section 8.07 and Section 8.10 and (c) any obligations under Section 3.05 and Section 3.06 (except that Securities of such series issued upon registration of transfer or exchange or in lieu of mutilated, lost, destroyed or stolen Securities shall not be obligations of the Company) and Section 10.01. Further, in the event a petition for relief under the Federal Bankruptcy Code or a successor statute is filed with respect to the Company within 91 days after the deposit, the entire indebtedness on all Securities of such series shall not be discharged, and in such event the Trustee shall return such deposited funds or obligations as it is then holding to the Company upon Company Request.

[The Company may make the deposit provided for in subsection (B) of this Section 7.01 only if permitted by the provisions for the subordination of the indebtedness evidenced by the Securities of such series, if any, that are a part of this Indenture.]

        Section 7.02.    Satisfaction and Discharge of Indenture.

        Subject to Section 7.04, upon compliance by the Company with the provisions of Section 7.01 as to the satisfaction and discharge of each series of Securities issued hereunder, and if the Company has paid or caused to be paid all other sums payable under this Indenture, this Indenture shall cease to be of any further effect (except as otherwise provided herein). Upon Company Request and receipt of an Opinion of Counsel and an Officers' Certificate (and at the expense of the Company), the Trustee shall execute proper instruments acknowledging satisfaction and discharge of this Indenture.

        Notwithstanding the satisfaction and discharge of this Indenture, any obligations of the Company under Sections 3.05, 3.06, 9.07, 9.10 and 10.01 and the obligations of the Trustee under Section 7.03 shall survive.

        Section 7.03.    Application of Trust Money.

        All money and obligations deposited with the Trustee pursuant to Section 7.01 shall be held irrevocably in trust and, if required by the Trustee for the Securities of any series, shall be made under the terms of an escrow trust agreement in form and substance satisfactory to the Trustee. Such money and obligations shall be applied by the Trustee, in accordance with the provisions of the Securities, this Indenture and such escrow trust agreement, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of (and premium, if any) and interest, if any, on the Securities for the payment of which such money and obligations have been deposited with the Trustee. Funds and obligations so held in trust are not subject to the provisions for the subordination of the indebtedness

33

evidenced by the Securities, if any, that constitute a part of this Indenture. If Securities of any series are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory sinking fund requirement, the Company shall make such arrangements as are satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

        Section 7.04.    Reinstatement.

        If the Trustee is unable to apply any money or Government Obligations deposited with the Trustee pursuant to Section 7.01 with respect to the Securities of any series by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 7.01, (a) until such time as the Trustee or any Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 7.01, and (b) upon receipt of the Officers' Certificate and Opinion of Counsel as provided in Section 7.01(3); provided, however, that if the Company has made any payment of interest on or principal of any Securities of such series because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of the Securities of such series to receive such payment from the money or Government Obligations held by the Trustee.

        Section 7.05.    Repayment to Company.

        After full payment of any and all amounts due and owing (i) pursuant to any provision of this Indenture and (ii) with respect to Securities of a series, the Trustee shall promptly pay to the Company upon written request any excess money, Government Obligations or Securities of such series held by it at any time.

ARTICLE VIII

DEFAULTS AND REMEDIES

        Section 8.01.    Events of Default.

        "Event of Default", whenever used in this Indenture with respect to Securities of any series, means any one of the following events and such other events as may be specified by the terms of the Securities of such series established as provided in Section 3.01 (whatever the reason for the Event of Default and whether it shall be occasioned by subordination provisions, if such provisions constitute a part of this Indenture, or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any rule or regulation of any administrative or governmental body), continued for the period of time, if any, and after the giving of notice, if any, designated herein and therein, as the case may be, unless the same is either not applicable to such series or is deleted or modified by the terms of the Securities of such series established as provided in Section 3.01:

        (a)   default in the payment of any interest upon any Security of such series when the same becomes due and payable, and continuance of such default for a period of 30 days; or

        (b)   default in the payment of all or any part of the principal of (or premium, if any, on) any Security of such series when the same becomes due and payable at its Maturity, upon redemption (if applicable) or otherwise; or

        (c)   default in the payment of any sinking fund installment or analogous obligation, if any, when and as the same shall become due and payable; or

        (d)   subject to Section 8.13, default in the performance, or breach, of any covenant or warranty of the Company in respect of the Securities of such series contained in this Indenture or in such Securities (other than a covenant or warranty in respect of the Securities of such series a

34

default in whose performance or whose breach is elsewhere in this Section 8.01 specifically dealt with), which default or breach shall have continued unremedied to the satisfaction of the Trustee, or without provision deemed by the Trustee to be adequate for the remedying thereof having been made, for a period of 90 days after there has been given, by registered or certified mail or national overnight courier, to the Company by the Trustee for the Securities of such series, or to the Company and such Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

        (e)   (i) an Event of Default with respect to any other series of Securities issued or hereafter issued pursuant to this Indenture or (ii) a default under any bond, debenture, note or other evidence of indebtedness for money borrowed, issued, assumed or guaranteed by the Company having unpaid principal in excess of $2,000,000 or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any such indebtedness for money borrowed, whether such indebtedness now exists or shall hereafter be created, which Event of Default or default, as the case may be, in either such case, shall have resulted in such other series of Securities or such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such other series of Securities or such indebtedness having been discharged or such declaration of acceleration having been rescinded or annulled within a period of 60 days after there shall have been given, by registered or certified mail or national overnight courier, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such Event of Default or default, as the case may be, and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder, unless at the end of such 60-day period and thereafter the Event of Default or default is being contested in good faith by the Company; provided, however, that subject to the provisions of Sections 8.01 and 8.02, the Trustee shall not be deemed to have knowledge of such default unless either (A) a Responsible Officer of the corporate trust department of the Trustee shall have actual knowledge of such default or (B) the Trustee shall have received written notice at its Corporate Trust Office thereof from the Company, any Holder, the holder of any such indebtedness or the trustee under any such mortgage, indenture or other instrument;

        (f)    the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy Code or any other similar Federal or state law or (B) a decree or order adjudging the Company or any Significant Subsidiary a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Significant Subsidiary under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary or of any substantial part of their respective property (other than the appointment of a trustee as a mortgagee or secured party in connection with the issuance of any Debt of the Company or such Significant Subsidiary), or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

        (g)   the commencement by the Company or any Significant Subsidiary of a voluntary case or proceeding under the Federal Bankruptcy Code or any other similar Federal or state law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under the Federal Bankruptcy Code or any other similar Federal or

35

state law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or of any substantial part of their respective property (other than the appointment of a trustee as a mortgagee or secured party in connection with the issuance of any Debt of the Company or such Significant Subsidiary), or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due.

        Section 8.02.    Acceleration of Maturity; Rescission and Annulment.

        If an Event of Default with respect to Securities of any series occurs and is continuing, then, and in each and every such case, unless the principal of all the Securities of such series shall have already become due and payable, the Trustee for such series or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of such series may declare the principal amount (or, in the case of Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) and accrued interest, if any, of all the Securities of such series to be due and payable immediately, by a written notice to the Company (and to such Trustee if given by Holders), and upon any such declaration of acceleration the same shall become immediately due and payable.

        At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained or entered as hereinafter in this Article VIII provided, the Holders of a majority in principal amount of the Outstanding Securities of such series, by written notice to the Company and the Trustee for such series, may waive all defaults with respect to such Securities and rescind and annul such declaration and its consequences if

        (a)   the Company has paid or deposited with the Trustee for the Securities of such series a sum sufficient to pay:

        (i)    all overdue installments of interest, if any, on all Securities of such series;

        (ii)   the principal of (and premium, if any, on), any and all Securities of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the Overdue Rate applicable to such series;

        (iii)  to the extent that payment of such interest is lawful, interest upon any overdue installment of interest at the Overdue Rate applicable to such series; and

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

        (b)   all Events of Default with respect to such series of Securities, other than the nonpayment of the principal of Securities which have become due solely by such acceleration, have been cured to the reasonable satisfaction of the Trustee or the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series or waived as provided in Section 8.13.

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

        Section 8.03.    Collection of Indebtedness and Suits for Enforcement by Trustee.

        The Company covenants that if:

        (a)   default is made in the payment of any interest upon any Security of any series when such interest becomes due and payable and such default continues for a period of 30 days; or

36

        (b)   default is made in the payment of all or any part of the principal of (or premium, if any, on) any Securities of any series when and as the same becomes due and payable at its Maturity, upon redemption (if applicable) or otherwise; or

        (c)   default is made in the payment of any sinking fund installment or analogous obligation upon any Security of any series when and as the same becomes due and payable,

the Company will, upon demand of the Trustee for the Securities of such series, pay to such Trustee, for the benefit of the Holders of any such Security, the whole amount then due and payable on any such Security for principal (and premium, if any) and interest, if any, with interest upon the overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installment of interest, at the Overdue Rate applicable to any such Security; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses disbursements and advances of such Trustee, its agents and counsel.

        If the Company fails to pay such amounts forthwith upon such demand, the Trustee for the Securities of such series, in its own name and as trustee of an express trust, may institute any action or proceeding in law or equity for the collection of the sums so due and unpaid, and may prosecute such action or proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Security, wherever situated.

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

        Section 8.04.    Trustee May File Proofs of Claim.

        The Trustee for the Securities of any series (irrespective of whether the principal of the Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether such Trustee shall have made any demand on the Company for the payment of overdue principal or interest), shall be entitled and empowered, by intervention in such proceeding or otherwise, in case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities of such series and any Coupons appertaining thereto or the property of the Company or of such other obligor or their creditors,

        (i)    to file and prove a claim or claims for the whole amount of principal (or, in the case of Original Issue Discount Securities, such portion of the principal amount as may be due and payable with respect to such series pursuant to a declaration in accordance with Section 8.02), premium, if any, and interest, if any, owing and unpaid in respect of the Securities of such series and to file such other papers or documents and to do such other acts as may be necessary or advisable in order to have the claims of such Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel) and of the Holders of the Securities of such series and the Holders of any Coupons appertaining thereto allowed in such judicial proceeding, and

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

37

        Any receiver, assignee, trustee, liquidator, custodian, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee for such series, and in the event that such Trustee shall consent to the making of such payments directly to the Holders, to pay to such Trustee any amount due to it for reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel, and any other amounts, due such Trustee under Section 9.07.

        Nothing herein contained shall be deemed to authorize any Trustee to authorize or consent to or accept or adopt on behalf of any Holder of Securities of any Series or any Holder of any Coupons appertaining thereto, any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the Holders of any Coupons appertaining thereto or the rights of any Holder thereof, or to authorize any Trustee to vote in respect of the claim of any Holder of any Security of any Series or any Holder of any Coupons appertaining thereto in any such proceeding.

        Section 8.05.    Trustee May Enforce Claims Without Possession of Securities.

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

        Section 8.06.    Application of Money Collected.

        Any moneys collected by the Trustee for the Securities of any series pursuant to this Article VIII shall be applied in the following order, at the date or dates fixed by such Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, if any, upon presentation of the several Securities and Coupons, if any, with respect to which such moneys were collected, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

        First: To the payment of all amounts due such Trustee under Section 9.07;

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

        Third: To the Company.

        Section 8.07.    Limitation on Suits.

        A Holder of Securities of any series or a Holder of any Coupons appertaining thereto may not pursue any remedy; with respect to this Indenture unless:

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

        (2)   the Holders of at least 25% in principal amount of the Outstanding Securities of such series make a written request to the Trustee to pursue the remedy;

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

38

        (4)   the Trustee does not comply with the request within 60 days after receipt of the request and offer of indemnity; and

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

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

        Section 8.08.    Unconditional Right of Holders to Receive Principal, Premium and Interest.

        Notwithstanding any other provision of this Indenture, the right of any Holder of a Security of any series or any Coupon appertaining thereto to receive payment of the principal of (and premium, if any) and (subject to Section 3.08) interest, if any, on such Security at the respective Places of Payment on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), at the respective rates and in the respective amounts expressed in such Security, or to bring suit for the enforcement of any such payment, is absolute and unconditional and shall not be impaired without the consent of the Holder of such Security, or Coupon, if any.

        Section 8.09.    Restoration of Rights and Remedies.

        If any Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Trustee or to such Holder, then and in every such case the Company, such Trustee and such Holder shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of such Trustee and such Holder shall continue as though no such proceeding had been instituted.

        Section 8.10.    Rights and Remedies Cumulative.

        Except as provided in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee for the Securities of any series or to the Holders of such Securities or any Coupons appertaining thereto is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

        Section 8.11.    Delay or Omission Not Waiver.

        No delay or omission of the Trustee for the Securities of any series or of the Holders of such Securities or any Coupons appertaining thereto to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article VIII or by law to such Trustee or to such Holders may be exercised from time to time, and as often as may be expedient, by such Trustee or by the Holders of such Securities or the Coupons appertaining thereto.

        Section 8.12.    Control by Holders.

        The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for the Securities of such series or exercising any trust or power conferred on such Trustee, provided that

39

        (a)   such Trustee may refuse to follow any direction that conflicts with law or this Indenture,

        (b)   subject to Section 9.01, such Trustee shall have the right to decline to follow any such direction if a Responsible Officer or Officers determines that the action so directed would be unjustly prejudicial to the Holders of the Securities of such series not taking part in such direction or would involve the Trustee in personal liability; or

        (c)   the Trustee may take any other action deemed proper by such Trustee which is not inconsistent with such direction.

        Section 8.13.    Waiver of Past Defaults.

        The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any default hereunder and its consequences, except:

        (a)   a default in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series, or in the payment of any sinking fund installment or analagous obligation with respect to the Securities of such series; or

        (b)   a default in respect of a covenant or provision of this Indenture which under Article XII cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

        Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

        Section 8.14.    Undertaking for Costs.

        The parties to this Indenture agree, and each Holder of any Security or of any Coupon by such Holder's acceptance thereof shall be deemed to have agreed, that in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for the Securities of any series for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant. The provisions of this Section 8.14 shall not apply to any suit instituted by the Trustee, any suit by any Holder, or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or any suit by any Holder of Securities or Coupons pursuant to Section 8.08.

        Section 8.15.    Waiver of Stay or Extension Laws.

        The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee for the Securities of any series, but will suffer and permit the execution of every such power as though no such law had been enacted.

40

ARTICLE IX

THE TRUSTEE

        Section 9.01.    Certain Duties and Responsibilities.

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

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

        (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, in the case of any such certificates or opinions which are specifically required by any provision of this Indenture to be delivered to the Trustee, the Trustee shall be under a duty to examine the certificate's and opinions to determine whether or not they conform to the requirements of this Indenture.

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

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

        (i)    this subsection shall not be construed to limit the effect of subsection (a) of this Section 9.01;

        (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;

        (iii)  the Trustee for the Securities of any series shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with a direction of the Holders of a majority in principal amount of the Outstanding Securities of such series pursuant to Section 8.12 relating to the time, method and place of conducting any proceeding for any remedy available to such Trustee, or exercising any trust or power conferred upon such Trustee, under this Indenture; and

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

        (d)   Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 9.01.

        Section 9.02.    Notice of Defaults.

        Within 90 days after the occurrence of any default hereunder known to the Trustee for any series with respect to the Securities of such series, such Trustee shall provide notice of such default to all Holders of the Securities of such series, and of Coupons, if any, appertaining thereto in the manner provided in Section 1.07, unless such default shall have been cured or waived. However, in the case of a default in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series, or in the payment of any sinking fund installment or analogous obligation, such Trustee

41

shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of such Trustee in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of such series and of Coupons, if any, appertaining thereto. Further, in the case of any default of the character specified in Section 8.01(c), no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section 9.02, the term "default" means any event which is, or, after notice or lapse of time or both, would become, an Event of Default with respect to Securities of such series.

        Section 9.03.    Certain Rights of Trustee.

        Except as otherwise provided in Section 9.01:

        (a)   the Trustee may rely and shall be protected in acting or refraining from acting upon any document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;

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

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

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

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

        (f)    the Trustee need not investigate any fact or matter stated in any document, but if the Trustee determines to investigate, it shall be entitled to examine during normal business hours and upon reasonable notice the books, records and premises of the Company, personally or by agent or attorney; and

        (g)   the Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care by it hereunder.

        Section 9.04.    Not Responsible for Recitals or Issuance of Securities.

        The recitals contained herein and in the Securities, except the certificates of authentication, shall be taken as the statements of the Company, and the Trustee and any Authenticating Agent assume no responsibility for their correctness. The Trustee and any Authenticating Agent make no representations as to the validity or sufficiency of this Indenture or of the Securities or any Coupons, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture and perform its obligations hereunder, and shall not be responsible for any statement herein or therein other than the certificates of authentication on any Securities which they may authenticate. The Trustee represents and warrants that the statements made by it in any Statement of Eligibility on Form T-I supplied to the Company will be true and accurate. The Trustee and any Authenticating Agent shall not be accountable for the use or application by the Company of the Securities or the proceeds thereof.

42

        Section 9.05.    May Hold Securities.

        The Trustee, any Paying Agent, any Securities Registrar, any Authenticating Agent or any other agent of the Company or of the Trustee, in its individual or any other capacity, may become the owner or pledgee of the Securities of any series and, subject to Sections 9.08 and 9.13 may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Securities Registrar, Authenticating Agent or such other agent.

        Section 9.06.    Money Held in Trust.

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

        Section 9.07.    Compensation and Reimbursement.

        The Company agrees:

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

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

        (c)   to indemnify the Trustee for the Securities of any series and its agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses (including, without limitation, the reasonable fees and disbursements of their counsel) of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder.

        Section 9.08.    Disqualification; Conflicting Interests.

        (a)   If the Trustee for the Securities of any series has or shall acquire any conflicting interest, as defined in this Section 9.08, with respect to the Securities of such series and the Coupons, if any, appertaining thereto, it shall, within 90 days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest or resign with respect to such series in the manner and with the effect hereinafter specified in this Article IX. In such event, the Company shall take prompt steps to have a successor appointed in the manner set forth herein.

        (b)   If the Trustee for the Securities of any series shall fail to comply with the provisions of subsection (a) of this Section 9.08, such Trustee shall, within 10 days after the expiration of such 90-day period, transmit notice of such failure to all Holders of the Securities of such series and the Coupons, if any, appertaining thereto as provided in Section 1.07.

        (c)   For the purposes of this Section 9.08, the Trustee for the Securities of any series shall be deemed to have a conflicting interest with respect to such series if

        (i)    such Trustee is Trustee under this Indenture with respect to the Outstanding Securities of any other series or is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of Securities issued under this Indenture. However, there shall be excluded from the operation of

43

this subsection (x) this Indenture with respect to the Securities of any other series and (y) any other indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding, if

        (1)   this Indenture and such other indenture or indentures are wholly unsecured and such other indenture or indentures (and all series of securities issued or issuable thereunder) are qualified under the Trust Indenture Act, unless the Commission shall have found and declared by order pursuant to Section 305(b) or Section 307(c) of the Trust Indenture Act that differences exist between the provisions of this Indenture with respect to the Securities of such series and the provisions of this Indenture with respect to one or more other series or the provisions of such other indenture or indentures which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify such Trustee from acting as such under this Indenture with respect to the Securities of such series and such other series or under such other indenture or indentures, or

        (2)   the Company shall have sustained the burden of proving, on application to the Commission and after opportunity for hearing thereon, that trusteeship under this Indenture with respect to the Securities of such series and such other series or such other indenture or indentures is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify such Trustee from acting as such with respect to the Securities of such series and such other series or under such other indenture or indentures;

        (ii)   such Trustee or any of its directors or executive officers is an underwriter for the Company;

        (iii)  such Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company;

        (iv)  such Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee or representative of the Company, or of an underwriter (other than the Trustee itself) for the Company who is currently engaged in the business of underwriting, except that (1) one individual may be a director or an executive officer, or both, of the Company but may not be at the same time an executive officer of both the Trustee and the Company; (2) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director or an executive officer, or both, of the Trustee and a director of the Company; and (3) the Trustee may be designated by the Company or by any underwriter for the Company to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, subject to the provisions of subsection (i) of this subsection (c) of this Section 9.08, to act as trustee, whether under an indenture or otherwise;

        (v)   10% or more of the voting securities of such Trustee is beneficially owned either by the Company or by any director, partner, or executive officer of the Company, or 20% or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or 10% or more of the voting securities of such Trustee is beneficially owned either by an underwriter for the Company or by any director, partner, or executive officer of the Company, or is beneficially owned, collectively, by any two or more such persons;

        (vi)  such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) of this Section 9.08 defined), (1) 5% or more of the voting securities, or 10% or more of any other class of security of the Company (not including the Securities issued under this Indenture with respect to which such Trustee is serving as

44

such and securities issued under any other indenture under which such Trustee is also trustee), or (2) 10% or more of any class of security of an underwriter for the Company;

        (vii) such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) of this Section 9.08 defined), 5% or more of the voting securities of any person who, to the knowledge of such Trustee, owns 10% or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company;

        (viii) such Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default (as hereinafter in this subsection (c) of this Section 8.08 defined), 10% or more of any class of security of any person who, to the knowledge of such Trustee, owns 50% or more of the voting securities of the Company; or

        (ix)  such Trustee owns, on the date of a default (as hereinafter in this subsection (c) of this Section 9.08 defined) upon the Securities of any series, but exclusive of any period of grace or requirement of notice, or any anniversary of such default if such default upon the Securities of any series remains in existence, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of 25% or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under subsection (vi), (vii) or (viii) of this subsection (c) of this Section 9.08. As to any such securities of which such Trustee acquired ownership through becoming executor, administrator, or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed 25% of such voting securities or 25% of any such class of security. Promptly after the dates of any such default upon the Securities of any series and annually in each succeeding year that the Securities of such series remain in default, such Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of such dates. If the Company fails to make payment in full of the principal of (and premium, if any) or interest, if any, on any of the Securities of any series when and as the same becomes due and payable, and such failure continues for 30 days thereafter, such Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such 30-day period, and after such date, notwithstanding the foregoing provisions of this paragraph, all such securities so held by such Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by such Trustee for the purposes of subsections (vi), (vii) and (viii) of this subsection (c) of this Section 9.08; or

        (x)   except under the circumstances described in subsections (i), (iii), (iv), (v) and (vi) of Section 9.13(b), such Trustee shall be or become a creditor of the Company.

        The specification of percentages in subsections (v) to (ix), inclusive, of this subsection (c) of this Section 9.08 shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of subsection (iii) or (vii) of this subsection (c) of this Section 9.08.

        For the purposes of subsections (vi), (vii), (viii) and (ix) of this subsection (c) of this Section 9.08 only, (1) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (2) an obligation shall be deemed to be "in default" when a default in payment of principal shall have continued for 30 days or more and shall not have been cured; and (3) such Trustee

45

shall not be deemed to be the owner or holder of (A) any security which it holds as collateral security, as trustee or otherwise, for an obligation which is not in default, as defined in clause (2) above, or (B) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (C) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity.

        (d)   For the purposes of this Section 9.08:

        (i)    The term "underwriter" when used with reference to the Company means every person who, within one year prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered or sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission.

        (ii)   The term "director" means any director of a corporation, or any individual performing similar functions with respect to any organization, whether incorporated or unincorporated.

        (iii)  The term "person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint-stock company, a trust, an unincorporated organization, or a government or political subdivision thereof. As used in this subsection, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security.

        (iv)  The term "voting security" means any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any, trust, agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder of such security are presently entitled to vote in the direction or management of the affairs of a person.

        (v)   The term "Company" means any obligor upon the Securities.

        (vi)  The term "executive officer" means the president, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization, whether incorporated or unincorporated, but shall not include the chairman of the board of directors.

        (e)   The percentages of voting securities and other securities specified in this Section 9.08 shall be calculated in accordance with the following provisions:

        (i)    A specified percentage of the voting securities of the Trustee, the Company or any other person referred to in this Section 9.08 (each of whom is referred to as a "person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.

        (ii)   A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.

        (iii)  The term "amount", when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security.

46

        (iv)  The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition:

        (1)   securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;

        (2)   securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or interest or otherwise;

        (3)   securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and

        (4)   securities held in escrow if placed in escrow by the issuer thereof. However, any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.

        (v)   A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges. However, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes. Also, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.

        Section 9.09.    Corporate Trustee Required; Eligibility.

        There shall at all times be a Trustee hereunder for the Securities of each series which shall be a corporation organized and doing business under the laws of the United States of America, any State or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $25,000,000, subject to supervision or examination by Federal, state or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.09 the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee for the Securities of any series shall cease to be eligible in accordance with the provisions of this Section 9.09, it shall resign immediately in the manner and with the effect hereinafter specified in this Article IX. At no time shall the Company or any of the Company's Subsidiaries serve as Trustee under this Indenture.

        Section 9.10.    Resignation and Removal; Appointment of Successor.

        (a)   No resignation or removal of the Trustee for the Securities of any series and no appointment of a successor Trustee for the Securities of such series pursuant to this Article IX shall become effective until the acceptance of appointment by the successor Trustee under Section 9.11.

        (b)   The Trustee, or any trustee or trustees hereafter appointed, for the Securities of any series may resign at any time with respect to one or more or all such series of Securities by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee for the Securities of such series shall not have been delivered to the Trustee for such series within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee for such series.

        (c)   The Trustee for the Securities of any series may be removed at any time with respect to one or more or all such series by Act of the Holders of a majority in aggregate principal amount of the

47

Outstanding Securities of such one or more series (each voting as a class) delivered to such Trustee and to the Company.

        (d)   If at any time:

        (i)    the Trustee for the Securities of any series fails to comply with subsection (a) of Section 9.08 with respect to such series after written request therefor by the Company or by any Holder of Securities of such series who has been a bona fide Holder of Securities of such series for at least six months, or

        (ii)   the Trustee for the Securities of any series ceases to be eligible under Section 9.09 and fails to resign after written request therefor by the Company or by any such Holder, or

        (iii)  the Trustee for the Securities of any series becomes incapable of acting with respect to the Securities of such series or is adjudged a bankrupt or insolvent or a receiver of such Trustee or of its property is appointed or any public officer takes charge or control of such Trustee or of its property or affairs for the purpose of rehabilitation, conversion or liquidation,

then, in any such case, (1) the Company, by a Board Resolution, may remove the Trustee with respect to such series, or (2) subject to Section 8.14, any Holder of a Security of such series who has been a bona fide Holder of such Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of such Trustee and the appointment of a successor Trustee for such series.

        (e)   If the Trustee for the Securities of any series resigns, is removed or becomes incapable of acting, or if a vacancy occurs in the office of Trustee for the Securities of any series for any cause, the Company, by a resolution of the Board of Directors, shall promptly appoint a successor Trustee for the Securities of such series and shall comply with the applicable requirements of Section 9.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee for the Securities of such series is appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 9.11, become the successor Trustee for such series and supersede the successor Trustee appointed by the Company. If no successor Trustee for any Security of such series is appointed by the Company and such Holders and has accepted appointment in the manner hereafter provided, then any Holder who has been a bona fide Holder of such Security for at least six months may, on, behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and appointment of a successor Trustee for such series.

        (f)    The Company shall give notice of each resignation and each removal of the Trustee for the Securities of any series and each appointment of a successor Trustee for the Securities of such series to Holders of the Securities of such series in the manner and to the extent provided in Section 1.07. Each notice shall include the name of such successor Trustee and the address of its Corporate Trust Office. If the Company fails to give the notice required by this subsection (f) of this Section 9.10 within 15 days of the appointment of a successor Trustee, such successor Trustee shall give such notice at the expense of the Company.

        Section 9.11.    Acceptance of Appointment by Successor.

        (a)   In case of the appointment hereunder of a successor Trustee with respect to all of the Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, the retiring Trustee and, if applicable, the receivers, trustees, custodians, assignees or court appointing it, an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee.

48

Upon the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

        (b)   In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto wherein each such successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Upon the request of the Company or of any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

        (c)   Upon the request of any such successor Trustee, the Company shall execute any instrument for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in subsection (a) or (b) of this Section 9.11, as the case may be.

        (d)   No successor Trustee for a series of Securities shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article IX.

        Section 9.12.    Merger, Conversion, Consolidation or Succession to Business.

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

49

        Section 9.13.    Preferential Collection of Claims Against Company.

        (a)   Subject to subsection (b) of this Section 9.13, if the Trustee for the Securities of any series shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within three months prior to a default, as defined in subsection (c) of this Section 9.13, or subsequent to such a default, then, unless and until such default shall be cured, such Trustee shall set apart and hold in a special account for the benefit of such Trustee, individually, the Holders of the Securities of such series, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities (as defined in subsection (c) of this Section 9.13):

        (i)    an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in subsection (ii) of this Section 9.13(a), or from the exercise of any right of set-off which such Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and

        (ii)   all property received by such Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds.

Nothing herein contained, however, shall affect the right of such Trustee:

        (1)   to retain for its own account (A) payments made on account of any such claim by any person (other than the Company) who is liable thereon, and (B) the proceeds of the bona fide sale of any such claim by such Trustee to a third person, and (C) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable state law;

        (2)   to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three months' period;

        (3)   to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three months' period and such property was received as security therefor simultaneously with the creation thereof, and if such Trustee shall sustain the burden of proving that at the time such property was so received such Trustee had no reasonable cause to believe that a default, as defined in subsection (c) of this Section 9.13, would occur within three months; or

        (4)   to receive payment on any claim referred to in subsection (2) or (3) against the release of any property held as security for such claim as provided in subsection (2) or (3), as the case may be, to the extent of the fair value of such property.

        For the purposes of subsections (2), (3) and (4), property substituted after the beginning of such three months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such subsections is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of such Trustee as such creditor, such claim shall have the same status as such pre-existing claim.

50

        If such Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among such Trustee, the Holders of the Securities of such series, the Holders of the Coupons, if any, appertaining thereto, and the holders of other indenture securities in such manner that such Trustee, the Holders of such Securities, the Holders of any such Coupons, and the holders of other indenture securities realize, as a result of payments from such special account and, payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or other applicable Federal or state law, the same percentage of their respective claims, figured before crediting to the claims of such Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of such Trustee, the Holders of such Securities, the Holders of any such Coupons, and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or other applicable Federal or state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" includes any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or other applicable Federal or state law, whether such distribution is made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceeding for reorganization is pending shall have jurisdiction (x) to apportion among such Trustee, the Holders of such Securities, the Holders of Coupons, if any, appertaining thereto, and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and proceeds thereof, or (y) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to such Trustee, the Holders of such Securities, the Holders of Coupons, if any, appertaining thereto, and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula.

        Any Trustee which has resigned or been removed with respect to any series of Securities after the beginning of such three months' period shall be subject to the provisions of this subsection (a) with respect to the Securities of such series as though such resignation or removal had not occurred. If any Trustee has so resigned or been removed prior to the beginning of such three months' period, it shall be subject to the provisions of this subsection (a) with respect to such series if and only if the following conditions exist:

        (i)    the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as Trustee for the Securities of such series, occurred after the beginning of such three months' period; and

        (ii)   such receipt of property or reduction of claim occurred within three months after such resignation or removal.

        (b)   There shall be excluded from the operations of subsection (a) of this Section 9.13 a creditor relationship arising from:

        (i)    the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by such Trustee;

51

        (ii)   disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity;

        (iii)  an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c) of this Section 9.13;

        (iv)  the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; and

        (v)   the acquisition, ownership, acceptance or negotiation of any self-liquidating paper as defined in subsection (c) of this Section 9.13.

        (c)   For the purposes of this Section 9.13 only:

        (i)    the term "default" means any failure to make payment in full of the principal of or interest on any of the Securities of the applicable series or upon the other indenture securities when and as such principal or interest becomes due and payable;

        (ii)   the term "other indenture securities" means securities upon which the Company is an obligor (as defined in the Trust Indenture Act) outstanding under any other indenture (1) under which such Trustee is also trustee, (2) which contains provisions substantially similar to the provisions of this Section 9.13, and (3) under which a default exists at the time of the apportionment of the funds and property held in such special account;

        (iii)  the term "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand;

        (iv)  the term "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by such Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation; and

        (v)   the term "Company" means any obligor upon the Securities.

        Section 9.14.    Authenticating Agent.

        The Trustee may appoint an authenticating agent (an "Authenticating Agent") for each series of Securities, which shall be acceptable to the Company, to act on behalf of such Trustee and subject to its direction in the authentication and delivery of the Securities of such series issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.06. Securities of each such series so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States of America,

52

any state thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of not less than $25,000,000 and subject to supervision or examination by Federal, state or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section 9.14 the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 9.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section 9.14.

        Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Authenticating Agent is a party, or any corporation succeeding to the corporate agency or corporate trust business of any Authenticating Agent, shall be an Authenticating Agent with respect to the Securities of all series for which such Authenticating Agent served as such, provided that such corporation shall be otherwise eligible under this Section 9.14, without the execution or filing of any paper or any further act on the part of the Trustee for the Securities of such series or such Authenticating Agent.

        Any Authenticating Agent may at any time resign by giving written notice of resignation to the applicable Trustee and to the Company. The Trustee for the Securities of any series may at any time terminate the agency of any Authenticating Agent for such series by giving written notice of termination to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 9.14, with respect to the Securities of one or more or all series, the Trustee for such series promptly may appoint a successor Authenticating Agent, which shall be acceptable to the Company, and upon doing so shall provide notice of such appointment to all Holders of the Securities of such series or any Coupons appertaining thereto in the manner and to the extent provided in Section 1.07. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers, duties and responsibilities of its predecessor hereunder with like effect as if originally named as an Authenticating Agent hereunder. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 9.14.

        The Trustee for the Securities of each series agrees to pay to the Authenticating Agent for the Securities of such series from time to time reasonable compensation for its services, and each such Trustee shall be entitled to be reimbursed for such payments subject to the provisions of Section 9.07.

        The provisions of Sections 3.09, 9.04 and 9.05 shall be applicable to each Authenticating Agent.

53

ARTICLE X

HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

        Section 10.01.    Holders' Lists.

        (a)   The Trustee for the Securities of each series shall preserve, in as current a form as is reasonably practicable, the most recent list available to it of the names and addresses of the Holders of the Securities of such series contained in the most recent list furnished to such Trustee by the Company as provided in subsection (b) of this Section 10.01 or in the Securities Register if such Trustee be the Securities Registrar for such series and the true names and addresses of Holders received by such Trustee in its capacity as Paying Agent for such series. Such Trustee may destroy any list furnished to it as provided in subsection (b) of this Section 10.01 upon receipt of a new list so furnished.

        (b)   If the Trustee is not the Securities Registrar for the Securities of a series, the Company shall furnish to the Trustee from information in the possession or control of the Company or any of its Paying Agents other than the Trustee (a) semi-annually, on a date not more than 15 days after each regular record date with respect to an Interest Payment Date, for each series of interest-bearing Securities, (b) on semi-annual dates in each year as specified by the term of the Securities for each series of non-interest bearing Securities and (c) 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 the Securities of such series obtained since the date as of which the next previous list, if any, was furnished. Any such list may be dated as of a date not more than 15 days prior to the time such information is furnished or caused to be furnished and need not include information received after such date. The Company shall also be required to furnish such information which is known to it concerning the Holders of Coupons and Unregistered Securities; however, the Company shall have no obligation to investigate any matter relating to any Holder of an Unregistered Security or any Holder of a Coupon.

        Section 10.02.    Communications to Holders.

        (a)   If three or more Holders of the Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee for such series, and furnish to such Trustee reasonable proof that each such applicant has owned a Security of such series for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of any series with respect to their rights under this Indenture or under the Securities of any series and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then such Trustee shall, within five Business Days after the receipt of such application, at its election, either

        (i)    afford such applicants access to the information preserved at the time by such Trustee in accordance with Section 10.01, or

        (ii)   inform such applicants as to the approximate number of such Holders whose names and addresses appear in the information preserved at the time by such Trustee in accordance with Section 10.01, and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application.

        If such Trustee shall elect not to afford such applicants access to such information, such Trustee shall, upon the written request of such applicants, mail to each Holder to whom the applicant desires to communicate whose name and address appear in the information preserved at the time by such Trustee in accordance with Section 10.01, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to such Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender such Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that,

54

in the opinion of such Trustee, such mailing would be contrary to the best interests of such Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, such Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender. Otherwise, such Trustee shall be relieved of any obligation or duty to such applicants respecting their applications.

        (b)   Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee, nor any agent of the Company or the Trustee, shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with subsection (a) of this Section 10.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under subsection (a) of this Section 10.02.

        Section 10.03.    Reports by Trustee.

        (a)   Within 60 days after the first May 15 which occurs not less than 60 days following the first date of issuance of any series of Securities hereunder, and within 60 days after May 15 in every year thereafter, so long as required by the Trust Indenture Act, as then amended, and so long as the Securities of any series are Outstanding hereunder, the Trustee for the Securities of the applicable series shall transmit by mail to all Holders of Registered Securities of such series as their names and addresses appear in the Securities Register, a brief report dated as of such date with respect to any of the following events which may have occurred since the date of the report issued by the Trustee in the immediately preceding year:

        (i)    its eligibility under Section 9.09 and its qualifications under Section 9.08, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections 9.08 and 9.09, a written statement to such effect;

        (ii)   the character and amount of any advances (and if such Trustee elects so to state, the circumstances surrounding the making thereof) made by such Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities of any series, on any property or funds held or collected by it as Trustee, except that such Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than ¹/2 of 1% of the principal amount of the Securities for which it is Trustee Outstanding on the date of such report;

        (iii)  the amount, interest rate and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Securities of any series) to such Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in clause (ii), (iii), (iv) or (vi) of subsection (b) of Section 9.13;

        (iv)  any change to the property and funds, if any, physically in the possession of such Trustee as such on the date of such report;

        (v)   any additional series of Securities for which it is Trustee and which such Trustee has not previously reported; and

        (vi)  any action taken by such Trustee in the performance of its duties hereunder which it has not previously reported and which in its opinion materially affects the Securities of any series, except action in respect of a default, notice of which has been or is to be withheld by such Trustee in accordance with Section 9.02.

55

        (b)   The Trustee for the Securities of each series shall transmit by mail to Holders of Registered Securities of such series as their names and addresses appear in the Securities Register, a brief report with respect to the character and amount of any advances (and if such Trustee elects so to state, the circumstances surrounding the making thereof) made by such Trustee (as such) since the date of the last report transmitted pursuant to subsection (a) of this Section 10.03 (or if no such report has yet been so transmitted, since the date of execution of this instrument) for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities of any series, on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this subsection, except that such Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of the Securities for which it is Trustee Outstanding at such time, such report to be transmitted within 90 days after such time.

        (c)   Reports pursuant to this Section 10.03 shall be transmitted by mail:

        (1)   to all registered Holders of Registered Securities, as the names and addresses of such Holders appear in the applicable Securities Register; and

        (2)   to such Holders of Securities of any series as have, within two years preceding such transmission, filed their names and addresses with the Trustee for such series for that purpose.

        (d)   A copy of each such report shall, at the time of such transmission to such Holders, be filed by such Trustee with each stock exchange or market upon which such Securities are listed, with the Company, and also with the Commission. The Company will notify such Trustee when such Securities are listed on any stock exchange or market.

        Section 10.04.    Reports by Company.

        The Company will:

        (a)   file with the Trustee for the Securities of each series, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it will file with such Trustee and with the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

        (b)   file with such Trustee and with the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

        (c)   transmit by mail to all Registered Holders, as their names and addresses appear in the Securities Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 10.04 as may be required by rules and regulations prescribed from time to time by the Commission.

56

ARTICLE XI

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

        Section 11.01.    Company May Consolidate, etc., Only on Certain Terms.

        The Company shall not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

        (a)   the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America or any state or the District of Columbia and, if the Company is not the surviving corporation, the resulting entity shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee for the Securities of each series, in form satisfactory to such Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all the Securities of such series and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

        (b)   immediately after giving effect to such transaction, no Event of Default, and no event which, after notice (or acquisition of knowledge) or lapse of time, or both, would become an Event of Default, shall have happened and be continuing; and

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

        Section 11.02.    Successor Corporation Substituted.

        Upon any consolidation by the Company with or merger by the Company into any other corporation or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 11.01, the successor corporation formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any and all of the Securities and the Coupons, if any, appertaining thereto issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee with respect to any series of Securities and the Coupons, if any, appertaining thereto and, upon the order of such successor corporation, instead of the Company, and subject to all of the terms, conditions and limitations in this Indenture prescribed, the Trustee with respect to any series of Securities shall authenticate and shall deliver any Securities of such series and the Coupons, if any, appertaining thereto which previously shall have been signed and delivered by the officers of the Company to such Trustee for authentication, and any Securities of such series and the Coupons, if any, appertaining thereto which such successor corporation thereafter shall cause to be signed and delivered to such Trustee for that purpose. All of the Securities and the Coupons, if any, appertaining thereto so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities and the Coupons, if any, appertaining thereto theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities and the Coupons, if any, appertaining thereto had been issued at the date of the execution hereof.

57

        In case of any such consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not substance) may be made in the Securities and the Coupons, if any, appertaining thereto thereafter issued as may be appropriate.

ARTICLE XII

SUPPLEMENTAL INDENTURES

        Section 12.01.    Supplemental Indentures Without Consent of Holders.

        Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee for the Securities of any or all series may enter into one or more indentures supplemental hereto, in form satisfactory to such Trustee, for any of the following purposes:

        (a)   to comply with Section 11.01; or

        (b)   to add to the covenants of the Company, for the benefit of the Holders of the Securities of any or all series and the Coupons, if any, appertaining thereto (and if such additional covenants are to be for the benefit of less than all series of the Securities, stating that such covenants are being added solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company; or

        (c)   to add Events of Default (and if such additional Events of Default are to be for the benefit of less than all series of the Securities, stating that such Events of Default are being added solely for the benefit of such series); or

        (d)   to establish the form or terms of the Securities of any series as permitted by Section 3.01 or authorize the issuance of additional Securities of a series previously authorized; or

        (e)   to permit payment of principal, premium or interest on Unregistered Securities or of interest on Coupon Securities; or

        (f)    to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which the Board of Directors deems necessary or desirable and which shall not adversely affect the interests of the Holders of any Securities or the Coupons, if any, appertaining thereto; or

        (g)   to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the Trust Indenture Act, or under any similar Federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly permitted by the Trust Indenture Act, excluding, however, the provisions referred to in Section 316(a) (2) of the Trust Indenture Act as in effect at the date as of which this Indenture was executed or any corresponding provision provided for in any similar Federal statute hereafter enacted; or

        (h)   to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series or to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 9.11; or

        (i)    to provide for the issuance of uncertificated Securities of one or more series in addition to or in place of certificated Securities; or

        (j)    to otherwise change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision.

58

        Section 12.02.    Supplemental Indentures With Consent of Holders.

        Subject to Sections 7.12 and 7.13, with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of each series affected thereby, by Act of such Holders delivered to the Company and the Trustee for such series of the Securities, the Company, when authorized by a Board Resolution, and the Trustee for each series of Securities affected thereby may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of the Securities of such series under this Indenture. However, no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby:

        (a)   change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable on the redemption thereof, or change any Place of Payment where any Security, or any premium or interest thereon, is payable, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 8.02 or the amount thereof provable in bankruptcy pursuant to Section 8.04, or adversely affect the right of repayment, if any, at the option of the Holder, or reduce the amount of, or postpone the date fixed for, any payment under the sinking fund for any Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or

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

        (c)   modify any of the provisions of this Section 12.02, Section 8.02 or Section 8.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.

        A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has been expressly included solely for the benefit of the Securities of one or more particular series, or which modifies the rights of the Holders of the Securities of one or more such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of the Securities of any other series or any Coupons appertaining thereto.

        It shall not be necessary for any Act of Holders under this Section 12.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

        Any consent given by any Holder of a Security under this Section 12.02 shall be irrevocable for a period of six months after the day of execution thereof, but may be revoked at any time thereafter by such Holder or by its successor in title by filing written notice of such revocation with the Trustee at its Corporate Trust Office; provided, however, that such consent shall not be revocable after the Holders of not less than 66²/3% in aggregate principal amount of the Securities of the series of which such Security is a part at the time outstanding shall have consented to such supplemental indenture. No notation on any Security of the fact of such consent shall be necessary, but any such written consent by the Holder of any Security shall be conclusive and binding on all future Holders and owners of the same Security and of all Securities delivered in exchange therefor, unless revoked in the manner and during the period provided in this Section 12.02.

59

        Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section 12.02, the Company shall mail a notice, setting forth in general terms the substance of such supplemental indenture, to the Holders of Securities of the affected series at their addresses as the same shall then appear in the Securities Registrar of the Company. 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 supplemental indenture.

        Section 12.03.    Execution of Supplemental Indentures.

        In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article XII or the modifications thereby of the trusts created by this Indenture, the Trustee for the Securities of any series shall be entitled to receive and (subject to Section 9.01) shall be fully protected in relying upon (i) an Officers' Certificate and (ii) an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. Such Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects such Trustee's own rights, duties or immunities under this Indenture or otherwise.

        Section 12.04.    Effect of Supplemental Indentures.

        Upon the execution of any supplemental indenture under this Article XII, this Indenture shall be modified in accordance therewith (but only with respect to the Securities of each series affected by such supplemental indenture), such supplemental indenture shall form a part of this Indenture for all purposes with respect to such series, and every Holder of Securities of any such series and any Coupons appertaining thereto theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

        Section 12.05.    Conformity with Trust Indenture Act.

        Every supplemental indenture executed pursuant to this Article XII shall conform to the requirements of the Trust Indenture Act as then in effect.

        Section 12.06.    Reference in Securities to Supplemental Indentures.

        Securities of any series (including any Coupons appertaining thereto) authenticated and delivered after the execution of any supplemental indenture pursuant to this Article XII may, and shall if required by the Trustee for the Securities of such series, bear a notation in form approved by such Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series and any Coupons appertaining thereto so modified as to conform, in the opinion of such Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by such Trustee in exchange for Outstanding Securities of such series and any Coupons appertaining thereto then outstanding.

ARTICLE XIII

COVENANTS

        Section 13.01.    Payment of Principal, Premium and Interest.

        The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest, if any, on the Securities of each series in accordance with the terms of such Securities, any Coupons appertaining thereto, and this Indenture.

        The interest on Coupon Securities shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. The interest, if any, on any temporary Unregistered Security shall be paid, as to any installment of interest evidenced by a Coupon attached thereto, if any, only upon presentation and surrender of such Coupon, and, as to other installments of interest, if any, only upon presentation of such Security for notation thereon of the payment of such interest.

60

        Section 13.02.    Maintenance of Office or Agency.

        The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Registered Securities of any series may be presented or surrendered for payment or surrendered for registration of transfer or exchange, where Coupon Securities may be registered as to principal, and where notices and demands to or upon the Company in respect of the Securities of such series and this Indenture may be served, which office or agency shall initially be any office of the Trustee. However, if the Corporate Trust Office of the Trustee for such series is not located in the Borough of Manhattan, The City of New York, such office or agency shall initially be the principal corporate trust office located in the Borough of Manhattan, The City of New York, of an Authenticating Agent designated pursuant to Section 9.14.

        The Company will give prompt written notice to the Trustee of the location and any change in the location, of any such office or agency and of the name and address of any Securities Registrar and Paying Agent. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, presentations, surrenders, notices and demands in respect of Registered Securities may be made or served at the Corporate Trust Office of the Trustee or the corporate trust office of any Authenticating Agent appointed hereunder, and presentations, surrenders, notices and demands in respect of Coupons appertaining to Securities of any series and Unregistered Securities may be made or served at the corporate trust office of the Trustee in the other city or cities referred to above.

        The Company may also from time to time designate one or more other offices or agencies (in or outside The City of New York) where the Securities of one or more series may be presented or surrendered for any or all of such purposes and may from time to time rescind such designations. However, no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency as provided in this Section 13.02 in each Place of Payment for Securities of any series for such purposes. The Company will 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.

        Section 13.03.    Money for Securities Payments to be Held in Trust; Paying Agent to Repay Moneys Held; Return of Unclaimed Moneys.

        If the Company acts as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest, if any, on any of the Securities of such series and the Coupons, if any, appertaining thereto, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any,) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of such series of its action or failure so to act.

        Whenever the Company has one or more Paying Agents with respect to any series of Securities, it will, on or prior to each due date of the principal of (and premium, if any) or interest, if any, on any Securities of such series and the Coupons, if any, appertaining thereto, deposit with a Paying Agent for such series a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee for such series) the Company will promptly notify such Trustee at its Corporate Trust Office of its action or failure so to act.

        The Company shall cause each Paying Agent for the Securities of any series other than the Trustee for such series to execute and deliver to such Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 13.03, that such Paying Agent will:

        (a)   hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on the Securities of such series in trust for the benefit of the Holders of the

61

Securities of such series, and the Coupons, if any, appertaining thereto, until such sums shall be paid to such Holders or otherwise disposed of as herein provided;

        (b)   give such Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any payment of principal (and premium, if any) or interest, if any, on the Securities of such series; and

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

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

        Any money deposited with such Trustee or any such Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Security of such series and the Coupons, if any, appertaining thereto and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, has become due and payable shall be repaid to the Company on Company Request, or (if then held by the Company) shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, be discharged from such trust and be delivered to the Company; and the Holder of such Security or the Coupons, if any, appertaining thereto, shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of such Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. However, such Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper, or, at the option of the Trustee, with respect to Registered Securities, mailed by first-class mail, postage prepaid, to Holders of such Registered Securities, notice that such money remains unclaimed and that, after a date specified therein, which shall be not less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company.

        Section 13.04.    Maintenance of Properties.    The Company will cause all material properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary of the Company.

        Section 13.05.    Statement as to Compliance.

        The Company will deliver to the Trustee for each series of Securities, within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on the first December 31 which occurs no less than 60 days following the first issuance of any Securities under the Indenture), a

62

statement of the principal executive officer, principal financial officer or principal accounting officer of the Company, which need not comply with Section 1.03, stating that:

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

        (2)   to the best of the signer's knowledge, based on such review, the Company has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obligation (without regard to any cure period or requirement of notice provided herein), specifying each such default known to the signer and the nature and status thereof.

        Section 13.06.    Corporate Existence.

        Subject to Article XI hereof, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises and that of each Subsidiary. However, the Company shall not be required to preserve the corporate existence of any Subsidiary or any such right or franchise if pursuant to a Board Resolution the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its other Subsidiaries, taken as a whole, and that the loss thereof is not disadvantageous in any material respect to the Holders of the Securities of any series.

63

ARTICLE XIV

HOLDERS' MEETINGS

        Section 14.01.    Purposes of Meetings.

        A meeting of Holders of Securities of any or all series may be called at any time and from time to time pursuant to the provisions of this Article IX for any of the following purposes:

        (a)   to give any notice to the Company or to the Trustee for the Securities of such series, or to give any directions to the Trustee for such series, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article VIII;

        (b)   to remove the Trustee for such series and nominate a successor Trustee pursuant to the provisions of Article IX;

        (c)   to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 12.02; or

        (d)   to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Securities of any one or more or all series, as the case may be, under any other provision of this Indenture or under applicable law.

        Section 14.02.    Call of Meetings by Trustee.

        The Trustee for the Securities of any series may at any time call a meeting of Holders of Securities of such series to take any action specified in Section 14.01, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or such other Place of Payment as the Trustee for such series shall determine. Notice of every meeting of the Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given to Holders of Securities of such series in the manner and to the extent provided in Section 1.07. Such notice shall be given not less than 20 nor more than 90 days prior to the date fixed for the meeting.

        Section 14.03.    Call of Meetings by Company or Holders.

        In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in aggregate principal amount of the Outstanding Securities of any or all series, as the case may be, shall have requested the Trustee for such series to call a meeting of Holders of Securities of any or all series, as the case may be, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee for such series shall not have given the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders may determine the time and the place in the Borough of Manhattan, The City of New York, or such other Place of Payment for such meeting and may call such meeting to take any action authorized in Section 14.01, by giving notice thereof as provided in Section 14.02.

        Section 14.04.    Qualifications for Voting.

        To be entitled to vote at any meeting of Holders, a person shall be (a) a Holder of one or more Securities with respect to which such meeting is being held or (b) a person appointed by an instrument in writing as proxy by such Holder. The only persons who shall be entitled to be present or to speak at any meeting of Holders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee for the Securities of the series with respect to which such meeting is being held and its counsel and any representatives of the Company and its counsel.

64

        Section 14.05.    Regulations.

        Notwithstanding any other provisions of this Indenture, the Trustee for the Securities of any series may make such reasonable regulations as it may deem advisable for any meeting of Holders of the Securities of such series, in regard to proof of the holding of Securities of such series and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

        The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of the Securities of such series as provided in Section 14.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting.

        Subject to the proviso in the definition of "Outstanding," at any meeting each Holder of Securities with respect to which such meeting is being held or proxy therefor shall be entitled to one vote for each $1,000 principal amount (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in the definition of "Outstanding") of Securities held or represented by such Holder. However, no vote shall be cast or counted at any meeting in respect of any such Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote other than by virtue of the Securities of such series held by such person or instruments in writing aforesaid duly designating such person as the person to vote on behalf of other Holders of such series. At any meeting of Holders, the presence of persons holding or representing Securities with respect to which such meeting is being held in an aggregate principal amount sufficient to take action on the business for the transaction of which such meeting was called shall constitute a quorum, but, if less than a quorum is present, the persons holding or representing a majority in aggregate principal amount of such Securities represented at the meeting may adjourn such meeting with the same effect, for all intents and purposes, as though a quorum had been present. Any meeting of Holders of Securities with respect to which a meeting was duly called pursuant to the provisions of Section 14.02 or Section 14.03 may be adjourned from time to time by a majority of such Holders present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

        Section 14.06.    Voting.

        The vote upon any resolution submitted to any meeting of Holders of Securities with respect to which such meeting is being held shall be by written ballots on which shall be subscribed the signatures of such Holders or of their representatives by proxy and the serial number or numbers of the Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to such record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that such notice was given in the manner and to the extent provided in Section 1.07. The record shall show the serial numbers of the Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee.

        Any record so signed and verified shall be conclusive evidence of the matters therein stated.

65

        Section 14.07.    No Delay of Rights by Meeting.

        Nothing in this Article XIV shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Securities of any series.

ARTICLE XV

CONCERNING HOLDERS OF SECURITIES

        Section 15.01.    Evidence of Action by Holders.

        Whenever in this Indenture it is provided that the Holders of a specified percentage or a majority in aggregate principal amount of Outstanding Securities of any or all series may take any action (including the making of any demand or request, the giving of any notice, consent, or waiver, or the taking of any other action), the fact that at the time of taking any such action the Holders of such specified percentage or majority have joined therein may be evidenced (1) by any instrument or any number of instruments of similar tenor executed by Holders in person or by an agent or proxy appointed in writing, or (2) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article XIV, or (3) by a combination of such instrument or instruments and any such record of such a meeting of Holders.

        Section 15.02.    Proof of Execution of Instruments and of Holding of Securities.

        Proof of the execution of any instrument by a Holder or its agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

        The fact and date of the execution by any Person of any such instrument may be proved in any reasonable manner acceptable to the Trustee.

        The ownership of Securities may be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

        Section 15.03.    Securities Owned by the Company or Other Obligor on the Securities to be Disregarded in Certain Cases.

        In determining whether the Holders of the requisite principal amount of the Securities of any or all series have given any direction, request, waiver, or consent under this Indenture, Securities which are owned by the Company or by any other obligor on the Securities or by any Person directly or indirectly controlling, or controlled by, or under direct or indirect common control with, the Company or any such other obligor shall be disregarded, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, request, or consent, only Securities which the Trustee knows are so owned shall be disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding for purposes of this Section 15.03 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Securities and that the pledgee is not a person directly or indirectly controlling, or controlled by, or under direct or indirect common control with, the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken in good faith upon and in accordance with the advice of counsel shall be full protection to the Trustee.

        Section 15.04.    Record Date.

        The Company may set a record date in the circumstances permitted by the Trust Indenture Act for the purpose of determining the Holders of any series entitled to give or take any request, demand, authorization, direction, notice, consent, waiver, or other action, or to vote on any action authorized or permitted to be given or taken by Holders of such series. If not set by the Company prior to the first solicitation of a Holder of Securities of such series in respect of any such action, or, in the case of any

66

such vote, prior to such vote or if not set by the Trustee in accordance with (1) Section 8.01, upon receipt by the Trustee of any notice of default pursuant to Section 8.01(d) or (2) Section 8.02, upon receipt by the Trustee of any written declaration of acceleration of maturity, or waiver, rescission, and annulment thereof, the record date for any such action, vote, notice, declaration, or direction shall be the 30^th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 10.01) prior to such first solicitation, vote, notice, declaration, or direction, as the case may be. With regard to any record date for action to be taken by the Holders of one or more series of Securities, only the Holders of Securities of such series on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

ARTICLE XVI

SUBORDINATION OF SECURITIES

[THIS ARTICLE IS ONLY APPLICABLE IF SECURITIES ARE TO BE SUBORDINATED]

        Section 16.01.    Securities Subordinate to Senior Debt.    The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of Securities of any series, by such Holder's acceptance thereof likewise covenants and agrees that all Securities from time to time issued hereunder and under a indenture supplemental hereto shall be subordinated and subject, to the extent and in the manner herein set forth and in any indenture supplemental hereto with respect to a series of Securities, in right of payment to the prior payment in full of all Senior Debt.

        Section 16.02.    No Payments When Senior Debt in Default; Payment Over of Proceeds upon Dissolution, Etc.     In the event the Company shall default in the payment on any Senior Debt when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by setoff or otherwise) shall be made or agreed to be made on account of the principal of or interest on the Securities of any series, or in respect of any redemption, retirement, purchase or other acquisition (except, if applicable, through the conversion thereof) of any Securities of any series.

        Upon the happening of an event of default with respect to any Senior Debt, as defined therein or in the instrument under which the same is outstanding, permitting the holders thereof to accelerate the maturity thereof (under circumstances when the terms of the preceding paragraph are not applicable), unless and until such event of default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by setoff or otherwise) shall be made or agreed to be made on account of the principal of or interest on the Securities of any series, or in respect of any redemption, retirement, purchase or other acquisition (except, if applicable, through the conversion thereof) of any Securities of any series.

        In the event of:

        (a)   any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to the Company or its property, or any of the Company's Subsidiaries that are guarantors under the Senior Debt,

        (b)   any assignment by the Company for the benefit of creditors, or

        (c)   any other marshalling of the assets of the Company,

        all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution (direct or indirect), whether in cash, property or securities, by setoff or otherwise, shall be made to any Holder on account of the Securities of any series, and to that end any payment or distribution, whether in cash, property or

67

securities (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the same extent provided in this Article with respect to the Securities of any series, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment) which would otherwise (but for the subordination provisions contained in this Article) be payable or deliverable in respect of the Securities of any series shall be paid or delivered directly to the holders of Senior Debt, as their respective interests may appear, until all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall have been paid in full.

        If the Securities are declared due and payable before their stated maturity because of the occurrence of an Event of Default (under circumstances where the preceding paragraph is not applicable), no payment (direct or indirect) shall be made in respect of any Securities unless and until all Senior Debt has been paid in full or such declaration and its consequence shall have been rescinded and all such defaults shall have been remedied or waived.

        If any payment or distribution (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate, at least to the extent provided in this Article with respect to the Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment) shall be received by the Trustee or the Holders in contravention of any of the terms of this Article and before all the Senior Debt has been paid in full, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered and transferred to, the holders of such Senior Debt at the time outstanding as their respective interests may appear for application to the payment of Senior Debt until all Senior Debt (including any interest thereon accruing after the commencement of any such proceeding referred to in subsection (a), (b) or (c) above) shall have been paid in full. If the Trustee or any such Holder fails to endorse or assign any such payment or distribution as required by this Section, the Trustee and the Holder of each Security by such Holder's acceptance thereof authorizes each holder of Senior Debt, any representative or representatives of holders of Senior Debt and the trustee or trustees under any indenture pursuant to which any instrument evidencing such Senior Debt may have been issued to so endorse or assign the same.

        No holder of Senior Debt shall be prejudiced in the right to enforce subordination of the Securities by any act or failure to act on the part of the Company.

        Subject to the payment in full of all Senior Debt, the Holders shall be subrogated (equally and ratably with the holders of all indebtedness of the Company which ranks on a parity with the Securities and is entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions applicable to the Senior Debt until the Securities shall be paid in full, and no such payments or distributions shall, as between the Company, its creditors other than the holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Securities. The provisions of this Article are and are intended solely for the proposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of Senior Debt, on the other hand, and nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Debt and the Holders of the Securities, the obligation of the Company to pay the Holders the principal of and interest on the Securities as and when the same shall become due and payable in accordance with the terms thereof, or prevent the Trustee or the Holders from exercising all rights, powers and remedies otherwise permitted by applicable law or under this Indenture, upon a Default or Event of Default hereunder, all subject to the rights of the holders of the Senior Debt to receive cash, property or securities otherwise payable or deliverable to the Trustee or the Holders.

68

        Upon any payment or distribution pursuant to this Section, the Trustee shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in this Section, are pending, and the Trustee, subject, as between the Trustee and the Holders, to the provisions of Section 8.01, shall be entitled to rely upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such payment or 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 Section. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Section, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, as to the extent to which such Person is entitled to participate in such payment or distribution, and as to other facts pertinent to the rights of such Person under this Section, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

        Section 16.03.    Trustee to Effectuate Subordination.    The Holder of each Security by such Holder's acceptance thereof authorizes and directs the Trustee in such Holder's behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in this Article and appoints the Trustee as attorney-in-fact for any and all such purposes.

        Section 16.04.    Trustee Not Charged With Knowledge Of Prohibition.    Notwithstanding the provisions of this Article or any other provision of this Indenture, but subject, as between the Trustee and the Holders, to the provisions of Section 8.01, the Trustee shall not be charged with knowledge of the existence of any Senior Debt, or of any default in the payment of any Senior Debt, or of any facts which would prohibit the making of any payment of moneys to or by the Trustee, unless and until three business days after the Trustee shall have received written notice thereof from the Company or any holder of Senior Debt or the representative or representatives of such holder; nor shall the Trustee be charged with knowledge of the curing of any such default or of the elimination of the act or condition preventing any such payment unless and until the Trustee shall have received an Officers' Certificate to such effect. The provisions of this Section shall not limit any rights of holders of Senior Debt under this Article to recover from each Holder any payment made to such Holder.

        Section 16.05.    Rights Of Trustee As Holder Of Senior Debt.    The Trustee shall be entitled to all the rights set forth in this Article with respect to any Senior Debt which may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in Section 8.11, or elsewhere in this Indenture, shall deprive the Trustee of any of its rights as such holder.

        Section 16.06.    Article Applicable To Paying Agent.    In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Sections 11.04 and 11.05 shall not apply to the Company or any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.

69

        IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of                         , 2003.

CAREER EDUCATION CORPORATION

By:

Name:

Title:

Attest:

By:

Name:

                                            , as Trustee

By:

Name:

Title:

Attest:

By:

Name:

STATE OF NEW YORK	)
	)	ss.:
COUNTY OF NEW YORK	)

        On this              day of                         ,             , before me personally came                         , to me personally known, who, being by me duly sworn, did depose and say that he resides in                         ,                         ; that he is the                          of Career Education Corporation, one of the corporations described in and which executed the above instrument; and that he signed his name thereto under the authority of the Board of Directors of said corporation.

[NOTARIAL SEAL]

                        
 
Notary Public

STATE OF NEW YORK	)
	)	ss.:
COUNTY OF NEW YORK	)

        On this              day of                         ,             , before me personally came                         , to me personally known, who, being by me duly sworn, did depose and say that he resides in                         ,                         ; that he is the                          of                         , one of the corporations described in and which executed the above instrument; and that he signed his name thereto under the authority of the Board of Directors of said corporation.

[NOTARIAL SEAL]

                        
 
Notary Public

QuickLinks

Exhibit 4.7

CROSS-REFERENCE SHEET^*

EX-4.9

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 4.9

SUBSIDIARY GUARANTEE

        GUARANTEE dated as of                        , 200  , by                        , a                    corporation, and                        , a                    corporation, (individually and collectively, the "Guarantor"), in favor of                        , a                    as Trustee (the "Trustee") for the Holders of the    % Notes due                    (the "Securities") issued pursuant to the Indenture dated                        , 200  between Career Education Corporation (the "Company") and the Trustee (as amended, modified or supplemented from time to time in accordance with its terms, the "Indenture"; capitalized terms used herein and not otherwise defined herein shall have the meanings attributed thereto in the Indenture).

        The Company has issued the Securities to the Holders subject to the terms and conditions of the Indenture. The obligation of the Holders to purchase the Securities is conditioned on the execution and delivery by the Guarantor of a guarantee in the form hereof of the due and punctual payment and performance of (a) all obligations with respect to the Securities at any time and from time to time under the Indenture, and (b) the principal of, interest and any premium on the Securities, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (the obligations described in (a) and (b) above being herein referred to as the "Guaranteed Obligations").

        Accordingly, in consideration of the premises and in order to induce the Holders to purchase the Securities, each Guarantor hereby, jointly and severally, agrees as follows:

        Section 1.    Guarantee.    Each Guarantor hereby, jointly and severally, irrevocably and unconditionally, guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, and the punctual performance, of all present and future Guaranteed Obligations.

        Section 2.    Waiver.    Each Guarantor hereby absolutely, unconditionally and irrevocably waives, to the fullest extent permitted by law, (i) promptness, diligence, notice of acceptance and any other notice with respect to this Guarantee, (ii) presentment, demand of payment, protest, notice of dishonor or nonpayment and any other notice with respect to the Guaranteed Obligations, (iii) any requirement that the Trustee or the Holders protect, secure, perfect or insure any security interest or Lien or any property subject thereto or exhaust any right or take any action against the Company or any other Person or any security, and (iv) any other action, event or precondition to the enforcement of this Guarantee or the performance by each Guarantor of its obligations hereunder.

        Section 3.    Guarantee Absolute.

        (a)   This Guarantee is one of payment and performance, not collection, and the obligations of the Guarantors under this Guarantee are independent of the obligations of the Company under the Indenture or the Securities, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guarantee, irrespective of whether any action is brought against the Company or whether the Company is joined in any such action or actions.

        (b)   The liability of the Guarantors under this Guarantee shall, to the fullest extent permitted under applicable law, be absolute and unconditional irrespective of:

(i)

any invalidity, irregularity, voidability, voidness or unenforceability of the Indenture, the Securities or any other agreement or instrument relating thereto, or of all or any part of the Guaranteed Obligations or of any security therefor;



(ii)

any change in the manner, place or terms of payment or performance, and/or any change or extension of the time of payment or performance of, renewal or alteration of, any Guaranteed Obligation, any security therefor, or any liability incurred directly or indirectly in respect thereof, or any other amendment or waiver of or any consent to departure from the Indenture or the Securities;

(iii)

any sale, exchange, release, surrender, realization upon any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, all or any of the Guaranteed Obligations, or any amendment or waiver of or consent to departure from any other guaranty for all or any of the Guaranteed Obligations;



(iv)

any exercise or failure to exercise any rights against the Company or others (including the Guarantors);



(v)

any settlement or compromise of any Guaranteed Obligation, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and any subordination of the payment of all or any part thereof to the payment of any Guaranteed Obligation (whether due or not) of the Company to creditors of the Company other than the Guarantors;



(vi)

any manner of application of any collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations or any other assets of the Company or any of its Subsidiaries;



(vii)

any change, restructuring or termination of the existence of any of the Company or any of its Subsidiaries; or



(viii)

any other agreements or circumstance of any nature whatsoever which might otherwise constitute a defense available to, or a discharge of, this Guarantee and/or obligations of the Guarantors hereunder, or a defense to, or discharge of, any of the Company or any other Person or party relating to this Guarantee or the obligations of the Guarantors hereunder or otherwise with respect to the Guaranteed Obligations, in each case other than the indefeasible payment in full of the Guaranteed Obligations.

        (c)   The Trustee may at any time and from time to time (whether or not after revocation or termination of this Guarantee) without the consent of, or notice (except as shall be required by applicable law that cannot be waived) to, the Guarantors, and without incurring responsibility to the Guarantors or impairing or releasing the obligations of the Guarantors hereunder, apply any sums by whomsoever paid or howsoever realized to any Guaranteed Obligation regardless of what Guaranteed Obligations remain unpaid.

        (d)   This Guarantee shall continue to be effective or be reinstated, as the case may be, if claim is ever made upon the Trustee or Holders for repayment or recovery of any amount or amounts received by the Trustee or Holders in payment or on account of any of the Guaranteed Obligations and the Trustee or the Holders repay all or part of said amount by reason of any judgment, decree or order of any court or administrative body having jurisdiction over the Trustee or Holders or their property, or any settlement or compromise of any such claim effected by the Trustee or Holders with any such claimant (including the Company), the Guarantors shall be and remain liable to the Trustee and Holders for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Trustee or Holders.

        Section 4.    Continuing Guarantee.    This Guarantee is a continuing one and shall (i) remain in full force and effect until the indefeasible payment and satisfaction in full of the Guaranteed Obligations, (ii) be binding upon each Guarantor and, except as provided in the Indenture, its successors and assigns, and (iii) inure to the benefit of, and be enforceable by, the Trustee and its successors, transferees and assigns. All obligations to which this Guarantee applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.

        Section 5.    Representations, Warranties and Covenants.    Each Guarantor hereby represents, warrants and covenants to and with the Trustee that:

2

        (a)   The Guarantor has the power to execute and deliver this Guarantee and to incur and perform its obligations hereunder;

        (b)   The Guarantor has duly taken all necessary action to authorize the execution, delivery and performance of this Guarantee and to incur and perform its obligations hereunder;

        (c)   No consent, approval, authorization or other action by, and no notice to or of, or declaration or filing with, any governmental or other public body, or any other Person, is required for the due authorization, execution, delivery and performance by the Guarantor of this Guarantee or the consummation of the transactions contemplated hereby;

        (d)   The execution, delivery and performance by the Guarantor of this Guarantee do not and will not violate or otherwise conflict with any term or provision of any material agreement, instrument, judgment, decree, order or any statute, rule or governmental regulation applicable to the Guarantor or result in the creation of any lien upon any of its properties or assets pursuant thereto;

        (e)   This Guarantee has been duly authorized, executed and delivered by the Guarantor and constitutes the legal, valid and binding obligation of the Guarantor, and is enforceable against the Guarantor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally and general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law);

        (f)    The Guarantor will take all necessary actions to comply with the provisions of the Indenture to the extent any such provision is applicable to the Subsidiaries of the Company.

        Section 6.    Expenses.    The Guarantors will upon demand reimburse the Trustee for any reasonable sums, costs, and expenses which the Trustee may reasonably pay or incur pursuant to the provisions of this Guarantee or in negotiating, executing, perfecting, defending, protecting or enforcing this Guarantee or in enforcing payment of the Guaranteed Obligations or otherwise in connection with the provisions hereof, including court costs, collection charges, travel expenses, and reasonable attorneys' fees, together with interest thereon as specified in Section 12 hereof.

        Section 7.    Terms.

        (a)   The words "include," "includes" and "including:" shall be deemed to be followed by the phrase "without limitation".

        (b)   All references herein to Sections and subsections shall be deemed to be references to Sections and subsections of this Guarantee unless the context shall otherwise require.

        Section 8.    Amendments and Modification.    No provision hereof shall be modified, altered or limited except by written instrument expressly referring to this Guarantee and to such provision, and executed by the party to be charged.

        Section 9.    Subrogation.    Upon making full payment with respect to any Guaranteed Obligation hereunder, the Guarantors shall be subrogated to the rights of the Trustee and Holders against the Company with respect to such obligation; provided that the Guarantors shall not enforce any payment by way of subrogation so long as any Guaranteed Obligation remains unpaid.

        Section 10.    Remedies Upon Default; Right of Set-Off.    (a) Upon the occurrence and during the continuance of any Event of Default, the Trustee may, without notice to or demand upon the Company or the Guarantors, declare any Guaranteed Obligations immediately due and payable, and shall be entitled to enforce the obligations of the Guarantor hereunder.

        (b)   Upon such declaration by the Trustee, the Trustee is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time

3

owing by the Trustee to or for the credit or the account of any Guarantor against any and all of the obligations of such Guarantor now or hereafter existing under this Guarantee that are then due, whether or not the Trustee shall have made any demand under this Guarantee. The Trustee agrees promptly to notify such Guarantor after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Trustee under this Section 10 are in addition to other rights and remedies (including other rights of set-off) which the Trustee may have.

        Section 11.    Statute of Limitations.    Any acknowledgment or new promise, whether by payment of principal or interest or otherwise and whether by the Company or others (including any Guarantor), with respect to any of the Guaranteed Obligations shall, to the fullest extent permitted under applicable law, if the statute of limitations in favor of the Guarantors against the Trustee or Holders shall have commenced to run, toll the running of such statute of limitations and, if the period of such statute of limitations shall have expired, prevent the operation of such statute of limitations.

        Section 12.    Interest.    All amounts payable from time to time by the Guarantors hereunder shall bear interest at an interest rate per annum determined in accordance with the Securities and Section 3.01 of the Indenture as if such amounts were payable by the Company.

        Section 13.    Rights and Remedies Not Waived.    No act, omission or delay by the Trustee shall constitute a waiver of its rights and remedies hereunder or otherwise. No single or partial waiver by the Trustee or Holders of any default hereunder or right or remedy which it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.

        Section 14.    Admissibility of Guarantee.    The Guarantors agree that any copy of this Guarantee signed by the Guarantors and transmitted by telecopier for delivery to the Trustee shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence.

        Section 15.    Notices.    All notices, requests and demands to or upon the Trustee or the Guarantors under this Agreement shall be in writing and given as provided in the Indenture (with respect to the Guarantors, to the address of the Company as set forth in the Indenture).

        Section 16.    Counterparts.    This Guarantee may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original and all of which shall together constitute one and the same agreement.

        Section 17.    CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; ETC.    (a) EACH GUARANTOR HEREBY SUBMITS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT THEREFROM IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING, (i) TRIAL BY JURY, (ii) TO THE EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (iii) THE RIGHT TO INTERPOSE ANY SET-OFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION).

4

        (a)   Each Guarantor irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by certified mail, postage prepaid, to such Guarantor at its address determined pursuant to Section 15 hereof.

        (b)   Nothing herein shall affect the right of the Trustee to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any Guarantor in any other jurisdiction.

        (c)   Each Guarantor hereby waives presentment, notice of dishonor and protests of all instruments included in or evidencing any of the Guaranteed Obligations, and any and all other notices and demands whatsoever (except as expressly provided herein).

        Section 18.    GOVERNING LAW.    THIS GUARANTEE SHALL BE CONSTRUCTED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

        Section 19.    Captions; Separability.    (a) The captions of the Sections and subsections of this Guarantee have been inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Guarantee.

        (b)   If any term of this Guarantee shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby.

        Section 20.    Enforcement.    If, in any action to enforce this Guarantee or any proceeding to allow or adjudicate a claim under this Guarantee, a court of competent jurisdiction determined that enforcement of this Guarantee against any Guarantor for the full amount of the Guaranteed Obligations is not lawful under, or would be subject to avoidance under, Section 548 of the United States Bankruptcy Code or any applicable provision of comparable state law, the liability of such Guarantor under this Guarantee shall be limited to the maximum amount lawful and not subject to avoidance under such law.

        Section 21.    Contribution.    Each Guarantor agrees that in the event a payment shall be made by any Guarantor (the "Claiming Guarantor") under this Guarantee or assets of such Claiming Guarantor shall be sold pursuant to any mortgage, security agreement or similar instrument or agreement to satisfy a claim of the Trustee or Holders, each other Guarantor (a "Contributing Guarantor") shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all Guarantors on the date hereof.

        Section 22.    Acknowledgment of Receipt.    Each Guarantor acknowledges receipt of a copy of this Guarantee, the Indenture and the Securities.

[Remainder of Page Intentionally Left Blank]

5

        IN WITNESS WHEREOF, each Guarantor has duly executed or caused this Guarantee to be duly executed in the State of New York as of the date first above set forth.

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

QuickLinks

Exhibit 4.9

EX-5

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 5

[KMZR Letterhead]

May 21, 2003

Career Education Corporation
2895 Greenspoint Parkway
Suite 600
Hoffman Estates, IL 60195

        Re:  Career Education Corporation
        Registration on Form S-3

Ladies and Gentlemen:

        We have acted as counsel to Career Education Corporation, a Delaware corporation (the "Company"), in connection with the preparation and filing of a registration statement on Form S-3 (such Registration Statement, as amended, being hereinafter referred to as the "Registration Statement") initially filed on March 11, 2003 with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement relates to the registration of up to $300 million aggregate initial offering price of an indeterminate amount of the following:

•

shares of the Company's Common Stock, $.01 par value per share (the "Common Stock");



•

shares of the Company's preferred stock, $.01 par value per share, and convertible preferred stock, $.01 par value per share (the "Preferred Stock"), in one or more series;



•

debt securities and convertible debt securities (the "Debt Securities") consisting of debentures, notes and/or other evidences of indebtedness, in one or more series, which are to be issued by the Company pursuant to one or more indentures (each, as may be supplemented from time to time, an "Indenture"), in each case between the Company and the trustees named therein (each, a "Trustee"); and



•

guarantees from certain of the Company's current domestic subsidiaries (the "Subsidiary Guarantors"), that may jointly and severally, fully and unconditionally guarantee the payment of principal, premium, if any, and interest under any series of Debt Securities (the "Subsidiary Guarantees").

        In addition, the Registration Statement relates to the registration of Common Stock and Preferred Stock that may be issued from time to time upon conversion of convertible Debt Securities or convertible Preferred Stock. The Debt Securities will be senior or subordinated and are issuable from time to time pursuant to the applicable Indenture. The Common Stock, Preferred Stock, Debt Securities and Subsidiary Guarantees (collectively, the "Securities") may be issued from time to time, pursuant to Rule 415 under the Securities Act. Specific terms pertaining to the Securities offered by the Company will be determined at or prior to the time of issuance and will be set forth in one or more supplements to the prospectus (each, a "Prospectus Supplement") constituting part of the Registration Statement.

        This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

        In connection with this opinion, we have relied as to matters of fact, without investigation, upon certificates of public officials and others and upon affidavits, certificates and written statements of directors, officers and employees of, and the accountants for, the Company. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such instruments, documents

and records as we have deemed relevant and necessary to examine for the purpose of this opinion, including (i) the Registration Statement on Form S-3 (File No. 333-103719) as filed with the Commission on March 11, 2003 under the Securities Act, and Amendment No. 1 to the Registration Statement as filed with the commission on May 22, 2003; (ii) the proposed form of the Indentures; (iii) a specimen certificate representing the Common Stock; (iv) the proposed form of the Subsidiary Guarantees; (v) the Amended and Restated Certificate of Incorporation of the Company, as presently in effect; (vi) the Amended and Restated By-Laws of the Company, as presently in effect; (vii) certain resolutions of the Board of Directors of the Company relating to the authorization and registration of the Securities and related matters; (v) the charter documents of each of the Subsidiary Guarantors, each as presently in effect; (vi) the by-laws, operating agreement or partnership agreement of each of the Subsidiary Guarantors, as presently in effect; (vii) certain resolutions of the Boards of Directors, Managers, or Partners of each of the Subsidiary Guarantors relating to the authorization and registration of the Subsidiary Guarantees and related matters.

        In connection with this opinion, we have assumed the legal capacity of all natural persons, the accuracy and completeness of all documents and records that we have reviewed, the genuineness of all signatures, the due authority of the parties signing such documents, the authenticity of the documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or reproduced copies. In making our examination of documents executed or to be executed by parties other than the Company, we have assumed that such parties had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and the validity and binding effect thereof.

        Based upon and subject to the foregoing, it is our opinion that:

        1.     Upon (i) adoption by the Company's Board of Directors or a duly authorized committee thereof of resolutions authorizing the issuance of the Common Stock and (ii) the issuance and delivery by the Company of the Common Stock, upon receipt of lawful consideration therefor as determined by the Company's Board of Directors or a duly authorized committee thereof (or pursuant to conversion or exchange of Preferred Stock or Debt Securities, in accordance with the applicable certificate of designation, preferences and rights ("Certificate of Designation") or Indenture, as the case may be), in the manner contemplated by the Registration Statement, any applicable underwriting agreement and any applicable Prospectus Supplement, the Common Stock will be validly issued, fully paid and nonassessable;

        2.     Upon (i) approval by the Company's Board of Directors of the terms of the Preferred Stock, including, without limitation, the designation, number of shares, dividend rate, any conversion or exchange rights, any redemption or sinking fund provisions and liquidation preference thereof, (ii) the Company's execution and filing with the Secretary of State of the State of Delaware of a Certificate of Designation (containing such terms as approved by the Company's Board of Directors) and its effectiveness in accordance with the Delaware General Corporation Law, (iii) the adoption by the Company's Board of Directors or a duly authorized committee thereof of resolutions authorizing the issuance of the Preferred Stock, and (iv) the issuance and delivery by the Company of the Preferred Stock upon receipt of lawful consideration therefor as determined by the Company's Board of Directors or a duly authorized committee thereof (or pursuant to conversion or exchange of Debt Securities or another class or series of Preferred Stock, in accordance with the applicable certificate of designation or Indenture, as the case may be), in the manner contemplated by the Registration Statement, any applicable underwriting agreement and any applicable Prospectus Supplement, the Preferred Stock will be validly issued, fully paid and nonassessable;

        3.     Upon (i) execution and delivery by the Company and the Trustee thereunder of the applicable Indenture, (ii) the qualification of the Trustee under the applicable Indenture in accordance with the Trust Indenture Act of 1939, as amended, (iii) the adoption by the Company's Board of Directors or a duly authorized committee thereof of resolutions authorizing the terms, issuance and delivery of the Debt Securities as contemplated by the applicable Indenture, and (iv) the execution by the Company,

authentication by the relevant Trustee and delivery by the Company of the Debt Securities, upon receipt of lawful consideration therefor as determined by the Company's Board of Directors or a duly authorized committee thereof, in the manner contemplated by Registration Statement, the applicable indenture, any applicable underwriting agreement and any applicable Prospectus Supplement, the Debt Securities will be legally issued and binding obligations of the Company under the terms of the applicable Indenture (except (x) as enforceability may be limited by the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effects of general principles of equity, whether applied by a court of equity or law and (y) as rights to indemnity or contribution under the same may be limited by federal or state securities laws or the public policy underlying such laws); and

        4.     Upon (i) execution and delivery by the Company and the Trustee thereunder of the applicable Indenture, (ii) the qualification of the Trustee under the applicable Indenture in accordance with the Trust Indenture Act of 1939, as amended, (iii) the adoption by the Subsidiary Guarantors' boards of directors, managers, members, partners or a duly authorized committee thereof, as applicable, of resolutions authorizing the terms, issuance and delivery of the Subsidiary Guarantees relating to the Debt Securities as contemplated by the applicable Indenture, and (v) execution and delivery by the Subsidiary Guarantors of the Subsidiary Guarantees, upon receipt of lawful consideration therefor as determined by the Subsidiary Guarantors' boards of directors, managers, members, partners or a duly authorized committee thereof in the manner contemplated by Registration Statement, the applicable Indenture, any applicable underwriting agreement and any applicable Prospectus Supplement, the Subsidiary Guarantees relating to the Debt Securities will be valid and binding obligations of the Subsidiary Guarantors, enforceable in accordance with their terms (except (x) as enforceability may be limited by the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effects of general principles of equity, whether applied by a court of equity or law and (y) as rights to indemnity or contribution under the same may be limited by federal or state securities laws or the public policy underlying such laws).

        Our opinion expressed above is limited to the laws of the State of New York, General Corporation Law of the State of Delaware, the applicable provisions of the Delaware constitution and the reported judicial decisions interpreting such laws, and we do not express any opinion concerning any other laws. This opinion is given as of the date hereof and we assume no obligation to advise you of changes that may hereafter be brought to our attention.

        We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.

Very truly yours,

KATTEN MUCHIN ZAVIS ROSENMAN

QuickLinks

Exhibit 5

EX-12

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 12

CAREER EDUCATION CORPORATION

RATIO OF EARNINGS TO FIXED CHARGES

				Quarter ended March 31,						Year ended December 31,
				2003			2002			2002			2001			2000		1999		1998
Earnings
	Add:
		Pretax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees		$	31,146		$	19,543		$	112,012		$	68,063		$	39,506	$	19,198	$	7,851
		Fixed charges			403			471			2,578			2,164			1,565		1,666		1,730
		Amortization of capitalized interest			14			9			35			11			—		—		—
		Distributed income of equity investees			890			647			2,136			1,697			—		—		—
		Share of pretax losses of equity investees for which charges arising from guarantees are included in fixed charges			—			—			—			—			—		—		—
	Deduct:
		Interest capitalized			—			—			(149	)		(471	)		—		—		—
		Preference security dividend requirements of consolidated subsidiaries			—			—			—			—			—		—		(157	)
		Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges			(1,166	)		(737	)		(2,348	)		(1,674	)		—		—		—
			Total earnings	$	31,287		$	19,933		$	114,264		$	69,790		$	41,071	$	20,864	$	9,424
Fixed Charges
	Interest expensed			$	342		$	325		$	2,094		$	1,493		$	1,358	$	1,482	$	1,416
	Interest capitalized				—			98			149			471			—		—		—
	Interest expensed and capitalized				342			423			2,243			1,964			1,358		1,482		1,416
	Amortized premiums, discounts, and capitalized expenses related to indebtedness				61			48			335			200			207		184		157
	Estimated interest within rental expense				—			—			—			—			—		—		—
		Total fixed charges		$	403		$	471		$	2,578		$	2,164		$	1,565	$	1,666	$	1,573
Ratio of Earnings to Fixed Charges					77.6			42.3			44.3			32.3			26.2		12.5		6.0

CAREER EDUCATION CORPORATION

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

				Quarter ended March 31,						Year ended December 31,
				2003			2002			2002			2001			2000		1999		1998
Earnings
	Add:
		Pretax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees		$	31,146		$	19,543		$	112,012		$	68,063		$	39,506	$	19,198	$	7,851
		Fixed charges			403			471			2,578			2,164			1,565		1,666		1,730
		Amortization of capitalized interest			14			9			35			11			—		—		—
		Distributed income of equity investees			890			647			2,136			1,697			—		—		—
		Share of pretax losses of equity investees for which charges arising from guarantees are included in fixed charges			—			—			—			—			—		—		—
	Deduct:
		Interest capitalized			—			—			(149	)		(471	)		—		—		—
		Preference security dividend requirements of consolidated subsidiaries			—			—			—			—			—		—		(157	)
		Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges			(1,666	)		(737	)		(2,348	)		(1,674	)		—		—		—
			Total earnings	$	31,287		$	19,933		$	114,264		$	69,790		$	41,071	$	20,864	$	9,424
Fixed Charges and Preferred Stock Dividends
	Interest expensed			$	342		$	325		$	2,094		$	1,493		$	1,358	$	1,482	$	1,416
	Interest capitalized				—			98			149			471			—		—		—
	Interest expensed and capitalized				342			423			2,243			1,964			1,358		1,482		1,416
	Amortized premiums, discounts, and capitalized expenses related to indebtedness				61			48			335			200			207		184		157
	Estimated interest within rental expense				—			—			—			—			—		—		—
	Preference security dividend requirements of consolidated subsidiaries				—			—			—			—			—		—		157
		Total fixed charges and preferred stock dividends		$	403		$	471		$	2,578		$	2,164		$	1,565	$	1,666	$	1,730
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends					77.6			42.3			44.3			32.3			26.2		12.5		5.4

QuickLinks

EXHIBIT 12

CAREER EDUCATION CORPORATION RATIO OF EARNINGS TO FIXED CHARGES
CAREER EDUCATION CORPORATION RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

EX-23.1

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

        We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3, No. 333-10719) and related Prospectus of Career Education Corporation and to the incorporation by reference therein of our report dated January 23, 2003, except for Note 18, as to which the date is February 18, 2003, with respect to the consolidated financial statements of Career Education Corporation included in its Annual Report (Form 10-K/A) for the year ended December 31, 2002, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Chicago, Illinois
May 21, 2003

QuickLinks

EXHIBIT 23.1

EX-23.2

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 23.2

Explanation Concerning Absence of Current Written Consent of Arthur Andersen LLP

        On March 25, 2002, Career Education Corporation (the "Company") announced that it had appointed Ernst & Young LLP to replace Arthur Andersen LLP ("Arthur Andersen") as its independent public accountants. Representatives of Arthur Andersen are not available to provide an updated written consent required for the incorporation by reference of Arthur Andersen's audit report with respect to the Company's financial statements as of December 31, 2001 and for the years ended December 31, 2001 and December 31, 2000 included in the Company's Annual Report on Form 10-K/A for its fiscal year ended December 31, 2002 into this Registration Statement on Form S-3. Because, after reasonable effort, the Company is unable to obtain Arthur Andersen's written consent to such incorporation by reference of their report, Rule 437a under the Securities Act of 1933, as amended (the "Securities Act") permits the Company to omit Arthur Andersen's updated written consent from this filing.

        Section 11(a) of the Securities Act provides that if any part of a registration statement at the time it becomes effective contains an untrue statement of a material fact or an omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring a security pursuant to such registration statement (unless it is proved that at the time of such acquisition such person knew of such untruth or omission) may sue, among others, every accountant who has consented to be named as having prepared or certified any part of the registration statement or as having prepared or certified any report or valuation which is used in connection with the registration statement with respect to the statement in such registration statement, report or valuation which purports to have been prepared or certified by the accountant.

        While Arthur Andersen did consent to the incorporation by reference of its audit report with respect to the Company's financial statements as of December 31, 2001 and for the years ended December 31, 2001 and December 31, 2000 contained in the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2001 into other registration statements filed by the Company and declared effective by the Securities Act, as noted above, Arthur Andersen has not consented to the incorporation by reference of such audit report contained in the Company's Annual Report on Form 10-K/A for its fiscal year ended December 31, 2002 into such registration statements or this Registration Statement on Form S-3. As a result, with respect to this Registration Statement on Form S-3 the Company's investors may not be able to recover against Arthur Andersen under Section 11(a) of the Securities Act or the lack of a currently dated consent may limit the time in which any liability under Section 11(a) could be asserted against Arthur Andersen.

QuickLinks

EXHIBIT 23.2